2009 – 2010 Enacted Budget Highlights

Submitted by the Office of Financial Management

State Operations

Overview
The 2009/10 Enacted Budget for the Office of Mental Health's (OMH) aligns significantly reduced growth in spending with the transformation of large and complex care systems for children, adults, and forensic (court-involved) individuals. In this budget, OMH State Operations will continue to increase the accessibility and acuity (urgency) of inpatient care, while reducing unneeded capacity, increasing the focus of State Operated community services and reducing costs. These goals are complex, interdependent, and linked to changes in community mental health services funded primarily via Aid to Localities resources.

OMH's State Operations cash avails in the Enacted Budget reflect a net decrease of $2 million from the Executive Recommendation to:

• Restore funds for the Legislature's rejection of an Article VII bill which would have eliminated certain reporting mandates for the Agency (+$1 million);
• Restore funds for transportation costs the Agency will continue to incur resulting from the Legislature's rejection of Article VII legislation encouraging the use of video-teleconferencing of certain judicial hearings required under the Sex Offender Management & Treatment Act (SOMTA) (+$1 million); and
• Reduce spending projections for the SOMTA program as a result of a recent re-estimate of the SOMTA population in OMH facilities in 2009-10 (-$4 million).

Details of the Governor's announcement to reduce the State’s workforce by 8,900 are still unfolding. The Enacted Budget cash projections cited above for the Office of Mental Health do not reflect the savings for the 2009-10 Workforce Reduction Plans.

Other Article VII bills that were either modified or rejected by the Legislature include the following:

• A bill authorizing OMH to reduce Adult inpatient capacity was modified to limit OMH inpatient capacity reductions by no more than 450 beds in 2009-10. Any additional reductions would have to be within the provisions of Articles 7.17 & 41.55 of Mental Hygiene Law. Further, OMH must provide notice to the Legislature prior to closure or conversion of these beds. 2009-10 savings estimates of -$6.1 million and a reduction of 153 FTE remain consistent with levels in the Executive Recommendation.
• A bill authorizing a 3-year delay in the implementation of legislation to expand certain mental health programs in Special Housing Units (SHU) in prisons was rejected. No funding or staffing has been added to support this expansion in 2009-10, but resources are assumed in the Financial Plan in 2010-11.
• A bill which would have clarified Mental Hygiene Law regarding the authority of OMH Facility Directors to act as representative payees to pay for the cost of care and treatment for persons who have assets, consistent with all applicable federal laws and regulations was rejected.

Furthermore, the final Enacted Budget accepted the proposals in the Executive Budget as follows:

• Reduce budgeted growth for the SOMTA Program by reducing staffing levels and allowing respondents to remain in DOCS custody during the pendency of court proceedings (-$15.2 million).
• Delay the implementation of certain forensic mental health services due to lack of demand and capital delays (-$2.1 million).
• Reduce through attrition, 30 administrative FTE in Central Office and facilities (-$1.5 million)
• Encourage clients served in OMH outpatient programs to use community pharmacies (-$1.2 million)
• Reduce funding to the Centers of Excellence for Cultural Competence (-$0.5 million)
• Increase funding for year 2 of a 3-year plan to better recruit and retain clinical staff, but at a rate that is $2 million less than originally planned (+$3.1 million)
• Accommodate increased energy, pharmacy and medical expenses (+$20.6 million)
• Provide new funding to support negotiated salary adjustments and salary increases for State employees who have not yet attained the job rate (+$23.8 million)
• Support 17,127 FTEs at of the end of the Fiscal Year.
• Establish census levels at 3,580 Adult inpatient beds, 695 Forensic inpatient beds and 538 Children & Youth (C&Y) inpatient beds.

