CALL TO ORDER Let the record show that Mr. Stone called the meeting to order at 10:00AM.

NORTHERN MICHIGAN REGIONAL ENTITY BOARD OF DIRECTORS MEETING 10:00AM, WEDNESDAY, JULY 29, 2015 CROSS STREET CONFERENCE ROOM, GAYLORD BOARD MEMBERS IN ATTENDANCE: BOARD MEMBERS ABSENT: STAFF IN ATTENDANCE: PUBLIC: Roger Frye, Ed Ginop, Annie Hooghart, Randy Kamps, Gary Klacking, Terry Larson, Jack Mahank, Gary Nowak, Jay O Farrell, Dennis Priess, Karla Sherman (via teleconference), Joe Stone, Don Tanner, Nina Zamora Richard Schmidt Christine Gebhard, Chip Johnston, Karl Kovacs, Ed LaFramboise, Dave Schneider, Sara Sircely, Carol Balousek Sue Winter CALL TO ORDER Let the record show that Mr. Stone called the meeting to order at 10:00AM. ROLL CALL Let the record show that Richard Schmidt is absent on this date; Karla Sherman in attending via conference call; and all other Northern Michigan Regional Entity Board Members are in attendance. PLEDGE OF ALLEGIANCE Let the record show that the Pledge of Allegiance was recited as a group. APPROVAL OF MINUTES The minutes of the June NMRE Board of Directors meeting were included in the materials packet for the meeting on this date. MOTION MADE BY RANDY KAMPS TO APPROVE THE JUNE 24, 2015 MINUTES OF THE NORTHERN MICHIGAN REGIONAL ENTITY BOARD OF DIRECTORS MEETING, SECOND BY GARY KLACKING. MOTION CARRIED BY UNANIMOUS VOTE. APPROVAL OF AGENDA The meeting agenda was included in the materials packet for the meeting on this date. Mr. Schneider requested two items be added under New Business as, e) NMSAS Request, and f) Contract Amendment No. 2 from the Department which was received via email at 4:00PM on Tuesday, July 28 th. MOTION MADE BY JACK MAHANK TO APPROVE THE AGENDA FOR THE JULY 29, 2015 MEETING OF THE NORTHERN MICHIGAN REGIONAL ENTITY BOARD OF DIRECTORS AS AMENDED, SECOND BY DON TANNER. MOTION CARRIED BY UNANIMOUS VOTE. CORRESPONDENCE A letter dated July 15, 2015 from Dave Schneider to Dave Beck requesting $500,000 of unspent Medicaid to the NMRE. The Minutes of the June 4, 2015 meeting of PIHP CEOs. The Agenda and Minutes of the July 2, 2015 meeting of PIHP CEOs. Page 1 of 6

MOTION MADE BY ROGER FRYE TO RECEIVE AND FILE THE NORTHERN MICHIGAN REGIONAL ENTITY CORRESPONDENCE AS PRESENTED AND REVIEWED ON THIS DATE, SECOND BY ANNIE HOOGHART. MOTION CARRIED BY UNANIMOUS VOTE. ANNOUNCEMENTS Let the record show that no announcements were made by Board Members during the meeting on this date. PUBLIC COMMENT Let the record show that no comments were made by the public during the meeting on this date. REPORTS Board Chair Report Mr. Stone stated he had nothing to report this month. CEO s Report The July 2015 NMRE CEO s report was included in the materials packet for the meeting on this date. Mr. Schneider reported progress with McLaren Health Plan to get a car coordination pilot underway. Focus will be on addressing asthma and diabetes as chronic conditions. Payments for Healthy Michigan (HMP) were inflated for FY15 to offset the effect of adverse enrollment. Enrollment in HMP has been much faster than anticipated. Recoupments are expected using FY14 expenditures data. Medicaid rates for FY16 are based on 1.5% increase; the Michigan Department of Health and Human Services intends to rebase, not just trend forward, using a new Relative Value Units (RVUs) methodology. MACMHB has written a response but lacks PIHP input. Professional Worker Shortage areas, which are zip code based, will also be factored into rates; NMRE is second highest region in the state. Changes in minimum wage are also impacting costs. Mr. Mahank asked about any mention of HAB Waiver. Mr. Schneider responded, the State is filing an 1115 waiver with a target of January 1, 2016; this would cause the 1915(b)&(c) waivers (HAB Waivers) to go away. As a region, no loss in revenue is expected as a result of this change. Mr. Schneider added more discussion of this topic will occur during the Financial Report later on the Agenda. Ms. Sherman asked about the status when it all shakes out in terms of funding. Mr. Schneider responded, I don t know. The goal is to have rates by October 1 st. Healthy Michigan adjustments would be retroactive. When the recoupment would occur is unclear at this time. Negative feedback may delay the process. Mr. Schneider reported he should know more next week. MOTION MADE BY JACK MAHANK TO RECEIVE AND FILE THE JULY 2015 NORTHERN MICHIGAN REGIONAL ENTITY CHIEF EXECUTIVE OFFICER S REPORT