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Ann Marie T. Sullivan, M.D., Acting Commissioner
Governor Andrew M. Cuomo

2009 Interim Report
Statewide Comprehensive Plan for Mental Health Services

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February 15, 2009

New York State
David A. Paterson, Governor

Office of Mental Health
Michael F. Hogan, PhD, Commissioner


Chapter 1
Transformation in Challenging Fiscal Times

The purpose of this Interim Report is to provide an update to the annual Statewide Comprehensive Plan for Mental Health Services published in October 2008. In particular, this first chapter is meant to help readers understand the impact and significance of mental illness and New York's efforts to improve care in economically challenging times. Chapter 2 highlights collaborations that are helping to strengthen integrated services and supports across systems of care, especially those among the mental hygiene agencies. Chapter 3 provides an overview of fiscal challenges and this year's proposed budget.

Understanding the Challenges

Mental health problems are prevalent and troubling
Each year, one in ten New Yorkers is affected by a mental illness that is serious enough to impinge upon functioning. The scope and significance of such illness often escape us unless we or someone close to us is touched by it. The stigma of mental illness and mental health care contribute to a climate in which mental health is generally not a high public priority, except when crises or incidents demand our attention.

Access to good care is hindered by many obstacles such as getting past the shame and stigma to seek help, dealing with insurance limits and barriers to care, or finding the right provider. Because of such obstacles, there is a gap of about nine years between the average age at which mental health problems first appear, typically age 14, and when care is first begun. This type of delay would be unacceptable for any other health condition, even for disorders that are far less serious. As such, these dynamics contribute to mental health concerns being a leading reason for school failure, the leading cause of adult disability, and the third leading cause of death by suicide of young adults. Additionally, we are aware of the pervasive impact of offenders with mental illness at every level of the criminal justice system, and the fact that individuals with mental illness are grossly over-represented among the persons who experience chronic homelessness.

Given the substantial and tragic impact of mental illness, where the cost in lost wages alone is about $200 billion annually in the United States, OMH continually strives to better understand what excellent care looks like. The challenges to providing good care are at the heart of OMH's efforts to improve mental health care in New York and reflected in the Governor's proposed budget for the coming fiscal year.

Good health care is personalized, continuous, and integrated
The realization that recovery is possible for anyone with a mental illness is counter to the belief that mental illnesses are "chronic" conditions that inevitably worsen over time. While the evidence does confirm that most mental health problems are long term and episodic, they are like other illnesses where there may be times of seemingly good health and other times when symptoms become difficult to manage, as with multiple sclerosis or diabetes. Learning to manage symptoms and adjusting one's life to cope with illness are the essence of recovery. Moreover, the single most important aid to recovery, besides self-awareness, is having a continuous relationship with a trusted health professional.

We have major work in New York to reduce barriers to continuous care and to engage people in finding solutions that improve the quality of their health and lives. The structure of American health care, the bias in New York toward inpatient and “episodic” acute care, and the sheer size and complexity of the New York State mental health system work against the availability of continuous healing relationships. Discontinuous care is not a recipe for developing a good rapport with a health professional and for learning self-management.

Recovery in the face of episodic, long-term mental illness is embodied by living, learning and working fully in one's community
Medications and therapy do not cure the illness, but rather help with its symptoms. The best care is that which helps people to build on their strengths, work around symptoms, and figure out how to live their lives productively and fully. Insurance-driven models find it difficult to accommodate reimbursement for services and supports that are often preferred by many individuals with mental illness; even effective supports such as self-help and peer support are not reimbursable. While holding down a job is critical to adult success, for example, employment services are not covered by Medicaid, even when people with mental illness have the worst outcomes in vocational rehabilitation services. Such realities represent primary challenges for mental health care – for making the best use of resources and enabling people to live satisfying, productive lives.

Making Sure Work is Grounded in Mission

In challenging fiscal times, OMH seeks to preserve capacity in existing safety net programs, while simultaneously restructuring for efficiency
As OMH seeks to address these fundamental challenges, it is grounded in its statutory mission, which defines the "safety net" role of OMH and the services provided and overseen. In general, these services are properly oriented toward adults with serious and persistent mental illness, and children and youth with serious emotional disturbance. For the majority of people who receive mental health treatment, service begins and ends without ever coming into contact with a program operated, funded or regulated by OMH. Instead, people prefer to obtain care in the less stigmatizing general medical sector from their pediatricians, medical practitioners or private practitioners, or they do not get mental health care at all.

safty net

When things get more serious, and when mental illness is so severe that it significantly impacts functioning in family life, school, or work, people tend to fall into the OMH safety net of programs. Care in the general medical sector does fail for a number of reasons, including limits on expert care and inadequate reimbursement for mental health care within primary care. This might occur, for example, when a clinician needs to not only prescribe medication for attention-deficit/hyperactivity disorder (ADHD), but also teach parents evidence-based approaches for better managing their child's behavioral problems. Thus, OMH serves as a safety net for those New Yorkers most affected by mental illness.

