Michigan Models New Approach to Treating Alcohol and Stimulant Use Disorders

Policymakers expand opioid use disorder health homes, improve care for people with other substance use disorders

Fact Sheet May 15, 2025 Read time:

Projects: Substance Use Prevention and Treatment

Overview

Since 2018, Michigan’s Medicaid program has provided treatment to patients with opioid use disorder (OUD) through health homes—a team of health providers that integrate and coordinate their services specifically for Medicaid enrollees.¹ These care models offer a range of services, including “comprehensive care management, care coordination, health promotion, comprehensive transitional care/follow-up, individual and family support, and referral to community and social support services.”² Care coordination services, which help organize care across different providers, increase the likelihood that patients with substance use disorders (SUDs) will initiate and stay in treatment.³

In September 2024, the Centers for Medicare & Medicaid Services (CMS) approved Michigan’s first-in-the-nation expansion of a health home to treat other SUDs as well.⁴ Such care is needed: In 2022, 43% of patient admissions to publicly funded SUD treatment programs in Michigan primarily involved the use of alcohol, 30% involved opioids, and 22% involved stimulants.⁵ Today, people enrolled in Medicaid in Michigan can receive similar care for alcohol, opioid, and stimulant use disorders across all parts of the state.

This innovative approach offers lessons for other state officials looking to broaden their substance use disorder treatment services.

Michigan’s OUD health homes improved care for participants

In Michigan, health home services are overseen by organizations known as Prepaid Inpatient Health Plans (PIHPs), which receive a fixed payment rate from the Michigan Department of Health and Human Services (MDHHS) to manage behavioral health and developmental disability services for Medicaid enrollees.⁶ The state is divided into 10 regions, and each has a PIHP responsible for Medicaid enrollees within its region.⁷

More than 3,500 people in Michigan were enrolled in an OUD health home in June 2023.⁸ Data shows that the people in this program were more likely to connect with care after an SUD-related emergency department visit as well as receive medication to treat their OUD. (See Table 1.)

Table 1

On Measures of Substance Use Treatment Quality, Michigan OUD Health Homes Outperform Other Types of Care

Comparison of publicly reported SUD-related health quality measures for Michigan adults, 2023

Measure	All adult Medicaid enrollees, ages 18-64	OUD health home enrollees, ages 18-64
Seven-day follow-up after emergency department visit for substance use*	27.6%	67.9%
30-day follow-up after emergency department visit for substance use*	42.6%	81.7%
Use of pharmacotherapy for OUD^†	62.4%	96.5%

*Percentage of people who receive follow-up care for an SUD or an overdose within seven days, and 30 days after visiting an emergency department for an SUD-related issue.

^† Percentage of people with OUD who received buprenorphine, methadone, or naltrexone at least once during the calendar year for which the measure is reported.

Sources: Centers for Medicare & Medicaid Services, “2023 Measure Performance Tables on the Health Home Core Set Measures,” 2023; Centers for Medicare & Medicaid Services, “Core Set Data Dashboard,” 2023

Adapting the health home model to address alcohol and stimulant use disorders

The MDHHS recognized the need to treat people with other substance use disorders and, in fiscal year 2022, allowed PIHPs to use federal block grant dollars to create “look-alike” OUD health homes for people with other types of SUDs.⁹

The Northern Michigan Regional Entity (NMRE), which serves 21 counties encompassing cities including Traverse City and Cadillac in the northern portion of the lower Michigan peninsula, took advantage of this opportunity and focused on better meeting the needs of individuals with AUD. In the first quarter of fiscal 2025, over half (59%) of the region’s 1,346 admissions for SUD treatment were primarily for alcohol, followed by methamphetamine (16%), and opioids (18%).¹⁰

"We were able to partner with four of our existing opioid health home providers to serve an additional 300 clients with alcohol use disorders during this three-year pilot program."¹¹
Heidi McClenaghan, NMRE quality manager

