News: CJ Exclusives

Proposal To Expand Rural Mental Health Services Faces Obstacles

Funding concerns, bureaucratic barriers may delay addition of new psychiatric beds in outlying communities

McCrory administration officials say a plan to convert vacant beds at struggling rural hospitals into mental health and substance abuse crisis facilities would use money from the sale of the state’s Dorothea Dix property to alleviate a growing public health need.

But even if the proposal is approved, it’s unclear whether enough funding is available to keep the program funded long-term, if rural communities have the proper medical staffing to treat the patients, and if government regulations controlling the addition of medical services might prevent hospitals from adding the new facilities.

State Department of Health and Human Services officials testified about the proposal in April before two legislative committees. It is an outgrowth of the Governor’s Task Force on Mental Health and Substance Abuse that Gov. Pat McCrory commissioned.

McCrory has emphasized the expansion of mental health and substance abuse services, saying failing to confront the problem is “an issue being hidden in our emergency rooms, in our county jails, and in our state prisons, and underneath bridges across North Carolina.”

Proceeds from the sale of the Dorothea Dix hospital property to the city of Raleigh would be one-time funds, DHHS division director Courtney Cantrell said to an April 12 meeting of the Joint Legislative Oversight Committee on Health and Human Services.

“We identified counties across North Carolina that are adjacent to large counties that have overuse of their emergency departments. We also look to see where most referrals were coming from,” Flo Stein, Cantrell’s deputy director, told an April 28 meeting of the House Appropriations Committee on Health and Human Services.

Priority for the one-time money would go to hospitals located where patients must travel the greatest distance to get treatment and stay the longest while receiving it.

The state will ask hospitals for proposals to “allow for those counties to either do inpatient beds or facility-based crisis beds for either adults or children, and for mental health and substance use disorders,” Stein said. “We are really looking forward to moving on this.”

DHHS would prefer to upgrade and renovate existing hospitals — at a cost ranging from $25,000 to $166,000 per bed — rather than building new facilities, which cost between $82,000 and $379,000 per bed, Cantrell said. While $25 million is targeted for the project, holding the cost to $12 million spread over three years could allow for the balance to be used in community-based programs.

“If you have a lot of high-cost, new construction projects, then we’ll probably have fewer beds,” Cantrell said. But with a concentration on renovations and upgrades, 150 beds might be possible.

Hospitals would submit competitive proposals including a “sustainability plan” outlining how they would cover operating costs, what insurance companies they would work with, and available community programs and partnerships.

“It’s hard to expand services with one-time funds” because costs persist with no revenue to maintain the services, Cantrell said, so the sustainability plan would be key.

“We certainly support DHHS’s efforts to increase access to appropriate care for people with behavioral health issues,” said Julie Henry, spokeswoman for the North Carolina Hospital Association.

“We’ve been saying for a long time that many of our hospitals, small and large, are not equipped or staffed” with the proper infrastructure in the right settings for individuals in behavioral health crisis “whether that’s substance abuse or … mental health,” Henry said.

“We do have some smaller hospitals that don’t have the inpatient census that they once had, so there are opportunities there,” Henry said. “Certainly, this infusion of funds could be helpful in that aspect.”

But making the crisis units for behavioral health and substance abuse patients financially sustainable “is something that we would want to have more conversation about, and that’s from a financial standpoint for our hospitals, and also from a staffing standpoint,” Henry said.

There is a statewide shortage of behavioral health professionals, ranging from licensed clinical social workers to psychologists and psychiatrists, she said.

“We’re going to take on a population of patients that is not traditionally insured, and you’re going to tell us that you’re going to help us fix the building to accommodate them, but you’re not going to assure us that we’re going to be reimbursed when they stay in our building for a month,” Henry said.

Those patients with insurance often are covered by Medicaid or other government programs that do not pay the full costs of treatment.

“If we invest in the staff to support their care, and that’s on us, then how can we be assured that we are going to be able to sustain that?” Henry said.

Cantrell suggested one option would be reallocating funds set aside only for patients with one type of illness and using them to cover several — the so-called “three-way” bed funds. Another possibility would be to allow three-way bed funds, now available only for inpatient units, to support facility-based crisis programs. That would require a change in legislation.

As this process unfolds, Holly Hill Hospital recently applied with the DHHS Division of Health Services Regulation for a certificate of need to add 32 adult inpatient psychiatric beds in Wake County at a cost of $15 million with completion set for January 2018.

The certificate-of-need program requires the applicant to undergo a thorough review by state regulators to determine if a service or facility is needed.

To spur growth in the number of beds for psychiatric patients, several lawmakers have advocated removing the certificate-of-need requirement for psychiatric facilities.

But Henry said maintaining the CON requirement is vital for the financial stability of hospitals and their affiliated health systems “that support those services that we often lose money on, and certainly don’t make money on.”

Cantrell said CON approval is being considered as part of the rural hospital facility-based crisis program.

“That’s required,” she said, “for patient safety, of course.”