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What we are learning: to turn straw into gold

MHMRA has just concluded one of the most difficult budget processes in my more than 30 years of public service. And, we are not out of the woods. Rather, we have pared back our resources, realigned our staffing, and set in motion an action plan to realize the extensive amount of earned income necessary to balance the budget. Yes, in order to deliver the services under our “umbrella”, increasing amounts of revenue must be earned. This may cause you to react negatively – it causes many concerned folks (consumers, family members, advocates, fellow professionals, and private providers) to question our direction. Have we, the public mental health and mental retardation system, lost our direction? No – I don’t think so.

What has been happening is in direct response to Texas Legislative mandates: 1) the public sector has been told to help “convert” as many of our adult mental health (AMH) priority population as possible to a third party insurance plan (primarily Medicaid); 2) the Texas Legislature has not provided additional tax funds to cover inflationary increases, such as: increased cost of medications (although significant new dollars were appropriated this past session to cover the cost of New Generation Atypical Antipsychotic Medications), salary adjustments (essential market adjustments have been needed to retain and recruit competent, dedicated staff at all levels in our highly competitive Medical Center environment), supplies, gas/travel, rent – the list of areas of increase is considerable; and 3) new requirements have been imposed through the Performance Contract with TDMHMR which requires significant realignments of our staff resources to comply with these requirements.

The budgetary impact has been most profound in two areas: the Adult Mental Health (AMH) Division and the Psychiatric Emergency and Inpatient Services Division. Let me start by describing what is happening within the AMH Division. Of the $39,096,981 operating revenue needed to cover AMH expenses, State General Revenue is $11,111,846 plus $7,633,343 in New Generation Medication funding. County funding, fund balance/lapse, other state funds (TCOMI and TCADA), and federal (PATH, MH Block Grant, Title XX, supported housing, and other federal grants) make up a significant portion of the balance to provide services for specific consumers. Of the total AMH FY 2001 budget, over $12 Million is allocated to cover the costs of consumer medications for the uninsured (including the $7.6 Million in New Generation Medication funding). Earned revenue (in excess of $7.6 Million) becomes the only way to balance this budget.

So, as has been necessary over the past several years, virtually all rehab and residential services must pay their way – there are not tax funds to pay for these services. Much of the service coordination provided must be to persons who have third party coverage to pay a substantial part of the cost of this service. And, what became readily apparent in FY 2000, psychotherapy outpatient services must be provided to persons whose third party coverage enables the Agency to recover the costs of providing these services. In FY 2001, the licensed psychotherapy professionals have been pulled together as a team under an administrative leader, flexed across clinics, and given specific targets for hours of service and revenue to be generated – in order to ensure their costs are covered through earned revenue. The remaining tax funds don’t cover the costs of psychiatric services (physicians, nurses, pharmacists, clinical coordinators, clerks, etc.). The psychiatric services component of AMH also has a revenue target from third party earnings that also must be met. Each service component of AMH has specific revenue targets that are essential to attaining a balanced budget. The AMH clinics have fallen substantially below their revenue targets for FY 2000, significantly contributing to the deficit Agency-wide in FY 2000.

Compounding this crisis in AMH has been two factors, one being the ever increasing cost of medications and the other being the new TIMA (Texas Implementation of the Medication Algorithms) requirements. To control the costs of medications within AMH, the Agency began scrutinizing who has been covered through the general revenue medication funds. One group – our Medicare population (around 20% of the AMH consumers are now Medicare covered) – has the costs of services covered – but not the cost of their medications. Thus, with regard to their psychiatric medications, the Medicare population is indigent – must be covered by general revenue. The AMH Division has around 30% of its population who are now Medicaid covered. But, you say, under Medicaid managed care, these consumers have unlimited scripts. Not true, we have now identified a substantial group of Medicaid recipients who are limited to 3 scripts under Medicaid a month (the old Medicaid medication benefit limits). Many of these Medicaid AMH consumers were having their scripts filled through general revenue funds. We have implemented a process which will span the first 60 days of FY 2001 (starting September 1) to inform and assist the medication-limited consumers to prepare to pick up their psychiatric medications through Medicaid or, if possible, consider switching into a plan which provides unlimited scripts as a part of the benefit package. After November 1st, MHMRA does not expect to pay for medications on behalf of consumers who have any type of Medicaid coverage. And, lastly, we have administratively asked our medical staff to fully ramp up our eligible consumers onto the New Generation Atypical Antipsychotic Medications, to draw down and utilize this special general revenue fund account as fully and completely as possible in FY 2001 without going over the target (our absolute Contract requirement is to not create an unfunded obligation for the Legislature). These New Generation Medication funds may only be used for specific atypical antipsychotic medications for certain consumers who are uninsured and meet diagnostic eligibility criteria and, as such, may not be used for any purpose other than to purchase the medications themselves. Medicaid consumers have full access to these medications through the Medicaid formulary.

TIMA is the revised implementation of the TDMHMR medication algorithms which recently concluded a 3-year research project. MHMRA was significantly involved with these state-of-the-art algorithms – several of our clinic physicians were actively involved over the past several years and saw, first hand, the benefits derived in terms of patient care. The algorithms are guidelines that will assist the psychiatrists under the TDMHMR provider network to have the most current information and apply this in their practice with our consumers. The algorithms could, over time, have a positive impact on the quality, efficacy, uniformity, consistency, and cost of pharmacotherapy throughout the state. However, to implement these guidelines, consumers must be seen more frequently than our current consumer to physician ratio will permit and paperwork requirements may increase the amount of time the physician may have to spend with each consumer each visit. Furthermore, to keep the consumer to physician ratios reasonable (from the current 400 to 450 consumers to one physician to the necessary 300 to 350 consumers:MD), the teams were reconfigured into TIMA teams: 1 MD, 1 clinical coordinator (LPHA), and 1 clerk. To implement TIMA, the AMH Division had to expand from 20 current physician teams to 25 TIMA teams – not only adding 5 psychiatric FTE positions to the FY 2001 budget but also reconfiguring the staffing to ensure the TIMA team composition. AMH is in the process of deleting some vacant positions as well as having to delete some existing positions with staff being assisted to try to find alternate positions for which they may be qualified within the Agency under the revised service models.