AS PRESENTED AND REVIEWED ON THIS DATE, SECOND BY NINA ZAMORA. MOTION CARRIED BY UNANIMOUS VOTE. SUD Policy Oversight Board The minutes of the July 6, 2015 meeting of the Northern Michigan Regional Entity Substance Use Disorder Policy Oversight Board were included in the materials packet for the meeting on this date. Addiction Treatment Services (ATS) proposed adding long-term residential beds and case management to its services. Mr. Schneider requested the Board not take action as staff did not have ample time to review. Chris Hindbaugh from ATS said there would be no added cost, but Mr. Schneider reported he questions this. A meeting is scheduled for next week to further discuss. Page 2 of 6

MOTION MADE BY ROGER FRYE TO RECEIVE AND FILE THE NORTHERN MICHIGAN REGIONAL ENTITY SUBSTANCE USE DISORDER POLICY OVERSIGHT BOARD REPORT AS PRESENTED ON THIS DATE, SECOND BY GARY NOWAK. MOTION CARRIED BY UNANIMOUS VOTE. NMRE Board Executive Committee The NMRE Executive Board met on July 22, 2015 to discuss the transition of NMRE staff to NMRE employment. The meeting minutes were included in the materials packet for the meeting on this date. This topic will be addressed in further detail under Old Business. Financial Reports The minutes of the July 13, 2015 NMRE Finance Committee were included in the materials packet for the meeting on this date as were the financial reports listed. NMRE FY15 Managed Care Administration report for eight months ended May 31, 2015 shows the NMRE 56% spent at 67% of the year. Kevin Hartley, NMRE CFO, is looking into the travel & conference expense; it was likely budgeted too low. The advertising expense reflects posting open positions which have been numerous in recent months. NMRE Revenue report through Q3 FY15 shows pending adjustments based on retro coverage. Healthy MI is high, $1.8M recoupment is expected, and current spending is slightly over budget. NMRE SUD Revenue report through Q3 FY15 shows Health MI is high; recoupment may be $1.5M, and current spending is slightly over budget. NMRE FY15 SUD Budget vs. Actual Report as of May 31, 2015 shows Professional and Contractual costs high due to utilization of temp services; conversely, the salary line is low. May Year-to-date Board Spending by Funding Source Mr. Schneider compared the PMPM amount to the actual payments to the Boards; current payments exceed the PMPM by $1.2M. In February 2015, the NMRE began funding the Boards based on PMPM. Current figures show AuSable Valley $67K underexpended to budget, Centra Wellness $103K overexpended to budget, North Country $399K underexpended to budget Northeast Michigan $456K underexpended to budget, and Northern Lakes $302K overexpended to budget. At least $2M hit to the risk reserve will be needed for 2015 taking the risk reserve to under $6M; traditional Medicaid risk is $10M. The NMRE approved procedure for budgeting calls for estimated revenue in June, with Finance Directors coming into the July Finance Committee meeting with balanced spending plans. Mr. Schneider stated, based on the July 13 th Finance Committee meeting, as a region, the NMRE is not there. Northern Lakes s spending plan was $2M over, North Country close at $40K over, AuSable Valley did its own projection of revenue and came up with $400K additional but agreed to come in at PMPM. The net result is a $2M problem for FY16. The situation is further complicated by the possibility of HAB Waiver going away in favor of the 1115 waiver. Current HAB Waiver slots are assigned to individuals based on need. Several years ago, additional slots were awarded to the region as a means of smoothing by the State. The Northwest Affiliation had a lot fewer slots. When the NMRE combined, this created a disproportionate distribution based on population. If HAB Waiver goes away (nearly 30% of budget), and dollars are spread out on a capitated basis, funding distribution changes significantly. Initial calculations suggest that Northern Lakes and AuSable Valley would gain funding, while the other three Member Boards would lose. Mr. Schneider expressed the current method of PMPM is not working (because of overspending), and is not sustainable. NMRE as the funding source bears all risk. If/when HAB Waiver goes away, the PMPM is simply not a viable option. A better model is needed. Mr. Schneider proposed bringing in Erin Wise, Director of Medicaid Operations for Michigan Public Health Institute (MPHI), to present on various payment models; the Page 3 of 6

