Severe Budget Cuts Leave Community-Based Mental Health Care in Limbo

Prominent providers laying off employees, closing campuses; say costs will be pushed onto hospitals, jails, local governments and taxpayers

By Myers Reece
Western Montana Mental Health Center in Kalispell. Beacon file photo

Sweeping budget cuts enacted by the state government have unleashed a series of layoffs and downsizing measures at social service agencies across Montana, which mental health advocates say will significantly diminish access to vital services, particularly for low-income and at-risk residents.

Meanwhile, providers say the cuts come at a time when margins have already been thinning for years because of stagnated reimbursement rates, creating a storm of circumstances that threatens to erode the foundation of community-based mental health care in the state.

The cumulative consequences, providers and advocates say, will have ripple effects on local governments, hospitals, jails, homeless shelters, foster care, inpatient facilities, employers, schools, families, and the lives of vulnerable residents, as well as the livelihoods of numerous mental health and social service workers losing their jobs statewide.

“There’s going to be a domino effect of these cuts,” said Jodi Daly, CEO of Western Montana Mental Health Center, in a recent interview. “It’s going to directly affect our clients and our communities in various ways. It’s a fallacy to think you can chip away at the safety nets of communities and expect a cost savings for those communities.”

Western Montana Mental Health Center (WMMHC), a nonprofit and the largest mental health center in Montana, recently announced dozens of layoffs and other institutional adjustments in response to a series of cost-cutting measures and administrative rules approved by the Legislature and Gov. Steve Bullock’s office, which have taken aim at Medicaid reimbursement rates and case-management programs.

The agency also plans to eventually close its campuses in Libby and Dillon, although it’s working with community partners to cover clients’ cases. Daly points out that WMMHC is still offering services in the rest of its communities, albeit at reduced or altered levels, including at its campus in Kalispell, which works with children and families at Stillwater Therapeutic Services and Sinopah House and adults at Lamplighter.

“It’s extremely heartbreaking,” Daly said of the layoffs.

AWARE Inc., a large private provider of mental health and disability services to more than 3,000 individuals and families statewide with about 1,000 employees, shut down its office and two group homes in Kalispell this fall, eliminating 20 jobs and displacing at-risk children to other residential facilities and providers, although many families are still without services.

On the heels of those downsizing efforts, WMMHC, AWARE and other agencies are still facing additional cuts emanating from the regular legislative session and a special session convened in November to address the state’s budget crisis, caused by lower-than-expected revenues and exacerbated by a costly wildfire season.

Daly said she is “waiting with bated breath” to see what the forthcoming cuts look like in their final form as the governor’s office works out the finer details.

“We’re still waiting for the second shoe to drop as it relates to the governor’s cuts,” Daly said.

The state budget cuts have heavily impacted the Department of Public Health and Human Services (DPHHS), specifically targeting case management, which is crucial to community mental health and other social services. Case managers serve as the hub of treatment programs, connecting all the various people and entities involved, and providers say the loss of their skillsets and training ripples throughout agencies. The majority of the 44 layoffs announced by WMMHC, effective Jan. 2, are case managers.

“The case management crew, they’re really the glue of the system,” said Dan Aune, board president for Mental Health America of Montana and a former director of multiple mental health clinics and a children’s psychiatric hospital. “They’re the folks who make sure people get to their appointment, follow their medication regimen, make sure they get to social activities.”

“What’s going to be missing is that connector for the person who has the diagnosis to their services,” he continued. “The likely outcome is people who have that diagnosis are going to be more at risk in terms of compliance with their medication, isolation, all of that.”

There are also major funding question marks for other social services, including those focused on individuals with developmental disabilities, as well as room and board funding for therapeutic group homes listed on the chopping block.

On Dec. 21, providers received word that the state plans to eliminate contracts for developmental disability-targeted case management effective March 31, which came as a surprise, according to Matt Bugni, chief information officer for AWARE. While the budget cut was included in the special session funding bill, Bugni said providers weren’t expecting this announcement.

Such a move would deliver a “significant blow” to an organization already reeling from other funding reductions, Bugni said.

“We’ve been operating under the expectation that this would be a rate cut, not an elimination of private sector jobs to shift work to state jobs,” Bugni said. “It wasn’t on the radar. It took us off guard.”

