Mental health care proposals keep hospitals, agencies watchful

March 18--Local hospitals and mental health agencies are keeping close watch on the current General Assembly session, anxious about several proposals that threaten their budgets while pushing for expansion of inpatient mental health care.

Today, the Public Health Committee will hear testimony about a bill that calls for an increase in the number of mental health hospital beds, a central information system hospitals can use to identify where open inpatient mental health beds are located, and establishment of a system of quality measures for state-funded inpatient mental health programs, among other changes.

Max Gorski, director of patient care services at Lawrence + Memorial Hospital in New London, is submitting testimony urging passage of the bill. Additional beds are needed for "intermediate" stay patients, he said, to alleviate backlogs in acute care programs such as L+M's Pond House and in emergency departments seeking to place patients after a psychiatric crisis. "Intermediate" stay beds are for patients who need hospitalization for up to 90 days.

"We've had people in our acute care unit for five to six months" waiting for an intermediate care placement, he said Tuesday.

Stephen Larcen, president of the behavioral health network of Hartford HealthCare, which includes The William W. Backus Hospital in Norwich, said the added inpatient beds and other provisions of the bill could be phased in over the next few years and would not require a large amount of money. The bill also calls for establishment of care coordination teams at emergency departments to help "high repeat users" of emergency room care establish and maintain mental health care, he noted.

"We think a small investment of about $4 million to $5 million would be what's needed, and it would pay for itself in reduced use of emergency rooms" by patients in mental health crisis, he said.

The bill also calls for Medicaid reimbursement rates for inpatient mental health to double so that it would be at the same level as Medicare reimbursements, Gorski said. Making a convincing case for these increases, however, is bound to be difficult given significant cuts proposed for other areas of mental health and health care.

Gino DeMaio, chief executive officer of Sound Community Services in New London, said his agency next year could face a cut of up to $3 million in its annual $9 million state grant for the outpatient mental health care it provides to about 1,270 patients per month. That reduction, part of Gov. Dannel P. Malloy's proposed budget for next year, would come in addition to a mid-year reduction in its state grant of about $250,000, he said. Sound Community Services' ability to continue serving its clients, almost all of whom are covered by Medicaid, would be seriously compromised, he said, given the low reimbursement rates for Medicaid.

"We're the only ones that provide this kind of service in southeastern Connecticut," he said. "I've been ripping my numbers apart" to figure out how to absorb the cuts, should they become part of the final budget.

Also cut would be grants to detoxification treatment programs such the Southeastern Council on Alcoholism and Drug Dependence, which serves about 3,500 clients annually.

"They (the state) are making the assumption that we can make all this up by billing Medicaid, and that's just a head-in-the-sand response," said John Malone, executive director of SCADD. "We can't make this up by doing more volume. I'm hoping the Appropriations Committee makes some significant changes in the governor's budget."

The cuts both to outpatient mental health and detoxification programs would impact programs at Backus, the Rushford Center in Middletown and others in the Hartford HealthCare network, Larcen said.

The state grants were intended to cover uninsured patients, but since more people are covered by Medicaid through the Affordable Care Act, the state is reducing its grants, said Mary Kate Mason, spokeswoman for the state Department of Mental Health and Addiction Services.

In December, the agency reduced about $5.4 million in grants this fiscal year to about 50 providers, she said.

"The reduction in the grants for mental health services will continue into fiscal 2015," she said. The fiscal 2014 grant was about $66 million, while the amount proposed for fiscal 2015 is about $58.9 million. She added that DMHAS worked with the Office of Policy and Management to develop the portion of Malloy's budget proposal that pertains to mental health.

"More people are able to receive coverage through the Affordable Care Act, so agencies will be able to bill for those services," she said. "There are still a lot of mental health services being paid for out of the state budget."

Larcen said the state grants are still needed to pay for services necessary for those with serious mental illnesses that are not covered by Medicaid. In addition, he said, "Medicaid rates are low."

In addition to the threats to mental health funding, another bill would allow municipalities to levy property taxes on nonprofit hospitals and colleges. Currently cities and towns receive Payment in Lieu of Taxes funds from the state that cover about 33 percent of the taxable value of hospital and college property. This comes on top of Malloy's plan to increase the gross receipts tax on hospitals and reduce Medicaid reimbursement rates.

"We are under financial assault," said Dr. Rocco Orlando, chief medical officer for Hartford HealthCare. He said the cumulative impact on the Hartford HealthCare network would be "in the tens of millions range.

"This will really affect our ability to provide services" and force layoffs, Orlando said.

Bill Stanley, vice president for Development and Community Relations at L+M, who testified at a March 11 public hearing against the property tax bill, said the measure would "foist off on institutions of healing and education" the state's obligation to fully fund PILOT payments to municipalities. When the PILOT program was first enacted, the state was supposed to reimburse towns at a rate of 77 cents for every dollar of tax-exempt property, he noted in his testimony.

"I don't blame the municipalities for wanting this," he said.

But if hospitals become subject to property taxes, he said, layoffs and cuts in services will result.

"The governor's budget is a disaster for hospitals," he said.

j.benson@theday.com

Twitter: @BensonJudy

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