Appel Discusses Behavioral Health Bed Shortage with Bridge

Laura Appel

Laura AppelBridge Michigan published an article Oct. 4 which focuses on the staffing challenges impacting behavioral health providers that limit bed capacity. The article begins by reviewing the number of reduced beds at state psychiatric facilities.

Laura Appel, executive vice president of government relations and public policy, MHA, contributed to the story. The article also references statewide aggregate data compiled by the MHA on the loss of staffed hospital beds and the dramatic increase in contract labor expenses. Shared in a report recently provided to the Michigan Legislature, the state has approximately 1,400 less staffed acute-care inpatient beds now compared to Oct. 2020 and Michigan hospitals are expected to spend $1.1 billion on contract labor compared to $516 million in 2021.

“We are working with the state to try and figure out how to make it through this crisis,” said Appel. “At the same time, I can’t blame (state officials) for their challenges.”

Legislature Returns to Continue Healthcare-related Work

The Legislature returned the week of Sept.19 to continue work on several pieces of legislation that the MHA is currently monitoring. Committees met in both the House and Senate, taking up legislation that included several new bills supported by the MHA in the areas of behavioral health, rural emergency hospitals, speech-language pathologist licensure and telemedicine.

In the House Health Policy Committee, initial testimony was taken on new legislation to make changes to the preadmission screening process for behavioral health patients. House Bill (HB 6355), introduced by Rep. Graham Filler (R-St. Johns) and supported by the MHA, would memorialize the requirement for preadmission screening units operated by the Community Mental Health (CMH) services program to provide a mental health assessment within three hours of being notified by a hospital of the patient’s need. If a preadmission screening unit is unable to perform the assessment within the three-hour time frame, HB 6355 would also allow for a clinically qualified individual at a hospital who is available to perform the required assessment.

Kathy Dollard, Psychologist and Director of behavioral health for MyMichigan Health, joined the committee to testify in support of HB 6355.

Kathy Dollard, psychologist and director of behavioral health for MyMichigan Health, joined the committee to testify in support of HB 6355. “Strengthening our behavioral health system includes strengthening our behavioral health workforce and that can start with creative solutions like providing clinically qualified hospital personnel the ability to conduct pre-admission screenings,” said Dollard. No votes were held on HB 6355 at this initial hearing.

MHA staff also provided testimony during committee on HB 6380. Introduced by Rep. Andrew Fink (R-Hillsdale), HB 6380 would make the necessary changes to state law to allow for Michigan hospitals to pursue a new federal designation of “Rural Emergency Hospital” (REH) status. A REH designation comes with significant requirements such as limiting total beds to 50, maintaining an average length of stay of 24 hours or less and a required transfer agreement with a level I or II trauma center. Hospitals that choose to convert to a REH will receive enhanced federal reimbursement to provide critical emergency and outpatient services, especially in geographic areas.

Lauren LaPine and Elizabeth Kutter of the MHA testified in support of HB 6380.

Lauren LaPine, director of small and rural hospital programs, MHA, and Elizabeth Kutter, senior director of advocacy, MHA, testified in support of the legislation. “HB 6380 provides rural hospitals in our state with the ability to continue providing care in our most rural communities,” said LaPine. No votes were taken on HB 6380.

Initial testimony on two bills that were previously reviewed by MHA’s Legislative Policy Panel also occurred during committee. Senate Bill (SB) 811, introduced by Sen. Curt VanderWall (R-Ludington), would extend the length of time for an individual to complete a temporary Speech-Language Pathologist license and extend the length of time those temporary licenses are valid. The MHA is supportive of SB 811, which did not see any votes this week.

House committee members also took initial testimony on SB 450, which would ensure that visitors of cognitively impaired patients are permitted in healthcare facilities. Introduced by Sen. Jim Stamas (R-Midland), the bill would prohibit the director of the Michigan Department of Health and Human Services (MDHHS) or a local health officer from issuing an order that prohibits a patient representative from visiting a cognitively impaired individual in a healthcare facility. As written, the legislation does not prevent a healthcare facility from implementing reasonable safety measures for visitors and will still allow for facilities to limit the number of representatives per patient. The MHA is neutral on the bill and will continue to monitor any action taken.

The Senate Health and Human Services Committee took initial testimony on SB 1135, which was introduced by Sen. Mike MacDonald (R-Macomb Township). SB 1135 would specify that previous expansions to Medicaid telemedicine coverage also apply to the Healthy Michigan Program and Michigan’s medical assistance program. Most notably, the legislation would require continued coverage for audio-only telemedicine services. The MHA is supportive of SB 1135, which would continue virtual care policies that have proved to be effective and safe during the COVID-19 pandemic.