Shedding Light on the Crucial Role of Medicaid

As elsewhere in the nation, Medicaid in New York has become the dominant funder of mental health care. While federal participation in Medicaid has allowed care to expand far beyond what would have been possible otherwise in the State, the benefit for mental health care has been subject to arbitrary federal policy. Home and community-based services waivers, like the successful New York State CARES program for individuals with developmental disabilities, for example, are not available for adults with a mental illness. Other impediments to care resulting from Medicaid include the health insurance focus of Medicaid, making it a challenge to provide supportive and rehabilitative services; reviews of proposals for improvements in care under Medicaid put in place by the previous administration in Washington, DC; and the complexity of Medicaid itself within New York's disperse and complex mental health system, leading to fragmentation in care and difficulties with accountability.

Fundamental improvements in mental health care in New York State require extraordinary collaboration between OMH and the Department of Health (DOH)/Medicaid
OMH has been working intensively with DOH on a mutual reform agenda to begin to address the challenges outlined. Many aspects of this joint reform agenda are reflected in this year's proposed budget. These challenges being addressed include:

Achieving Reform in Challenging Fiscal Times

Almost everything is under reform simultaneously in the New York mental health system, while the day-to-day work remains challenging and the external environment continues to get more difficult. Underlying major and cross-cutting reform efforts is the recognition that there needs to be a reduction in the growth of spending, without stalling needed reforms.

OMH is striving to increase the productivity and focus of its hospitals
As with some other states and driven in part by Medicaid reimbursement for short-term psychiatric treatment, New York, over the last two decades, sought to meet the need for brief hospital care in general hospital units while establishing a “back-up" intermediate or long-term role for the adult State-operated hospitals. While this arrangement in some ways has served the State reasonably well, many OMH hospital beds continue to be occupied by individuals who are no longer improving as a result of inpatient care and in need of alternative supports. Ironically, the longer one stays in a hospital, the harder it can be to leave, as skills of community living are eroded by the routines of institutional life. As a result, intensive psychiatric services are often inaccessible.

OMH hospitals are the "safety net within the safety net” for individuals with the most intractable mental illness. OMH child, adult and forensic hospitals provide inpatient treatment and community care programs (in the case of the forensic hospitals, "community care" is provided within Department of Correctional Services prisons). The bulk of OMH resources and services are devoted to adult services, currently with 4,000 hospital beds and more than 20,000 individuals cared for in community programs. With close attention to improving the efficiency and accessibility of inpatient care, OMH increased adult admissions during 2008 by 14.9 percent from 2007. At the same time the census declined by 215 or 5.5 percent.

The focus is now being extended to ensure that hospital-operated community services are delivering maximum value, and complementing community services provided by nonprofit providers and general hospitals. This year, as noted in Chapter 2, work has already begun on improving the focus and efficiency of both inpatient and community services through collaborative local services planning initiatives with the County Mental Hygiene Directors.

Collaboration underlies Medicaid mental health care reform
Medicaid mental health reform was launched successfully last year in collaboration with DOH/ Medicaid, through changes in the financing, regulation and emphases of clinic mental health care. The changes were designed to increase access to ambulatory care and ultimately reduce the need for hospital care. Changes in the past year reduced and removed regulatory barriers to clinic expansion and began to attenuate the negative effects of the complex Comprehensive Outpatient Program Services (COPS) financing program.1

These initial steps have positioned OMH and its providers to move toward a consistent and more uniform reimbursement strategy that allows the system to become compliant with the financing requirements of the Health Insurance Portability and Accountability Act (HIPAA). Rather than continuing with the current OMH reimbursement approach, OMH has been working with all stakeholders over the past year to design the parameters of the approach of paying for discreet services as required by HIPAA. The goal is to rely upon the same methodology – termed Ambulatory Patient Groups or APGs – which began to be phased in last year for general Medicaid health providers. The highlights of the plan include gradual implementation beginning late in 2009 or early in 2010; a four-year phase-in to assist providers in adapting; consistent rate structures that differentiate (e.g., geographic region); and payment rates that are linked to the complexity of the service being delivered.

DOH is also collaborating with OMH to create a reimbursement pool for uncompensated care (medically necessary mental health treatment for individuals who are not Medicaid eligible). The intent is to improve the adequacy of and consistency in reimbursement of mental health services to individuals enrolled in managed care plans, and to manage the transition to this new system.

