KMH taking $500,000 hit

A law that’s been on the books for eight years will rear its ugly head on July 1, dashing $82 million dollars from Washington state’s mental health services.

“It’s a change in Medicaid regulations,” said Larry Keller, executive director of Kitsap Mental Health Services.

Medicaid, the federally run program that pays healthcare costs — including mental health services — for low-income individuals and families, has been around since 1965.

According to Keller, as long as Medicaid patients were properly cared for with the money given to the state by the federal government for that purpose, community mental health organizations could use the “savings” from their Medicaid managed care program to pay for services for those not on Medicaid.

But according to a 1997 federal law, states can use Medicaid money only for Medicaid patients and services.

Many states, Washington included, had been using their extra Medicaid money to pad their community mental health budget. Last year, the money accounted for 89 percent of the budget.

This year, the feds put a stop to the practice and a $2.2 billion state budget hole virtually ensures not all the $82 million lost will be reallocated.

“It’s logical in some ways,” Keller said. “But it has a severe consequence.”

Keller said Kitsap Mental Health will lose approximately $500,000 as a result of the $82 million state loss.

“We feel there will be about 1,500 clients that we’ve served in the past that we will no longer be able to serve,” Keller said. “Ultimately, there’s going to be a capacity issue.”

Kitsap Mental Health serves 5,000 clients yearly. Keller said the staff will more than likely try to restructure services so that there is more group therapy and more individuals can take part. However, he fears many mentally ill patients in Kitsap County will have to be turned away.

Keller said a large percentage of South Kitsap’s homeless population is mentally ill and administrators are even restricted in how they use Medicaid money for their Medicaid patients.

“A lot of (patients) will go to the emergency room and try to enter the system that way,” Keller predicted. “A lot of people will go to community health clinics. Some (patients) will commit misdemeanors because of their illness and go to jail.”

Keller said these emergency response systems are obviously the most expensive to operate. Community mental health services are a first step and the emergency room should be a last resort.

He said Kitsap Mental Health officials are creating a plan with emergency care workers and law enforcement that includes staying in touch with local legislators.

“We’re sure talking to them as often as we can,” Keller said. “We’re hoping there will be at least some money allotted.”

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