Michigan - Integrated Employment — Licensing, Medicaid Enrollment and Startup Requirements

Last reviewed: 2026-09-10

The Michigan Department of Health and Human Services (MDHHS) Behavioral and Physical Health and Aging Services Administration (BPHASA) funds Supported Employment through the Habilitation Supports Waiver (HSW) and the Managed Specialty Services and Supports (MSS&S) program. This service provides job development, placement, and on-site coaching to help individuals with intellectual and developmental disabilities achieve competitive integrated employment at prevailing wages.

Providers cannot enroll in the state's Medicaid system and immediately begin billing for this service. Approval requires securing a subcontract with one of Michigan's ten regional Prepaid Inpatient Health Plans (PIHPs) or their constituent Community Mental Health Services Programs (CMHSPs), which act as the exclusive managed care gatekeepers for behavioral health and I/DD waiver funds in their respective counties.

1. Service Definition and Scope

Supported Employment in Michigan is defined as an approach that emphasizes helping people obtain and maintain individual competitive integrated employment in the community. The service is authorized under the HSW and must align with Michigan's Employment First policy, prioritizing competitive work over facility-based prevocational services.

Services include job development, job coaching, and employment maintenance. The state explicitly prohibits using these funds for sheltered workshops or subminimum wage arrangements.

• Target Population: Medicaid beneficiaries with intellectual or developmental disabilities enrolled in the HSW or MSS&S programs.
• Service Components: Job development, job placement, on-site coaching, and fading supports.
• Setting Requirements: Must occur in competitive integrated community settings alongside individuals without disabilities.
• Wage Standard: Beneficiaries must be compensated at or above the minimum wage, and not less than the customary wage paid by the employer for the same work.
• Exclusions: Cannot be billed concurrently with Prevocational Services or Skill Building Assistance for the same hours.

2. Regulatory and Oversight Agencies

The primary state authority is the MDHHS Behavioral and Physical Health and Aging Services Administration (BPHASA), which manages the 1915(c) HSW and 1915(b) waivers. BPHASA sets the overarching policy, service definitions, and provider qualifications in the Michigan Medicaid Provider Manual.

Day-to-day oversight, credentialing, and quality assurance are delegated to the ten regional PIHPs and their network of CMHSPs. Providers interact primarily with their local PIHP for contracting and compliance.

• State Agency: MDHHS Behavioral and Physical Health and Aging Services Administration (https://www.michigan.gov/mdhhs/keep-mi-healthy/mentalhealth)
• Medicaid Enrollment Portal: Community Health Automated Medicaid Processing System (CHAMPS) (https://milogintp.michigan.gov)
• Regional Oversight: Prepaid Inpatient Health Plans (PIHPs) (https://www.michigan.gov/mdhhs/keep-mi-healthy/mentalhealth/mentalhealth/pihp)
• Local Oversight: Community Mental Health Services Programs (CMHSPs) (https://macmhb.org/)

3. Gatekeeping Prerequisites: Who Can Even Apply

Michigan utilizes a closed managed care network for behavioral health and I/DD services. A provider's application to deliver Supported Employment will not be accepted by the state unless the provider has successfully responded to a Request for Proposals (RFP) or open enrollment window issued by a regional PIHP or CMHSP.

Additionally, all prospective providers must pass an initial HCBS Settings Rule compliance assessment conducted by the PIHP to verify that their service delivery model does not isolate beneficiaries.

• Network Affiliation: Required subcontract with a regional PIHP or local CMHSP.
• Procurement Access: Dependent on PIHP/CMHSP network adequacy; many regions only accept applications during specific RFP windows.
• HCBS Settings Assessment: Required pre-contractual review to ensure compliance with the CMS Final Rule for community integration.
• CHAMPS Enrollment: Required prerequisite; PIHPs cannot pay providers who are not actively screened and enrolled in CHAMPS.

4. Licensure and Certification Requirements

Michigan does not issue a distinct state facility license for Supported Employment agencies. Because the service is delivered in the community and at employer worksites, it falls outside the scope of Adult Foster Care or facility licensure.

Instead of state licensure, providers must achieve credentialing through their contracting PIHP. Many PIHPs require providers to obtain national accreditation (such as CARF) for employment services within a specified timeframe after the initial contract.

• State Facility License: None required for Supported Employment.
• PIHP Credentialing: Mandatory review of agency policies, financial stability, and staff qualifications prior to contracting.
• Accreditation: Often required by PIHP contract (e.g., CARF Employment Services accreditation) within 1-3 years of network entry.
• Business Registration: Must be registered and in good standing with the Michigan Department of Licensing and Regulatory Affairs (LARA).

5. Medicaid Provider Enrollment

Effective January 1, 2018, all providers furnishing services to Michigan Medicaid beneficiaries, including those participating in a managed care organization's provider network, must be screened and enrolled in CHAMPS.

