Despite state administrators' fire-breathing overspending on a mental health service called community support, lawmakers plan to give the administrators wiggle room on how much savings to squeeze from the expensive program.
Legislators have talked for more than a year about reining in community support costs. But recommendations for cuts got whittled from $65 million to $36 million as budget negotiations progressed last month. Finally, budget writers decided not to specify savings they expect, allowing the state Department of Health and Human Services to shoot for a general target for cuts.
The mental health budget would also increase state psychiatric hospital staff and pay for psychiatric care at local hospitals, though at levels lower than suggested by experts.
The state has had a hard time controlling costs of community support, a mental health service that is supposed to teach clients skills they need to stay out of hospitals. State administrators expected the service would cost $5 million a month, but expenses rose to more than $973.5 million last year. A News & Observer investigation this year determined that at least $400 million was wasted.
Even after the state instituted cost-cutting measures, the service proved hard to control. The state spent more for community support from July 2007 through February than it did over the same eight months the year before.
Because of questions about community support expenses, the federal government is withholding $137 million from the state and auditing providers' patient records.
Legislators said Dempsey Benton, DHHS secretary, asked for discretion on how much savings to bring about this year.
A DHHS spokesman said Benton would not talk about the budget, but Sen. Tony Rand, a Fayetteville Democrat and a lead budget negotiator, said Benton gave legislative budget writers a rundown on what he needed to get community support under control.
Benton can cut costs, Rand said, but does not know by how much. The budget would allow Benton to "go into other areas to effectuate the savings," Rand said.
The legislature leaned heavily on Benton's budget recommendations in its attempts to shore up a foundering mental health system, even though Benton may not be in office to oversee all of this year's spending. Halfway through the budget year, the state will have a new governor, who may appoint a new DHHS secretary.
"I think the program is laid out specifically enough that almost anyone could come in," said Verla Insko, a Chapel Hill Democrat who helps lead a legislative committee on mental health. "The danger is if someone would come in with a very different vision on what the system should be like. Then we run into trouble."
Included in the budget is a special provision that would shorten appeals by community private providers who are told to repay money or stop providing services. The companies would take their cases directly from a state DHHS hearing to Superior Court, bypassing the state administrative court. Benton had argued that appeals take too long and require the state to keep paying providers who may have overcharged or aren't doing good work.
Karen McLeod, president of the Children and Family Services Association, a group of mental health, social services and foster care providers, said she supports legislators giving the department leeway in how much to save. Shaping a mental health service should center on quality "and not a number picked by the General Assembly," she said.
Many companies are expected to drop out of the business next year, she said, when national accreditation requirements kick in.
"It's going to be a huge cost savings," McLeod said. "There are so many reasons why community support went wrong. One reason was lack of quality standards that needed to be put into place."
The budget includes money to hire more than 100 state mental hospital workers and pay local hospitals for 187 beds for psychiatric patients.
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