As someone who works in revenue cycle management and cares deeply about independent providers and the patients they serve, I find the recent announcement from Blue Cross Blue Shield of Michigan raises serious concerns about the future of mental health in Michigan.

Blue Cross Blue Shield of Michigan is changing how it reimburses mental health services provided by limited licensed clinicians. And if you work in behavioral health in this state, or you are a behavioral health patient in this state, you need to understand what’s happening and when.

Billing Under Supervision

Incident-to billing for the purpose of supervision of limited-license mental health professionals is not a loophole. It’s a long-established reimbursement mechanism that allows services provided by one clinician to be billed under a supervising provider. In the mental health world, this has been the pathway through which Limited Licensed Counselors (LLCs), Limited Licensed Master Social Workers (LLMSWs), Temporary Limited Licensed Psychologists (TLLPs), and Limited Licensed Marriage and Family Therapists (LLMFTs) have been able to practice in professional settings while completing the supervised hours required for full licensure.

These are not students observing sessions from the corner of a room. They hold master’s degrees. They’ve

 completed supervised practicum and internship hours. The State of Michigan has issued them a license and then required them to complete an additional 3,000 to 4,000 hours of supervised clinical experience before they can practice independently. Incident-to billing is what makes it financially viable for practices to employ them during that period.

I also want to address a comment that I have seen a few times in some social media posts about this change. Several established mental health providers have used the “back in the old days” take to downplay the negative impact this change will have. Because there wasn’t an option to bill under supervision and get paid for it when they were fresh out of school and needed to get their hours in, they don’t think this should be a big deal. These “kids just need to suck it up,” as they did.  The problem with that argument is that the demand for mental health services wasn’t the same as it is today. The cost of obtaining the education to get the license was also significantly lower. I’m as Gen X as they come and have given plenty of “suck it up” speeches, but this new policy is not something that needs to be addressed by just “sucking it up”. 

The Real Reason for the Change

I understand why BCBSM is looking at this. There are practices that hire limited-license clinicians primarily to generate volume. The supervising provider’s name is on the claim, but meaningful supervision isn’t happening. That’s a real problem. It’s unfair to patients, it’s unfair to the clinicians who don’t get the mentorship they need, and it gives legitimate supervisory relationships a bad name.

But here’s what I know from working alongside independent practices across Michigan: those situations are the exception, not the rule. The overwhelming majority of providers who supervise limited-licensed clinicians do so because they believe in building the next generation of mental health professionals. They do it because their patients need access to care that wouldn’t exist otherwise. They do it because someone mentored them once, and they remember what that meant.

A policy that eliminates reimbursement for the entire mechanism without a viable alternative doesn’t fix the bad actors. It punishes everyone else while the bad actors find another workaround.

Here’s the part that deserves scrutiny and to me backs up my suspicion that this change is an overreach intended to target fraud: the same clinicians can still bill incident-to in facility-based settings. So the quality and oversight concerns BCBSM cited as the reason for this change apparently don’t apply when those same clinicians are working in a hospital or outpatient psychiatric center. A limited licensed therapist does not become more or less competent based on where the claim is submitted.

Mental Health Professional Shortage Areas

I think about my clients in rural Michigan a lot when I look at this policy. In a small town in the Upper Peninsula, or a rural county in the northern lower peninsula, or a community that already sits in one of Michigan‘s 233 designated Mental Health Professional Shortage Areas, recruiting fully licensed mental health professionals can be extremely difficult and costly. Practices in these areas can barely meet their communities’ needs now. If the BCBSM reimbursement policy is fully implemented in its current form, those communities will suffer. 

BCBSM covers over 5 million Michiganders. When the state’s largest insurer restructures reimbursement in a way that reduces provider capacity, the ripple effects don’t stay contained to billing departments. They show up in longer waitlists, in patients who can’t find a new provider when their clinician leaves a practice, in emergency rooms seeing mental health crises that outpatient care could have prevented, and in communities that were already stretched thin, getting stretched further.

And there’s a pipeline problem nobody is talking about loudly enough. Limited licensed clinicians are not just today’s workforce; they are the future fully licensed workforce. If practices can’t afford to employ them, they leave. Some leave the field entirely. Others leave Michigan. Either way, we’ve made the shortage worse at exactly the moment we needed to build capacity.

What should happen instead?

If BCBSM’s concern is supervision quality, and that is a legitimate concern,  then address supervision quality directly. Strengthen documentation requirements. Audit claims in which supervisory relationships appear suspicious. Hold practices accountable for what supervision actually looks like. Don’t eliminate the mechanism that thousands of clinicians and their patients depend on because some practices have abused it.

An alternative reimbursement pathway needs to exist before the March 1, 2027, drop-dead date, not as an afterthought. BCBSM should be in active conversation with professional counseling, social work, marriage and family therapy, and behavioral health organizations right now. The deadline is real. The impact is real.

What you should do right now.

If you employ limited-licensed clinicians, supervise them, or are one, this is not something you can wait on. Understand what Phase I requires today. Start planning what March 2027 will look like for your practice if nothing changes. Talk to your professional associations. Make noise through the right channels.

There is a petition circulating that calls on BCBSM to create an exception or alternative reimbursement pathway, to engage professional organizations before full implementation, and to ensure this policy doesn’t worsen Michigan’s mental health workforce shortage. I’m not normally one to promote these kinds of petitions because they don’t really have a binding effect, but the issue is well defined in the petition, so it’s worth at least reading it. If this issue affects you or your patients, sign it.

And if you’re a patient whose therapist holds a limited license, ask questions. Know what insurance they accept, whether that coverage is changing, and what your options are. Don’t wait to find out the hard way.

Michigan’s mental health system does not have the capacity to absorb this kind of disruption without patients suffering the consequences. We need solutions that protect access, not policies that quietly restrict it.

Aimee Heckman is the founder of Ease RCM Solutions, a full-service medical billing and revenue cycle management company serving independent healthcare providers in Michigan and throughout the United States.