Behind-the-scenes discussions about how to control a runaway mental-health reform will break open this spring. The Easley administration will ask the General Assembly to limit appeals for clients denied services and companies denied payments, and to grant the state more power over local mental-health offices.

Gov. Mike Easley and Dempsey Benton, secretary of the state Department of Health and Human Services, are promoting a lengthy agenda that includes more spending on local services and deep changes in the way the state system works. They would generally give more power to the state and less to local officials.

A legislative shopping list being drawn up includes:

* More money to pay for beds in local hospitals for patients who are mentally ill or abuse drugs. That is meant to reduce demand on overcrowded state facilities.

* Pay incentives for short-handed state psychiatric hospitals.

* New crisis services in rural counties that now must dowithout them.

These moves would be the largest changes since the mental-health reforms of 2001, which sought to reduce the size of mental hospitals and provide more treatment in the community. Hundreds of companies signed up to provide services in the community paid for by Medicaid.

The administration's most controversial requests involve increased state control over the 25 county and regional mental-health agencies, called Local Management Entities, and the desire to speed appeals by mental-health and substance abuse treatment providers that the state wants to cut off from government business.

Benton says he wants a say in hiring and firing the executive directors of the local offices.

"We've got to have that connection," he said. "We got to have directors who understand this is a statewide system with a local presence."

He wants fewer local offices and the power to step in quickly when they don't do a good job. Some local offices are too small to handle their duties, Benton said.

He knows these proposals may run into trouble with legislators.

"We'll probably have disagreements," he said. "But I think our challenge is to sell them on the fact that services can be better delivered with a modified structure where we can get more robust organizations in a regional setting, and help us better deliver services. I think we can make that case."

The local offices don't set reimbursement rates for the private providers or make the rules for entry into the mental-health business. But they are charged with building the network of service providers.

Streamlining appeals

The News & Observer recently reported that the state had wasted at least $400 million on mental-health reform and spent too little on treatment of serious mental illness. The report also revealed that the state was operating four psychiatric hospitals where, since December 2000, 192 employees had abused patients and 82 patients had died under questionable circumstances.

Significant change is likely. But leaders of a legislative committee on mental health will likely resist the administration's push for more control over local offices. They rejected similar proposals last year from Benton's predecessor.

State Rep. Verla Insko, a Chapel Hill Democrat and mental-health oversight committee leader, said Easley and the legislature differ in their views of how the mental-health system should look.

"The state envisions this as a state-run system," she said. "The General Assembly envisions it as a state-directed and locally managed system."

Benton says he will also ask the legislature to streamline the process for community support providers who appeal a decision by the state to remove them from the program, or take back money they have been paid. And he wants to streamline appeals from individuals who have been denied services. Providers' appeals could now take more than a year to handle, and more than 5,000 individuals have also filed appeals.

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