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Old 01-16-2005, 04:51 PM
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Default Clark County's successful Mental Health Court could close.

In Peril: Cuts threaten mental health aid

Sunday, January 16, 2005
By KATHIE DURBIN , Columbian staff writer

Clark County's successful Mental Health Court could close.

A program that keeps mentally ill children out of hospitals by sending counselors into their homes could end.

And at least 40 mentally ill clients could lose the subsidies that enable them to live in boarding houses and residential treatment centers.

The Bush administration's strict new interpretation of federal rules on Medicaid spending is sending shudders through the ranks of local mental health treatment providers. Already, 1,500 of the county's low-income mentally ill residents have lost services. Providers warn that more severely mentally ill people will end up on the street or in jails, hospital emergency rooms and homeless shelters.

"The restrictions on the money will force people to use either crisis services or hospital emergency room services, which are the two most expensive ways to deliver services," said Midge Burmaster, director of the regional network that coordinates mental health programs in Clark County.

In 1993, the state of Washington negotiated a deal with the federal agency that oversees the Medicaid program of health insurance for the poor. For 11 years, that contract gave Washington providers broad discretion in serving the low-income mentally ill.

Now that deal is off, and the 2005 Legislature has until June 30 to come up with a plan for filling a $41 million annual funding gap.

Washington is one of the first states where the new interpretation of the Medicaid rules will be enforced. Similar changes will be negotiated with other states as their contracts waiving the rules come up for renewal, a Medicaid official said.

Medicaid, the nation's largest health insurance program, has become a budget-buster in recent years. The cost of the program has shot up 63 percent, to $300 billion, in just the past five years.

Its spiraling price tag has placed a huge burden on the states as well as the federal government. The nation's governors are fighting the Bush administration's effort to shift more of the cost to the states. They vow to fight any proposal to cap the federal contribution by turning Medicaid into a block-grant program.

"The federal government enticed us into Medicaid," said state Rep. Jim Moeller, D-Vancouver, who sits on the House Health Care Committee. "To have them pull out and say, 'We've changed the rules, we aren't going to fund these clients anymore, they have to meet these criteria,' is in my opinion almost criminal."

Old rules more flexible

Under the old rules, Washington got federal Medicaid dollars based on how many of its Medicaid-eligible clients were being treated for mental illness. The state matched those dollars and used the combined funds to provide treatment to Medicaid clients under a managed-care system.

Fourteen regional offices distributed the money and coordinated treatment. Savings realized through this system some $41 million last year could be used to serve non-Medicaid patients, including the homeless and the working poor. Those patients account for about 30 percent of the state's mental health caseload, including 1,500 patients in Clark County alone.

But in April, Medicaid officials retracted the state's waiver and replaced it with a new contract that prohibits the state from spending Medicaid dollars on non-Medicaid patients.

In Washington and across the nation, Medicaid dollars have been critical to serving people who don't have insurance and can't afford to pay for mental health treatment. In the 2005-07 biennium, Medicaid dollars will pay 89 percent of the cost of Washington's $750 million community mental health program.

About one-third of the 127,000 adults and children served by the program in 2003 were not Medicaid-eligible. Most were poor; about three-quarters had incomes below the poverty line. Many failed to qualify because their monthly Social Security disability payments exceeded the income cutoff of $565.

"People who are not on Medicaid can be every bit as sick and every bit as poor as people who are eligible for Medicaid," said Gregory Robinson, executive director of Columbia River Mental Health Systems, the county's largest provider of community mental health treatment. "For example, people who are homeless can't qualify. And people who have been institutionalized in the jails lose their Medicaid, so they aren't eligible for transition services when they're released."

Programs endangered

Some of the Medicaid savings paid for innovative programs like the Mental Health Court, services to mentally ill jail inmates, and residential support. That no longer will be allowed.

Under the new contract, the state is prohibited from using Medicaid dollars to provide treatment in any mental health facility with more than 16 beds. Clark County has three such facilities.

Columbia River Mental Health Services no longer will be able to use Medicaid dollars to operate its 32-bed Elahan Place, which provides short-term housing and crisis care.

"We will have to reconfigure it," said spokeswoman Pat Stryker. "It will continue to operate in some form."

That could increase administrative costs, money that could otherwise be used to provide direct treatment.