Daly said providers and advocates worked hard to convey their concerns, citing an Aug. 22 meeting in which more than 20 CEOs, directors and representatives of health care organizations, including WMMHC and AWARE, traveled to Helena to meet with state leaders and provide recommendations for addressing the budget crisis. She didn’t feel their voices were heard as loudly as she hoped.

“I think anything and everything that could have been done to educate representatives and community stakeholders and DPHHS was done,” she said. “Right now it feels like it was misunderstood, ignored, rebuffed.”

The DPHHS maintains that officials from the department and governor’s office went to great lengths to listen to and accommodate the concerns, including a September letter requesting meetings with providers and key stakeholders, and multiple meetings and phone calls each month since July.

“DPHHS has worked hard to minimize the budget reduction impacts to providers and the people we all serve,” DPHHS Director Sheila Hogan said in a statement to the Beacon. “We have also gone to great lengths over the past several months to reach out to key agency stakeholders, including mental health providers, to hear their concerns and ideas. We are committed to working collaboratively with all providers to help address today’s challenges.”

One twist in the funding saga is a 7-1 vote by the Children, Families, Health, and Human Services Interim Committee to continue an objection to administrative rules that would implement reimbursement rate reductions. The rules are set to go into effect Jan. 1, and the vote on its face would delay their enactment, but providers believe such a delay likely won’t occur because the Legislature folded the rules into the main budget measure during the special session. Bugni says there could be potential legal implications if the state moves forward with the objection in place.

Aune, who is based out of Bozeman but does mental health consulting across the country, echoes Daly’s worries about local taxpayers now bearing more costs because of reduced state funding, describing emergency rooms and law enforcement agencies as two entities that will immediately feel the repercussions of dwindling community-based services. There will also be more patients who end up in inpatient facilities, Aune said.

“They’re going to bear the brunt of this,” Aune said. “We didn’t take care of it at the state level, so the cost is going to be at the community level. That’s going to cost taxpayers at a local level.”

Flathead County Sheriff Chuck Curry said he and others in law enforcement have been monitoring the budget discussions and “have attempted to have our voices heard on this issue,” with the understanding that such cuts have “unintended consequences,” which could have repercussions for the county’s already overcrowded jail.

“Any time we start impacting community-based mental health services, it certainly impacts the jail population,” Curry said. “I’m very concerned. Unfortunately, if we’re not treating them in the community, they often do wind up in a facility such as ours.”

Aune said Oregon spends 85 percent of its mental health dollars in communities and only 15 percent on institutions, which he says is a more efficient treatment and funding model. In Colorado, the ratio is 75 percent to 25 percent. Montana is the opposite, he said, with 70 percent going to institutions, such as the state hospital in Warm Springs and state chemical dependency clinic in Butte, and 30 percent directed to communities.

A bed in the state hospital costs $585 a day, Aune said, compared to $3,000 a year to provide care for a person with a diagnosis in the community. Aune calls it “an administrative philosophy” driven by politics, noting that the institutions are large state employers.

“If we could move those dollars from the institutions to communities, I don’t think we’d have such a big fight on our hands,” Aune says. “But if you’re a politician, those institutions represent jobs and votes.”

“Our value for people who are vulnerable,” he adds, “is not as high as you find in other states.”

Aune’s advocacy group has been working for years to promote the advantages, both in terms of finances and quality of care, of community-based mental health care.

“All the things we’ve worked on for a number of years have sort of been taken away with a broad budget cut,” he said. “It’s a pretty frustrating time in our industry.”

Aune, Daly and Bugni all share the same concern over what they see as a lack of a cohesive vision and plan for mental health and behavioral services in Montana, a problem further brought to light by the current funding dilemmas.

“What’s the plan?” Bugni said. “If there’s a better plan and a way that this can be handled, I’d like to know what that plan is before certain services that we think are pretty important get decimated.”

Daly doesn’t think that bodes well for a state with the nation’s highest suicide rate and a high rate of children in out-of-home placement, among other dubious distinctions.

“How do you cut all of this when you have those distinctions?” Daly said. “We really need to start working on some healthy policy. We need leadership and partnership.”