In September 2024, the MDHHS received approval from CMS to permanently expand the OUD health home model to people with alcohol and stimulant use disorders across the state.¹²

“Expanding health home services strengthens our ability to connect Medicaid beneficiaries with substance use disorders to comprehensive, coordinated care,” said Elizabeth Hertel, director of the MDHHS. “By enhancing care management and support services, we’re helping individuals stay engaged in treatment and address the factors that impact long-term recovery.”¹³

Key Features of Michigan’s SUD Health Home

Patient eligibility: To receive SUD health home services, Michigan Medicaid enrollees cannot be incarcerated at the time of enrollment and must meet all three of the following criteria:

Have a diagnosis of alcohol, stimulant, or opioid use disorder.
Have or be at risk of developing a second chronic condition, including mental health conditions, asthma, diabetes, heart disease, chronic obstructive pulmonary disease, or have a body mass index over 25.
Not be enrolled in another health home program or Integrated Care MI Health Link (a program that provides integrated care for people who are dually eligible for Medicare and Medicaid) or receiving hospice services.

Service providers: SUD health home services are provided by “health home partners,” which can include:

Community mental health services programs
Federally qualified health centers/primary care safety net clinics
Hospital-based physician groups
Physician or physician practices
Rural health clinics
Substance use disorder providers
Opioid treatment providers
Tribal health centers

Staffing requirements: Each health home partner must be able to meet the following staffing requirements per 100 people served:

Behavioral health specialist (0.25 full-time equivalent [FTE])
Nurse care manager (1 FTE)
Peer recovery coach or community health worker (2-4 FTEs)
Medical consultant (0.10 FTE)
Psychiatric consultant (0.05 FTE)

Health home administration: In each region of the state, the PIHP serves as a lead entity (LE) responsible for managing health home services. LEs develop a network of health home providers to meet the needs of their region, support these providers in delivering high-quality coordinated care through training and technical assistance, and manage the Medicaid members’ enrollment into the health home.

Payment model: LEs receive a monthly rate of $364.48 per health home enrollee from the MDHHS, at least 80% of which goes to health home partners on a per-enrollee basis. The remainder is used to support the program’s administration.

The LEs also distribute a performance incentive annually to health home providers meeting MDHHS quality improvement benchmarks; this incentive is up to 5% of the base rate per member served. For the initiative’s first year, health home partners will be assessed on how quickly they link people to treatment after diagnosis, patient follow-up after an emergency department visit, and the number of emergency department visits involving SUDs.

Source: Michigan Department of Health and Human Services, “Substance Use Disorder Health Home (SUDHH) Handbook,” 2024

What other states can do

As of December 2024, there are six states with SUD health homes; Michigan is the only one that allows eligibility for people with substance use conditions beyond OUD.¹⁴ Policymakers in the other five states can consider also expanding eligibility to people with other SUDs.

In states lacking a Medicaid health home model, policymakers can create one and begin providing critical services to people with a range of SUDs. Under current law, states that establish health homes receive additional federal Medicaid dollars totaling 90% of the program’s cost for the first two years—so a state would only pay 10% initially.¹⁵ After 24 months, the state would receive their usual federal match for Medicaid services.¹⁶

Michigan’s experience shows it’s possible to create health homes that offer needed care coordination to people with a variety of SUDs. Other states aiming to better serve their residents can follow suit.