In the Senate’s Regulatory Reform Committee, testimony was taken on another MHA-supported bill to regulate the sale of kratom in Michigan. Kratom is a substance of concern with opiate-like effects that has no approved medical use in the United States. HB 5477, introduced by Rep. Lori Stone (D-Warren), would create a license for kratom sales and manufacturing, require testing of products and require new safety warnings on kratom substances sold in Michigan. While the MHA prefers a federal Schedule I ban of the drug, the association is supportive of HB 5477, which will help limit adolescent addiction and prevent adulterated products from being on the market.

Members with questions on these bills or any other state legislation should contact Adam Carlson at the MHA.

MHA Monday Report Aug. 29, 2022

MHA Monday Report

Behavioral Health Legislation Introduced in State House

capitol building

New legislation to make changes to the screening process for potential admission to inpatient psychiatric care for behavioral and mental health patients was introduced Aug. 17 in the Michigan House of Representatives. Rep. Graham Filler …


Court of Appeals Rules for Providers in ANF Case


CMS Releases FY 2023 Final Rule to Update Skilled Nursing Facilities PPS


CMS Wage Data Revisions Due Sept. 2


Member Feedback Requested on Proposed Telemedicine Policy


Paul KeckleyThe Keckley Report

Game On: FTC Takes on Hospital Consolidation via COPA Dismantling

“The Federal Trade Commission (FTC) issued a scathing 20-page report last Monday criticizing hospital Certificate of Public Advantage (COPA) agreements and urging state lawmakers to suspend their use. …

The FTC has its sights on hospital consolidation: it’s high on the list of industries where its activist’ muscle is likely to be flexed more frequently and effectively. … Like strong bipartisan support for the Hospital Price Transparency Rule, it reflects the FTC’s rejection of hospital claims about inadequate reimbursement by payers including Medicare and Medicaid, price gauging by device, drug and technology suppliers and unfair competition from insurers and niche providers often funded by private investment to optimize profits at the expense of hospitals.

And it offers a solution that’s strong on populist appeal but weak on practical implementation in the current hospital environment: competition vs. consolidation. Regulatory Constraints on hospitals like EMTALA and others are not applied to insurers and retailers who offer a widening range of care management services in direct competition with hospitals. The playing field is increasingly tilted against hospitals.

Paul Keckley, August 22, 2022


News to Know


MHA in the News

MHA CEO Brian Peters

Behavioral Health Legislation Introduced in State House

capitol building

capitol buildingNew legislation to make changes to the screening process for potential admission to inpatient psychiatric care for behavioral and mental health patients was introduced Aug. 17 in the Michigan House of Representatives.

Rep. Graham Filler (R-St. Johns) introduced House Bill (HB) 6355 to amend the Mental Health Code and make the preadmission screening process more efficient. Under the bill, preadmission screening units, whether operated by the Michigan Department of Health and Human Services or Community Mental Health services programs, must provide a mental health assessment within three hours of being notified by a hospital of the patient’s need. If a preadmission screening unit is unable to perform the assessment in a timely manner, HB 6355 would also allow for a clinically qualified individual at the acute care hospital to perform the required assessment. The bill provides for reimbursement to the hospital if hospital staff provide the preadmission screening.

The MHA supports HB 6355 because it addresses the ongoing issue of long wait times for emergency department behavioral and mental health patients. This legislation should help shorten the difficult wait times between the evaluation and beginning services.

HB 6355 was referred to the House Health Policy Committee. Members with questions regarding HB 6355 should contact Adam Carlson at the MHA.

MHA CEO Report — Benefits of the State Budget

MHA Rounds Report - Brian Peters, MHA CEO

MHA Rounds Report - Brian Peters, MHA CEO“We must find time to stop and thank the people who make a difference in our lives.” ― John F. Kennedy

We have rightfully spent a lot of time in the past two years thanking the heroes who work in our hospitals and other healthcare settings for the incredible work they have done in the face of extreme challenge.

I want to take a moment now to thank another group of people who have recently helped our cause through their bipartisan actions; our elected officials in Lansing were extremely busy the last week of June passing the fiscal year 2023 state budget, which has since been signed by Gov. Whitmer. Our MHA mission is to advance the health of individuals and communities — and this budget absolutely provides significant help in that regard. While some elements of the new budget represent long-standing MHA priorities, others are new funding items that have the potential to reshape access to care and help our members and the patients and communities they serve.

