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Sunday, February 7, 2010

Mentally ill suffer from budget cuts

NASHUA – Six years of incremental budget cuts have left the state’s mental health centers on the brink of financial catastrophe, according to mental health experts.

They worry that more cuts will push them over the edge.

Over the edge, in this case, would mean cutting services to mentally ill people as counselors are forced to reserve their time and resources for more severely ill patients.

It’s a position in which all of the state’s community mental health centers find themselves to one extent or another, according to a new study released by the Endowment for Health.

“We’ve been walking a tightrope for six years. The very next jostle is apt to knock us off,” said Carol Farmer, associate executive director of the Greater Nashua Mental Health Center at Community Council.

The report closely analyzed a six-year financial history of the centers and discovered that while the mental health system isn’t in dire straits, it has no cushion to cover significant losses in revenue.

All 10 of the mental health centers are independent nonprofits that contract with the state Department of Health and Human Services on an annual basis.

But too much of the centers’ revenue, an average of 75 percent of the combined $150 million in 2009, comes from state Medicaid and Medicare reimbursements and a federal match of those funds.

The centers lack the ability to shift revenue from other sources to cover cuts in government reimbursements because there aren’t many other revenue sources, according to the study.

The Endowment for Health has already published similar studies on the state’s community health centers and hospitals, according to Jeanne Ryer, the Endowment for Health’s program director.

“Policymakers need to understand the fragility of this system as they attempt to address state budget shortfalls,” she said.

About 80 percent of the Nashua center’s $10 million-plus annual budget comes from Medicaid and Medicare reimbursements and the federal matching funds.

A series of cuts have already necessitated considerable concessions on the part of the counselors and other employees at the Nashua center, Farmer said.

Counselors are working more hours and have taken on more clients.

Employees haven’t received raises in three years, and the center cut time off and its contribution to employees’ 403(b) accounts, the nonprofit version of a 401(k), Farmer said.

“We’ve dealt with this over the last six years and really held our own,” she said. “There’s no place else to go. If something more needs to be cut, it’s direct care to patients.

“Now we’re at the wall. Something has to give.”

The state’s Medicaid/Medicare reimbursements are only part of the equation. Since federal contributions are based on state funding, when the state makes cuts, it hits the centers’ pocketbooks twice as hard.

The state has also increased eligibility requirements for patients, reducing the number of people for whom the centers can bill the state while they maintain the same overhead expenses.

The Nashua center runs programs out of four city buildings. Adult services are housed at 7 Prospect St., and child and adolescent services are at 15 Prospect St., along with the Greater Nashua Visitation Center. Administrative offices and special services are at 100 West Pearl St., and the center now rents a floor of an Elm Street building for a substance abuse program. It also leases the building to the Nashua School District for its Phoenix Program, Farmer said.

Also, in October, the state reduced the center’s billing rate because state revenues weren’t keeping pace with projections made when the center signed the most recent contract with DHHS. Further revenue shortfalls are expected to prompt another cutback this month or next, Farmer said.

On Friday, HHS Commissioner Nick Toumpas outlined some of those cuts, which included raising child day care rates and cutting Medicare and Medicaid reimbursement rates paid to hospitals and other human-services providers, to close the agency’s $43 million deficit.

The economic downturn has led to more than 19,000 more individuals seeking public assistance, and without quick action, some state programs could go broke, Toumpas said.

The mental health centers could lose an $8 million in Medicaid and Medicare funding as part of the expected announcement, according to estimates made in the Endowment study before Toumpas’ proposal.

If that translates directly to the number of patients treated, it would mean more than 3,000 fewer patients served, according to the study. That’s about 6 percent of the 50,000 mentally ill people the centers serve statewide.

Farmer said community mental health officials are trying to work with state officials and lawmakers to come up with solutions that don’t include more cuts.

In addition to demanding more for their employees, the center’s leadership is searching for new grants and fundraising opportunities, as well as trying to bolster its roster of patients with private insurance. It has also requested “administrative relief” from the state in the hopes that fewer paperwork and record-keeping requirements will increase patient time, Farmer said.

One idea would be to switch from the current fee-for-service model in which the center is reimbursed for each hour it spends with each patient to a new method that would offer lump-sum payments each month based on the number of patients served.

That money, not targeted at a specific patient, would allow counselors to spend more time with some patients and less with others and still keep them in line with their treatment plans, Farmer said.

“The bottom line is, we know there’s no money,” she said. “We’re not asking for more money. We’re asking for more flexibility in how we apply the money in the best interest of our consumers.”

Absent that sort of financial agility and or an easing of administrative requirements, patient care is the only thing left to suffer the effects of more cuts, Farmer said.

“There can be no other answer unless we find a new way to do business,” she said.

Joseph G. Cote can be reached at 594-6415 or