Stressed Budgets Lead States To Cut MH Resources

States are also relying on the Medicaid program to fund more of their mental health budgets because the federal government provides a matching contribution, according to Koyanagi. “The problem is that Medicaid doesn’t cover people with serious mental illnesses who are homeless or earning a living just above the poverty line but don’t have health insurance. Without a Medicaid card, these people often can't get access to mental health services,” said Koyanagi.

Although low-income people with severe mental disorders are eligible for Medicare as disabled persons, their medications are not covered, and their psychiatric treatment is reimbursed only up to 50 percent, said Gudeman.

Without accessible community mental health services, more people with serious mental illnesses show up in hospital emergency rooms or other crisis facilities, which in the long-term is more costly, according to Bernstein.

Howard Goldman, M.D., director of mental health policy studies and a professor of psychiatry at the University of Maryland School of Medicine, told Psychiatric News that despite the overall decline in mental health funding, states have shifted more of their funds towards community mental health services in the last decade.

Goldman, who is also a project director at the National Association of State Mental Health Program Directors Research Institute, referred to a 1999 report showing that state mental health agencies in Fiscal Year (FY) 1997 spent $9 billion, or 56 percent of their total expenditures, on community-based mental health services, which was up 31 percent from FY 1993. State psychiatric hospital inpatient spending in FY 1997 represented 41 percent of the total state mental health agency expenditures, according to the report.

In addition, several state mental health authorities have shown interest in improving the quality of mental health care by partnering with academic centers to develop and implement evidence-based services, said Goldman.

Examples of evidence-based practices are assertive community treatment (ACT) programs and supportive employment, according to Goldman. The first ACT program was founded in the late 1970s in Madison, Wis., and relies on a multidisciplinary team of usually 10 to 12 professionals to provide a comprehensive array of services to people with serious mental illness in the community, Goldman explained. Because of the intensity of services, ACT programs typically have small caseloads, making them more cost-effective, according to Goldman.

Bernstein, the executive director of Bazelon, commented that evidence-based practices are important, but do not reach or work for everyone who relies on the public mental health system.

The Bazelon Center plans to urge state legislators to reform the system and adopt a model law its staff developed. The law would entitle people with serious mental illnesses to receive comprehensive mental health services and supportive services to assist their recovery, integrate into the community, and foster economic self-sufficiency, said Bernstein.

Koyanagi, the main author of another new Bazelon report, Recovery in the Community: Funding Mental Health Rehabilitative Approaches under Medicaid, said that 49 states and the District of Columbia now cover community-based psychiatric rehabilitation services under Medicaid, and slightly fewer states cover case management services, although these services are not mandated by Medicaid law.

“Most states cover basic psychiatric rehabilitation skills such as going to the grocery store that enable people with mental illnesses to function independently. But fewer states cover supportive services that enable people with serious mental illnesses to be employed and live independently, and even fewer cover critical services such as peer support and integrated services for co-occurring mental illness and addiction disorders,” said Koyanagi.

“State laws also fall short because they allow the provision of mental health services to be subject to existing resources. We hope that if state legislatures adopt the model law, they will back it up with the appropriate resources,” said Bernstein.