In a nutshell, the AMH Division is budgeted to earn $7,686,789 this fiscal year – an average of $640,565 per month. A detailed report by AMH component is being put in place which will reflect the weekly earned revenue target, the amount of service provided and billed, the amount collected, the amount rejected by the payor, the amount appealed, and the amount of the appeals collected. With 52% of the AMH consumers now covered by a third party payor (30% Medicaid, 20% Medicare, and 2% commercial), the refocusing and realigning should enable us to generate this level of revenue in order to serve the over 8,800 unduplicated adults each month as required under the Performance Contract in FY 2001. If we fail to serve the number each month, TDMHMR will ask for a return of the general revenue in pro rata amounts – even though the general revenue available doesn’t cover the cost of services for the 8,800 required to be served. If we fail to earn the amount needed each month, we will use up more of our very limited reserve funds which are critical to addressing our week-in, week-out cash flow requirements – virtually placing the mental health components at risk of bankruptcy – which we obviously must not do. If we let the AMH Division slip into financial crisis, the number of staff, the accessibility to care through geographically dispersed locations, and the already woefully limited services and supports will have to be curtailed even further for our uninsured consumers. Simply put, we must not fail to successfully make the transition to this new funding model for the AMH system.

The other area of significant hemorrhaging in FY 2000 has been with our new Crisis Center – The NeuroPsychiatric Center (NPC), on Ben Taub Loop. Conceptualized and staffed to handle an anticipated 600 to 800 persons a month, the NPC has been serving 1,200 to 1,300 persons per month. One area of surprise, we are seeing more children and adolescents than expected. And, with the Crisis Intervention Team (CIT) training within HPD and other Harris County law enforcement entities expanding and taking hold, more people with an apparent acute psychiatric condition are being voluntarily or involuntarily brought to NPC for evaluation and intervention if warranted. CIT is working! Few inappropriate people are being brought by law enforcement. Fewer people with mental illness appear to be entering the jails and are now brought to NPC. Almost 300 people were brought to NPC by law enforcement last month.

NPC is seeing larger numbers of persons than expected requiring increased staffing on the first floor (The Psychiatric Emergency Services – PES). Open 24 hours a day/7 days a week, PES has had a steep learning curve, creating efficient operating procedures to interface with the courts for involuntary commitments, various hospitals and emergency centers throughout Harris County, law enforcement, etc. It has been difficult in large part because there has been much to learn and in part because staffing has been limited or vacancies existed in a number of essential areas.

What we are learnimg
The second floor could not open until the first floor was stabilized. The model for the second floor fluctuated between opening as a hospital or as a crisis stabilization unit. Both enable MHMRA to accomplish the NPC mission for the second floor – to serve as a short term acute stabilization unit for primarily voluntary patients who should be able to be stabilized in an average 3 to 5 days. We have now analyzed the expenses and revenues to be earned under both models and settled on the Crisis Stabilization Unit model for initial opening which is due early September.

Billing for services rendered by NPC is, by necessity, critical. Having an annual operating budget in FY 2001 of $9,356,480 with a total of $6,392,704 in dedicated tax resources (state and county allocations), NPC has retrained staff on codes, realigned its billing mechanism, and put in place daily monitoring and quality reviews to ensure that this major aspect of its funding is realized in FY 2001 (earned revenue = $2,963,776).

In truth, NPC has been serving not just more consumers than expected but more uninsured consumers as well. The consumer mix (uninsured to those with Medicaid/Medicare coverage) has been off projections. We are working to better “market” NPC to the managed care plans to provide emergency psychiatric services to the most in need, both the uninsured and those with managed care coverage. The challenge for any urban emergency service is to make this work – attracting those with coverage as well as the uninsured. The uninsured come for service. In fact, Harris County has one of the highest percentages of our population who are uninsured (over 30%) in the state of Texas – Texas is one of the highest in the nation.

The MHMRA Children’s Mental Health Services Division has also undertaken significant reconfigurations to address its revenue requirements and Performance Contract Target Numbers. CHIP is rolling out – but slowly, with minimal impact to date. Staff are being realigned to better address the TDMHMR First Time Offender (FTO) requirements and criteria for services under this special general revenue fund allocation. Further opportunities to reach out into the juvenile justice system (JPO), Children’s Protective Services through 4Cs, and public education systems should be actualized at the outset of FY 2001.

The MR Services Division is in the “best” shape financially and should well be able to meet its revenue targets within FY 2001. Funds for persons with mental retardation are much more realistically tied to the cost of delivering services and supports and the funding mechanisms more closely linked to the individual consumers themselves. This next year should, however, see the exciting but difficult rollout of MRLA (Mental Retardation Local Authority). And, we believe, we should receive some 90 new HCS community slots for implementation perhaps as soon as this fall.

FY 2001 continues the challenging and difficult transition as required by the Texas Legislature. It is more like a transformation as to how the public system of services and supports will look (who is served), how it will act (as a managed care entity), what it will deliver (the types of services and supports – and for how long), and how it will be funded. As a governmental entity, we have less and less tax support and more and more earned revenues, having to function increasingly like a non-profit business, emphasizing those business practices which produce a balanced budget and permit us to address both infrastructure and inflationary requirements. We are learning how to turn straw into gold.

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