State mental health division says it is broke

Hundreds of mentally ill people in Hawaii will be left without mental health services, including medication management, because the state’s Adult Mental Health Division has shut down payments, said Marya Grambs, Mental Health America of Hawaii executive director. "It's a complete emergency," Grambs told the Star-Bulletin.

The division has told providers under contract to provide adult services that it has run out of money. Officials say they are trying to find other department funds that can be transferred to the division until June 30, but "it is not realistic to anticipate that sufficient funds to meet our needs will be transferred," according to acting Division Chief Michelle Hill. "We must inform you that you can anticipate prolonged delays and, in some cases, stoppage of payments from the Adult Mental Health Division," she said in a letter to providers.

"I think the ball rests with the governor,” Grambs said. “She has to allocate some emergency funding to address this. It's a completely untenable situation. You cannot have people with serious and persistent illness who are not going to get treatment services."

Hill said the Adult Mental Health Division would continue to make payments as funds are available based on the order in which claims are received. The department received a $10 million emergency appropriation last year to cover a funding shortage, but that is not possible this year, she said.

The news that there is no money to pay agencies follows concerns about caps on case management services to mentally ill adults instituted in January to try to contain expenditures. "The reduction in hours was difficult to adjust to, but not paying providers at all is not going to work for us," said Brian Schatz, chief executive officer of Helping Hands Hawaii, which has about 800 clients in different programs. "To loan the government money over the next several months is unacceptable," Schatz said.

He and others are suggesting covering the mental health shortfall with federal stimulus money for Medicaid. State Human Services Director Lillian Koller said the additional federal money, for the period from Oct. 1, 2008, to Dec. 31, 2010, is not specified for Medicaid use and has few strings on how it can be used.

But if some or all of the $320 million was spent to prevent reductions in mental health services, expand physician fees or meet other needs, Koller said cuts would have to be made in other areas because of the state deficit, now projected to be $910 million.

The health department said it intends to make all payments for services, although there might be "prolonged delays." Officials say they have been meeting with providers to prepare them for the funding plight and told them in November that they projected $25 million deficit this fiscal year, ending June 30.