Department of Community Health

The Department of Community Health (DCH) is responsible for health policy and management of the state’s publicly funded health care systems. These programs include Medicaid health coverage for those with limited incomes; mental health services for people who have a mental illness or developmental disability; services for individuals who need substance abuse treatment; and services provided through local public health programs. The department also provides services to promote the independence and preserve the dignity of Michigan’s elderly through the Office of Services to the Aging. The governor’s proposed budget for fiscal year 2016 recommends total funding of $19 billion, of which $3 billion is general fund. This includes one-time funding of $7 million general fund. The recommendation for fiscal year 2017 is $18.7 billion, of which $3 billion is general fund.

Improving Michigan’s Health Care System

• The Healthy Michigan Plan, Michigan’s innovative and successful Medicaid reform, will mark its first year in April, 2015. With support from the legislature, this executive initiative provides health care to income-eligible uninsured adults. Currently, over 530,000 Michigan residents are enrolled in and received health care under the Healthy Michigan Plan. These individuals now have access to routine and preventive medical care that improves health outcomes and reduces uncompensated costs for health care providers. Those enrolled in the Healthy Michigan Plan must comply with cost-sharing requirements including a personal health savings account. Cost-sharing promotes personal investment in health care decisions and outcomes, and contributes to the success of this reform initiative.

• Due to the Healthy Michigan Plan’s success, significant new funds support Michigan’s health care providers including primary care and specialty physicians, and hospitals throughout the state. In recognition of these new funds in the health care system and reductions in uncompensated care, the governor’s budget reduces general fund support for specialty payments to hospitals including enhanced payments for obstetrical services, enhanced rural hospital payments and Graduate Medical Education payments. Instead he proposes that rural hospital payments and Graduate Medical Education payments be supported with hospital provider assessments. Additional revenues to the health care system as a direct result of the Healthy Michigan Plan more than offset these reductions.

Improving Michigan’s Dental Health

• The governor’s budget continues the successful expansion of Healthy Kids Dental by investing $21.8 million ($7.5 million general fund) to cover children ages 0 through 8 in Wayne, Oakland and Kent counties. With this expansion, 822,000 Medicaid-eligible children will have enhanced dental coverage. The remaining age groups in these three counties will be phased-in over the next several years. Healthy Kids Dental increases provider reimbursement rates for dental services, encourages provider participation and ensures that children receive good dental care.

• In a significant expansion of dental services for adults, the Executive Budget proposes partial year funding of $23 million ($7.9 million general fund) for a new statewide managed care contract to provide Medicaid dental services for over 600,000 low-income adults.

• Program savings of $64.1 million ($22 million general fund) will partially offset the costs of expanding dental services to adults effective July 1, 2015. These savings will be achieved through increased pharmacy rebates and Health Maintenance Organization contract care coordination.

Behavioral Health Services

• The governor’s budget supports behavioral health services by funding the Mental Health and Wellness Commission at $32.1 million ($12.7 million general fund) in fiscal year 2016. This continuing investment recognizes the personal and financial losses that result from untreated mental health disorders and the value of coordinated mental health services. These funds increase the availability of treatment options and support initiatives to make mental health services accessible to the public.

• To help youth move from psychiatric treatment facilities into community-based settings, $5 million ($1.9 million general fund) of the Mental Health and Wellness Commission funding shown above is invested in transition psychiatric services for children and a children’s behavioral action team. Helping youth re-integrate into the community will improve their mental health outcomes and reduce the need for future hospitalizations.

• Increased support for children with Autism Spectrum Disorder is reflected in the governor’s budget with an additional $11.6 million gross ($4 million general fund) for autism services, including the expansion of autism Medicaid coverage to age 21. To help train new service providers, $500,000 general fund is allocated to each of Michigan State University, Eastern Michigan University, Western Michigan University, Central Michigan University, and Oakland University to increase the state’s autism service capacity.

Other Highlights of the Governor’s Budget

Medical Services

• Michigan’s health care safety net is supported in the governor’s budget with $10.9 billion ($1.5 billion general fund) for medical services and $1.4 billion ($163.9 million general fund) for the long-term care portion of the Medicaid program. The Medicaid caseload for fiscal year 2016 is projected at 1.75 million recipients. A federal appropriation of $3.2 billion funds the Healthy Michigan Plan for fiscal year 2016. The Healthy Michigan Plan caseload estimate is 580,000 recipients. Together, over 2.3 million Michigan residents have medical coverage through the Medicaid program.

• Savings in the Medicaid budget include reducing reimbursement for Health Maintenance Organization laboratory fees from Medicare rates to Medicaid fee-for-service rates. This policy change saves $31.8 million ($10.9 million general fund).

Senior Services

• The fiscal year 2016 executive budget continues the expansion of the Program for All- Inclusive Care for the Elderly (PACE) by shifting $8.3 million general fund from longterm care to PACE. This expansion covers programs in Jackson and Traverse City. PACE provides community-based services to those 55 or older who would otherwise need care in a nursing home.

• Senior nutrition and in-home services for the elderly are supported in the governor’s budget with $83.9 million ($28.2 million general fund). These vital services help seniors remain in the community in their own homes while avoiding costly nursing home care. These funds ensure that Michigan remains a “no wait state,” providing senior services without a waiting list.

Enhancing Service Delivery to Achieve Better Outcomes: The River of Opportunity

• On February 6, 2015, the governor signed an executive order combining the departments of Human Services and Community Health into the Department of Health and Human Services. An executive budget revision will be issued after the executive order becomes effective April 10, 2015 that aligns the new department’s budget. This new department is a key component in implementing and supporting the governor’s service delivery model — the River of Opportunity. The River of Opportunity restructures government in a way that puts people first by providing coordinated services that are targeted to individual needs and easy access.