With the stroke of his pen on Tuesday, Governor Christie and his administration marked the end of the effective community mental health safety net in New Jersey. An appropriation in the state budget served as the last hope for community mental health providers in their fight to ensure that they can continue to provide care for the state’s most vulnerable under the Department of Human Services’ (DHS) controversial fee-for-service (FFS) funding cuts that went into effect on July 1. Without this budget appropriation, the future for New Jersey residents struggling with mental illness looks increasingly bleak.

Under FFS, the state will only reimburse providers for services considered “billable,” in some cases at rates that do not cover actual costs. Not included under FFS reimbursements are costs for nursing, security, transportation, billing, and infrastructure costs that are essential to being able to operate a community mental health facility. The state will also no longer reimburse for supportive services that help clients stick to their treatment plan — follow-up phone calls, helpmanaging daily responsibilities.  

This funding cut, disguised as a new funding formula, will mean that mental health providers across the state are facing budget shortfalls upwards of 40 percent of their entire operating budgets. These shortfalls have forced providers to begin cutting and limiting funding for a wide variety of their programs including outpatient psychiatric care and medication management services that treat thousands each year. As the year progresses, further cuts will be required to ensure that the non-profit facilities can continue to treat, at best, a fraction of their current clients.

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Community mental health providers are, in many cases, the only option for mental health treatment for thousands in the state attempting to recover from mental illness.  Although the severity of their illnesses may vary, each of these patients that is cut off from care due to the reckless and short-sighted fiscal decision by the State will be forced to navigate an uncertain future without access to the continuing mental health treatment they require. When the community mental health safety net fails those struggling with mental illness, the burden for their care doesn’t simply disappear but it shifts to families, first responders, police, schools, jails, hospitals, homeless shelters and their communities.

With these cuts officially now in effect, the warning signs are all there for mental health crisis in the making. The New Jersey Community Mental Health Coalition, a group of nine community mental health providers that will be most heavily impacted by these cuts, has repeatedly asked for assistance from the state and has voiced their considerable concern over the manner of the transition and how it will hurt the tens of thousands of patients they treat annually. The state’s largest psychiatric hospital, Greystone Park Psychiatric Hospital Advisory Board, sent a letter to the Department of Human Services last month voicing their grave concerns over the transition and the impacts to their facility. Numerous county freeholder boards and dozens of town councils have passed resolutions asking the state to revise the funding formula. Each of these warnings received nothing more than a promise of consideration from the state. And no meaningful changes to the flawed transition.

The evidence is already there to show what happens when states move to a FFS system without heeding the warnings of their mental health communities. Poorly planned and implemented FFS transitions, similar to NJ’s, have been disastrous for many other states. In Michigan, 10,000 residents lost service when the state moved to FFS funding. Nearly a third of community mental health providers in Massachusetts closed clinics between 2013 and 2015 because funding didn’t cover the actual cost of services. In Kansas, mental health funding has plummeted, and patients are put on waiting lists and offered fewer services. Despite the efforts of the members of the NJCMHC and the mental health community to alert DHS to the potential for a crisis and the negative impacts to the state, DHS has insisted on pushing through on the implementation of the FFS system as is.

As of July 1, providers have begun cutting services and the process of alerting many of their patients that they will no longer be able to treat them. They have also stopped the intake of new patients. Though it is already too late for many, theCommunity Mental Health Safety Net Act (S-3121, A-4827), a bill which currently sits in the State Senate and Assembly Appropriations Committees, can, if passed, help to mitigate any further damage to state’s mental health safety net.  The appropriation specified in the bill will allow providers with cash flow issues to pull from an emergency fund to ensure that they can continue to provide essential services at their current levels. Any funding not spent out of this pool of funds will be returned to the state at the end of the year. The law simply provides a glidepath for providers into the FFS system in case the state’s rosy budget predictions are inaccurate and predicted adjustments to the FFS rates need to be made.

The Community Mental Health Safety Net Act has drawn bi-partisan support, and is currently sponsored as Senate Bill S-3121 by Senator Robert M. Gordon, District 38 (D- Bergen and Passaic) Senator Anthony R. Bucco, District 25 (R- Morris and Somerset)- and Senator Robert W. Singer, District 30 (R- Monmouth and Ocean). The Assembly Bill A-4827 is being sponsored by Assemblywoman Valerie Vainieri Huttle, District 37 (D- Bergen).