Medicaid and Michigan Mental Health Framework Updates

NASW continues to recieve questions and concerns over the recent Michigan Mental Health Framework changes and training requirements for Medicaid providers. NASW-Michigan has been working with the Michigan Mental Health Counselors Association (MMHCA) to get answers from MDHHS. 

Below are some answers to some of the common questions we have been recieving so far. In the next week or so we will be putting out a larger questionaire to our memberships to gain remaining questions and concerns. 

Additionally, a virtual space has been created for behavioral health providers to share what they know, ask questions, and to connect. If you are interested in joining the Facebook group, please click here (Michigan Medicaid Collab).

✯ Michigan Mental Health Framework✯

Sent by MMHCA - October 2025

Dear MMHCA Members,

As part of our ongoing advocacy on your behalf, MMHCA submitted questions to the Michigan Department of Health and Human Services (MDHHS) through Representative Dievendorf regarding upcoming changes to serving clients with Medicaid. These questions were collected from MMHCA members, online groups, and board discussions.

We recently received a response document from MDHHS, which we are sharing directly with you (attached). While some of the answers are more detailed than others, we believe it is important that you have access to the full document as originally provided. 

In addition, we encourage you to review the following resources shared by MDHHS for further clarification:

E-mail update from MDHHS 9/30/25: https://docs.google.com/document/d/14Dou5r_migxjBju72JO3krTJZtOL1Hw0stFQB5T_ja8/mobilebasic

MIHealthyLife: https://www.michigan.gov/mdhhs/mihealthylife/mental-health-framework

FAQ Document (9/25/25) https://www.michigan.gov/mdhhs/-/media/Project/Websites/mdhhs/Assistance-Programs/Medicaid-BPHASA/Other-Prov-Specific-Page-Docs/20250925---MHF-FAQs.pdf

We remain committed to advocating for our profession and ensuring you have the most up-to-date information available. Thank you for continuing to raise your questions and concerns as your voices guide our work.

Following are the questions we asked and the answers we received.

If a provider in private practice has a client who meets the new SMI criteria, will they be able to continue seeing that client? 

MDHHS does not seek to change which providers deliver mental health care to Medicaid enrollees through the Mental Health Framework (MHF). Instead, the MHF is about increasing payer accountability and bringing more of an enrollee’s mental health care under one payer. Under current policy, PIHPs are responsible for authorizing and covering outpatient mental health care for enrollees with SMI. The MHF reinforces that responsibility, clarifying through a new MDHHS indicator which enrollees have a higher level of mental health need (as determined through standardized assessment) and ensuring PIHPs assume coverage responsibility for all of the mental health care for those enrollees. MHPs will be responsible for most mental health care for enrollees with lower levels of mental health need or who have not yet been assessed. 

Private practice providers that have contracted exclusively with MHPs will be able to continue serving enrollees identified as having higher levels of mental health need through two channels:  

1. By joining the PIHP’s network; or 
2. Under Transition of Care policy, which enables enrollees to continue seeing providers with whom they have an established relationship but who are not in their payer’s network for at least 12 months following coverage responsibility change.  

If so, how do they contract with PIHPs, given no clear contracting/credentialing process exists?

Providers who are interested in contracting with PIHPs in the future should contact the PIHP directly. MDHHS aims to provide support to payers and providers, including MHP and PIHP providers to facilitate new or modified contracting for FY 2027. 

If not, will MCOs/Medicaid bill PIHPs on behalf of providers so care is not disrupted?

Not applicable. As noted above, private practice providers have multiple channels for continuing to serve patients with higher levels of mental health need. MDHHS will not bill PIHPs for care, nor does it expect MHPs to bill PIHPs for care. 

If a provider is not trained in MichiCANS or LOCUS by October 1st, will they be unable to bill Medicaid?

No. MDHHS understands that not all mental health providers will have completed the required LOCUS and MichiCANS trainings by October 1, 2025 and anticipates that it will take time over the course of FY 2026, for all applicable providers to complete such trainings. A provider’s training status will not impact their ability to bill Medicaid for mental health care services rendered, though providers should complete required trainings as soon as possible. Providers should refer to the Mental Health Framework website for more information on how to access available trainings free of charge.   

