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Community Mental Health gives update on budget crunch

Grand Haven Tribune (MI) - 8/27/2015

Aug. 27--HOLLAND TOWNSHIP -- Facing a $2 million budget shortfall, officials from Ottawa County's mental health agency say they're doing what they can to address the issue.

The agency hosted a roundtable discussion Wednesday evening to provide an update on its budget crunch.

"There's lots of reasons for that," Community Mental Health Executive Director Lynne Doyle said. "A lot of it has to do with our re-regionalization."

According to Doyle, new requirements have caused the agency to join a seven-county region, which has resulted in changes in Medicaid funding that's distributed to CMH.

And more reductions are likely needed, too.

"One of the biggest things coming around the bend here at Community Mental Health in the future is (the Lakeshore region) voted to change their Medicaid funding method," Doyle said.

A $6.8 million hit over the next four years, the new methodology begins Oct. 1, 2016, and disburses Medicaid funds on a per-member, per-month basis.

"That's a 25 percent cut in Medicaid," Doyle said. "We've been given four years to absorb the impact of the Medicaid funding reduction."

Doyle did note that the state Department of Health and Human Services is working on an equal method of distributing Medicaid funds, which would go into effect in October 2016. An 18-month phase-in, this would offset some of the nearly $7 million in cuts.

"What that could mean at the end of 18 months is an additional $1 million," Doyle said.

Doyle also noted that the state has been working on ways to distribute its General Fund money more equally, which could result in another $1.5 million for the agency.

But agency officials are still looking to roll up their sleeves.

"With a looming $6.8 million, or even $4 million to $5 million reduction, we'll need to make changes," Doyle said.

The agency is focused on looking at ways they can contract with other partners to provide services, identifying and providing the most timely and cost-effective services to clients, and making administrative efficiencies.

"We're working on it, but there's certainly work to be done," Doyle said.

Officials are also eyeing a possible millage that would go before county voters at some point in the future.

"The proposal we're going to be submitting would bring in another $3 million a year," Doyle said. "It would by all means soften the blow of the budget reductions."

Doyle also addressed the pending closure of Kandu Inc. The Ottawa County-based nonprofit operation that provides work experience for individuals with disabilities will close Sept. 4 after 62 years in business.

"That was very unexpected news for us," Doyle said. "(Kandu officials) let me know the day they issued a press release that they would be closing by the end of the month."

In a recent Tribune article, Kandu CEO Tom Vreeman said the organization's board of directors evaluated the business model and determined it didn't appear as though it would be supported in the future, given funding and changing policies for disabled persons.

According to Doyle, the Community Mental Health's contributions to Kandu were cut by $400,000 over the past two years. This equates to about 5 percent of its operating budget, she said.

The local mental health department is working to place workers with various opportunities once Kandu closes, and officials are also working on a long-term solution.

"We've been working for a long time to come up with a model for what employment services will look like in the future here," Doyle said. "I think the end result will be a solid model that is going to work for everyone."

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