State has agreed to pick up the cost. Mr. Schneider pointed to cost variances throughout the region, nothing further examination is needed. He stressed the need to examine how money is being spent, not just enrollment. Mr. LaFramboise added that, when looking at cost variance, outcomes must also be factored into the equation. Mr. Johnson expressed, We have to advocate for more money. Mr. Kamps stated the NMRE is fortunate to have an Executive Director who knows the history of funding. He added that identifying and sharing best practices is need and reliable data is critical. Mr. Kovacs voiced the PMPM was intended as a method of distributing dollars, not a means of budgeting. MOTION MADE BY RANDY KAMPS TO RECEIVE AND FILE THE NORTHERN MICHIGAN REGIONAL ENTITY FINANCIAL REPORTS AS PRESENTED AND REVIEWED ON THIS DATE, SECOND BY JAY O FARRELL. MOTION CARRIED BY UNANIMOUS VOTE. NEW BUSINESS Jeff Brown Proposal A proposal to bring in Jeff Brown to provide training to NMRE and CMHSP staff on the topic of monitoring delegated functions was distributed to the Board on this date. The two delegated functions of Access and Provider Network Management will be targeted. The proposal received the recommendation of the Operations Committee. MOTION MADE BY JACK MAHANK TO APPROVE THE PROPOSAL FROM JEFFREY L. BROWN TO PROVIDE AN ASSESSMENT AND RECOMMENDATIONS ON DELEGATED FUNCTIONS NOT TO EXCEED A COST OF THREE THOUSAND DOLLARS ($3,000.00), SECOND BY DENNIS PRIESS. MOTION CARRIED BY UNANIMOUS VOTE. Erin Wise Proposal Mr. Schneider stated presentation of this agenda item is no longer needed. Ms. Wise will be presenting to the NMRE Operations and Finance Committees in August per the discussion under Financial Reports. LEP Policy A policy drafted by NMRE staff to address Limited English Proficiency (LEP) was included in the materials packet for the meeting on this date. MOTION MADE BY DENNIS PRIESS TO APPROVE THE NORTHERN MICHIGAN REGIONAL ENTITY LIMITED ENGLISH PROFICIENCY (LEP) POLICY AS PRESENTED AND REVIEWED ON THIS DATE, SECOND BY TERRY LARSON. MOTION CARRIED BY UNANIMOUS VOTE. The Board approval date of July 29, 2015 will be added to the Policy. Cultural Competency Policy A policy drafted by NMRE staff to address Cultural Competency was included in the materials packet for the meeting on this date. MOTION MADE BY ED GINOP TO APPROVE THE NORTHERN MICHIGAN REGIONAL ENTITY CULTURAL COMPETENCY POLICY AS PRESENTED AND REVIEWED ON THIS DATE, SECOND BY GARY KLACKING. MOTION CARRIED BY UNANIMOUS VOTE. The Board approval date of July 29, 2015 will be added to the Policy. NMSAS Funding Increase Page 4 of 6

A request for additional funds was made by NMSAS to meet current needs. A summary was distributed to the Board on this date. NMSAS Director, Sue Winter, was in attendance to discuss and answer questions. Ms. Winter stated the approved allocation for Medication Assisted Treatment was based on 200 methadone clients. Current needs are greater for Suboxone than anticipated, drawing on Community Block Grant funding. Ms. Sircely reviewed the request. New (March 2015) treatment guidelines place emphasis on case management and nursing services. NMRE SUD Advisory Board did recommend approval of the increase during its July meeting. Mr. Stone asked for clarification that the total increase goes toward services, rather than staff raises, or other non-treatment related expenses. Ms. Winter voiced her confirmation. MOTION MADE BY GARY NOWAK TO APPROVE THE ALLOCATION INCREASE TO NMSAS RECOVERY CENTER IN THE AMOUNT OF ONE HUNDRED NINETY-SEVEN THOUSAND DOLLARS ($187,000.00), SECOND BY TERRY LARSON. MOTION CARRIED WITH ONE NAY VOTE RECORDED FROM MR. TANNER. Amendment No. 2 to the Agreement between MDCH and PIHP Mr. Schneider stated Amendment No. 2 to the contract between the Michigan Department of Community Health and the Northern Michigan Regional Entity was received via email at 4:00PM on July 28 th (yesterday). Copies were distributed to the Board on this date. The Amendment, due to the Department on or before August 28, 2015, states: Payment to the PIHP will be based on the total funding availability for specialty supports and services as identified in the annual Legislative Appropriation for community mental health services programs for the period of October 1, 2014 through September 30, 2015. The estimated value is contingent upon and subject to enactment of legislative appropriations and