State slashes aid for mentally ill

Medicaid office's reduction by one-third of payments to companies and nonprofits will hurt clients, advocates say

Mentally ill patients will have a more difficult time getting good care in North Carolina because of a decision by state officials to pay private companies and nonprofits less for a basic service they offer such patients, critics said Monday.

State officials said the rate cut was based on a review that found the state was paying for professional services that in many instances were being provided by high school graduates. But some providers -- as well as advocates for the mentally ill -- said Monday that a blanket cut in rates could lead to some providers shutting down and others cutting back on services.

The lower rate is going to force a switch to cheaper labor for providers that have people with college degrees working with clients, said Frank Edwards, president of NAMI Wake County, an advocacy group for the mentally ill. Companies that don't want to rely on workers with less education may stop doing the job all together, he said.

"I think a lot of providers are going to stop providing that service based on that rate," he said.

The state Department of Health and Human Services said last week it would cut payments from about $61 an hour to $40 an hour for a service that provides thousands of clients guidance and help with basic life skills such as preparing for job interviews or having utilities restored. The decision to cut the rate comes as result of an audit of the service for mentally ill people and drug abusers, called community support.

A memo from the state last week said it was assumed that providers would have people with college or advanced degrees doing most of the work. A review of provider records found that paraprofessionals, typically people who have high school diplomas or GEDs, were usually working with patients, the memo said.

The rate cut surprised providers and advocates, who said patients would end up the losers.

Officials with the state Medicaid office, which set the rate, did not return phone calls Monday. But they said in a memo last week that a review of billing and patient records kept by providers showed that people without college degrees are going "a vast majority" of the work with patients.

The state started the audit because it suspected some agencies were abusing the system. The rate cut is retroactive, so any claims processed after April 1 will be paid at the lower rate.

Administrators at private companies said the state had options other than a blanket cut. It could have decided to base payments on the qualifications of with workers, for example.

Critics said the state's conclusions were flawed because it focused its review on private companies that were more likely to have problems.

"It's kind of like they were hunting for something and they found it, and they're going to punish everybody," Edwards said. "It's going to have ramifications that's going to hurt consumers."

The Caring Family Network, a provider that works in the Triangle, may have to stop taking new patients and lay off workers, said Sean Schreiber, director of development.

"We've had no time to plan or make adjustments," he said.

Carolina Outreach, which provides community support to about 270 children from Durham, Orange and Chatham counties, will keep workers with master's degrees, said Timothy Brooks, the group's co-director.

"The families we work with have a wide array of needs that require a level of sophistication that most paraprofessionals don't have," he said. The group's practices will change, Brooks said, but they have not had time to plan what to do.

"We don't like the idea of leaving families in need," he said. "What we hope is we can get families what they need without going bankrupt."

Providers in rural areas may not have enough college-educated workers to fill jobs, Brooks said, but that's not a problem in the Triangle. And it doesn't make sense to pay for professionals' work as if they had only high school diplomas.

Bob Hedrick, executive director of the N.C. Providers Council, a trade group representing private companies that provide mental health services, said the state should keep rates the way they were and wait for a more complete review.

"We were blindsided by this," he said.