Our MHA team does a tremendous job advocating for the importance of items such as the Healthy Michigan Plan, graduate medical education of physician residents, disproportionate share hospital funding, maximization of our robust provider tax program and Medicaid payment rates, the rural access pool and obstetrical stabilization fund, and critical access hospital reimbursement rates. Every election cycle, new legislators are welcomed to Lansing and the MHA’s efforts never stop to ensure these decisionmakers are aware of the impact these budget items play in their communities. The bottom line is the financial viability of hospitals is increasingly reliant on these important programs, and the MHA is dedicated to protecting them.

Hospital closures continue to happen across the country. However, they have occurred at a much higher rate in states that have not participated in Medicaid expansion through the Affordable Care Act. Maintaining funding for our expansion program — the Healthy Michigan Plan — has been one of our top priorities, and the pandemic has made the importance of insurance coverage more important than ever. In short, when the pandemic hit and thousands of Michiganders lost their jobs, the Healthy Michigan Plan was there to ensure access to good healthcare.

Our hospitals that treat the highest numbers of uninsured and underinsured patients also qualify for disproportionate share hospital funding, which provides enhanced reimbursement to account for the higher costs of care. This pool is funded through hospital provider taxes that reduce the state’s general fund contribution to the overall Medicaid program.

Small, rural and independent hospitals can often experience financial challenges in a particularly acute way, thus items such as the rural access pool, obstetrical stabilization fund and critical access hospital reimbursement rates also support access to healthcare services in rural areas. Labor and delivery units typically do not contribute to positive margins, but they are extremely important for families and communities. The obstetrical stabilization fund provides additional means for hospitals in rural areas to maintain these services so expectant mothers can avoid driving exorbitant distances for these services. Lastly, the state also included $56 million in new funding to increase Medicaid reimbursement rates for primary care services, which will help individuals on Medicaid receive the necessary primary and preventative care that can help prevent hospitalizations and reduce overall healthcare costs.

The top concern of hospital leaders remains workforce sustainability, and the continued funding for graduate medical education is one tool we must continue to use to maintain the physician talent pipeline that is sorely needed. At the same time, we are extremely happy to see inclusion of state funds to expand access to Bachelor of Science in Nursing degree programs at the state’s community colleges to help address the nurse talent pipeline, a $56 million line item. This proposal was supported by the MHA when it was formally introduced, and we look forward to seeing our post-secondary partners implement it to grow the healthcare workforce.

Lastly, behavioral health investments have been at the forefront of our advocacy efforts for some time and we were very pleased to see new funding to improve and enhance state behavioral health facility capacity. Michigan lacks adequate capacity to treat patients with behavioral and mental illness and this new funding is an important and necessary step to address the shortage. Included is $50 million to expand pediatric inpatient behavioral health capacity, $30 million to establish crisis stabilization units and $10 million to fund the essential health provider loan repayment program to cover behavioral health professionals.

In total, the budget includes $625 million in new investments for behavioral health funding and investments in workforce. While this will not solve all the issues impacting hospitals, it provides needed resources and demonstrates the commitment of lawmakers to a healthy Michigan. This budget also signifies that our work must continue to advocate for the resources necessary for hospitals and health systems to care for all Michiganders. Once again, on behalf of the entire MHA family, I want to acknowledge and thank both Governor Whitmer, as well as lawmakers in the state House and Senate, for their support of this latest state budget. And I would also encourage anyone who cares about access to quality, affordable healthcare to engage in the process, share your stories and input with those who can make a difference going forward. But also remember to say thank you when they support our cause.

As always, I welcome your thoughts.

Crain’s Coverage on Healthcare Funding in State Budget

Brian Peters

Brian PetersThe MHA received media coverage since July 15 from Crain’s Detroit Business on new investments for behavioral health funding and the healthcare workforce in the fiscal year 2023 state budget.

Crain’s first published an article July 15 on the state’s higher education budget, which includes $56 million to fund the Michigan Associate Degree in Nursing to Bachelor of Science in Nursing program at community colleges across the state. Included was a quote from MHA CEO Brian Peters in support of the funding.

“Staffing shortages are impacting Michigan hospitals throughout the state, particularly in the areas of nursing,” said Peters. “This plan will help us get more highly-skilled professionals into the field quickly and increase access to nursing education in more communities across the state.”

Crain’s also published an editorial July 22 focusing on the investments being made to improve mental health treatment, particularly among children and teens. The editorial also included a quote from Peters from an op-ed Crain’s published in February from Peters.

“While we do have a small number of outstanding facilities dedicated entirely to mental health care services, and acute-care hospitals have dedicated resources and units to these services, it is simply not enough,” said Peters.

