The state will pay less for a mental health service offered to the state's seriously ill residents.
The 7 percent cut was a surprise to advocates for the mentally ill and to providers who said they are already losing money on the service, called assertive community treatment, or ACT, teams.
The teams include psychiatrists, nurses, therapists and social workers who offer comprehensive mental health care to people with severe illnesses such as schizophrenia.
"It's just devastating," said Debra G. Dihoff, executive director of the National Alliance on Mental Illness in North Carolina.
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ACT is one of five new community-based services the state offers with a proven record of helping people, she said, and the state cannot afford to lose teams.
Brad Deen, a spokesman for the state Department of Health and Human Services, said the state's Medicaid division changed reimbursement rates for a number of mental health services introduced in March 2006. The new ACT team rates, Deen said, are based on a review of national data and cost information from state providers.
Rates will go up Oct. 1 for 11 mental health services. Prices will drop on three services.
The state was criticized for setting a high, $61-an-hour rate for a more basic service, community support, while paying too little for more intensive services such as ACT teams.
A News & Observer investigation this year found that the state wasted more than $400 million on community support. Companies offered the service to people who did not need it. Workers took clients to movies and basketball games. Most of the work was done by people without college degrees.
Companies sprang up to offer the lucrative basic service rather than provide higher-end services that help keep people out of hospitals. The state later cut the community support rate.
John Tote, executive director of the Mental Health Association in North Carolina, called the ACT team cut "completely ludicrous."
Tote said his organization has the most ACT teams in the state, serving more than 1,000 clients.
It costs an average of $1,850 a month to take care of each person, he said, while the state is now paying about $1,296. Under the new rate, companies will receive about $90 less per client each month.
Tote said he could not cover the shortfall by adding more clients. If he keeps all the ACT teams running, Tote said, he will have to cut staff salaries or health insurance benefits or find other savings.
ACT teams are proven effective in helping keep people out of mental hospitals, said Fred Waddle, lobbyist for Easter Seals UCP. Easter Seals operates nine ACT teams for 500 clients.
The state should be focused on getting more ACT teams, Waddle said, not cutting the rate.