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In the changes, patients lost access to therapists and the other professional services that community mental-health offices offered. Some mentally ill patients who had stable relationships with doctors and therapists under the old system ended up relying on charity.

Nancy Pace was one of them. Pace, 49, who lives outside Hendersonville, about 20 miles south of Asheville, has bipolar disorder and attention deficit disorder. She has depended on the state to pay for her care.

When the changes from the 2001 law were implemented, Pace's services ended.

She bounced from office to office. She decided to see doctors at a free clinic in Hendersonville. They checked to make sure she had the proper medication for about a year. The clinic recently referred Pace to a private provider, but she was reluctant.

"Some of the other agencies, if you don't need and you don't feel like you want community support and case management, they don't want to serve you," Pace said.

Local office directors say they need: teams of doctors, nurses and therapists who will work with severely mentally ill adults; places for emergency mental-health treatment; psychiatrists; and drug detox.

Patients have lost places such as a clubhouse in Jacksonville where they could socialize with others and perform simple tasks.

Jessica Stone, who has paranoid schizophrenia, once belonged there. Her father, Jim Stone, said being around others helped his daughter realize when her symptoms were getting worse.

But the clubhouse is gone, a victim of the reforms. Stone, 32, now relies on community support to navigate life outside hospitals. She gets 15 hours a week with a worker who helps her adjust to community life.

Community support may not be exactly what his daughter needs, Jim Stone said, but it's the only service available.

"It didn't take long to get rid of all these services," he said, "and nothing has come to take their place."

Money goes unspent

The system is so tangled that even as patients struggle, local mental-health offices often fail to spend all the money the state gave them to treat patients.

Medicaid, federal insurance for the poor and disabled, is considered an entitlement, so if a resident qualifies for care and can find it, it's covered. With patients who rely on state payments, getting care is more complicated.

To get state money for treatment, the providers get permission from the county or regional office where the patient lives. Providers say it takes too long for the local offices to approve treatment and pay for it.

People looking for care can get pinched for two reasons:

* Because state money is limited, the local mental-health offices ration care. For example, a doctor may recommend six therapy sessions for a patient, but the local office may approve three.

Last week, the local office that covers New Hanover and two other counties said state-paid patients who do not need urgent care will be put on a waiting list. The region is running out of state money.

* Also, in some areas, there aren't enough service providers. Last year, $18.5 million in state money for mental-health programs went unspent, along with $3.8 million for substance abuse. Nearly $10 million in federal money for substance abuse was left over, as was $2.5 million for mental health.

Regional mental-health offices spent about 85 percent of their treatment money last year.

"We were spending out the wazoo on Medicaid, but we had a lot of state money that was going unspent," said Leza Wainwright, deputy director of the Division of Mental Health, Developmental Disabilities and Substance Abuse Services.

Legislators who had fought for more state money for mental health were baffled that local offices were giving it back.

"We realized we've got a pretty severe shortage of providers in a whole lot of the state that we've now got to rebuild," said Nesbitt, the Asheville senator.

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