Mentally ill people who live in two privately owned boarding homes, Evergreen Inn and Ridgefield Care Center, also will lose support. Savings from the Medicaid-managed care program previously paid for their care.

"We have 40 people in those two congregate care facilities," Burmaster said. "If we can't continue to fund residential services, that will contribute to more people in the homeless shelters, in the jails, on the streets."

Savings from the Medicaid program paid about half the cost of operating the Mental Health Court. Now that program is struggling to survive. Burmaster said the county is trying to find a way to keep it afloat.

"It's gotten great evaluations," she said. "It's a service we want to continue. But it's a program we would have to use our very limited state dollars to sustain."

Task force urges funding

Washington's new contract also restricts coverage for Medicaid-eligible patients who suffer from specific mental illnesses, including children's attention-deficit and hyperactivity disorders, obsessive-compulsive disorders, and dementia associated with Alzheimer's.

"It's unfair that Washington is being punished for its efficiency, but unfortunately, we have no choice and simply must retain these services," said Rep. Eileen Cody, D-Seattle. "Local communities do not have the resources to cover this loss."

Cody served on a bipartisan task force that met for six months to develop a strategy for dealing with the restrictions on the use of Medicaid dollars.

In a report issued Dec. 8, the task force called on the governor-elect and the 2005 Legislature to immediately adopt a supplemental $20 million budget to cover the program through June 30, and to address long-term funding. Otherwise, the panel warned, the potential consequences for local communities and county budgets could be devastating.

"County jails, hospital emergency rooms, health care providers and others in our communities across the state all depend on this funding," said Sen. Linda Parlette, R-Wenatchee, task force co-chairman.

U.S. Rep. Brian Baird intervened personally with Medicaid officials and at the end of December won a six-month extension, buying time for the 2005 Legislature to address the funding gap with unrestricted state dollars.

"What we have to do is come up with state dollars to plug the hole," Moeller said. But with the Legislature facing a $1.8 billion deficit, he added, "Realistically, it's going to be an uphill push."

County tackled rules early

Counties are scrambling to comply with the rule changes.

Spokane County notified a provider in late December that it would no longer pay for mental health workers to visit 600 elderly patients suffering from Alzheimer's disease and depression in their homes. Officials said the new rules prohibit the county from financing the program's $560,000 annual budget with Medicaid dollars.

In Skamania County, staff members at a publicly funded counseling center informed about 40 clients without Medicaid coverage that they could no longer get treatment there.

Clark County got a jump on the new rules a year ago. With a $57,500 grant from the Southwest Washington Medical Center Foundation, which faced the prospect of mentally ill clients flooding its emergency room, Mental Health Northwest established the Wellness Project, a clinic staffed by volunteers to serve clients no longer eligible for services under the new rules.

The foundation also provided $294,000 to Columbia River Mental Health Services to continue providing prescription drugs to nearly 400 mentally ill clients who would otherwise have been cut off. That money will carry the agency through June 30.

"We had the prospect of 350 to 400 people on our streets with schizophrenia, severe depression and bipolar disorder," said Stryker, the agency's spokeswoman.

Feds defend approach

Roderick Haynes, a spokesman for the federal Center for Medicare and Medicaid Services (CMS) in Seattle, said Washington's new contract reflects a strict interpretation of language in the 1965 Social Security Act, which established Medicaid, and the 1997 Balanced Budget Amendment, which requires state accountability and consistency in how Medicaid dollars are spent.

"Obviously it is a cost that will no longer be borne by the federal government, and there will be a shortfall with existing state funds," Haynes said. "It's unfortunate. I have great empathy, but the question is how this funding shortfall should be addressed, and it's the federal government's position that it should be addressed by state resources."

CMS spokesman Peter Ashkanez in Washington, D.C., said cost containment is not the main reason for the change. "It's not so much that we're looking for savings as that we want to pay the states appropriately," he said.

Whatever the reason, Mike Piper, director of Clark County Community Services, is feeling the pressure.

"The feds are auditing state spending right now," he said. "And we've been visited twice by state monitors in the past couple of months. They look at individual cases. The state doesn't want to be in the position of owing the feds hundreds of millions of dollars. If local mental health agencies do not change their practices, they could lose $80 million in federal dollars in the next biennium." Kathie Durbin is a special projects reporter for The Columbian. She can be reached at 360-759-8034 or kathie.durbin@columbian.com.
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