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LANSING, MI (WOWO) Michigan public health officials paid nearly $2.9 million to consulting firm McKinsey & Company for work tied to a failed redesign of the state’s Medicaid-backed behavioral health system.
The consulting work supported a proposal from the Michigan Department of Health and Human Services to restructure how roughly $4.9 billion in mental health services are administered. However, in late January, a judge ruled the request for proposal conflicted with Michigan law. The state subsequently withdrew the bid.
Financial records show McKinsey received a $2.45 million contract to help design and implement a new procurement process for behavioral health contracts. An additional $447,000 was paid as legal challenges from regional entities followed the release of the framework.
The payments were made through the Michigan Public Health Institute, a nonprofit that works with state agencies on public health initiatives. The institute has received more than $200 million from the state this fiscal year and serves as a financial intermediary for various public health projects.
Michigan currently maintains about $39 million in active contracts with McKinsey for services including grant consulting, digital tools, and operational support. The firm has previously faced scrutiny for its role in advising pharmaceutical companies during the opioid crisis and has paid settlements to states, including Michigan.
Some lawmakers have pledged to investigate the Michigan Public Health Institute’s role in facilitating contracts and to review the state’s ongoing agreements with McKinsey. Meanwhile, community mental health leaders remain uncertain whether a revised restructuring proposal will be introduced later this year.
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