A second challenging problem for DOH and OMH relates to psychiatric inpatient care and several ways it manifests. As described above, much of the short-term hospital treatment of acute mental illness is now provided and paid for largely by Medicaid in general hospital psychiatric units, not in State hospitals. Yet, despite high numbers of beds and high expenditures compared to other jurisdictions, access to acute psychiatric inpatient care is often hard to achieve, because patients in New York stay longer on average than in most other states. The leading cause of long, acute-care hospital stays is often related to problems in finding housing, which is necessary for stable adjustment following discharge from the hospital.

Many patients with psychiatric problems also get stuck in crowded emergency rooms. Emergency departments without separate psychiatric facilities are often disturbing environments for people in psychiatric crisis, and the presence of persons with psychiatric crises in emergency departments can greatly complicate delivery of other emergency medical care.

Another important problem relates to a higher readmission rate to hospital care within
30 days after receiving treatment and being discharged from Medicaid-paid inpatient psychiatric care in New York State. This readmission rate is higher than national norms, suggesting that there may be problems in connecting people to needed follow-up care in their communities.

Fiscal problems are also prominent, with the payment system for Medicaid inpatient psychiatric care antiquated, flawed, and arbitrary. Psychiatric care is reimbursed at lower rates than other medical specialties, and a higher proportion of patients are uninsured. Medicare still retains arbitrary limits on psychiatric inpatient care. The result is financial instability for psychiatric units and general hospital closure of psychiatric units across the State, depriving communities of urgently needed care.

OMH and DOH are advancing a multipath strategy to begin to address these problems. OMH is intimately involved in these reform efforts reflected in the DOH budget. The first strategy is to overhaul reimbursement for acute inpatient psychiatric care in Medicaid. The goal is to have more adequate and equitable reimbursement that favors highly accessible care over inefficient, long-stay care. A modern approach to reimbursement of acute psychiatric care in Medicare, which would be developed with significant input from New York hospitals, offers an attractive alternative.

The second strategy by OMH and DOH is to develop alternatives to costly and ineffective repeat emergency room use. As in other areas of acute medical care, a small percentage of individuals use a high volume of emergency room and acute inpatient treatment (psychiatric, medical, alcohol and drug treatment) because their ongoing treatment is not adequate. The problem of some individuals receiving "too much" expensive medical care that fails to address and stabilize underlying health problems is not unique to mental health care; it is a central challenge and failure of America's fragmented, highly technological health system. This problem is also prominent for individuals who have multiple long-term or "chronic" illnesses. People with serious mental illness are over-represented in this group for several reasons. A primary reason is that their physical health is often greatly compromised due to high rates of smoking, poor diet and exercise, indifferent medical care and, ironically, the side effects of psychiatric medication. For these reasons, alternative approaches to integrate, coordinate and monitor the overall care of people with serious mental illness are urgent. Such approaches are happening on multiple fronts and include:

Expanding availability and reforming housing models is of high priority in fostering recovery
Housing is foundational to recovery and active community participation. New York's investment and expertise in community mental health housing leads the nation. It is known for models such as "Housing First,” which recognizes that treatment of homeless individuals with mental illness can only begin once people have safe housing in the community. Despite its successes, the State faces enormous challenges in housing for people with mental illness. These individuals are uniformly indigent; 85 percent are unemployed and most rely upon a monthly Supplemental Security Income subsidy of about $700. In most of the State, as is the case nationally, the basic rental cost of a one-room apartment exceeds an individual's total income. Worse, the supply of very affordable housing is eroding due to changes in the housing marketplace. Tens of thousands of people with mental illnesses are in hospital units, homeless shelters, and adult homes or leaving correctional facilities annually; many more are living with over-extended families or friends.

Many of the residential services, such as group homes, which the State has created over the years have turned out to have limited utility over the long term. While these services have value for persons in transition or with significant disabilities, they tend to become de facto permanent housing because other housing options or supports are scarce or not available. In collaboration with other agencies and its provider community, OMH is working to address these complex challenges. To improve the supply of housing and to reduce reliance on stand-alone mental health housing, the agency is pursuing joint development of mixed-used housing with the New York State Housing Finance Agency (HFA) and the Division of Housing and Community Renewal (DHCR). To improve the flexibility of current arrangements, OMH is exploring the selective conversion of group homes to permanent supportive housing. While these developments are proceeding well, they are exceedingly complex. Financing housing development in a way that viably integrates tax credits, bond funds, private investment and other sources of capital is challenging under the best of circumstances and even more so in a credit crunch. Financing the operation and maintenance costs is just as important and just as complex. Stigma continues to impede and slow down housing development, even though the track record demonstrates that supportive housing developments are good neighbors that tend to improve neighborhood property values. In addition, financing the services that individuals need to "make it" in normal housing involves a complex mix of Medicaid, State, local and private funding streams.

