ANNAPOLIS – The state’s cash-strapped mental health system’s deficit is expected to triple initial estimates to more than $70 million by 2003, according to a new report.
Lawmakers say the Mental Hygiene Administration, which oversees the state’s mental health system, may have to cut services to close the gap.
“If the projections hold up, the mental health administration will be looking at deficits that I, frankly, don’t know how they’re going to handle,” said House Environmental Matters Committee Chairman John Hurson, D- Montgomery, who has held hearings on the state’s mental health system.
“It will mean significant slashing of services to very, very needy people without any real plans on how we’re going to take of them,” Hurson said Friday.
The report by legislative analysts was first presented Thursday before a Senate Health and Human Services Subcommittee.
In 1997, the state switched to a fee-for-service system that reimburses clinics for each patient. But state fees cover 84 percent of clinics’ expenses, while Medicare covers only 50 percent of psychiatric bills, according to mental health providers.
State funding, however, hasn’t kept pace with the increasing demands for mental health services, creating a deeper fiscal crunch, said Lori Doyle, vice president of ReVisions Behavioral Health Systems of Cantonsville.
One of the state’s largest mental health providers, CPC Health Inc. in Montgomery County, closed last year. Two other clinics in the county, operated by Threshold Services Inc., are in danger of closing.
Gov. Parris N. Glendening’s $22 billion budget for 2003 includes $25.2 million for direct mental health services.
The Mental Hygiene Administration, however, has been struggling to pay off its deficit.
Although revenues from a tax amnesty program last year wiped out a large portion of the administration’s deficit, $27 to $29 million remained, according to the report. The deficit grew to $50 million for the 2002 fiscal year.
Without significant measures to trim costs, the deficit is projected to reach $70 million by the end of the 2003 fiscal year, according to the report.
“People are very alarmed that it has continually grown as fast as it has,” said Senate Health and Human Services Subcommittee Chairman Christopher Van Hollen, D-Montgomery.
Department of Health and Mental Hygiene Secretary Georges Benjamin did not return calls Friday.
To make up the deficit, legislative analysts recommended cuts, including $20 million from a fund that covers mental health patients ineligible for Medicaid and $2 million from money earmarked for school-based mental health center expansion.
Lawmakers must now consider slashing payments to providers or reducing services, said Doyle of ReVisions Behavioral Health Systems.
“Who do you cut off?” Doyle said. “The bottom line is that difficult choices have to be made at some point.”
While some lawmakers would like to infuse the state’s mental health system with more money, others like Hurson say that’s unlikely in a tight fiscal year.
“I don’t think that’s even a possibility,” he said. “I think we need to figure out why they’re running huge deficits.”
Still, one proposal approved unanimously by the Senate Finance Committee last month would provide clinics with a financial boost.
The bill would require Medicaid to reimburse providers the full amount of a mental health outpatient service if the patient is eligible for Medicare and Medicaid.
The bill is now before the Senate Budget and Taxation Committee, which Will begin making budget decisions next week.