availability of funds. MOTION MADE BY RANDY KAMPS TO APPROVE AMENDMENT NO. 2 TO THE CONTRACT BETWEEN THE MICHIGAN DEPARTMENT OF COMMUNITY HEALTH AND THE NORTHERN MICHIGAN REGIONAL ENTITY BY SIGNATURE OF THE NORTHERN MICHIGAN REGIONAL ENTITY S CHIEF EXECUTIVE OFFICER, SECOND BY DON TANNER. MOTION CARRIED BY UNANIMOUS VOTE. OLD BUSINESS Representation on MACMHB Executive and Steering Committees Mr. Schneider reminded Board Members of the August 14 th submission date to be considered to represent the PIHP on the Association s committees. Two applications have been received by NMRE Board Members to date. Conflict of Interest Policy Pursuant to the June NMRE Board of Directors meeting, a revised Conflict of Interest Policy was included in the materials packet for the meeting on this date. MOTION MADE BY GARY KLACKING TO APPROVE THE NORTHERN MICHIGAN REGIONAL ENTITY CONFLICT OF INTEREST POLICY AS PRESENTED AND REVIEWED ON THIS DATE, SECOND BY ROGER FRYE. MOTION CARRIED WITH TWO NAY VOTES RECORDED FROM MS. HOOGHART AND MR. TANNER. The Board approval date of July 29, 2015 will be added to the Policy. Transition of Employees to NMRE A draft Transition of Employees Plan was included in the materials packet for the meeting on this date. This was the topic of discussion during the NMRE Executive Committee meeting on July 22, 2015. The NMRE currently leases staff from North Country CMH (.5 FTE from Northern Lakes CMH). The Plan addresses the process of transitioning the leased staff to NMRE employment. Mr. Schneider clarified this item is being presented on this date for discussion; no action is needed at this time. Mr. Schneider reviewed the Plan for Page 5 of 6

the Board. Mr. Schneider stated he thinks the target date of October 1, 2015 will, at a minimum, need to be pushed back to January 1, 2016. Mr. Kamps voiced support of the Plan. Mr. Stone stated he doesn t see it necessary to transition all current staff to the NMRE. Mr. Ginop asked about the facility. Mr. Schneider responded that moving is an option but continuing to lease the location from North Country would save costs; the exception being the Cross Street building in Gaylord which may discontinue to better meet current needs. Mr. Priess expressed concern with driving up administrative costs. Mr. Schneider responded that if the salary issue was resolved, he would be open to continuing the staff lease arrangement. Plan Update The July update of the NMRE Annual Plan was included in the materials packet for the meeting on this date. Mr. Schneider read through each Objective and relayed its status. Motion made by Roger Frye to receive and file the July 2015 update to the Northern Michigan Regional Entity Annual Plan as presented and reviewed on this date, second by Gary Klacking. Motion carried by unanimous vote. SUD Transition Update Ms. Sircely reported the provider panel opening is underway. Packets must be postmarked by 5:00PM Friday, July 31, 2015. Recommendations will come before the Board next month. Regional Synar rates have been calculated at 18%, meeting the lower than 20% benchmark. The SUD Claims Representative position remains vacant though interviews are in process. Catch-up work on entering encounters is being done by all available NMRE staff. Presentation Customer Satisfaction Mr. Mahank suggested that, due to meeting length, this be delayed until the August NMRE Board meeting which Mr. Schneider agreed to do. COMMENTS Board Let the record show that Ms. Hooghart requested an itemized copy of the bill for legal services to Roz Parmenter/Dykema Gosset to construct the Conflict of Interest Policy. She voiced further disagreement with the Policy stating it is very prohibitive, tying Board members hands from speaking on behalf of their representing Board. Mr. Schneider stated he would get her the information. Staff Let the record show that no comments were made by staff during the meeting on this date. Public Let the record show that no comments were made by the public during the meeting on this date. MEETING DATES The next meeting of the Northern Michigan Regional Entity Board of Directors is scheduled for Wednesday, August 26, 2015 at 10:00AM in the Cross Street Conference Room in Gaylord. ADJOURN MOTION MADE BY NINA ZAMORA TO ADJOURN THE JULY 29, 2015 MEETING OF THE NORTHERN MICHIGAN REGIONAL ENTITY BOARD OF DIRECTORS, SECOND BY ED GINOP. MOTION CARRIED BY UNANIMOUS VOTE. Mr. Stone adjourned the meeting at 12:04PM. Page 6 of 6