Sustaining the development of supportive housing and the reform of finance and support models is much more challenging in an environment of budget cuts and project-by-project review and approval. Nonetheless, OMH is committed to these tasks. Housing developed under the NY/NY III agreement will proceed, as will projects where sites have been secured. Resources appropriated in the 2008–09 budget for the development of supported housing will be used in part to expand the array of supported housing and to create a new, more flexible housing subsidy program during 2010–11.

Strengthening Collaborations to Improve Care

The collaboration between OMH and DOH/Medicaid is critical because of interdependencies between Medicaid reimbursement and the clinical and support needs of persons dealing with mental illness and their families. Collaboration extends to a number of other agencies, such as the partnerships OMH has forged with HFA and DHCR. Chapter 2 provides an overview of other select collaborative change efforts that have reform and transformation of care at their core.

Chapter 2
Collaboration and Progress toward Transformation

As noted in Chapter 1, OMH is involved in a number of interagency collaborations aimed at improving services and supports, fostering recovery, and building resiliency among adults and children who confront serious mental illness and emotional disturbance and their families. These collaborations are beyond the number and scope of efforts seen in most agencies. But, they are necessary because people with mental illness are involved in the work of many agencies, including schools, health care, human services, housing/ homelessness, disability/income support and criminal justice agencies, and others. What follows are examples of progress for select change efforts within OMH and across mental hygiene and other agencies in New York State.

Collaboration across Child-Serving Agencies: Development and Initial Implementation of the Children's Plan

In October 2008, OMH and eight other child-serving State agencies submitted the first comprehensive Children's Plan to Governor Paterson and legislative leaders. The Plan was tasked to OMH by the Children's Mental Health Act of 2006, but completed collaboratively because children's development and mental health issues are a major concern for every child-serving system. From early education to parenting, from pediatrics to the schools, and from foster care to juvenile justice, children and youth with behavioral problems and their families are of major concern. And in each of these areas, collaboration is required to address the problem.

Underlying the interagency collaboration has been the guiding principle that the social and emotional development of children is not any one system's responsibility, but everyone's responsibility. The participating Commissioners from all involved State agencies (OMH, Office of Children and Family Services [OCFS], Department of Health [DOH], State Education Department [SED], Office of Mental Retardation and Developmental Disabilities [OMRDD], Division of Probation and Correctional Alternatives [DPCA], Office of Alcoholism and Substance Abuse Services [OASAS], Commission on Quality of Care and Advocacy for Persons with Disabilities [CQCAPD])have continued to meet under the auspices of the Council on Children and Families (CCF), with regular participation by parent and youth advocates. Leadership and staff from the participating agencies have continued to team up to develop high urgency, modest-to-implement proposals to address key recommendations of the Plan. Several proposals, summarized below, share a common element. The solutions are being planned and implemented collaboratively within the mainstream child-serving agencies and are involving mental health best practices and expertise.

These initiatives are exceptionally important efforts allowing New York State to begin to reverse patterns such as child neglect, preschool expulsion, in-school violence, and institutionalization and even death. The hope is that each young person will be fully prepared for adulthood with a supportive family and community, effective schools, and high quality health care. Currently, the Plan involves nearly two dozen initiatives that are being implemented and sustained through cross-system planning, collaboration, funding and in-kind services. Highlights of progress being made on these efforts include:

Collaboration among Mental Hygiene Agencies

Inter-Office Coordinating Council
Following the "People First" forums conducted in 2007, the three mental hygiene agencies have continued to work more closely together. Efforts have included revitalization of the Inter-Office Coordinating Council, currently chaired by Commissioner Carpenter-Palumbo. The Council recently incorporated the Interagency Planning Committee into its formal structure.

The Interagency Planning Committee continues to meet monthly with representatives of the Conference of Local Mental Hygiene Directors. Members are building upon and refining the online County Planning System (CPS) for use by counties in developing integrated local plans for meeting the needs of children, and their families, with developmental disabilities, chemical dependency and mental health diagnoses. In January 2009, the three agencies entered into a memorandum of understanding to ensure the necessary resources to continue their statutorily required planning efforts in an integrated, efficient manner.  The three agencies have also produced the first-ever plan and report by the Most Integrated Setting Coordinating Council and continue to work to improve services to individuals with co-occurring disorders.

