Greetings from Raleigh!
You’re probably surprised to receive another update so soon after Monday’s newsletter.
Since we are working so furiously on getting the full budget in place–hopefully by next week–I wanted to give you a summary look at some of the provisions coming from the conferees on the Health and Human Services with regard to the mental health provisions of the budget. When the final budget does pass, I will give you complete details.
Health and Human Services Budget Includes Complex Special Provisions Addressing the Mental Health System
In addition to ironing out differences over allocation of money in the state’s Health and Human Services Budget, the joint conferees tackled the inclusion of a multitude of special provisions aimed at strengthening the mental health system. At the beginning of the session, Senator Basnight directed me to become involved in learning about the nature of the problems facing the mental health system and participating in designing solutions to those problems. Advocates for mental health reform have complained that the legislature is underfunding the mental health system in this budget given that the Legislative Oversight Committee on Mental Health recommended an additional $135 million in each year be allocated in this biennium budget. The joint conferees have proposed $20 million in FY 2007-08 and $16 million in FY 2008-09 in new spending. Three factors have dominated discussions between the conferees resulting in this modest expansion proposal:
1. During the year leading up to this session, Health and Human Services overspent projections in the Medicaid-financed community support programs for the mentally ill, people with developmental disabilities, and people with substance abuse problems by $195 million state tax dollars and over $411 million federal dollars. In one particular service, the state was paying $61.00 an hour for high school graduates to take persons on recreational outings, among other things. Because the state paid $61.00 an hour, regardless as to whether the service was delivered by a high school graduate or a psychiatrist with a PhD, the companies delivering the services would utilize those employees it had to pay less in order to maximize their profit margin.
2. The executive director for an LME located in the northeast is being paid a salary and benefits of over $330,000.
3. The local mental health entities were returning state dollars allocated for mental health services from last year’s budget. At one time, the General Assembly projected that up to $80 million would be returned. As we began discussions concerning realigning how those recurring dollars would be spent in the upcoming budget, those projects have dwindled down to approximately $40 million as LMEs began spending the money.
The conferees ultimately concluded that these problems needed to be addressed before we could expect continued public support for major expansions of revenue in the mental health arena. We tackled the above problems as follows:
1. Health and Human Services will be required to track what services are provided in the community supports program and what level of expertise was provided to deliver those services. The conferees initially sought to do away with one single rate of pay and instead go to a tiered system that would specifically pay psychiatrists more for their services. Such a change would
have to be approved by the Center for Medicare and Medicaid Services (CMS), a federal agency that oversees the Medicaid program. HHS convinced conferees that by seeking a review by CMS, there would be a serious risk that CMS would simply defund federal dollars for community support services.
2. We have included a special provision that limits the salary for an LME director to no more than 10% above the normal allowable salary range and limits an LME director’s benefits to no more than those provided to all permanent employees of an LME.
3. Local mental health entities have been restricted from transferring dollars allocated for the three different populations targeted to receive health services: the mentally ill, the developmentally disabled, and persons with substance abuse problems. This money has been allocated into each category without a specific determination as to the specific needs of a local area. The conferees have put in special provisions directing HHS to permit two LMEs, in addition to the seven already designated, to have single stream funding. The provision also directs HHS to design criteria so that all LMEs that meet the criteria will be eligible to have the flexibility to allocate resources tailored to their specific needs.
In addition to addressing problems with waste, abuse, and fraud in the mental health system, conferees have sought to implement structural changes to further empower the local LMEs to manage the delivery of mental health services while clarifying the role of the Department of Health and Human Services in its role as the oversight agency. HHS has been charged to develop performance based criteria to be used to evaluate the success or failure of each LME. LMEs will have additional management authority over the delivery of services in individual cases. There will be four pilot projects that will allow LMEs to reduce the usage of state psychiatric hospitals as a result of a local LME’s ability to manage cases that reduce the number of patients using these state facilities.
In terms of expenditures, the conferees realigned unspent money from last year’s budget to increase resources for crisis services by $13.7 million. We also increased the number of Community Alternative Program for the Mentally Retarded/Developmentally Disabled (CAP-MR/DD) slots by 300 by realigning $4.5 million in unspent developmental disability services dollars. We have continued last year’s effort of funding affordable housing for individuals with mental illness, developmental disabilities, and substance abuse disorders, by appropriating an additional $7.5 million to the NC Housing Trust Fund to finance the development of additional affordable apartments and appropriated $8 million over the course of the biennium to fund operating subsidies to make apartments across the state more affordable. These funds will make an estimated 900 additional affordable apartments.
Mental Health Parity Bill Passes Senate
Last week, the Senate passed a committee substitute to House Bill 973, short titled “Mental Health Equitable Coverage.” The Senate version of the plan passed on a vote of 36 to 12. The Senate plan fully covers nine particular types of mental illness and offers partial coverage to other illnesses. These nine enumerated, fully-covered illnesses include: bipolar disorder, major depressive disorder, obsessive compulsive disorder, paranoid and other psychotic disorders, schizoaffective disorder, schizophrenia, post-traumatic stress disorder, anorexia nervosa, and bulimia. The House plan only covered one in six workers, while the Senate plan covers all eligible workers who are insurable under the current law.
Enjoy the remainder of the week and try to stay cool! Please feel free to share any concerns you may have.
Sincerely,
Doug Berger