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MDHHS legal director testifies on RFP development; court admits summary EQI exhibit over objection
Summary
At a Michigan court hearing over the state's behavioral-health RFP, MDHHS bureau director Leslie Asman testified about the RFP steering process, cost disparities shown in department EQI data and conflict-of-interest concerns; the judge admitted a litigation summary exhibit derived from EQIs over an objection that the underlying data were not authenticated.
A Michigan court on Tuesday heard testimony from Leslie Asman, bureau director of legal affairs at the Michigan Department of Health and Human Services (MDHHS), about the department's development of a 2025 request for proposals (RFP) to consolidate behavioral-health managed-care functions.
Asman said she participated on the RFP steering committee, reviewed the RFP in full and advised department leadership during its drafting. She told the court the RFP was prompted in part because five fiscal-year-2025 PIHP (prepaid inpatient health plan) contracts were not signed and because an 11-15 demonstration waiver expired on Sept. 30, 2024, and was not renewed by CMS for several compliance reasons.
Why it matters: Asman's testimony aimed to explain DHHS's rationale for moving from many regional PIHP/CMHSP arrangements toward fewer, larger PIHPs. The department says consolidation will reduce duplicated administrative functions, improve cost transparency and produce more consistent services.
Asman described what she and MDHHS staff found when they compared encounter-quality-indicator (EQI) reports: in a sample row for a therapy service code the summary showed CMHSPs attributing large net expenditures and higher cost-per-unit numbers compared with network providers. Asman said the summary highlighted substantial variance, describing one computed differential as "1,178% difference between what the CMH is attributing" and the provider network cost. She said those variances were "by and large" between roughly "80% and 800% higher" in many sample rows.
On conflict of interest, Asman testified that governance structures where a CMHSP sits on a PIHP board can impede oversight, citing a prior fiscal-audit situation in which a CMHSP CEO on the board voted to block deeper fiscal review. She said those governance arrangements contributed to MDHHS's decision to pursue a competitive procurement.
Exhibit ruling: Defense counsel offered a chart (marked in court as defendant's proposed Exhibit A) that summarized EQI data. Opposing counsel objected, arguing lack of foundation and that the underlying spreadsheet tabs had not been shown. After argument about hearsay, business-record exceptions and Federal/State evidence rule 1006 summary procedures, the presiding judge admitted the summary over objection, finding MDHHS maintained the underlying EQI records, the records had been made available electronically to opposing counsel, and the summary was an appropriate use of Rule 1006; the judge said the objection was preserved for the record.
Asman's limitations: On cross-examination she acknowledged she had only "broad strokes" knowledge of how funding streams braid together at the CMHSP level, and she said operational details (for example, whether PIHPs would accept particular out-of-network providers or how utilization-management decisions would be performed) remain to be developed if the RFP architecture is adopted. She explained that for non-Medicaid services CMHSPs could continue certain general-fund functions but that Medicaid payer contracts would move to the PIHP layer under the RFP's design.
Data provenance and production dispute: Counsel questioned whether the EQI spreadsheets provided to plaintiffs contained the same tabs ("tab 6") Asman relied on; Asman said MDHHS's actuarial division and vendor Milliman helped create templates and verify data while CMHSPs input the raw data. Plaintiffs said the summaries were prepared for this litigation and pressed the defense to show the underlying tabs; the court allowed the parties to confer and preserved objections.
Other points: Asman testified the RFP reserves preadmission screening for involuntary civil admissions with CMHSPs and that the RFP includes measures to preserve CMHSPs as community safety-net providers for non-Medicaid services. Counsel confirmed the court and parties were working from the Sept. 12 version of the RFP and that five clarifying amendments were made during the question-and-answer period. The judge set the next hearing for 10:30 a.m. the following day.
What happens next: The court admitted the EQI summary exhibit for now but preserved the objection; the production dispute about the underlying EQI tabs and discovery issues (including a claimed text-message production) remain subjects for follow-up before further testimony continues.