Particularly with respect to the treatment of co-occurring mental health and substance abuse disorders, much progress has been made. In December of 2008, a statewide Task Force on Co-Occurring Disorders released recommendations for more integrated treatment. The recommendations seek to ensure that each patient and family can access care anywhere in OMH- and OASAS-licensed programs, receive one evaluation, learn if they have a co-occurring disorder, be educated about treatment options, collaborate in establishing a single treatment plan, receive evidence or consensus-based treatment (or referral), and participate in recovery-oriented care. The complete report can be found online at

The efforts of OMH and OASAS are being enhanced by a grant received from the New York State Health Foundation in early January 2009 to fund the first statewide Center of Excellence for the Integration of Care (CEIC). The Center will strive to transform the system of care for the 1.4 million New Yorkers who face both mental health and substance use conditions. The goal of the Center is to foster the implementation of integrated care in more than 1,200 licensed outpatient mental health and addiction clinics in the areas of screening, assessment, and evidence-based practices for New York State residents with co-occurring disorders.

The CEIC has begun work with 20 clinics in the Hudson River Region and will expand to the Western and Central Regions in the near future. Moreover, OMH and OASAS Field Office Directors and senior agency leaders meet quarterly to make sure there is forward momentum toward the goal of “no wrong door” into treatment.

In January 2008, OMH and OMRDD embarked on a formal partnership to find solutions for improving access to services and supports in the most integrated community setting appropriate to individual needs for people with co-occurring mental health and developmental disabilities. Staff from both systems of care have been working together since and are being guided by a set of common principles – the need for leadership at all levels to achieve desired outcomes, basic staff competencies to serve people with developmental and mental health challenges, timely technical assistance, enriched short-term supports where circumstances indicate they will promote positive outcomes, and residential crisis services tailored regionally.

Both agencies have been making strides, especially in the area of improving staff competencies. A training curriculum has been created that covers (1) navigating both systems of care and (2) examining successful models of collaboration. A third training module on the clinical integration of services and supports is under development. Individuals have been identified to serve as trainers and are being prepared to pilot the training sessions in late April 2009. In addition to this progress, staff members from each agency continue to work together closely to extend the applicability and benefit of successful local responses.

Law Enforcement and Corrections Collaborations

In the context of the most extreme budget challenges faced in many decades, OMH has been working in close partnership with the Department of Correctional Services (DOCS) to provide some of the most sophisticated mental health services to State prison inmates in the nation. With a full-service, accredited psychiatric hospital in Marcy (the Central New York Psychiatric Center) and services to 8,500 inmates in 50 State correctional facilities, OMH provides a full range of mental health services to the prison population. OMH and DOCS are collaborating in both current service management and future program development.

OMH is also working with numerous other agencies to better identify, track, treat and manage sex offenders under the Sex Offender Management and Treatment Act (SOMTA). Under this legislation, OMH evaluates and recommends for "civil management" inmates convicted of specific sex offenses.

Considering the problematic and flawed implementation of sex offender civil commitment programs in many other states, New York's implementation efforts have been well managed. In light of very serious budget challenges, however, examination of the sex offender program is essential. A very small number of offenders are committed to institutional care at great cost; the cost is high because provision of intensive treatment is constitutionally required as a condition of commitment. Nonetheless, data show only limited efficacy of this treatment. Recommendations are made in the 2009–10 budget to reduce the costs of the treatment program and to defer the growth in the OMH population.

Finally, OMH is working with many State and local partners on efforts to reduce the flow of individuals with a mental illness into the adult and youth correctional systems wherever appropriate. These collaborations with State and local law enforcement agencies, for example, focus on improving the mental health education and training of police officers and on strengthening police and community mental health partnerships. With courts, efforts concentrate on collaborations such as those with the Office of Court Administration to provide appropriate supports to developing State Mental Health Courts.

Collaboration with Administrative and Control Agencies

Collaboration with administrative and control agencies assumes additional significance, given the multiple requirements for oversight, control, auditing, and inspection of operations in a time of fiscal restraint. In addition to even closer working relationships with the Division of Budget on expenditure controls and review of transactions, other areas of heightened collaboration include that with the Office of the Medicaid Inspector General (OMIG) on addressing Medicaid billing issues; the Department of Civil Service on overcoming obstacles to nurse recruitment and retention and ensuring that OMH hospitals can come into compliance with the legislated ban on mandated nurse overtime; and the Office of Information Technology for examining the size and complexity of OMH information systems, and working together to modernize and streamline both administrative and clinical records systems, for example, the development of Electronic Medical Records.

OMH State and Local Collaboration

Adult State Psychiatric and Local Planning
OMH is in the midst of a broad planning effort to transform its adult Psychiatric Centers so their mission aligns with the core mission of the agency. An important goal is to have inpatient care parallel that for other medical illnesses, where acute care is provided in inpatient settings and rehabilitation occurs at home and in the community. The role of OMH psychiatric hospitals, therefore, is moving from the provision of backup care for general hospitals to the creation of highly accessible, tertiary care centers where the most intensive level of psychiatric care is offered for the highest degree of acuity and most serious of mental illnesses.