Aid to Localities

Overview
Community mental health services supported by Aid to Localities funding in the 2009/10 Enacted Budget are engaged in sweeping changes to reorient programs toward recovery and resiliency, provide sustainable funding models, and make care more consumer and family driven. The Budget accomplishes these changes while dramatically reducing the rate of growth in spending by promoting efficiencies in certain high cost services and by deferring new spending commitments until they are affordable.

Major themes of reform advanced in this budget include:

• Expanding access to outpatient clinic treatment (annualizing investments begun in 2008/09) while providing resources to establish an indigent care pool for clinics, and introducing a new rate methodology, that is consistent with federal requirements, to be phased in over four years.
• Advancing reform of children's services as recommended in the Children's Plan, via partnerships with other child-serving state agencies.
• Tackling the long-standing problem of unemployment of adults with mental illness with the assistance of a (federal) Medicaid Infrastructure Grant, and reorienting adult mental health services toward a recovery oriented and consumer-driven approach.
• Addressing problems in access to and reimbursement of acute psychiatric inpatient care by rebasing rates and implementing a more rational payment methodology.

OMH's Local Assistance appropriations in the Enacted Budget were increased by $11.4 million from the Executive Recommendation to:

• Restore the one percent reduction in the 2008-09 Cost of Living Adjustment (COLA) (+$9.5 million);
• Restore the reduction to “flex” service dollars for the Home and Community Based Waiver (HCBS) program, bringing the funding levels back to $2,500 per slot for all providers (+$0.6 million);
• Delay elimination of the funding differential for Unified Services counties by 15 months -- the reduction is still planned for July 1, 2010 (+$1 million); and
• Add funding for transfer to the Commission on Quality of Care and Advocacy for Persons with Disabilities (CQCAPD) to provide legal services and support for parents with psychiatric disabilities (+$0.3 million).

In addition, the Department of Health's budget includes $4 million gross (effective April 1, 2009) to temporarily delay the rate reductions for Article 31 Continuing Day Treatment (CDT) programs by 15 months -- the reduction is planned for July 1, 2010. Importantly, all CDT programs will convert to the new half-day full day rate methodology as originally scheduled starting April 1, 2009.

Furthermore, the final Enacted Budget accepted the proposals in the Executive Budget as follows:

• Provide no COLA for community mental health programs (-$56.5 million) and no trend factor for Residential Treatment Facilities (-$1.1 million) in 2009-10;
• Reduce State Aid for county administration activities which can be mitigated by counties maximizing Federal Salary Sharing (-$1.1 million);
• Eliminate and redirect funds for 75 unallocated Family Based Treatment Beds (-$1.9 million);
• Maximize reimbursement and recoveries including overpayments for comprehensive outpatient programs and exempt income for residential programs (-$8.5 million);
• Freeze the community bed pipeline excluding New York/New York initiatives (-$6 million);
• Defer and restructure new commitments (-$17 million);
• Implement a Comprehensive Children's Plan (+$1.7 million);
• Establish a Peer Support Resource Center (+$0.7 million);
• Implement the new Federal Grant to improve employment opportunities (+$6 million);
• Continue supported housing expansion and develop a new rent subsidy program (+$5.6 million);
• Continue expansion of vocational services within the Personalized Recovery Oriented Services (PROS) program (+$1.3 million);
• Continue support for ambulatory care reform to sustain and expand the clinic system and establish an Indigent Care pool (+$5 million); and
• Reallocate a portion of savings to support conversions to alternative program models (+$6 million).

In addition, the Enacted Budget also includes Article VII legislation to:

• Transition to a new case payment reimbursement methodology for inpatient psychiatric care including rebasing of hospital inpatient rates in the DOH budget (effective December 1, 2009);
• Transition to the new Ambulatory Patient Groups (APGs) reimbursement methodology for hospital and freestanding mental health clinics starting on or after October 1, 2009.
• Establish a new indigent care pool, in the DOH budget, for freestanding clinics including mental health programs.
• Extend the exemption for social worker and mental health practitioner licensing requirements by an additional five months through June 1, 2010.