Fiscal Year 2023 State Budget Signed

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capitol buildingGov. Whitmer signed July 20 the fiscal year 2023 state budget. Included in the 2023 budget agreement is $625 million in new investments for behavioral health funding and the healthcare workforce. This includes:

  • $50 million to expand pediatric inpatient mental and behavioral health capacity throughout the state.
  • $30 million to establish crisis stabilization units for mental and behavioral healthcare.
  • $10 million to fund the essential health provider loan repayment program to cover behavioral and mental health professionals.
  • New and ongoing funding of $3.5 million to support the statewide trauma system.
  • $56 million to increase Medicaid reimbursement rates for primary care clinician services.
  • $56 million to fund the Michigan Associate Degree in Nursing to Bachelor of Science in Nursing program at community colleges across the state.

Additionally, the state budget provides the resources necessary for hospitals and health systems to continue advancing the health of individuals and communities throughout Michigan. Specifically, the budget reflects the protection or enhancement of many MHA priorities, including:

  • Maintains funding for the Healthy Michigan Plan.
  • Protects funding for the graduate medical education of physician residents.
  • Supports disproportionate share hospitals.
  • Continues funding for the rural access pool and obstetrical stabilization fund.

Each of these funding sources are instrumental to keeping hospitals financially secure, particularly those serving vulnerable and underserved populations. MHA CEO Brian Peters released a statement July 1 applauding the healthcare focus of this budget and highlighting significant investments toward rural and behavioral health. These new appropriations will allow hospitals to continue and expand upon service lines that are in increased demand due to the pandemic.

The governor also made several line-item vetoes that do not directly impact hospital priorities when signing the budget, including vetoes of funding the administration argues is anti-abortion.

Members with questions may contact Adam Carlson.

Proposal Released to Update Medicare Outpatient Prospective Payment System

The Centers for Medicare and Medicaid Services (CMS) recently released a proposed rule to update the Medicare fee-for-service outpatient prospective payment system (OPPS) effective Jan. 1, 2023.

The CMS notes that the agency did not rework the proposed rule to incorporate the recent Supreme Court decision to restore payments for 340B drugs. While the rule proposes to continue paying average sales price (ASP) minus 22.5% for 340B drugs, the CMS notes that the agency expects to revert to the previous policy of paying ASP plus 6%. The CMS anticipates offsetting the 340B payment increase estimated at $1.96 billion nationally by reducing the proposed conversion factor. The CMS indicated the reduced conversion factor would be $83.28, which is 1.1% lower than the current factor of $84.18.

Other provisions of the proposal include:

  • Establishing the new rural emergency hospitals (REH) model with proposals regarding payment policy, quality measures and enrollment policies
  • Exempting rural sole community hospitals (SCHs) from the site neutral clinic visit cuts and instead paying the full OPPS rate for visits provided at grandfathered off-campus hospital outpatient departments
  • Increasing the cost outlier threshold by 35% from the current $6,175 to $8,350 to maintain outlier payments at the targeted 1% of total OPPS payments, resulting in fewer cases qualifying for an outlier payment.
  • Updating the inpatient only list to remove 10 services and add eight services.
  • Implementing a permanent 5% cap on wage index decreases.
  • Adding one procedure, a lymph node biopsy or excision, to the Ambulatory Surgical Center (ASC) Covered Procedures List.
  • Requiring prior authorization for an additional service category,­ facet joint interventions, beginning dates of service on or after March 1, 2023.
  • Proposing separate payment in the ASC setting for four non-opioid pain management drugs that function as surgical supplies.
  • Continuing payment for remote behavioral health services beyond the end of the public health emergency.
  • Implementing a payment adjustment for additional costs incurred for domestically manufactured National Institute for Occupational Safety and Health (NIOSH)-approved surgical N95 respirators with payments provided biweekly as interim lump-sum payments to the hospitals and reconciled at cost report settlement.
  • Changes to the hospital outpatient quality reporting (OQR) program including:
  • Making the Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery (OP-31) measure voluntary rather than mandatory beginning with the 2025 reporting period and 2027 payment determination.
  • Aligning the hospital OQR program patient encounter quarters for chart-abstracted measures to the calendar year for annual payment update determinations.
  • Seeking comment on the future reimplementation of the Hospital Outpatient Volume on Selected Outpatient Surgical Procedures (OP-26) measure or the future adoption of another volume indicator as a quality measure.
  • A request for information on improving health equity.

