State budget cuts will significantly impact the amount and variety of mental health services available to people in Richmond County, and the profits for the companies that provide those services.

This according to Sandhills Center for Mental Health Services CEO Michael Watson in his report to the organization’s Board of Directors at their meeting Tuesday.

To cope with the cuts, Sandhills is formulating a plan to put stricter monitoring practices in place for money that is spent, and the Board of Directors may choose to use its savings to bridge the gap.

Richmond County Commissioner Thad Ussery serves is an officer of the Sandhills Center’s Board of Directors, and he explained the cuts taken together can mean as much as a $5 million reduction to services in the eight-county area.

“These cuts are going to be felt pretty severely throughout the program,” he explained. “Fortunately, we’re in a position to absorb some of these cuts with fund balance, but they are going to be really severe no matter what we do.”

The report, obtained by the Daily Journal through the Sandhills Center press office, says the state budget allotted $2.3 million less than last year to pay for community mental health services in the eight-county area covered by the Sandhills Local Management Entity (LME).

LME’s were first put into place in 2005 to replace county mental health facilities as part of the state’s strategy to privatize mental health services.

In addition, the state budget has $1.6 million less funding for services for people with developmental disabilities, and includes the phasing out of all community support services funding by July of 2010 and the “reduction/elimination of Group Home services for children.”

“This is going to be one of the biggest hits, losing funding for group homes,” Ussery said.

He said Sandhills estimates approximately 1,900 juveniles are currently housed in group homes throughout the eight counties.

“With that level of mental health conditions, it’s not always a safe situation,” he said. “Now, they are going to be in a less restrictive community placement. That was a question that was asked of Mr. Watson, ‘What’s going to happen to these children?’ And he said we don’t know at this point.”

In his report, Watson said the cuts in group home funding “will have significant impacts on children under the jurisdiction of County Departments of Social Services and Juvenile Court.”

Along with the cuts, case management services will be separated from community support services, and made a funding entity unto itself.

Watson wrote that over the past several months, the staff of Sandhills has worked to develop strategies to cope with the cuts, the report states, including stricter monitoring the creation of a payment schedule to include specific amounts of money for specific services by category.

The proposed categories would include age and type of service. Watson gave the example of allocating $300,000 for case management services for people with developmental disabilities.

The plan would also define the amount of services that can be authorized, the length of time they can be authorized for and would require periodic reviews to be sure the services are still necessary.

Nine specific strategies to cope with the cuts are listed in the report:

n Using savings to offset a portion of the cuts.

n Across-the-board reductions in service contracts.

n Cutting both first-time and the continuation of authorizations of services.

n Increasing the frequency of reviews for “intensive,” or more expensive, services.

n Ensuring provider billing and payment are current.

n Setting caps on the amount of services individuals can obtain.

n Considering setting up a “risk pool,” described as budgeting 95 percent of actual dollars and saving 5 percent to address issues of over-utilization.

n Focusing on protecting critical services, such as walk-in/crisis services, psychiatric care, inpatient care and Mobile Crisis Team and hospital transition services.

n Making stricter management decisions to ensure individuals get the services they need. “No more/no less.”

Ussery also pointed out $65 million in state Medicaid matching funding has been pulled, which means $200 million is lost with the federal matching funds, across the state.

The impact on Sandhills is unclear in dollar figure amount, but it is clear there will be less money to pay for clinical services and preventative treatment, Ussery said.

“The one good thing they did in the budget is add $12 million in funding to support community inpatient services, which pays for treatment when someone needs to be put in a facility,” Ussery said. “However, I’m not sure that the increase in funding for crisis-type services will make up for the cuts in preventative services.”

At the meeting, Watson also announced he will step down as the head of the Sandhills Center, and is accepting a position as an assistant secretary with the North Carolina Department of Health and Human Services in Raleigh.

Richmond County native Victoria Whitt was named to the post of interim CEO.