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GOVERNOR PATAKI’S 2006-07 EXECUTIVE BUDGET PROPOSAL: Yesterday, Governor Pataki released his 12th, and final, executive budget proposal. While we are pleased by many of the Governor’s proposals (i.e. a COLA for human service workers and a large children’s mental health initiative), it is important to keep in mind that many of these multi-year proposals will only come to fruition if they are continued by the next Governor. That said, there are several components of the Governor’s $6.1B proposal for the Office of Mental Health that give us reason to be quite pleased, while there are others that cause us concern for the welfare of New Yorkers living with mental illness and those who provide crucial mental health services.

As regular readers of MHANYS Mental Health Update (formerly MHANYS’ Friday Fax from Albany) know, we joined together with other mental health groups over the past several months to advocate for a 10% increase in a variety of community-based, recovery-oriented mental health programs. Our advocacy efforts paid off to a certain extent yesterday with the inclusion of a three-year 2.5% Cost of Living Adjustment (COLA) for a variety of health and human service related areas. Covering those who provide services under the auspices of the Office of Mental Retardation and Developmental Disabilities, Office of Alcoholism and Substance Abuse Services, Department of Health, State Office for the Aging, Office of Children and Family Services, this COLA will also cover residential and non-residential community-based programs under the Office of Mental Health (will not include clinic, CDT, and day treatment base rates). The COLA will be based on the Consumer Price Index, the first taking effect on October 1, 2006, the second on April 1, 2007, and the third on April 1, 2008. As the memo on the Governor’s bill states, “The COLA is expected to improve recruitment and retention of workers employed by voluntary providers as well as provide for inflationary cost increases.” As we have made the case over the past several years, the memo goes on to state that, “Such providers have only received limited COLAs over the past 11 years – in fact a cumulative 7.5 percent increase contrasted to the comparable cumulative 29.4 percent trend factor afforded hospitals and nursing homes – which has created serious workforce and other operating pressures, regulatory compliance and quality of care issues, and concerns about addressing community expansion needs. The three-year COLA is intended to help alleviate these issues.” While mental health advocates are pleased by the 2.5% COLA, it is still a far cry from the 10% we were advocating for that would begin to address this great disparity particular to the mental health field.

Regarding the post-incarceration placement of sexual offenders in psychiatric centers, MHANYS has maintained that such action represents a misuse of the mental health system. However, as the most recent editions of MHANYS Mental Health Update have indicated, we are somewhat mollified by the Governor’s proposal to create a separate facility in which sexual offenders would be detained, albeit under the auspices of the Office of Mental Health. This proposed facility would be located on the grounds of a Department of Correctional Services facility in Chenango County called Camp Pharsalia. Additional details provided yesterday indicate that a total of $165M has been dedicated for the purposes of creating “appropriate” housing for sexual offenders within the mental health system. $130M would be used to construct this new facility at Pharsalia, while $35M would be used to modify existing facilities at Central New York Psychiatric Center (the forensic facility located near Rome, NY) and in a vacant building on the grounds of St. Lawrence Psychiatric Center until the facility at Pharsalia is ready. In the budget briefing, Commissioner Carpinello also mentioned that if need arises, facilities at Rochester Psychiatric Center and Manhattan Psychiatric Center could also be modified and used to house sexual offenders. As for programs and treatment for sexual offenders while in these psychiatric centers, $26.8M would be dedicated to hire 697 full time employees charged with providing treatment to these offenders.

Perhaps the largest and most expansive initiative for those with mental health needs is the $29M ($62M annualized) dedicated for children’s services. Marking a truly comprehensive approach, what OMH has dubbed, “Achieving the Promise for New York’s Children and Families,” this proposal would include a number of components. First is ‘Child and Family Clinic Plus,’ which OMH states, “will transform the local mental health clinic from a passive program waiting for clients to present, to an active program that will intervene earlier in a child’s developmental trajectory,” and will screen nearly 400,000 children each year. Included in this is proposal is $21.5M (annualized) for an additional 450 Home and Community-Based Waiver slots (300 for OMH, 150 for the Office of Child and Family Services). This would bring the total number of slots to 1,436, which would serve up to 2,160 children. In addition, $620,000 was included for an Evidence-Based Treatment Dissemination Center to create a “sustained clinical training model in evidence-based treatment protocols and in specialized consultation to support the organizational changes necessary to transform the way in which mental health services are delivered.” Lastly, $450,000 was proposed to make “telepsychiatry a reality for New York’s counties designated as rural health areas.” This is a very welcome initiative.

The Governor’s proposal also included $6.5M (annualized) for supported housing programs. Such funding will primarily be used for rent stipends for those people needing support as they work toward recovery from mental illness.

Also mentioned in earlier MHANYS Mental Health Updates has been the issue of co-occurring disorders and our involvement in SAMHSA’s Policy Academy on co-occurring disorders. In the Governor’s proposal, we were pleased to see that he earmarked $2M to increase the funds for demonstration projects that will increase the proportion of individuals with co-occurring substance abuse and mental illness receiving evidence-based dual disorder treatment.

MHANYS has also been at the forefront of the issues concerning the transition that those with both Medicaid and Medicare (dual eligibles) have had to make in order to maintain prescription drug coverage. Essentially, the problem occurs when duals are not able to produce the now-mandatory co-payment required for drug access under Medicare. As we have noted on these pages before, such a requirement could restrict access for thousands of people with mental health needs to the drugs that keep them healthy and stable. On Friday, the Assembly announced the introduction of legislation that would require the state to cover co-pays for duals unable to make the mandatory co-pays necessary to get access to drugs under the new Medicare Prescription Drug Program. This is a proposal that MHANYS and our colleagues have advocated for to ensure a smooth transition for duals into Part D.