The MHA will provide hospitals with an estimated impact analysis in the coming weeks. Comments are due to the CMS Sept. 13. The MHA will release its draft comment letter prior to the due date and encourages members to review the proposed rule and contact Vickie Kunz regarding issues identified by Sept. 2. The CMS is expected to release a final rule around Nov. 1.

State Budget Advances to Governor’s Desk

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capitol buildingThe fiscal year (FY) 2023 state budget bills were approved by the Michigan Legislature July 1. House Bill (HB) 5783 and Senate Bill (SB) 845, which provide for the FY 2023 budget, now go to the governor’s desk for final review and signature into law.

In a statement released July 1, MHA CEO Brian Peters said, “The fiscal year 2023 state budget approved by the Michigan Legislature provides necessary resources to assist hospitals and health systems in advancing the health of individuals and communities throughout our state. We appreciate the work and consideration placed by lawmakers that continues to protect hospital priorities.”

These priorities include maintaining funding for the Healthy Michigan Plan, graduate medical education of physician residents, disproportionate share hospitals that treat the highest numbers of uninsured and underinsured patients, the rural access pool and obstetrical stabilization fund, and critical access hospital reimbursement rates, all of which support access to healthcare services in rural areas. Each of these areas are instrumental in keeping hospitals financially secure, particularly in areas serving vulnerable and underserved populations.

The budget also supports MHA and hospital priorities with new funding to improve and enhance state behavioral health facility capacity and address the healthcare workforce. Michigan lacks adequate capacity to treat patients with behavioral and mental illness, and this new funding is an important and necessary step to address the shortage. The investment of state funds to expand access to Bachelor of Science in nursing degree programs at the state’s community colleges is a significant movement toward replenishing Michigan’s healthcare talent pipeline.

In other action, the House of Representatives supported legislation to create an opt-out grant program for hospitals to establish medication-assisted treatment (MAT) for substance use disorders in their emergency departments. SB 579, introduced by Sen. Curt VanderWall (R-Ludington), now returns to the Senate for a final concurrence vote before it is sent for the governor’s signature. Hospitals provided MAT programs prior to introduction of the bill, and the MHA has already partnered with the Michigan Department of Health and Human Services (MDHHS) to implement the first round of grants provided under this legislation. No hospitals would be required to participate in the program.

The full Senate advanced to the House of Representatives a bill to register certain medical laboratories in Michigan. SB 812, also introduced by VanderWall, would create a registry for interventional pain management, kidney access and vascular laboratories. As currently written, SB 812 would not provide any form of oversight or clinical requirements for the registered labs, and the MDHHS would not have authority to deny or remove registered labs from the list. The MHA has not taken a position on the bill but is closely monitoring any changes.

Finally, a bill related to telemedicine was introduced in the Senate. SB 1135, introduced by Sen. Mike MacDonald (R-Macomb Township), would amend the state’s Social Welfare Act to ensure that recent expansions in telehealth visit coverage also apply to the Medicaid Medical Assistance Program and Healthy Michigan Program. The bill would specify that recipients are covered equally for telehealth visits, expand the “distant site” definition, and ensure that providers are reimbursed at an equal rate to in-person services. The MHA is reviewing the legislation and has not yet taken a position on the bill. The association will keep members apprised of future action.

Members with questions on state legislation related to healthcare should contact Adam Carlson at the MHA.

Media Recap: SCOTUS Dobbs Decision, State Budget and Rural Hospital Challenges

Brian Peters

The MHA received media coverage on a variety of topics during the weeks of June 27 and July 4. Areas of focus included the Supreme Court of the United States (SCOTUS) decision in Dobbs v. Jackson Women’s Health, the passage of the fiscal year 2023 state budget and challenges facing small and rural hospitals.

The MHA shared a statement with media following the SCOTUS decision that repealed Roe v. Wade. Outlets that included comment from the MHA in their stories included the Detroit Free Press, Bridge and Gongwer.

The passage of the state budget the morning of July 1 by the Michigan Legislature was celebrated by MHA CEO Brian Peters in a media statement that outlined the existing MHA budget priorities that continue to be protected as well as significant new funding to support behavioral health capacity and the healthcare workforce. MLive, MiBiz, The Center Square and Gongwer carried portions of the statement.

Renewed attention was brought to financial challenges faced by small and rural, particularly independent, hospitals due to a legislative request for funding from Sturgis Hospital as the organization pursues the possibility of converting to the new rural emergency hospital designation through the Centers for Medicaid and Medicare Services. MiBiz and Bridge published articles that include reaction from the MHA following assistance the association made in the legislative ask that secured $11 million for Sturgis Hospital.

Members with any questions regarding media requests should be directed to John Karasinski at the MHA.