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Bazelon Center Action Alert

Federal Mental Health Funding at Risk in Next Year’s Budget

Urge Your Senators and Representative to Halt Cuts

The President’s FY ’07 Budget: Domestic Social Programs Slighted

• From Bad to Worse
• Transforming Mental Health Care
• Medicaid Legislative and Administrative Proposals
• What You Can Do

February 23, 2006 —President Bush sent his budget proposal to Congress this month, detailing the Administration’s spending plan for fiscal year 2007, starting October 1, 2006. If passed as submitted, the $2.77-trillion package would make deep cuts and eliminate many discretionary programs, while showering increases on defense and homeland security.

The Department of Health and Human Services (HHS) would receive $3.8 billion less than last fiscal year. Within HHS, the Substance Abuse and Mental Health Services Administration (SAMHSA) would lose $67 million, of which $35 million would be subtracted from programs administered by the Center for Mental Health Services (CMHS).

The Bazelon Center calls on mental health advocates to help prevent such harmful reductions —cuts that would further reduce public mental health systems’ already tenuous capacity to meet community needs. Your calls and letters throughout the appropriations process can help win congressional support for the community-based mental health services ignored in the President’s budget.

From Bad to Worse: Budget Follows the Narrow Passage of Deficit Reduction

The Medicaid and Medicare proposals in the President’s budget follow on the heels of Congress’ passage of the Deficit Reduction Act of 2005 (S. 1932), making steep beneficiary-unfriendly changes to Medicaid policy. After dramatic see-sawing between the two houses at year’s end (see December Action Alerts), the bill was approved in early February by a mere two votes (216-214) in the House. The President has now signed it into law, Public Law 109-171. 

Your calls joined a deluge of grassroots advocacy by the disability, child, senior, low-income and other communities to tighten the vote margin by educating Representatives about the dire implications of such changes. Notably, Republican Representatives John Sweeney, Jim Gerlach, Rob Simmons and Jim Ramstad, who had supported the bill in December, changed their votes to “no” on the second round. All House Democrats opposed the bill.

The cuts, which save roughly $39 billion over five years, are the first deep reductions in entitlement programs since 1997, when Congress passed the Balanced Budget Act. Included in the list of Medicaid policy changes that will have grave consequences for people with mental disabilities are: third party liability; targeted case management; increased cost-sharing; and altered benefit plans that, for certain populations, substitute benefits modeled on private insurance for Medicaid and make it harder for children to receive protection under the EPSDT mandate.

Still, advocates can work locally to minimize the harm because many of the Medicaid provisions are at states’ option. Governors and state legislatures will have a major role in deciding how best to implement the new law. The Bazelon Center is preparing a detailed analysis of the Medicaid provisions affecting children and adults with mental disabilities for the next issue of our Mental Health Policy Reporter. Watch for it on our website and in your email.

Transforming Mental Health Care

The President’s budget would reform the mental health block grant administered by SAMHSA so that $153 million of its funding ($428 million with no increase over FY ’06) is directed to mental health system transformation consistent with the findings of the President’s New Freedom Commission on Mental Health.. States would be required to use grant funds above their minimum allotment for activities aimed at 1) helping Americans understand that mental health is essential to overall health; 2) making mental health care consumer- and family-driven; 3) eliminating disparities in mental health services; 4) making early mental health screening, assessment and referral to services common practices; 5) delivering excellent mental health care and accelerating research; and 6) enabling the use of technology to access mental health care and information.

The State Incentive Grants for Transformation (SIGS), administered by CMHS through its discretionary grants, support the development of comprehensive plans to address fragmentation in a state’s public mental health system. SIGS would continue under the FY ’07 budget at $20 million (a $6-million reduction). Fiscal year 2007 would be the SIGs’ third year. The program received approximately $20 million in FY ’05 and $26 million in FY ’06.

Overall, funds for innovative and demonstration programs at CMHS, under the Programs of Regional and National Significance (PRNS), would take most of the hits, losing $35 million in the President’s plan. Funding would be frozen for jail diversion ($6.9 million), seniors mental health ($4.9 million), post-traumatic stress disorders ($29.5 million) and consumer technical assistance support programs ($2 million), while the school violence program would suffer the largest discretionary-program cut, of $17.6 million. Only the suicide prevention grant would be increased, with an additional $3 million targeted to the American Indian/Alaskan Native youth population.

The children’s mental health program ($104 million), PATH program ($54 million), and protection and advocacy program ($34 million) would be funded at FY ’06 levels.

Medicaid Legislative and Administrative Proposals

The President’s budget again seeks greater state flexibility in Medicaid. On top of the deep cuts made by the Deficit Reduction Act, passed last month, the budget proposes to reduce Medicaid spending by a total of $43 billion over 10 years. The cuts will profoundly affect a great many low-income beneficiaries, including people with mental illnesses, who rely on this federal safety net for health and mental health care

Among its proposals, the Administration would slash reimbursement for Medicaid targeted case management services to the administrative matching rate of 50 percent. Medicaid targeted case managers serve as a vital link to beneficiaries receiving critical medical, social, educational, housing and other necessary services. (See the Bazelon Center’s August 18, 2005 Action Alert)

The Administration also proposes “clarifying” allowable services that can be claimed as Medicaid rehabilitation services. Rehabilitative services are critical for providing intensive community services to individuals with a mental illness, including medication management and skill training that promotes recovery and the ability to thrive in the community. (More on this in our August 18, 2005 Action Alert.)

The Administration would also prohibit federal Medicaid reimbursement for school-based administration or transportation costs with respect to the Individuals with Disabilities Education Act (IDEA).

The administrative changes can be made without any action by Congress, according to the President’s budget plan.

What You Can Do

Contact your members of Congress — particularly if they’re on the key appropriations committees (listed below)—and ask them to speak out in favor of mental health funding.

Specifically, urge your Senators and Representative to

• Reject cuts to CMHS’ discretionary (PRNS) budget. The PRNS funds important programs aimed at translating research science into practice at the community level.
• Support increased funding (rather than level) for PRNS programs, including the jail diversion program, seniors’ mental health initiative, and consumer technical assistance and support programs.
• Support needed increases in programs providing comprehensive community-based mental health services, such as the mental health block grant, PATH program and children’s mental health services program.
• Reject legislative and administrative actions that jeopardize access to Medicaid services for needy beneficiaries, including a reduction in the targeted case management administrative match and changes to the definition of the rehabilitation option.

If your legislators are not on the Labor-HHS Appropriations Subcommittee (see list), ask them to contact a subcommittee member and express support for mental health funding.

Remind them that making community-based mental health services more available through programs funded by the Center for Mental Health Services will help lower the barriers that now stand between children and adults with serious mental disabilities and the mental health care they need.

You can reach your Senators and Representatives by calling the Capitol switchboard at 202-224-3121 or on their direct lines, available on www.congress.org.  Remember, when you call or email, to identify yourself as a constituent, giving your address and zipcode.

For more information: A copy of the President’s FY ’07 budget proposal is available at: http://www.whitehouse.gov/omb/budget/