Yesterday, the Governor’s budget proposal included $200M for Medicaid to cover drugs that are not available to duals under the Medicare Part D. It has been our understanding that this “wrap around” would be the state’s permanent policy, but we were alarmed to learn that this proposal from the Governor would only be available as a safety net to duals until July of this year. However, the Governor did propose a permanent “wrap around” benefit for certain drugs, including anti-depressants and anti-psychotics. In addition, the Governor recommended $5M for “a range of activities to assist the transition including education, training and coordination of benefits.”

Also in the area of Medicaid, we saw a number of initiatives aimed at reducing the amount New York spends on Medicaid, including a continuation of the cap on county Medicaid costs. While details are yet to come, the Governor has proposed the establishment of an Office of Medicaid Inspector General that would be solely focused on preventing, detecting, and investigating fraud, waste and abuse in Medicaid. The Governor’s proposal would also include the establishment of criminal penalties for possession of illegally obtained prescription drugs and markedly increased penalties for Medicaid providers involved in Medicaid fraud (from $2,000 to $10,000 for first offenses and from $7,500 to $30,000 for subsequent offenses).

Most alarming amongst the Governor’s Medicaid initiatives is his proposed elimination of a physician’s ability to make the final determination about whether a Medicaid recipient gets a certain medication under the Preferred Drug Program and the Clinical Drug Review Program. Equally distressing is a proposal that would include ‘cost’ as a criteria used in determining which drugs would require prior authorization under Medicaid. The incorporation of these safeguards into the agreement that brought about the Preferred Drug Program last year were absolutely essential to ensuring that mental health drugs and those with mental health needs were not harmed by this new program. We stand firm in our belief that the doctor knows what is best for his/her patient and should retain this crucial ability to have the final say about which drug(s) a Medicaid recipient should get. In addition, knowing that many drugs used to treat mental illness are quite expensive, incorporating cost into the equation used to determine which drugs should be preferred would almost guarantee unacceptable restrictions on mental health medications.

As was announced late in 2005, New York City and New York State established a third agreement to jointly fund an initiative designed to alleviate the needs of the homeless population living in New York City. $7.7M of funding was included in the Governor’s proposal for the first year of this New York/New York III agreement, which will provide for 450 units for individuals with serious mental illness, and 400 for other populations. Over ten years, this agreement should produce 9,000 units of supportive housing for those presently living without a home. This is a significant step forward in housing for people with psychiatric disabilities. This is an initiative that we would like to see happen statewide as well.

Under the stewardship of the MHAs of NYC and Westchester’s Michael Friedman, $2M was identified for demonstration projects associated with the Geriatric Mental Health Act, signed into law by the Governor last year.

As many have read from MHANYS before, suicide prevention has become a very high priority for the Office of Mental Health (i.e. OMH’s SPEAK program), which was also reflected in the Governor’s proposal. $1.9M has been recommended for “initiatives to increase awareness of the prevalence of suicide and (to) improve the public understanding of the causes, effects and treatment of emotional disturbances that underlie suicidal ideation and behavior.” This funding is primarily intended to increase the number of localities utilizing a suicide prevention plan.

Last year, given our efforts surrounding Timothy’s Law, mental health advocates were truly disheartened to learn of the Governor’s proposal to eliminate mental health benefits under the state-operated insurance program, Family Health Plus. While no such proposal was made this year, the Governor did recommend “prohibiting coverage for individuals employed by large businesses; increasing co-payments for inappropriate use of emergency services; and requiring mandatory co-payments for all services.” While details on this appear sketchy at this point, we have concerns about how such provisions could impact people living with mental illness and their access to healthcare.

In previous years, hospital closures and bed reductions have often topped our compilation of the Governor’s proposals regarding mental health. This year, we are happy to see that attention has been focused on other initiatives. While the Governor proposed closing Bronx Psychiatric Center two years ago, this year, he included $68M for the first phase of a $226M capital improvement at Bronx Adult and Bronx Children’s Psychiatric Centers. This change in position demonstrates the need for a comprehensive planning process that includes input from all communities throughout the state and encompasses all aspects of mental health care, including the future of such facilities. With regard to the closure of Middletown Psychiatric Center, approved as part of last year’s budget, everything appears to be going smoothly toward the expected closure on April 1, 2006 and the reinvestment of $7M from that facility into Orange and Sullivan Counties. Regarding bed reductions, it was interesting to read in some of the Governor’s supporting documentation that the trend toward reduction of state operated inpatient beds appears to have ended.

It was refreshing for mental health advocates not to face cuts or reductions in the Governor’s proposal this year. There are many positive facets to this budget proposal, from the children’s initiative, to increased waiver slots, to additional supported housing funding. We appreciate the efforts of the Governor and Commissioner Carpinello for these positive initiatives.

However, we have significant concerns about the COLA and the severity of the problem facing mental health providers to recruit and retain qualified and dedicated staff. While it is an important first step, unfortunately, this 2.5% increase barely begins to address these systemic problems that hamper the provision of mental health services in this state.

In addition, while many of our concerns about the safety of patients in the mental health system have been addressed by the Governor’s proposal, we maintain significant concerns that the vast resources necessary to house sexual offenders in the mental health system will end up coming out of resources used for the present operation of the state’s mental health system. We believe that the funding for sexual offenders must be separately lined out in the budget and that OMH should regularly demonstrate that mental health funding and programs have not been negatively impacted by these new responsibilities to house sexual offenders.

As we had feared in previous years, before the implementation of the Preferred Drug Program, we are greatly concerned about the proposed elimination of safeguards within this program, designed to ensure that vulnerable people are not harmed by the state’s efforts to save money on prescription drug costs for Medicaid recipients.

As the budget dance between the Governor and Legislature unfolds, we will provide regular updates on the status of these issues.