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On January 1, 2017, the KHI News Service became part of KCUR public radio’s new initiative, the Kansas News Service. The Kansas News Service will continue to cover health policy news and broaden its scope to include education and politics. All stories produced by the former KHI News Service are archived here. Stories and photos may be republished at no cost with proper attribution and a link back to KHI.org.

Kansas mental health providers: Funding cuts, stalled contracts add to pressures

By Jim McLean | October 03, 2016

Kansas mental health providers continue to sound the alarm on how Medicaid rate cuts and contract disputes are affecting care.

At a recent meeting of the Kansas Mental Health Coalition, members were encouraged to lobby incumbent legislators and election challengers about the need to adopt a state budget that restores the Medicaid cuts ordered by Gov. Sam Brownback to balance the state budget and the approximately $20 million in grant funding that has been cut since 2007.

“The state’s Mental Health Reform Grant is designed to help CMHCs (community mental health centers) fulfill their mission as the state’s mental health safety net,” says a position paper distributed at the meeting. “But legislators have slashed that grant by 65 percent over the last five years, fraying that safety net beyond recognition.”

Contracts in jeopardy

Beyond the funding cuts, coalition members are concerned about the potential loss of training and quality assurance services that faculty and research staff at state universities have provided.

Until now, the state has used federal Medicaid funds to contract for those services. But heading into this year’s negotiations, officials at the Kansas Department for Aging and Disability Services determined that federal rules prohibit the use of Medicaid funds to pay for training.

Photo by Jim McLean/KHI News Service Susan Fout, right, commissioner of behavioral health for the Kansas Department for Aging and Disability Services, addresses members of the Kansas Mental Health Coalition at a recent meeting. At left is Amy Campbell, lobbyist for the coalition.

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Susan Fout, KDADS commissioner of behavioral health, told coalition members the agency based the decision on a directive from the federal Centers for Medicare and Medicaid Services (CMS).

“It came in a letter to state Medicaid directors,” Fout said.

In response to a request from the KHI News Service for a copy of the letter, Angela de Rocha, a spokesperson for KDADS, provided a copy of a July 13, 2011, informational bulletin distributed by CMS to state Medicaid directors. The bulletin stated that: “Costs associated with requirements that are prerequisite to being a qualified Medicaid provider are not reimbursable by Medicaid. However, costs associated with maintaining status as a qualified provider may be included in determining the rate for services.”

Asked why language in a 2011 CMS bulletin was just now being applied to contract negotiations, de Rocha explained that the state’s two main Medicaid agencies had been interpreting the rules differently. The Kansas Department of Health and Environment, the state’s main Medicaid agency, already stopped allowing Medicaid funds to be used for training. She said KDADS now is attempting to get on the same page.

“We’re trying to make the procedures and policies consistent across both agencies,” de Rocha said.

Rick Cagan, director of the Kansas chapter of the National Alliance for Mental Illness, said, “From the agency’s point of view that sounds like a logical argument.”

But he said he didn’t understand why KDADS officials weren’t more proactive in letting providers know about the change before contract negotiations started.

“All of this seems to have come out of the blue,” he said.

Confusion and uncertainty

Cagan said the lack of communication has led to confusion that could have been prevented, starting with a controversy over the University of Kansas Center for Mental Health Research and Innovation losing a long-standing quality assurance contract. For decades, the contract had funded work aimed at helping community mental health centers implement and follow evidence-based treatment practices.

A training program operated by the Center for Behavioral Health Initiatives at Wichita State University also has been affected. The program trains people recovering from mental illnesses to work as peer support specialists in community mental health centers and small nonprofit organizations known as consumer-run organizations, or CROs.

The 13 CROs scattered across Kansas don’t offer treatment, but give people with mental illnesses a place to socialize. Some mostly offer a place to drop in informally, while others have classes on nutrition, stress relief and recreation.

Peer specialists can connect with people with mental health issues in ways that clinicians can’t, said Dantia Maur MacDonald, a grant writer and outreach coordinator for Morning Star, a Manhattan-based CRO.

“Everyone who works at our organization has mental illness, so we have lived experience,” Maur MacDonald said. “We can reach people who will not accept support or therapy anywhere else. It’s very magical. We help people in a different way.”

But Maur McDonald and others who work at CROs are worried that the training they need is in jeopardy because of stalled contract negotiations between KDADS and Wichita State. A contract extension agreed to in August has expired.

“All this uncertainty is terrible for people with mental health conditions,” she said. “We can’t get very straight answers about what’s happening.”

Fout, the KDADS commissioner of behavioral health, said the agency is increasing funding for the network of 13 CROs from about $770,000 to approximately $1 million so that they can pay for their own training if they choose to do so.

“All this uncertainty is terrible for people with mental health conditions. We can’t get very straight answers about what’s happening.”

- Dantia Maur MacDonald, a grant writer and outreach coordinator for Morning Star, a Manhattan-based consumer-run organization

She said the agency also wants the CROs to use the additional funding to collect data to demonstrate that the services they provide help to keep people with mental illnesses out of the criminal justice system and hospitals.

“We need the data to show people what this program does,” Fout said to members of the mental health coalition. “We don’t have any data to show.”

Brad Ridley, KDADS commissioner for finance and information services, said the department asked the CROs to either make their own contracts or do a group-purchasing agreement through the state to purchase data services. The state is moving toward making purchases based on results, Ridley said, and CROs haven’t tracked their results so far.

“We can really show what the CROs are doing with the money they have,” he said.

KDADS won’t set up the contract to cost more than the amount of increased funding the CROs received this fiscal year, Ridley said.

That promise doesn't do much to reassure those who already are operating on tight budgets, however.

Judy Thompson, who works at Sunshine Connection in Topeka, said the organization already pays so little to its employees that the executive director has to live with her parents. She estimated the KDADS proposal could cut as much as $22,000 from the organization’s $135,000 budget.

The current budget “is the bare minimum that we can operate on just to pay the bills,” she said.

Amy Campbell, a lobbyist for the mental health coalition, said the fact that budget issues are still being negotiated more than three months into the fiscal year is making it difficult for CROs to operate. 

"It's putting a lot of stress on these organizations and it's not the right way (for the state) to do business," Campbell said. 

Maur McDonald and other CRO staffers are also concerned that obtaining the kind of information KDADS is seeking could discourage people with mental illnesses from seeking services.

— KHI News Service reporter Megan Wingerter contributed to this story.