Supported Employment agencies typically enroll as Atypical Providers if they do not provide medical services, though they must still obtain a National Provider Identifier (NPI) and associate their enrollment with the specific PIHPs they contract with.

• Enrollment System: CHAMPS via MILogin (https://milogintp.michigan.gov).
• Provider Type: Typically enrolled as a Facility/Agency/Organization (FAO) or Atypical Agency.
• Application Fee: Subject to the CMS institutional provider application fee (approx. $709) unless waived by Medicare enrollment.
• Processing Time: Typically 3-4 weeks for CHAMPS approval after submission.
• Revalidation: Required every 5 years through the CHAMPS portal.

6. Staffing, Training and Background Checks

Staff delivering Supported Employment must meet qualifications outlined in the Michigan Medicaid Provider Manual and specific PIHP contracts. This generally includes being at least 18 years old, possessing a high school diploma or GED, and completing mandated training.

Agencies must conduct comprehensive background checks through the Michigan Workforce Background Check system before a staff member can provide direct services.

• Minimum Qualifications: 18 years of age, high school diploma or equivalent.
• Background Checks: Mandatory fingerprint-based criminal history check via the Michigan Workforce Background Check system.
• Exclusions Screening: Monthly checks against the OIG List of Excluded Individuals/Entities (LEIE) and state exclusion lists.
• Training Requirements: CPR/First Aid, recipient rights, and specific employment training (e.g., ACRE or APSE CESP certification) as dictated by the PIHP.

7. Documentation, Policies and Records

All Supported Employment services must be explicitly authorized in the beneficiary's Individualized Plan of Service (IPOS), developed through a person-centered planning process. The provider's documentation must directly link the services rendered to the employment goals in the IPOS.

Providers must maintain detailed progress notes for every encounter, documenting the date, start and stop times, specific interventions provided, and the beneficiary's response.

• Authorization: Services must be documented and approved in the IPOS.
• Encounter Notes: Must include date, exact start/stop times, location, and staff signature.
• Wage Tracking: Documentation verifying the beneficiary is earning at least minimum wage in a competitive setting.
• Record Retention: Medicaid records must be retained for a minimum of 7 years.

8. Billing, Rates and Claims

Supported Employment providers do not bill the state's CHAMPS system directly for fee-for-service reimbursement. All claims are submitted to the contracting PIHP or CMHSP using their designated electronic health record or clearinghouse.

Rates are not standardized statewide; they are negotiated and established by each regional PIHP based on local funding allocations and provider contracts.

• Payer: The regional PIHP or local CMHSP.
• Procedure Codes: Typically billed using HCPCS codes such as H2023 (Supported employment, per 15 minutes), as defined by the PIHP fee schedule.
• Rate Setting: Determined by the PIHP contract, not a statewide fee schedule.
• Claim Format: Submitted via HIPAA-compliant 837P transactions or the PIHP's proprietary portal.

9. Approval Sequence and Timeline

The pathway to becoming a provider begins with establishing the business entity and obtaining an NPI, followed by enrolling in CHAMPS. However, the critical step is monitoring PIHP procurement sites for network openings.

Once an RFP is open, the provider submits a proposal, undergoes credentialing, and signs a contract. The entire process can take 6 to 12 months, heavily dependent on the PIHP's contracting cycle.

• Step 1: Entity formation and obtaining an NPI.
• Step 2: Enrollment in CHAMPS as a Medicaid provider.
• Step 3: Responding to a PIHP/CMHSP Request for Proposals (RFP) or open enrollment.
• Step 4: Completing PIHP credentialing and HCBS Settings compliance review.
• Step 5: Executing the network contract and receiving IPOS authorizations.

10. Common Denials and Survey Findings

Providers frequently face contract denials or audit clawbacks due to non-compliance with the HCBS Settings Rule, particularly if employment settings are deemed too isolating or resemble sheltered workshops.

During PIHP audits, the most common financial recoupments stem from missing or incomplete encounter notes, or providing services that were not explicitly authorized in the current IPOS.

• Settings Violation: Delivering services in a facility-based or non-integrated setting.
• Documentation Gap: Missing start/stop times or staff signatures on progress notes.
• Unauthorized Service: Billing for job coaching hours that exceed the amount authorized in the IPOS.
• Lapsed Credentials: Staff providing services before background checks are fully cleared.

11. Key Contacts and Resources

Prospective providers should begin by reviewing the Michigan Medicaid Provider Manual and identifying their regional PIHP. The MDHHS Provider Enrollment Help Desk is available for CHAMPS-related issues.

Local CMHSP and PIHP websites are the primary source for RFP announcements and specific credentialing packets.

• MDHHS Provider Enrollment Help Desk: 1-800-292-2550
• CHAMPS Portal: https://milogintp.michigan.gov
• Michigan Medicaid Provider Manual: https://www.mdch.state.mi.us/dch-medicaid/manuals/MedicaidProviderManual.pdf
• Michigan Association of CMH Boards (PIHP Directory): https://macmhb.org/

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