Ottawa County — Executive staff told the Ottawa County Community Mental Health board on Nov. 21 that an ongoing state restructuring of Medicaid prepaid health plans (PHPs) and new regional revenue estimates threaten to deepen a fiscal shortfall and could change the county organization's role in managing Medicaid benefits.

Michael, speaking for agency leadership, said a two-day court hearing in early December (Dec. 8–9) and an anticipated ruling around Dec. 10 could affect the Michigan Department of Health and Human Services' RFP process and the state's plan for how regions and PHPs are configured. He said the core question remaining is whether local CMHs will continue to co-manage Medicaid benefits or be reduced to service-provider roles under the new structure.

The more immediate concern shared with the board was a region-level revenue update that reduced Ottawa CMH's expected Medicaid revenue by about $2.8 million, which expanded the agency's projected deficit. Michael described a systemic forecasting problem: expenditures and revenues are tracked differently across authorizations, utilization and payouts, and the board heard that an $11 million reporting jump between September and October revealed weaknesses in relying only on amounts paid out.

"We have to come up with a better forecasting model," Michael said, describing steps underway including a new financial system (PCE), contracting with IBH for forecasting based on authorizations and utilization, and new dashboards to detect revenue risks earlier.

He outlined local controls already taken: a hiring freeze and position control that produced roughly $678,000 in savings and additional administrative savings of about $422,000 — a combined reduction of about $1.1 million for the year. But he cautioned those measures alone likely will not erase the projected deficit if Medicaid revenue continues to decline.

Board members and staff discussed how appeals to administrative law judges (ALJs) can create steep, retroactive cost increases for individual service plans — examples cited in the meeting ranged from several hundred thousand dollars to more than $1 million per person — and how successful appeals can then become de facto policy in utilization management, contributing to volatility.

Several directors said they would press for unified, region-wide rate and utilization standards. Michael said the regional entity has developed a residential rate calculator and Ottawa CMH has developed its own; the board will compare the two to seek greater uniformity. He also described CCBHC (Certified Community Behavioral Health Clinic) revenues that required retroactive recalculation of prior fiscal-year amounts and said the board will see a detailed CCBHC plan in December.

Board members discussed advocacy steps if the state's RFP proceeds: a regional push in January to present data to state officials, and a long-term feasibility study on shifting from the current distribution model to a needs‑based allocation. Several speakers stressed the difficulty of effecting change because LRE (regional entity) bylaw amendments require unanimous approval from all five members.

The board did not take a formal vote on policy during the meeting; members approved the meeting agenda and later approved a consent package that included contracts and the financial statement.