Faced with $25 million in cuts to the state's mental health budget, service providers statewide are laying off employees and closing or scaling back offerings.
At stake are programs that they say keep low-income adults and children with the most disabling mental illnesses in schools and communities and out of hospitals, emergency rooms and jails.
"These are the services for people with the most severe psychiatric disabilities in the entire mental health system," said Herb Cromwell, executive director of the Community Behavioral Health Association of Maryland. "People with schizophrenia, people who have been in state hospitals for whom rehabilitation services are needed to help them establish independence, get a job and manage a house."
State Mental Hygiene Administration officials say the cost-containment measure - in the form of lower reimbursement rates to providers - is an effort to rein in four years of runaway spending and budget deficits.
"This is a budget that has an insatiable appetite," said Nelson J. Sabatini, secretary of the state Department of Health and Mental Hygiene. "No matter how much money you put into the program, the utilization of services continues to expand beyond a financially sustainable level."
Providers of care to the mentally ill agree that the deficits must be addressed, but fear that the lower rate structure - which took effect Feb. 1 - is a short-term fix with potentially grave long-term implications.
"Agencies are kind of hunkering down and trying to preserve as many services as possible," said Cromwell, whose association represents 50 of the largest providers of community mental health programs in the public system.
Kathy Seifert, executive director of Eastern Shore Psychological Services in Salisbury, is particularly worried about a 14-year-old client who attempted suicide by swallowing 90 pills of her anti-depressant medication.
"We were already giving her more services than the system allocated because she had to have them," she said.
Seifert plans to request the services her client requires, but doesn't expect to receive state approval. She said she is committed to providing the appropriate care, but under the new reimbursement rates her compensation amounts to $12 a session.
"The state will not pay for the level of services she needs to be safe in the community, so I'm faced with providing the services for free and putting my company in jeopardy," Seifert said. "I have to say to myself, 'Can I ethically serve these children if I'm giving them less than what they need?'"
Dale Meyer, president of People Encouraging People, a Baltimore program that serves adults with psychiatric disorders, said the reduced rates will leave her with a $600,000 hole in her budget, a gap she's tried to close by not filling about 30 positions and asking employees to handle increased workloads.
"We've gone back, to my way of thinking, to what we had 20 years ago," she said. "It feels like a MASH unit now, more like triage."
People Encouraging People client Kenneth Schell, 53, finds himself with more time on his hands these days. The day program he attends cut its hours and afternoon activities, including bowling, museum visits and restaurant outings.
"Being left alone with nothing to do sets me in a mood," said Schell, who suffers from schizophrenia and depression.
Sabatini rejects some providers' predictions of dire outcomes for clients.
"Those are the typical kinds of arguments used to scare people into tolerating fiscal irresponsibility," he said, adding that some providers' inefficient use of resources contributed to staff and program cuts.
"If providers were more judicious in the way they delivered the care, and worried about the fiscal consequences, we wouldn't have these problems," he said.
Despite the cost-containment measures, providers say that Gov. Robert L. Ehrlich Jr. has demonstrated a strong commitment to helping the public mental health system erase its deficit and meet the demand for services.
In his 2005 budget, he included $54 million to cover a deficit carried over from 2003, and $32 million in new funds for the system.
In testimony before House and Senate subcommittees last month, Cromwell said the Community Behavioral Health Association will ask the governor for $2 million in a supplemental budget appropriation to help providers continue services to clients who are most at-risk.
"If education is Exhibit A on the need for more revenue in this state," Cromwell said, "then mental health is Exhibit B."
The services affected by the new rates are not individual or group therapy sessions. A component of community care called "psychiatric rehabilitation," the programs are adjuncts to therapy for chronically mentally ill adults and severely disturbed children. Services for adults are intended to help individuals live independently in a community setting, and include housing and support services, vocational and life skills training and day programs. How to handle anger and stress, in-home visits for violent or self-destructive youths and after-school programs are among the offerings for children and adolescents.
State mental health officials set the new monthly rates at $667 for adults and $297 for youth services. The arrangement replaces the fee-for-service model that paid $55 a visit for both groups. With the reduced rates, providers say they can no longer afford to treat the neediest clients, some of whom require five to seven visits a week.
Mental health advocates and providers say the origin of the system's financial crisis goes back to underfunded budgets that have not kept pace with the rising demand for services.
Since a restructuring of the system in 1998, the number of people receiving services has nearly doubled, from 50,000 to 93,000. Much of the growth stems from an increase in Medicaid patients and clients under 21, who account for about half of the system's users. In the past two years, the program's financial woes have led to staff shortages and at least 12 outpatient clinic closings.
In a round of cost-cutting last summer, Maryland Health Partners - the private company hired by the state to review claims and pay reimbursements - toughened the medical criteria it uses to authorize mental health services.
Cromwell said that mental health advocates and providers are talking with state mental health officials about the possibility of developing a modified public system that would preserve the strengths of the current model - access and choice - and control growth.
Some providers tallied up their anticipated losses before the new rates became official, and took steps to maintain the most critical services.
At Archway Station in Allegany County, administrators are trying to save a program that provides home visits to families, after losing more than a third of its staff to attrition and transfers. The counselors now work with 77 clients, down from 125 - a result of increased case denials from Maryland Health Partners - and counselors make one weekly visit to clients instead of four.
"They're strangling us," said program coordinator Charlene Syx, who said that in two cases, the reduced home visits led to an institutionalization and a foster care placement.
Syx has appealed denials of services in about 10 cases. But she holds out little hope of prevailing and said it frequently takes months for MHP to issue a decision.
She is worried about the reaction of a 14-year-old client whose case is under appeal.
"He said, 'If I can't have my workers come and see me, I'll get services again if I have to hurt myself or somebody else to have someone come and see me,'" she said.
"On one hand, you might say he's manipulating us," Syx said. "But he's desperate; he knows he needs services."
Elizabeth Bowers, 38, began going to a psychiatric rehabilitation program in Dundalk last year after a bout of severe depression. She's taken computer classes and she socializes with others who have similar disorders. Under staff supervision, she works out at a local gym and goes to the library.
Bowers, who has a job in the offices of On Our Own - a peer advocacy group for the mentally ill - said she would be devastated if the program closed.
"If I didn't have it, I'd be sleeping all day," she said. "They've really helped me out a lot; now I'm up and doing things with other people."