Illinois responds to federal stick: mentally ill to get better care

Threats of federal funding cutoffs have led Illinois to propose dramatic changes in the way it cares for the mentally disabled. New federal laws will require a higher level of care for an estimated 12,000 residents of 600 nursing homes. The state's response would strengthen a mental health system that has been condemned by a gubernatorial task force and the League of Women Voters, an operation that Ann Kiley, director of the Department of Mental Health and Developmental Disabilities, has called the "shreds of a system."

The state's response to federal nursing home reform legislation will increase reliance on the community mental health system. If followed, the plan will put into place services that could ease pressure on state mental hospitals overwhelmed with persons seeking admission. But the plan will require substantial increases in the amount that Illinois spends to provide services, increases that could encroach on spending for other menial health or human services.

The stimulus for action is the Omnibus Budget Reconciliation Act, passed by the U.S. Congress in 1987. The measure, known as OBRA, sprang from an alliance of congressional budgetcutters and human service advocates. The new law says that the mentally ill or retarded living in nursing homes who do not need nursing care must receive treatment to help them achieve independence or to overcome psychotic episodes. The law carries a heavy stick: the threat to cut off all or part of Illinois' annual $2 billion in Medicaid funding. The threat has produced what some characterize as a second wave of deinstitutionalization, a quarter of a century after the first efforts to move clients from state institutions. Ironically this wave will be from the nursing homes where many of those who were moved out of state facilities ended up. The dislocations will be considerable. There are an estimated 9,000 mentally ill clients living in nursing homes who will be affected by OBRA, while by contrast there are 3,000 beds for the mentally ill in state facilities. Rep. Woody Bowman (D-4, Evanston) emphasizes the potential chaos: "We could shut down our state system with less effect than OBRA will cause when fully implemented. A sudden shock like this could destroy an already creaky and marginal mental health system in Illinois."

Illinois requested and was given additional time to meet the federal law's April 1, 1990, deadlines for compliance. Since January 1 the state has, as required, been screening applications for admissions to nursing homes to determine whether nursing home placement is appropriate or whether treatment for mental illness or developmental disabilities is needed. By next April all residents of nursing homes must have been screened, and the state estimates that screening will turn up 9,000 mentally ill and 3,000 developmentally disabled in need of services. The treatment required by the developmentally disabled must be provided by June 30, 1992, and the service for the mentally ill by June 30, 1994.

Besides the 12,000 residents that it is estimated will have to be served in or moved from nursing homes, the state projects that its new screening procedures over the next five years will find another 4,000 individuals, both mentally ill and developmentally disabled, who in the pre-OBRA days would have been admitted to nursing homes. Many will probably be individuals living with aging parents and will probably be able to live in a community setting, says Colette Croze, deputy director for community programs with the mental health department. Croze identifies these deflected clients as those likely to become homeless if no program were put in place.

The state's response to OBRA's nursing home reform also allows an opportunity to take pressure off state facilities. The classic example of problems within the state system is Chicago-Read Mental Health Center, whose 7,000 admissions per year represent a third of the entire state system's.

The screening that the federal legislation requires for nursing home residents presents the opportunity to relieve state facilities. The state mental health department will contract with community agencies to conduct the screening, which initially will also include screening persons being placed in small 15-bed units for the developmentally ill and state facilities for the developmentally disabled. Once the screening process identifies inappropriately placed nursing home residents, the local agencies will begin to prescreen for admission to state hospitals for the mentally ill. The two-step implementation of the screening by local agencies will allow the prescreening process to be established in the first phase before overwhelming the local agencies with the 40,000 persons who appear annually seeking admission at state facilities. Delilah Brummet, interim acting director of the department while Kiley is on sick leave, says that once in place, the prescreening system will prevent persons in crisis being dropped off at state facilities: "If it turns out they just need some very good community-based services from X agency, then X agency will get them and they'll never show up at Read."

For the 12,000 current nursing home residents that the state believes will be affected by the new federal law, the Illinois response calls for leaving 5,000 mentally ill residents

June 1989 | Illinois Issues | 15

in nursing homes that will have been reclassified as intermediate care facilities (nursing homes) for the mentally ill. Another 1,400 clients who have lived in nursing homes more than 30 months will stay where they are with increased opportunities for active treatment. The other 5,600 will be moved to community residences.