If so, what happens to their clients in the meantime, especially high-risk or suicidal clients?

Not applicable. See above response.

When will LOCUS trainings be offered, in what format, and how much time will providers need to block off from client care?

LOCUS training will be available as an online, self-paced course that will take approximately five hours to complete. The training will be launched by October 2025, with applicable providers encouraged to complete the training as early as possible. MDHHS is providing the training free of charge to providers, and providers may be able to access continuing education credit.  

Why have MichiCANS trainings been capped and why are remote trainings limited to 75 participants, despite thousands needing certification in weeks?

MDHHS is working with its training vendor, which sets the participant cap, to extend capacity as much as possible over the next several months. MDHHS will be making additional MichiCANS training available on a continuous basis moving forward. MDHHS understands that not all mental health providers will have completed the required LOCUS and MichiCANS trainings by October 1, 2025 and anticipates that it will take time, over the course of FY 2026, for all applicable providers to complete such trainings. 

After completing MichiCANS/LOCUS, where are assessments supposed to be submitted?

Providers who have completed the required MichiCANS training will access the MichiCANS Screener tool through CareConnect360 (CC360), either through existing CMHSP access to CC360 or through MILogin. Upon completion of the MichiCANS Screener, scores will be automatically transmitted to MDHHS via CC360.  

Currently, most CMHSPs access and submit the LOCUS tool through their EHRs; CMHSP providers can continue to use this functionality in the future. Non-CMHSP providers who have completed the required LOCUS training will be given access to a web-based platform managed by the State’s LOCUS vendor.

Providers can access the LOCUS tool and submit results through this secure web-based platform.  

Will there be a central system?

Aggregate score and date of assessment will be housed in the MDHHS data warehouse upon transmission from CC360, the external LOCUS vendor, or the CMHSP EHR.  

What HIPAA/data protection standards will apply?

MichiCANS data for both the Screener and the Comprehensive, the data is stored in the MDHHS Data Warehouse. The Data Warehouse is encrypted using the latest standards in encryption technology, this is for both data at rest and in transit. The MDHHS data warehouse cannot be accessed outside the State of Michigan network. There are various levels of access and authentication in place. All non-State of Michigan employees will need to have advanced authentication methods in place to access the data warehouse. Access to data is managed through a process of assigning specific data sets to user roles. In this role-based method of granting access, the State of Michigan can limit access in a very detailed manner. A web-based system is utilized in authorizing access to data, called the Database Security Application (DSA) and that system also automatically requires annual recertification of access and will drop user access for non-use of the application. The DSA abides by HIPAA requirements for treatment, payment, and health care operations. The MDHHS Data Warehouse also protects data per 42 CFR Part II and the Michigan Mental Health Code. 

For the LOCUS assessment, providers will only have access to submit an assessment. They will not be able to view any information on an enrollee/their previous assessments. The only information viewable will be the composite score and the date the assessment was conducted, which will be visible in CHAMPS, which providers must go through a process to obtain access to. All privacy and security rules will be followed in contracts with the LOCUS vendor.

How will billing work once payer responsibility shifts away from insurance companies to PIHPs or other organizations, given there is currently no mechanism for providers to bill?

To be clear, starting in FY 2027, payer responsibility for mental health care will be based on an enrollee’s level of mental health need as determined by standardized assessment (or whether the enrollee is in a 1915(c) Home and Community-Based Services waiver (CWP, HSW, SED) or 1915(i) State Plan Behavioral Health benefit), where PIHPs will be responsible for the mental health of enrollees with higher levels of mental health need or who are in a waiver or State Plan Behavioral Health benefit, and MHPs will be responsible the mental health of all other enrollees. This means that, for certain enrollees, MHPs will be responsible for some services they do not cover today (e.g., some services provided by CMHSPs and downstream providers) and, for certain enrollees, PIHPs will be responsible for services they do not pay for today (e.g., outpatient mental health services provided by non-CMHSP providers).  

