Op-Ed: NJ Must Add Financial Safeguards to New Mental Health Funding Model

Robert L. Parker | May 25, 2017 | Opinion
Without a ‘safety net’ for mental health providers, as many as 20,000 residents could lose access to life-sustaining services

Robert L. Parker
New Jersey’s community mental health system is about to be gutted, unless lawmakers include financial safeguards in the state’s new funding model to ensure sustained treatment for thousands of residents.

The change to fee-for-service funding of mental health is drastic: For more than 40 years, New Jersey has guaranteed to cover expenses community mental health providers can’t recoup from clients, allowing nonprofits to serve people in need no matter their ability to pay. Under fee-for-service funding, providers will be reimbursed for certain “billable” services, but not others, and in some cases at rates that do not cover actual costs.

As NJ Spotlight reported recently, some community mental health providers have projected budget deficits of close to $2 million, which will force them to scale back services and ultimately limit clients’ access to treatment. NewBridge Services, which provides counseling in Morris, Passaic, and Sussex counties, estimates it will be unable to serve as many as 768 clients and face staff reductions of up to 20 percent. The New Jersey Association of Mental Health and Addiction Services estimates as many as 20,000 state residents could lose access to services.

What will be the repercussions? One only need look at the fallout in other states across the country that have cut funding to mental health care. In Michigan, 10,000 residents lost service when the state moved to fee-for-service funding. Nearly a third of community mental health providers in Massachusetts closed clinics between 2013 and 2015 because funding didn’t cover the actual cost of services. In Kansas, mental health funding has plummeted, and patients are put on waiting lists and offered fewer services.

Gov. Christie this month signed a law that will create an advisory board to monitor implementation of fee-for-service funding and determine if the state’s payment rates are sufficient, but that alone won’t prevent a crisis. Providers would have already reduced services, or possibly closed their doors by the time any review could take place.

NewBridge and eight other nonprofits formed the New Jersey Community Mental Health Coalition (NJCMHC) in April to sound the alarm of a pending mental health crisis. But providers are not alone. Freeholders in Bergen, Cape May, Morris, Ocean, and Sussex counties have passed resolutions calling on the state to provide financial safeguards. They understand that the burden of a failed community mental health system will fall on counties and towns, with increased demand on police and other first responders, hospital emergency departments, and jails.

‘Grave reservations’

And just last week, the chair of Greystone Park Psychiatric Hospital’s board of trustees wrote to state Department of Human Services acting director Elizabeth Connolly raising “grave reservations” about the fee-for-services model.

“The board feels this approach is shortsighted and will ultimately cost more in human impact and the economic costs to the state,” Eric Marcy wrote. “It seems counterintuitive that we would be moving to a fee-for-service system when there has been a move towards providing a system of comprehensive care across a continuum,” Marcy wrote. “Quality, not quantity, is what should be driving the care of the chronically mentally ill.”

One of the biggest concerns is the provision that payments will be withheld when clients miss sessions, despite the fact that is a common occurrence for people with serious mental illness. (It’s estimated that appointments are missed 20 percent to 30 percent of the time.) Among those who will be most affected are people who have insurance but cannot afford their deductibles and copays. NewBridge has always offered a generous sliding scale, charging as little as $5 a session, but that ends July 1.

There is bipartisan support to include financial safeguards. Sen. Tony Bucco (R-Morris) and Sen. Robert W. Singer (R-Ocean) have joined with Sen. Robert Gordon (D-Bergen) to sponsor a bill (S-3121) that would set aside $90 million in the state’s 2018 fiscal-year budget to reimburse providers for any shortfalls in revenue for one year. (There is a companion bill, A-4827, in the Assembly.) This would provide a cushion while the kinks of fee-for-service funding are worked out.

New Jersey citizens should contact their local legislators and insist this crucial safeguard be included in mental health funding. Legislators can be found by municipality at this link.

Fee-for-service funding is supposed to improve efficiencies, but we have to get the implementation right. If not, we will lose the safety net that has assured quality treatment for our most vulnerable residents. If NewBridge and other community mental-health providers cannot help them, who will?

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