Mental health officials plan for higher costs, reimbursements
MONTPELIER — From fiscal year 2013 to 2014, officials are anticipating a $5.3 million increase in certain Department of Mental Health expenses related to the restructuring of the state’s psychiatric health system.
“It’s (in the) early stages, we’ve got a lot of work to do in all our departments, and given the pressures that we’ve had I’m not surprised that’s where we have landed,” acting Mental Health Commissioner Mary Moulton said Tuesday. “Of course we’re always concerned about an impact on general fund dollars that are above the line.”
But as the state transitions from the Vermont State Hospital in Waterbury — which closed in 2011 due to damage from Tropical Storm Irene — to new temporary and permanent facilities throughout Vermont, a new psychiatric hospital in Berlin will generate millions more in Medicaid reimbursements that the state had previously lost as a consequence of the old state hospital’s decertification.
The hospital was decertified by federal regulators in 2003 after multiple patient suicides, was briefly recertified in 2004, then lost the certification again just months later in 2005. One report by the U.S. Department of Justice described the conditions in the Waterbury hospital as prisonlike. It also noted that the seclusion of patients and restraint interventions employed by mental health workers seemed to substantially depart from generally accepted professional standards.
During testimony Monday before the Legislature’s Mental Health Oversight Committee, a handout given to lawmakers projected state mental health expenses rising overall from $41.1 million in fiscal year 2013 to $61.5 million for fiscal 2014.
The projected expenses are associated with Act 79, legislation passed earlier this year that overhauled the mental health system in Vermont.
Due to a spreadsheet tallying error, the actual expenses projected are $52.7 million for fiscal year 2014, said Mental Health Department Financial Director Heidi Hall during an interview Tuesday.
Only a fraction of that cost affects the state’s general fund.
Before Irene, the roughly 50-bed hospital in Waterbury required about $23 million annually in operating costs, and the state’s general fund paid for 90 percent or more of that, Hall said.
The operating cost of the new 25-bed Berlin hospital is expected to be around $18.1 million each year.
But most of that money — 56.4 percent — will be covered by federal dollars.
The federal reimbursement percentage is an anticipated rate, and it could fluctuate by 0.1 percent or 0.2 percent, Hall said.
The projections include staff salaries but not construction costs.
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