Providers should enter into contracts with the appropriate plan(s),be it PIHP or MHP in their area depending on the services they provide and new coverage policies in effect in FY 2027. Providers should bill for services rendered in accordance with their agreements with such plans and with MDHHS policy and guidance.  

Note: There are no MHF-related coverage responsibility changes in effect for FY 2026.

MDHHS has said there will be a standardized referral process, but no details have been provided. How will this work, and will all providers be required to participate?

In FY 2026, MHPs, PIHPs, CMHSPs and other providers will be expected to use a standardized process when it becomes available for making referrals for mental health care across MHP and PIHP delivery systems (e.g., a referral from an MHP-network mental health provider to a CMHSP, or a referral from a CMHSP to an MHP-network mental health provider). MDHHS is releasing a Standardized Mental Health Referrals Guide that will provide more information on:  

• Providers’ need to conduct a “warm handoff” (i.e., connecting patients they are referring to a receiving provider/practice by phone) when making mental health referrals across delivery systems;  
• Use of a standardized referral form and process, to be collaborated upon with plan and provider input over the course of FY 2026;    
• Use of a CC360 referrals module for information sharing and tracking referral status across plan and provider type (available at no cost to plans or providers); and 
• MHPs’ need to proactively monitor mental health referrals for all of their enrollees based on information in the CC360 referrals module. 

Recognizing that guidance and the CC360 referrals module are still being shared and that it will take time for plans and providers to integrate the new process into their systems, adoption of the standardized referral process will be required for plans and providers only after they gain access to the CC360 module. MDHHS expects that this will occur for MHPs, PIHPs and CMHSPs in October 2025 and for other providers in early 2026. MDHHS will be open to feedback from plans and providers alike on the tool, module and overall process as implementation rolls out, over the course of FY 2026.  

What protections are in place to ensure Medicaid clients do not experience treatment gaps on October 1st due to provider disenrollment or training backlogs?

As noted above, MDHHS understands that not all mental health providers will have completed the required LOCUS and MichiCANS trainings by October 1, 2025 and anticipates that it will take time, over the course of FY 2026 for all applicable providers to complete such trainings. Consequently, a provider’s training status will not impact their ability to bill Medicaid for mental health care services rendered, though providers should complete required trainings as soon as possible.  

Further, MDHHS does not anticipate provider disenrollment as a result of the MHF and seeks to provide support to providers, as needed, to facilitate any new or modified contracting between plans and providers due to FY 2027 coverage responsibility changes. To further protect against treatment gaps, in FY 2027, MDHHS’ Transition of Care policy will require that enrollees be able to continue seeing mental health providers with whom they have an established relationship but who are not in their payer’s network for at least 12 months following coverage responsibility change as a result of the MHF.  

Note: There are no MHF-related coverage responsibility changes in effect for FY 2026.

What are the requirements when a patient has:

• Primary commercial insurance + secondary Medicaid?

Mental Health Framework only applies to individual enrolled with a Medicaid Health Plan, individuals with commercial HMO or PPO coverage cannot be enrolled in a Health Plan so this would not impact those members.  In the few cases individuals with insurance that do not fit under these categories, the plans would follow the rules of the primary insurance. 

• Primary Medicare + secondary Medicaid?

Medicare eligibles are a voluntary population, but the same rules in terms of following Medicare as primary would be in effect.

Long-term Concerns

Why are mild conditions (mild depression, adjustment disorders, ADHD, generalized anxiety disorder) included in the SMI list, when these are among the most common and least severe diagnoses?

MDHHS is not clear what “SMI list” being referred to in this question. 

How will shifting the majority of Medicaid clients into CMH systems, already overburdened, avoid disenfranchising beneficiaries and lowering quality of care?

