State Budget Needs to Adequately Fund Community-Based Mental Health and Substance Use Services

The New Jersey Legislature's FY 2017 budget passed in both the Senate and Assembly. At $34.8 billion, ut us$275 million greater than the latest budget proposed by Governor Christie. The New Jersey Association of Mental Health and Addiction Agencies, Inc. (NJAMHAA) is pleased that the Legislature's proposed budget includes the restoration of $50 million of hospital charity care funding, $20 million for one-time Community Provider Contract Adjustments and a $2.4 million Child Collaborative Mental Health Care Pilot. NJAMHAA advocates for the Legislators to ensure that these funding additions stay in the budget. It is equally critical that the $127.5 million of state and federal funds, which have been dedicated to increase Medicaid Fee-for-Service (FFS) reimbursement rates for community mental health and substance use services, are appropriately distributed and used to sufficiently increase rates so that services can continue to be provided for New Jersey's most vulnerable residents.

"We have been advocating strongly and persistently for increased rates for outpatient services, psychiatric evaluations, medication monitoring, Community Support Services [CSS], partial care and partial hospitalization services. We appreciate that the Department of Human Services has increased some of these rates and is still re-evaluating others. However, the increases that have been made are not sufficient to cover the costs of providing care and will result in tens of thousands of New Jersey residents losing services that have enabled them to make great progress toward wellness and recovery," said Debra L. Wentz, PhD, President and Chief Executive Officer of NJAMHAA. CSS is a new service category for clinical and case management services that are being separated from housing in what was previously known as Supportive Housing.

In a survey of NJAMHAA member providers, 37 of 55 agencies reported an anticipated negative impact of the inadequate FFS rates and 34 programs in these agencies, mostly outpatient, would most likely close as a result. Hospital-based mental health providers, the Early Intervention Support Services programs (which are designed to bring individuals from emergency rooms and prevent inpatient hospital admissions) and other mental health providers rely on outpatient service programs to provide the appropriate level of care for the long term. However, the insufficient rates for outpatient mental health programs will lead to many thousands of individuals losing this service, including 6,000 to 7,000 people in Bergen County alone and more than 20,000 statewide.

"Inadequate rates will also prevent individuals who develop mental healthcare and substance use treatment needs in the future from receiving the care they need. The number of people in need of services continues to increase due to natural and manmade disasters, fiscal crises and their impact on long-term unemployment and other traumatic situations. Furthermore, mental illnesses and substance use disorders are illnesses that are highly prevalent and need to be diagnosed and treated as soon as possible and as consistently as possible to maximize the opportunities for recovery, lifelong wellness and prevention of the need for much more costly hospital services," Dr. Wentz added.

The Fee-for-Service rates must fully cover the costs of these vital services, including the parts of services that are billable to Medicaid and those that are not. The rates must also cover all overhead costs and other expenses incurred in the operation of the provider organizations. Providers need to be able to pay competitive salaries and benefits in order to recruit and retain staff so that the individuals they serve can receive consistent, high-quality services.

"It is imperative that community-based mental health and substance use providers be adequately funded to ensure they remain fiscally viable and continually able to deliver their invaluable services to everyone in need. The lives of New Jersey residents and our state's fiscal strength depend on it," Dr. Wentz stated.

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