Budget woes gut mental health care in Chicago; Can Medicaid expansion ease the pain?

At age 12, Chicagoan Jessica Patrick was sent to live in a psychiatric institution because of epilepsy and bipolar disorder related to a brain tumor. By age 17 she had “lost all hope of ever getting out,” resigning herself to living in a since-closed dismal nursing home in the city’s Uptown neighborhood where she said residents were frequently harassed by staff and didn’t get enough to eat.

Today at age 34, Patrick is living independently, writing music and working with a peer support group for people with mental illness. She credits Thresholds, one of the state’s largest community mental health providers, for basically saving her life.

But she worries that budget cuts will mean others in her situation aren’t getting the same services.

Chicago providers of mental health care were devastated by state budget cuts between 2009 and 2012, causing them to drastically scale back services, contributing to clinic closures and meaning that scores of people without insurance or Medicaid were unable to receive care. The state budgets for FY 2013 and FY 2014 (which began July 1) included modest funding increases, but not nearly enough to heal the damage that had already been done, providers say.

Next year, the expansion of Medicaid eligibility under the federal Affordable Care Act will mean about 13,000 more people statewide can get mental health care who previously weren’t funded. This is a boon for Chicagoans with mental illness, providers say. But it also raises new challenges, as they will scramble to serve the new patients without adequate funds up front to expand their staff and infrastructure, including providing the kind of outreach and transitional support that allowed Patrick to leave nursing homes.

Brutal Cuts

In 2007, Thresholds staff helped Patrick leave the nursing home by finding state-subsidized housing, helping pay her security deposit and most importantly giving her moral, medical and logistical support on a near-daily basis. It wasn’t easy: she had never lived on her own before, she suffered from fits of rage and despair and then the brain tumor she thought she had beaten came back. In 2008 she had two surgeries and then went to live in the Uptown treatment center Grasmere Place.

On March 3, 2009 Patrick again headed out on her own, and Thresholds was there, helping her find an apartment and a state housing subsidy.

On a July evening, Patrick talked in Thresholds’ north side offices with Lena Raimondo, a survivor of mental illness herself, who runs Thresholds Peer Success program and became a close mentor and friend. They lamented the state budget cuts, which saw annual mental health care funding descend from approximately $715 million in 2009 to $584 million in 2012.

“I’ve been doing this 16 years and I’ve never seen cuts like this,” said Raimondo. “I never thought we’d get to this point.”

The Illinois Department of Human Services says the 2013 budget included $614 million and 2014’s budget includes $681 million, though the increases are in specific categories and funding for most programs will remain level.

Raimondo noted that many people with mental illness are unable to work and receive just $710 a month in Supplemental Security (SSI) federal disability payments. “You have no life beyond four walls, no hope for a tomorrow. I tell my women clients to shoplift deodorant and Kotex, it’s come to that,” Raimondo said.

And that’s for the people who are receiving services from Thresholds or other providers. The budget cuts meant such providers had to eliminate much of the care they were providing people without either insurance or Medicaid. Cuts in outreach efforts – where staff ride the public transit and walk the streets – also meant they weren’t making contact with as many people who needed services but hadn’t sought them out. The state FY 2014 budget book reported that an estimated 23 percent of people who need mental health treatment were receiving it in 2010, while only 16 percent were projected to receive treatment in 2014.

Eileen Durkin is president and CEO of the Community Counseling Centers of Chicago (C4Chicago), a mental health care company specializing in moving residents from institutions to independent living. Like Thresholds, she said C4Chicago has had to drastically cut services to patients without Medicaid or insurance. She points to 2009 as the year “the state of Illinois broke the social compact it had with vulnerable citizens – the working poor, the unemployed.”

State cuts have come on top of cuts in county and city mental health services, including the controversial closure last year of six of the city’s 12 mental health clinics and the scaling back of the county health care system. Private community mental health clinics have also closed or reduced services because of the state budget cuts. This, providers say, has meant a dearth of services especially on the south and west sides where they are needed most.

“We used to have the catch phrase that we serve the sickest and the poorest, but the reality is we don’t anymore because the sickest and the poorest are not insured at all,” said Joel K. Johnson, president and CEO of the Human Resources Development Institute (HRDI), a company which since 1974 has provided mental health care, substance abuse treatment and other services in Illinois. “There’s an unmet need in the community.”

“A lot of mental health providers are trying to fill in the gaps,” said Heather O’Donnell, Thresholds vice president of public policy and advocacy. “There’s a tremendous amount of pressure on staff to serve more people with fewer resources.”

Medicaid expansion

Starting in 2014 the state’s Medicaid rolls are expected to expand by about 342,000 people – those earning up to 138 percent of the federal poverty line -- as part of the state’s implementation of the federal Affordable Care Act. DHS spokesperson Januari Smith said about 13,000 additional people are expected to seek mental health care. The federal government will pick up the tab for the new recipients through 2016 and then will roll back its funding for those recipients to 90 percent after 2020, with the state covering the rest of the cost. DHS said it is unclear yet what kind of fiscal impact the new state obligation beyond 2016 will have.

O’Donnell and other Chicago mental health providers are thrilled about the Medicaid expansion, since it means many people will be able to get care who weren’t otherwise able. But it will also create new challenges, since providers will be stretched to expand their staff, facilities and other resources in order to meet the needs of the new patients.  

“We get reimbursed once we provide care – but how do you help providers expand to meet that capacity?” asked O’Donnell. “If thousands more people show up at Thresholds, we don’t have the capacity. This is something providers will be struggling with.”