The MHF will not be shifting the majority of Medicaid enrollees into the CMH systems. The FY 2027 changes in coverage responsibility should not affect which providers deliver mental health services nor how care is provided. As noted above, MDHHS expects both MHPs and PIHPs to expand their provider networks to ensure their enrollees have sufficient access to care. To further ensure there is no disruption in care, MDHHS’ Transition of Care policy will require plans to cover allow enrollees to continue seeing providers with whom they have an established relationship but who are not in their network for at least 12 months following coverage responsibility change.  

What protections will ensure underserved groups (people of color, rural Michiganders, LGBTQ+ individuals) are not disproportionately harmed by these changes?

Mental Health Framework changes do not cause harm to any enrollees. Expanding access to mental health assessments and accountability for referrals across systems for mental health care will improve the care experience for all enrollees, including those underserved categories referenced. The LOCUS and MichiCANS formalize the assessment process which can be applied consistently to all populations.  

Providers report MichiCANS takes 45–90 minutes and LOCUS 30–60 minutes, but reimbursement is only $20. How were these rates calculated, and do they reflect real workload?

MDHHS expects providers to incorporate the MichiCANS Screener (for children and youth) and LOCUS (for adults) into their existing assessment practices; how providers do this is up to each provider/practice. MDHHS and its actuary, Milliman, have been engaging providers across the State on assessment practices to inform their development of a forthcoming “comparison rate report,” that will provide benchmark market data on provider costs associated with submitting the MichiCANS Screener and LOCUS. This report is intended to assist providers and MHPs in negotiating appropriate rates for the added task of submitting these State-designated assessment tools in accordance with State requirements—to supplement the rates that providers can bill today for conducting mental health assessments/evaluations. Of note, the draft comparison rates that Milliman shared with providers this summer included rates that varied by provider type and all were above $20. Milliman’s forthcoming report will articulate the methodology and assumptions used. 

Did MDHHS consider how low reimbursement plus new burdens may push providers to stop accepting Medicaid?

See above.  

How will this impact limited licensed providers who rely on Medicaid clients for supervised hours, potentially worsening the workforce shortage?

The MHF does not change the scope of practice for limited licensed providers. Limited licensed providers may continue delivering services, including standardized assessments, under supervision by a fully licensed provider of the same profession. 

Will CMHs ultimately take over contracting rights for all Medicaid clients?

PIHPs are responsible for their provider networks.

If so, will community providers be forced into subcontractor (1099) roles with CMH, reducing reimbursement?

Not applicable. See the response above.

How will MDHHS prevent this from worsening wait times and reducing access to specialty care?

Not applicable. See response above. MDHHS will hold both PIHPs and MHPs accountable for ensuring timely and adequate access to routine and specialty mental health care and will be closely monitoring such access throughout MHF implementation and under the new PIHP contracts. 

What steps will MDHHS take to provide clear, accessible, and timely information about policy rollouts in the future, given the current confusion and provider drop-offs?

MDHHS will release Standardized Assessment and Referral Guides with additional information on the MHF policies and requirements effective for FY 2026. Prior to FY 2027, MDHHS will release a comprehensive MHF Policy Bulletin related to coverage responsibility changes.  

Stakeholders are encouraged to routinely visit MDHHS’ Mental Health Framework website, which will be the primary venue for communication with stakeholders for updates, meeting announcements, links to relevant policy documents, and FAQ responses.

Is this restructuring primarily designed to channel Medicaid dollars into CMH systems at the expense of patients and independent providers? 

No. The MHF is intended to clarify and increase payer accountability and bring more of an enrollee’s mental health care under one plan. As is noted above, the FY 2027 changes in coverage responsibility should not affect which providers deliver mental health services nor how care is provided.

If you have questions please email us at MMHCABOARD@MMHCANOW.ORG.

In Service,

MMHCA’s Board of Directors

Christopher DeBoer, President

Krystin Sankey, Treasurer

Carol Berger, Secretary

Members at Large:

Dr. Stephanie Burns

Dr. Joy Creel

David Flowers

Dr. Katherine James

Dr. Larry Pfaff

Lauri Rowe

Amy Szaraz

Dr. Elizabeth Teklinski

Steve Wheeler