Through the statewide planning process – better known as the 5.07 process – the OMH Office of Planning and Field Offices are taking the lead in fine tuning local systems of care in concert with State Psychiatric Centers, and the counties and local not-for-profits in their catchment areas. They are examining the mix of inpatient and outpatient services and supports and ways to ensure that they are offered harmoniously and as efficiently as possible. Specifically, they are considering how local systems are doing in engaging people in care, fostering peer support and individual recovery, helping ensure that people are not lost in care, facilitating movement of people from the highest levels of care to higher levels of functioning, building resilience in individuals, families and communities, and in identifying opportunities for improvement.

As such, each adult Psychiatric Center has been challenged to embrace its leadership role in promoting collaboration among parts of the service system and fostering its effective, efficient functioning; to become fully integrated into its local services network and to offer mental health services of high value to the communities it  serves; to transform into an inpatient tertiary care center for persons with high-acuity mental illness; and as an outpatient provider, to fill the gaps in services urgently needed by persons with mental illness so they can live successfully in the community and to do this in a way complementary to existing not-for-profit providers.

Currently, each State Psychiatric Center is working with its localities to identify where gaps exist and where the Center could provide urgently needed services. It will then outline plans containing strategies for re-deploying resources or re-configuring services to fill gaps, implement the strategies, monitor progress toward meeting their goals, and evaluate their effectiveness of its role in improving local systems of care as a member of the local service network. The Field Offices will provide technical assistance and oversight and the individual plans will be incorporated into the online County Planning System used by all three mental hygiene agencies.

Children's Psychiatric Planning
Recognizing that success in community-based mental health leads to changes in the treatment and support needs of children and their families, OMH is working in New York City on the development of a five-year plan to guide the provision of services and supports. The aim is to have sufficient inpatient and outpatient capacity and resources so that children receive care where they are – in their schools, in their homes, and in their communities. Just as with the adult Psychiatric Center transformation effort, the focus on inpatient services and State-operated outpatient services (Brooklyn Children's Psychiatric Center, Bronx Children's Psychiatric Center, Queens Children's Psychiatric Center and the Children's Unit at South Beach Psychiatric Center) will be on ensuring care that is child-centered, family driven and of the highest quality, based on the best scientific evidence, and accessible to the most vulnerable and needy.

Two fundamental questions being addressed by this planning effort are: What should the New York City children's mental health system look like in the future? What should the role and structure of State-operated services be in five years? Under the leadership of OMH and the New York City Field Office, a plan and evaluation process are being developed by a workgroup that includes broad stakeholder participation (e.g., New York City Department of Health and Mental Hygiene, New York City Administration for Children's Services, SED/DOE, OMRDD, OASAS, Citizens Committee for Children of New York, youth/family advocacy). Slated for submission in July 2009, the plan will cover an analysis of local trends, a vision for the future, a service design, recommendations to align resources to service needs so they better serve children and their families, an implementation plan, and evaluation.

Peer Agenda
The critical nature of peer support to recovery is well documented in the literature and of high priority to OMH. Work is under way on a number of fronts and overall is aimed at strengthening services and supports highly valued by persons with serious mental illness:

Planning at the local level is also taking place with peers and recipients of services and involves teams from the Commissioner's Recipient Advisory Committee, members of the Multicultural Advisory Council, and members of the Commissioner's Committee on Families providing direct input into the creation of a new planning framework. Each of these groups will be making recommendations for revising the current strategic framework from one more oriented on systems of care to one that focuses on the adults, children and families served and the outcomes highly valued by them. This work will be integrated into the 5.07 planning process and will continue to guide policy that places people at the heart of the system of care.

More information on the peer agenda is provided in Chapter 3 under the 2009–10 budget in the section on modest transformation investments.

Chapter 3
Highlights of the Proposed 2009 –10 Executive Budget

Budgeting and Management in a Fiscal Crisis

As Governor Paterson has illustrated, the current economic downturn reveals the serious problem that New York State has not been living within its means. On multiple fronts, particularly the funding of schools and Medicaid, expenditures in New York are comparatively the highest in the country. This reality is heightened in today's economic crisis, which draws attention to the continuing and structural nature of this imbalance. Under the Governor's leadership, we are being challenged to reduce current spending and defer new commitments wherever possible, as well as to continue to restructure services so they produce better value at lower relative cost.