Even with an influx of funds, hiring new therapists and psychiatrists – including replacing ones laid off during the worst budget years – may be a major challenge.

“Wages have been held low for a while in these jobs, even more so in the urban areas,” said Christopher Larrison, an associate professor in the School of Social Work at the University of Illinois Urbana-Champaign. “If you let people go and they’ve left the community and found other jobs, you won’t be able to quickly rehire highly skilled people. Even if you bring in more Medicaid clients, it’s not going to change the income structure in a way that changes what you can pay people.”

The Four Drug Limit

Though more people will be covered by Medicaid, complaints persist about levels of coverage for Medicaid recipients. Illinois mental health patients are particularly impacted by a policy that mental health advocates call the “four drug limit.” That means people must get pre-approval for each individual prescription above four. The approval process can be lengthy and cumbersome, and patients are often denied even with a doctor’s recommendation, providers say, leaving them to face what Thresholds psychiatrist Steve Weinstein called “a nightmarish appeals process.”

“It’s a real struggle to keep people getting the medications they need when they are denied,” Weinstein said. “And a lot of people with severe mental illness don’t have case workers. They’re likely just to walk away and not have the medication.”

Often several drugs in tandem are needed to address mental health issues, and people with mental illness are also highly likely to suffer from other ailments including diabetes and cardiovascular and respiratory problems, which require other medications.

Thresholds and other mental health providers have been lobbying for legislation to change the four drug limit by creating a “carve-out” wherein antipsychotic drugs wouldn’t count toward the limit. Such carve-outs already exist for some drugs used to treat cancer, HIV and other serious diseases, as well as contraceptives. 

Last session the state House introduced a bill, HR2469, that would have created the anti-psychotic drug carve-out; but it languished in the Rules committee and never passed. 

The four drug limit forced Patrick to choose between taking medication for chronic ulcers and Trazodone, a psychiatric drug that helps her remain calm and get to sleep. As documented in correspondence reviewed by the BGA, this spring she was denied coverage for her ulcer medication. She was also taking three prescriptions for epilepsy and the Trazodone, putting her over the four drug limit. Patrick was especially frustrated by the April letter from the state agency Healthcare and Family Services (HFS) that said “the item was denied for the following reason: the request has been denied.”

“That’s not a reason!” she said during a July meeting at Thresholds office. She decided to stop taking Trazodone instead, to put her under the four drug limit. Thresholds Peer Support leader Lena Raimondo was upset to hear that.

“Trazodone is seriously needed in Jessica’s case, for someone who will walk the streets at 1 a.m.,” said Raimondo. 

HFS spokesperson Kelly Jakubek said that the four drug rule is a beneficial way to make sure people are using a cost-effective and safe drug regimen, and it has helped doctors catch situations where patients are taking too many drugs or drugs that interact dangerously.

“The four prescription policy was developed as a result of budget negotiations, but best-practices call for an annual review of the full regimen of prescriptions for any patient,” she said.

Penny-wise, pound-foolish

Mental health providers acknowledge that the state is in a dire budget situation, and that increasing funding to the level of years past may simply not be possible. They say they have become more resourceful, finding ways to continue serving their patients.

“We have taken the opportunity of decreased funding to drill down and become more efficient and nimble as an organization,” said Johnson. “We’ve concentrated a lot on quality, elimination of waste, fraud and abuse. We’ve become a stronger delivery system as a result of having to attempt to do more with less.”

“We can’t invent money – we have to figure out how to be more efficient with what we do have,” added Durkin, noting that the agency laid off about 45 staff because of state budget cuts but has found ways to gradually hire most of them back.

Even given the state budget crisis, providers say taxpayers will fare best in the long run if the state directs more dollars to mental health care, including preventative care, outreach and early detection of mental illness. That’s because people with untreated mental illness often end up in emergency rooms and jails, or homeless, costing taxpayers exponentially more than the price of treatment and support that could have helped them avoid such situations. 

“We recognize the state of Illinois is not in the best fiscal situation,” said Johnson. “But we also recognize there’s a need and if the need is not met, if this population of citizens that we provide services to do not get the services, then hospitals, law enforcement” and other government institutions will fill the gap.

“It’s far more cost effective for us to serve on an outpatient basis than for them to go untreated,” he continued. “And it trickles down to other systems like child welfare. If a mom is a single parent and she’s hospitalized, the children may need to go into protective services.”

The database StateMaster.com, which creates rankings based on government data, lists Illinois as 31st in the nation for per capita spending on mental health care. That’s well behind other cash-strapped states including Michigan and Mississippi.

Community treatment

The 2014 budget increase includes $4 million to add 96 more beds to a downstate center where people with mental illness who are considered dangerous are detained and treated after serving criminal sentences. And state funds for supportive housing for people with mental illness have increased about $4 million over the past two years.

The 2014 budget also provides significantly increased funding for moving people out of institutions and helping them survive on their own. There’s an extra $11 million for community programs as an alternative to institutionalization, and $19 million for compliance with a 2010 consent decree known as Williams vs. Quinn, which mandated the state move people who had been wrongfully institutionalized into independent living situations.

DHS Division of Mental Health acting director Theodora Binion said that de-institutionalization is a high priority for the department because it is both better for people with mental illness and more cost-effective for taxpayers.

“There’s been a rebalancing of the system,” she said. “Even with some of the challenges we face there’s been a fairly significant investment in community-based care away from institutionalized care. That’s an investment in quality care.”

Image by Nick Farnhill via Flickr