Endnotes

Allen Jansen and Jon G. Villasurda Jr., “Michigan’s Behavioral & Opioid Health Homes,” Behavioral Health and Developmental Disabilities Administration, Michigan Department of Health and Human Services, 2020, https://www.house.mi.gov/hfa/PDF/HealthandHumanServices/DHHS_Subcmte_Testimony_BHDDA_Health_Home_Presentation_6-9-20.pdf.
“Health Home Information Resource Center,” Centers for Medicare & Medicaid Services, https://www.medicaid.gov/resources-for-states/medicaid-state-technical-assistance/health-home-information-resource-center/index.html.
Louise Penzenstadler et al., “Effect of Case Management Interventions for Patients With Substance Use Disorders: A Systematic Review,” Frontiers in Psychiatry 8, no. 51 (2017), https://pmc.ncbi.nlm.nih.gov/articles/PMC5382199/. Erin A. Vogel et al., “Strategies to Improve Treatment Utilization for Substance Use Disorders: A Systematic Review of Intervention Studies,” Drug and Alcohol Dependence 212 (2020), https://escholarship.org/uc/item/1c02k9p9.
James G. Scott, director, division of program operations, Medicaid and CHIP Operations Group, Centers for Medicare & Medicaid Services, letter to Meghan E. Groen, senior deputy director, Behavioral and Physical Health and Aging Services Administration, Michigan Department of Health and Human Services, Sept. 26, 2024, https://www.medicaid.gov/medicaid/spa/downloads/MI-24-1002.pdf.
“Treatment Episode Data Set—Admissions (TEDS-A), 2022,” Substance Abuse and Mental Health Services Administration, https://datatools.samhsa.gov/teds-a/2022/teds-a-2022-ds0001/variable-list.
“PIHP,” Community Mental Health Association of Michigan, https://cmham.org/membership/pihp/.
“PIHP,” Community Mental Health Association of Michigan.
Northern Michigan Regional Entity, “Service Delivery Transformation Section: June 2023 Update,” in Northern Michigan Regional Entity Board Meeting Packet, June 28, 2023 (2023), https://www.nmre.org/application/files/8217/2434/4502/NMRE_JUNE_BOARD_MEETING_MATERIALS_062823.pdf.
Lindsey Naeyaert, “Michigan’s Health Homes,” Michigan Department of Health and Human Services, 2022, https://bhealthintegration.com/wp-content/uploads/2022/08/OHH-Kickoff-Intro.pdf.
Northern Michigan Regional Entity, “Northern Michigan Regional Entity Substance Use Disorder Services Admission Report,” 2025, https://www.nmre.org/application/files/8217/4066/6944/SUD_ADMISSIONS_REPORT_030325.pdf.
Heidi McClenaghan, quality manager, Northern Michigan Regional Entity, email to The Pew Charitable Trusts, March 5, 2025.
James G. Scott, letter to Meghan E. Groen.
Quote from Elizabeth Hertel, director of the Michigan Department of Health and Human Services, via Kelsey Bowen, department specialist, Michigan Department of Health and Human Services, email to The Pew Charitable Trusts, Feb. 26, 2025.
North Carolina also has a chronic conditions health home, which provides services to people with “severe SUD” among other conditions as part of a broader delivery system transformation effort. Centers for Medicare & Medicaid Services, “Medicaid Health Homes: State Plan Amendment Overview,” 2024, https://www.medicaid.gov/resources-for-states/downloads/hh-spa-overview-dec-2024.pdf. James G. Scott, director, Center for Medicaid and CHIP Services, letter to Jay Ludlam, deputy secretary of medical assistance, North Carolina Division of Medical Assistance, June 28, 2023, https://www.medicaid.gov/sites/default/files/2023-07/NC-22-0024.pdf.
Chris Traylor, “CMCS Informational Bulletin: Guidance for States on the Availability of an Extension of the Enhanced Federal Medical Assistance Percentage (FMAP) Period for Certain Medicaid Health Homes for Individuals With Substance Use Disorders (SUD),” news release, May 7, 2019, https://www.medicaid.gov/sites/default/files/Federal-Policy-Guidance/Downloads/cib050719.pdf.
Center for Health Care Strategies, “Best Practices for Designing and Implementing Substance Use Disorder (SUD)-Focused Health Homes,” 2020, https://www.chcs.org/media/Best-Practices-for-Designing-and-Implementing-Substance-Use-Disorder-Paper.pdf.