Government and Health Care

A perfect storm in mental health services

Kent commissioners hear details of the Network180 crisis.

April 24, 2015
| By Pete Daly |
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The Kent County Board of Commissioners heard details of the “perfect storm” funding crisis in community mental health services, with the disparity between what the state government does for Southeast Michigan versus West Michigan once again an issue.

Scott Gilman, executive director of Network180 — who used the phrase “perfect storm” — said the state government’s change in January 2014 from a county funding basis to a regional basis triggered an effective cut of $7.5 million in Medicaid funding for community mental health for the new West Michigan region called Lakeshore Regional Partners.

He said the rationale given by the Michigan Department of Community Health is there have been actuarial changes in the funding review process, and, supposedly, in the new West Michigan region there is now “less morbidity” and too much Medicaid “carry-forward” funding.

In addition to Kent County, Lakeshore Regional Partners includes Allegan, Ottawa and Muskegon counties.

The region has experienced a $17.4 million reduction in traditional Medicaid funds in less than 18 months.

The state’s health plan, called Healthy Michigan, has a surplus that cannot be used to offset the reductions in Medicaid.

“Morbidity” is an actuarial term essentially meaning need for mental health services, and “carry-forward” refers to Medicaid funding not immediately needed that is set aside for later use.

Network180 provides little actual hands-on mental health services itself; rather, it is an umbrella organization that coordinates and contracts for needed services from nonprofit agencies in Kent County that do the work caring for individuals and families.

The services cover developmentally disabled patients, mental health services and substance abuse services, and are provided by community mental health agencies Hope Network, Cherry Health, Arbor Circle, Bethany Christian Services, Wedgwood Christian Services, D.A. Blodgett – St. John’s and Pine Rest Christian Mental Health Services.

In October the MDCH completed actuary updated rates for 2015, and Lakeshore Regional Partners lost an additional $2.5 million in Medicaid funding. There were other cuts, too — eventually totaling about $11 million in lost Medicaid funding for community mental health in the region. The impact on Kent County patients is or will be equivalent to about $5 million, according to Gilman.

The Legislature approves funding to MDCH, and the state’s current appropriations provide an average of about $260 per patient in Kent County, as opposed to more than $400 per patient in Oakland County, Gilman said.

Starting last July, there were decreases in enrollment in the Lakeshore Regional Partners Temporary Aid for Needy Families program, which triggered an estimated $7.4 million cut in Medicaid funding. In February, LRP announced total administrative reduction plans at each of the five community mental health partners. The Network180 extended organization must ultimately reduce its expenses by $5 million.

“We need to fix the TANF problem now,” Gilman told the commissioners.

He said the funding crisis poses a “double bind” because Network180 “can’t close the front door” to patients who need help. He compared it to the public school system that is required to admit every pupil who shows up for class.

So far, total administrative costs across the LRP service area have been cut by about $3.5 million, or 30 percent. At Network180 itself, administrative costs have been reduced by about $1 million, equal to 28 percent.

Gilman said it is clear that community mental health in Kent County is seriously underfunded, based on patient needs data on hand. He also emphasized benefit and cost standards are not aligned at the state level.

Jim Saalfeld, Kent County board vice-chair, said county officials would continue to press state officials for a legislative fix for the crisis impacting patients served by Lakeshore Regional Partners.

“This is not a system that is fair. It has got to be fixed,” he said.

“These are our family, friends and neighbors,” said Commissioner David Bulkowski, whose day job is executive director of Disability Advocates of Kent County. He noted that, under the changes at the state level, Network180 is operating on much less funding but still serving the same number of patients.

“We’re going to cut real services for real people,” said Bulkowski.

Assistant Kent County Administrator Wayman Britt, who has been working with Network180 and West Michigan representatives in Lansing since the crisis began to unfold, said “there are things we can change” but it will depend on whether the state government is willing to work with the community mental health services establishment in West Michigan.

He said he is not convinced this is merely a Network180 problem; rather, it is “a broader problem.”

Gilman said he fears as services for those with serious mental issues are reduced, more individuals may fall within the criminal justice system.

Following testimony by social workers in the Lakeshore Regional Partners region, board chair Dan Koorndyk reassured them that “we are working on it,” trying to recover funding at the state level.

“The inequity of Southeast Michigan and West Michigan is driving me crazy,” added a frustrated Koorndyk.

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