A look over the long run at expenditures across state mental health programs reveals that New York State has already achieved substantial spending controls in mental health, particularly because it has shifted the burden of investments away from State general funds. National data show that, compared to other areas of state government, the rate of growth in mental health spending in New York has been reduced relative to other states, and transferred to other sources (principally Medicaid). Importantly, the shift in revenue sources toward Medicaid highlights the necessity of rationalizing the Medicaid/mental health relationship, and indicates that reductions in relative general fund support for mental health care may be reaching a limit.

As described in the Statewide Comprehensive Plan last October, a number of budget savings initiatives were undertaken under the direction of Governor Paterson to balance the budget and manage projected gaps.

Budget Reductions in 2008–09

While the State spending for mental health care in New York State has been essentially flat for the last 10 years, as noted previously, further reductions were necessary in 2008–09 in response to a worsening budget crisis. Two rounds of reductions were made. The first round of cuts occurred with the budget enacted in April 2008. A second round of cuts was taken at Governor Paterson's direction (in State operations) and in the special legislative session in August of 2008. A summary of the reductions for both rounds and their annualized impact follows.

First Round  –  OMH Financial Management Plan

Local Assistance Budget Actions 2008–09 Annualized Impact 2009–10
State Aid reductions (sheltered workshop, local governmental unit administration, community support) ($4.2) ($5.6)
Medicaid reductions (COPS & continuing day treatment) ($0.6) ($2.3)
Conversions to Medicaid ($2.0) ($3.5)
Slowed program development ($6.1) ($2.8)
Delay of new initiatives ($3.3) ($2.0)
Local Assistance Total ($16.2) ($16.2)
State Operations    
Facility-related reductions ($8.8) ($7.5)
Central Office/statewide-related reductions ($2.9) ($4.3)
Slowed program development ($1.7) ($1.7)
SOMTA ($9.7) --
State Operations Total ($23.1) ($13.5)
Round 1 Total ($39.3) ($29.7)

The OMH Financial Management Plan achieved balance with about a $39 million reduction in spending. This was achieved through a series of measures that sustained efforts to transform mental health care while capturing necessary savings. The focus was on targeting reductions to services that were not of the highest priority, and preserving core services through increased productivity. Moreover, an important goal was to ensure that reductions were spread so that no one region, community or program suffered.

For the second round of reductions, the Governor's aim was to reduce State agency spending, put in place a hard hiring freeze, and reach agreement with the Legislature to enact additional spending reductions in a Special Emergency Economic Session in August.

Second Round  –  State Operations 7% Reductions and August 2008 Special Economic Session

Local Assistance Budget Actions 2008–09 Annualized Impact 2009–10
Further delay of new initiatives ($0.8) --
6% cut Legislative program adds ($0.1) --
Additional Local Assistance reductions ($1.9) ($7.3)
Local Assistance Total ($2.8) ($7.3)
State Operations
Facility-related reductions ($16.0) ($24.1)
Central Office/Statewide-related reductions and revenue enhancements ($41.6) ($31.1)
Delays in forensic initiatives/SOMTA adjustment ($5.9) ($4.1)
Eliminate Nathan Kline Institute Legislative program add ($1.5) ($1.5)
State Operations Total ($65.0) ($60.8)
Round 2 Total ($67.8) ($68.1)

The following table shows the impact of reductions and other budgetary actions during the two rounds for 2008–09. Of note is that, while reductions were proposed in November and December 2008, only legislative member items were included in the February 2009 round of reductions.

2008–09 Budget Savings Summary

  Budget Actions 2008–09 Annualized Impact 2009–10
First round total ($39.3) ($29.7)
Second round total ($67.8) ($68.1)
Grand Total ($107.1) ($97.8)

Proposed Budget 2009–10

Given the current fiscal challenges and the OMH reform efforts under way at OMH – where much is changing at the same time – OMH is moving ahead with an understanding that clear priorities and sound management are vital. Specifically, the agency's strategic direction is being guided by three fundamental tenets that require:

It is upon these principles that OMH has approached the 2009–10 budget proposal. OMH continues to be committed to the major strategy of sustaining core programs, while deferring cost increases wherever possible until they are affordable. Generally, new programs authorized in previous budgets, but not yet operational, are being postponed unless they are core commitments or necessary to save money. Additionally, new expenditures are being deferred even if they are important, for example, cost-of-living adjustments (COLAs), community residential program enhancements, and, and as proposed by the Governor, negotiated salary increases.

Thus, OMH views preservation of core mental health services in State operations and in local programs as essential to making changes that lie ahead. Providing a predictable resource environment is crucial for improved efficiency and responsiveness of OMH hospitals, to more responsive housing and residential services, and to the adoption of recovery- and resiliency-driven approaches that foster recovery.

