Comment on this story

by Joe Sullivan

The eight residents of Harmony House in South Knox County are all severely and persistently mentally ill (SPMIs in the lexicon of mental health). All of them have been hospitalized on one or more occasions, and none of them are believed able to cope without the close supervision of their medications and activities that Harmony House provides.

But faced with abrupt cuts in TennCare funding for such supervised residential facilities, Helen Ross McNabb Center, which operates Harmony House, has been compelled to shut it down. “These cuts have singled out the most vulnerable people in the state, and I have no idea where we’re going to place them, though we’re certainly going to try,” says McNabb’s president, Andy Black.

The only other provider of similar group homes in the Knoxville area, Oak Ridge-based Ridgeview Psychiatric Center, hasn’t yet terminated the 69 residents whose care it oversees (45 of them in Knoxville). “We’re trying to convince [TennCare’s administrator of mental health services] that the cuts are nonsensical and undercut everything that we believe is important to recovery,” says Ridgeview’s CEO, Bob Benning.

But the executive director of the Tennessee Association of Mental Health Organizations, Dick Blackburn, holds out little hope that the cuts will be rescinded or that any of the members of his association can continue to provide supervised residential care at the much lower TennCare reimbursement rates that are due to take effect Dec. 1.

Those cuts are unrelated to Gov. Phil Bredesen’s efforts to contain TennCare outlays under a revampment plan that’s now before the federal Center for Medicare and Medicaid Services for approval. To the contrary, the impetus for cutting residential support services for the mentally ill came from CMS. According to Blackburn and others, federal funding for these services was disallowed effective July 1 on the grounds that they don’t meet Medicaid’s definition of health care that qualifies for federal matching of state outlays.

The result, in simplified terms, was an $11 million cutback in TennCare funding of the managed care organization that administers the mental health component of the program, Magellan Health Services. That’s only a small fraction of the $330 million that Magellan disburses to mental health care providers. The mental health component of TennCare, in turn, is only a tiny part of the program’s aggregate $7.9 billion budget for the current fiscal year.

But the impact of the cuts is huge on the lives of the SPMI population for whom supervised residential settings will no longer be available. Without close monitoring of their medications, most of them are expected to revert to helpless homelessness and end up being rehospitalized at one of the state’s five mental health institutes where the cost of care is far higher than in privately operated group homes.

The prospect is disheartening to mental health care advocates and those concerned with homelessness alike. “We’re going to have more mentally ill people dumped on the street at a time when homelessness is already on the rise,” laments Ginny Weatherstone, executive director of Knoxville’s Volunteer Ministry Center for the homeless. The timing of Magellan’s Sept. 30 letter informing providers of the impending cuts is especially consternating to Weatherstone. “We’d just announced a 10-year plan to eradicate homelessness in Knoxville with the support of our two mayors [Bill Haslam and Mike Ragsdale]. Then we get this body blow from the state. It’s very discouraging.”

The timing of the residential care cuts is also pernicious in relation to the prospect of the elimination of federal funding that the state’s mental health hospitals have been receiving for the past decade. When TennCare was launched in 1994, artful state officials managed to get federal matching funds for the hospitals, making Tennessee virtually the only state to do so. But for individuals age 18 to 64, CMS is calling a halt to this Medicaid match as well, while allowing for a phase-out over the next two years to cushion the impact. One estimate of loss of revenue to the state is on the order of $60 million, and it’s unclear how, or whether, the Bredesen administration will fill this hole in the state budget.

“Commissioner [of the state Department of Mental Health and Developmental Disabilities] Ginna Betts is coming to Knoxville in November looking for input on how to reduce hospitalization. What irony!” Benning exclaims.

Neither state department nor Magellan officials were responsive to my calls for information about the cuts in funding for residential supportiveness. They are actually a subset of a broader set of cuts that also include elimination of grants for employment-related services and other forms of rehabilitation assistance. Mental health providers and advocacy groups were all caught unaware by the Sept. 30 Magellan letter and had no opportunity to comment or propose ways to mitigate the damages.

Prior to the advent of TennCare, supportive group homes for individuals classified by the state as SPMI were funded solely by the state. For all the governor’s rightful emphasis on containing TennCare cost escalation now, a relatively modest $11 million would seem to be a price well worth paying to prevent the degradation of this highly vulnerable group of people and its societal consequences.

October 21, 2004 • Vol. 14, No. 43 © 2004 Metro Pulse