To serve the 5,000 mentally ill residents who need active treatment, the state proposes to identify 35 nursing homes to be redesignated to take care of the mentally ill (the jargon for that is intermediate care facilities for the mentally ill and the shorthand is ICF/MIs). For those reclassified nursing homes, the state rate of payment for the residents will be increased from the current nursing home rate of $38 per day by as much as $10 per day, a figure that will depend upon federal rules that define active treatment. The new rate will be far less than the $160 per day that Illinois spends to take care of a mentally ill client in a state hospital. Officials of the department say the reason for the rate differences is that those in nursing homes are less chronically ill than those in the state facilities. Brummet explains it this way: "They've been living with only a nursing level of care for some period of time, whereas people who go into our state operated facilities by definition need a psychiatric base, in some instances a medical base level of care. That is significantly higher than what you're going to see in nursing homes."

Originally there had been a plan to reclassify some nursing homes as Residential Rehabilitation Facilities. Nursing home operators protested that they would have to give up the certificates of need that allow them to operate, and they favored remaining under the auspices of the Department of Public Aid and a reimbursement schedule with which they are familiar. Subsequent federal rules provided reimbursement advantages for keeping the intermediate care facility label. As a result the nursing homes will continue to be overseen by the Department of Public Aid. Susan S. Suter, public aid director, says that she is prepared to add staff familiar with mental illness to assure that adequate treatment is offered by these homes.

The 1,400 clients who have resided in nursing homes for more than 30 days will be given the chance to remain where they are. The state plans to offer treatment in the nursing homes for them.

Finally, the other 5,600 clients will be placed in community programs over five years. That is a lot of new placements in a state that currently has about 6,600 community beds for both the retarded and the mentally ill. The increase is particularly large for the mentally ill, for whom there are now about 1,400 community beds and for whom plans call for the addition of 3,200 beds by the fiscal year that ends June 30, 1994. In communities where suitable apartments are not available the state will offer low cost-loans to help underwrite construction. The device to be utilized for the placements is the Community Integrated Living Arrangement (CILA), an initiative pushed by the mental health department last year. Under the CILA concept the state provides for service instead of providing it. The program works like this: A local agency, licensed by the mental health department, analyzes the needs of a particular client. The client may need a place to live, perhaps alone with daily or weekly visits from a staff member or in a setting that has 24-hour supervision. He or she may also need day programming services and psychosocial rehabilitation. And there may be needs for emergency service to deal with psychotic episodes. After assessing those needs the agency makes a proposal to the state to provide those services for a given cost for a particular person.

The state assurance that services are being provided comes in two ways. First, the agency is licensed. To get that license the agency must demonstrate its ability to provide those services, and the threat to pull the license exists. Second, the mental health department plans to do random checking. It plans to send inspectors to check with clients and ensure that services being paid for are needed, adequate and being provided.

The first CILA arrangements are underway. This year the

June 1989 | Illinois Issues | 16

mental health department sought requests for proposals to serve 750 clients as part of a general expansion. So far about 100 individuals, all developmentally disabled, are living with CILA arrangements. The department placed a $25,000 cap on the annual CILA cost, and the average agency proposal came in well below that, at about $19,000 per year.

It is in the CILAs that the future of community mental health will be decided. There is resistance to community placements, and the notion that the mentally ill make good neighbors is difficult to sell. The department has planned an education program to overcome resistance. Much rides on this effort, because if this wave of nursing home deinstitutionalization goes badly, the notion of community mental health could be set back. As Rep. Tom Ryder (R-96, Jerseyville) puts it, "If we don't do it right this time, then you can kiss good-bye to the kind of support both legislatively and in the population that mental health has enjoyed in the last couple or three years."

To do all this the Department of Mental Health and Developmental Disabilities has requested funding for 39 new positions. The Department of Public Aid has asked for five new jobs. Brummet says that was the most they believed they could get approved by the General Assembly. Although her department would like to have more, they believe they can get started with 39. Public Aid's Suter says she may have to reconfigure her personnel to add staff with mental illness specialties to handle the new nursing homes for the mentally ill.