A second major strategy in 2009–10 is to restructure programs for efficiency or savings while retaining capacity. With the OMH Sex Offender Management and Treatment Act (SOMTA) programs, for example, we are able to reduce staffing patterns to levels comparable to other forensic services, but not at levels where risk increases. Other actions include deferring some new prison mental health investments and closing several units in State Psychiatric Center hospitals where the patient census has already declined or will decline due to planned placements. The latter has several benefits: vacant, unneeded beds are being closed and professional staff members, particularly registered nurses, are being deployed to cover urgent needs, while overall staffing continues to be reduced through attrition, the job freeze and careful management. Additionally, in most of the adult Psychiatric Centers, Transitional Placement Programs are being introduced, with increased community exposure and modestly reduced clinical staffing. This approach mirrors one used by general hospitals by converting inpatient to rehabilitation beds and helping eligible patients prepare for transition to more appropriate, less costly community programs. This approach also permits OMH to better utilize some staff (especially nurses) in key posts where they are needed.

2009–10 Executive Budget Savings and Reallocations

Savings and reallocations (cash in millions) in the mental health budget and the annualized impact of the proposed actions are outlined in the following tables. Explanation of salient information in the tables is then provided to enhance understanding.

OMH Local Assistance

  Budget Actions 2009–10 Annualized Impact 2010–11
Proposed savings defer COLA\trends ($67.1) ($67.9)
Local assistance reductions ($4.6) ($5.1)
Maximize recoveries ($8.5) ($8.5)
Freeze residential pipeline beds ($6.0) ($6.0)
Defer/restructure new commitments ($17.1) ($9.5)
Local Proposed Savings Total ($103.3) ($97.0)
Annualization of CDT restructuring (DOH) ($8.5) ($8.5)
Local Proposed Savings Total w/DOH ($111.8) ($105.5)
Proposed reallocations Children's Plan $1.7 $3.0
Peer support initiative $0.7 $1.4
Medicare eligibility demo $0.5 --
CDT  restructuring conversions $6.0 $6.0
OMH indigent care pool $5.0 $10.0
Local Proposed Reallocations Total $13.9 $20.4
Local Net Change* ($89.4) ($76.6)

*Excludes DOH savings

OMH State Operations

  Budget Actions 2009–10 Annualized Impact 2010–11
Proposed savings facility-related reductions ($8.6) ($13.0)
Central Office/statewide-related reductions ($14.3) ($15.3)
Delays in forensic initiatives/SOMTA adjustment ($22.9) ($30.0)
State Total ($45.8) ($58.3)
Proposed reallocations staff for child abuse    
Reporting bill $0.1 $0.1
Staff for NICS background check bill $0.2 $0.2
State Total $0.3 $0.3
State Change ($45.5) ($58.3)

OMH 2009–10 Budget Savings Summary

  Budget Actions 2009–10 Annualized Impact 2010–11
Total OMH Net Change ($134.9) ($134.9)

Advancement of recovery-oriented services
While budget reductions in continuing day treatment (CDT) do not mandate reductions in capacity, OMH is working with providers that wish to transition to more sustainable program models. The intent is not to dramatically reduce capacity for this program which, while a dated model, nonetheless provides essential supervision in some communities. Rather, OMH is working with providers who seek to transition their current CDT programs in the direction of more efficient clinic models, or to rehabilitation-oriented Personalized Recovery Oriented Services (PROS). Because PROS is crucial to reform and a model that fosters recovery, for example, by assisting clients in finding meaningful work and community participation, a small increase in PROS employment resources provided in the 2008–09 budget is included in the proposed budget.

Modest, transformational investments
Even in a challenging budget environment, some challenges call for small investments that accelerate change. They represent important change that is unlikely to occur otherwise and leads to larger, more robust reforms. Two such reform initiatives are proposed in this budget, one involving children and the other involving adults.


Governor Paterson's proposed OMH budget for 2009–10 reflects a fair, thoughtful and tough approach to New York's substantial mental health obligations. It significantly curtails spending (in conjunction with reductions implemented in the 2008–09 budget, mental health spending will be reduced by more than $230M from levels originally anticipated in that budget). The proposed budget preserves the ability of OMH to deliver on core obligations to some of the State's neediest citizens, while restructuring many programs to improve quality, efficiency and access. It defers costs for investments that, while desirable, simply cannot be afforded at this time. Finally, the proposed budget makes small but essential investments aimed at transforming mental health care, strengthening the well-being and resiliency of New York State children and families, and fostering the ability of adults to work toward recovery and economic independence.

  1. COPS was developed years ago as an alternative to general fund budget cuts by providing supplemental medical assistance reimbursement to licensed mental health outpatient providers in exchange for the provision of enhanced outpatient services.

Comments or questions about the information on this page can be directed to the Office of Planning.