PIHP Procurement
MDHHS released a Request for Proposal (RFP) on August 4, 2025, moving to a competitive procurement process for awarding Prepaid Inpatient Health Plan (PIHP) contracts. The RFP’s structure, if implemented, would effectively abolish the existing PIHPs by making it impossible for CMH-created Regional Entities to fulfill their statutory role. Through the RFP, MDHHS has redrawn the regional boundaries to reduce the number of PIHP regions in the State from 10 to 3. MDHHS further prohibits bidders from submitting a bid for less than a full region. Thus, existing PIHPs are precluded from successfully bidding because PIHPs, as Regional Entities by statute, are limited to serve only their designated service areas.
On August 28, 2025, SWMBH joined two other PIHPs and three CMHSPs (collectively, the Plaintiffs) in filing a lawsuit in the Michigan Court of Claims, challenging the legality of the RFP. In conjunction with the filing, the Plaintiffs requested that the Court issue a Preliminary Injunction – an Order that would preserve the status quo and effectively pause the RFP while the Court considers the legal challenges raised in the lawsuit. The State filed a response to the lawsuit and moved the Court dismiss the lawsuit altogether.
On October 9, 2025, the Court held a hearing to consider the Plaintiffs’ request for a Preliminary Injunction and the State’s motion to dismiss the case. Following the hearing, on October 14, 2025, the Court issued Orders concerning the Plaintiffs’ request for Preliminary Injunction and the State’s Motion to Dismiss. The Court held:
- There is a genuine issue of material fact as to whether the terms of the RFP violate Michigan law.
- MDHHS has authority to shift to a competitive procurement system and reduce the number of PIHP regions.
Our case was joined with another case filed by a separate group of CMHs and one county, and a three-day hearing was held beginning December 8, 2025. The hearing focused on whether various terms in the RFP violate law. Following this hearing, the Court issued an Order on January 8, 2026, in which the Court found that “the RFP, as drafted, impermissibly conflicts with Michigan law in numerous respects, especially insofar as the RFP restricts CMHSPs from entering into financial contracts for the purpose of funding CMHSPs’ managed-care functions.” The order does NOT direct the State how it must fix the deficiencies. Rather, the Order indicates that the State must determine how to address the conflicts between Michigan law and the RFP.
The Court retained jurisdiction to handle any issues depending on how the State chooses to move forward.
Below are videos of three speakers at a press conference held September 17, 2025, on the Capitol steps:
Senator Stabenow and Representative Rheingans at press conference in opposition to MDHHS bid out proposal: https://vimeo.com/1121988990/07f17a65c6?share=copy
Emily White at press conference in opposition to MDHHS bid out proposal: https://vimeo.com/1121903427/e7c5074570
Labor leadership at press conference in opposition to MDHHS bid out proposal: https://vimeo.com/1121671023/84751bb17b