There is another issue. Can the state sustain the funding needed to implement the plan in subsequent years? First year (fiscal year 1990) costs for OBRA compliance are estimated at $69 million. But those costs rise another $30 million in fiscal 1991, and then by $40 million, $35 million, and $25 million in consecutive years, until the fiscal 1994 costs are $199 million above the fiscal 1989 costs.

The $200 million to deal with OBRA is a lot of money. And on top of that the department will have to spend money each year to cover inflation, pay raises and the general costs of running state insitutions and other parts of the community system. Rep. Bowman says he believes that the department will get all or most of its OBRA request this year, but he worries about costs in the future: "It is possible for budgets to sustain very rapid growth over a long period of time. I cite the Department of Corrections, which has almost quadrupled its budget in a 12-year period, an increase of $300 million." Growth in the mental health department will be twice as fast with the $200 million for OBRA and another $100 to cover the inflationary costs in other department operations; the increase will hit the $300 million mark in five years.

Even without an income tax increase for the year that begins July 1, Illinois can spend a relatively healthy $800 million in new money on its total operations. That comes from $500 million in natural revenue growth, $150 million in spending made this year that need not be repeated, and $170 million from the proposed cigarette tax. In future years, absent new tax increases, the new money that must be spent on OBRA will squeeze other human service needs, be they for higher welfare check payments or smaller caseloads for child abuse caseworkers.

It is fear of future funding that tempers otherwise overwhelming support from community mental health agencies for the state's nursing home reform plan. Orville Mercer, executive director of Mental Health Services of Southern Madison County in Granite City, applauds the increased attention to community-based services: "Our biggest fear is that if the legislature doesn't fully fund it, down the road dollars could be siphoned off from other programs." Peter Rinn, executive director of the Illinois Association of Community Mental Health Agencies, supports the concept of OBRA completely, but worries about other needs: "DMHDD's preoccupation with OBRA may well lead to the creation of a new caste system for the mentally ill and developmentally disabled in Illinois: (1) the covered — potential and current nursing home residents protected underneath the OBRA umbrella and (2) the uncovered — all others living outside the protection of the OBRA umbrella.'' Less than 10 percent of the mentally ill and developmentally disabled in Illinois are affected by OBRA, Rinn says, and the department has sought for no new funding for children and adolescent services, for teen suicide prevention and beefing up crisis services.

Others worry that the mental health department has underestimated the numbers that need to be served and the cost of that service. David Stover, executive director of the Illinois Association of Rehabilitation Facilities, believes the number of nursing home residents needing service could surpass 20,000. Stover also says that the cost of CILA arrangements may exceed $25,000 and that nursing home rates must be boosted more than $10 to provide active treatment.

The concerns of the Mental Health Association in Illinois are little different. "Without question it's a tremendous opportunity. It's the kind of thing we needed to move the system along. Implementing it is going to be tricky," says Jan Holcomb, the association's vice president for long-range planning. Holcomb says she sees needs for development in the community system that can only come from a long-term infusion of resources: "We have deep concerns that the public and the legislature will forget the commitment in the future and that we will slide back."

The department is taking a one-step-at-a-time approach, working to ensure that it gets the first year's appropriation and spends it well before fretting about the future. Acting director Brummet says, "Sure, it's going to be a struggle every single year, but if you don't get the money this year, the system is going to be in chaos. There's no way the federal government won't, if only to put more pressure on the state, come in and decertify some of the homes. Therefore this year is the most critical year."

The threat of federal cutoff of Medicaid funding has gotten the attention of state policymakers and has given the Department of Mental Health and Developmental Disabilities a stick to use with lawmakers in boosting its budget. Few dispute the direction the department wants to move. What is in dispute is the ability to move as fast as Brummet and company are proposing to go. And what worries some lawmakers is the hole that paying for the nursing home reforms will make in the rest of the budget. □

Michael D. Klemens is Statehouse Bureau Chief for Illinois Issues.

June 1989 | Illinois Issues | 17