Keene group to lose contract

Part of cost-cutting at Monadnock Family Services

Published April 21, 2008 in the Keene Sentinel
By Casey Farrar
Canceling a cleaning contract with Wyman Way Cooperative is the next in a growing list of cutbacks for a Monadnock Region mental-health organization.

Monadnock Family Services CEO Kenneth Jue said he met Friday with Matthew P. Haas, board president of the cooperative, to discuss ending cleaning services at Monadnock Family Services’ offices at 64 Main St. in Keene.

The cooperative, which is a nonprofit organization aimed at rehabilitating people with mental illnesses, emotional disturbances and substance-abuse problems, will continue to clean Monadnock Family Services’ offices on 93rd Street, Jue said.

With devastating deficits statewide, Monadnock Family Services might be only the first of the state’s 10 community mental-health centers forced to make cuts, according to according to Roland P. Lamy Jr., executive director of the New Hampshire Community Behavioral Health Association, a group formed by the state’s centers.

Jue estimates Family Services will save $10,000 per year by hiring another cleaning company to provide the service on Main Street.

James P. Noyes, general manager of the cooperative, said the the contract brings in $2,700 per month.

The cooperative, which employs 19 people, is making plans to place affected employees in other jobs in the community, including cleaning, grounds keeping and painting, according to Haas.

Haas said he doesn’t yet know what the financial effect of the contract loss will be.

“It’s a very big contract,” he said. “If anything, this is kind of a good time of year to have the contract cut, if there is a good time, only because had it been winter time it would be very difficult to find jobs to do indoors.”

Haas said the board of the cooperative had been informed that cutbacks were coming before the announcement last Monday that Monadnock Family Services was dealing with a $500,000 deficit this year.

The cooperative also offers moving services and is considering expanding a service providing transportation to people for medical appointments, such as doctor visits and prescription pick-ups, Haas said.

“Our income is going to be very different for a while, but knowing (about the changes) ahead of time helps,” Haas said. “We need to see how it plays out and probably we’ll get a better picture of things in November and December, when the summer rush ends.”

Last week, Monadnock Family Services announced major employee and service cutbacks in response to its budget deficit.

Jue said the contract with the cooperative won’t be cancelled until after a new contract is negotiated with another company, adding that he doesn’t know how long it will take to make the change.

A contract with the cooperative costs more than other cleaning services because members of the cooperative often work together on jobs and sometimes require additional time or training to complete tasks, Jue said.

“I hate to do it,” Jue said. “It’s purely a financial decision.”

Other mental-health centers in the state feel the pinch

Losses from unmet Medicaid deductibles have cost the 10 centers across the state nearly $4.5 million this fiscal year, leaving all of them grappling with budget deficits, Lamy said.

Lamy said the amount each center has lost varies by the population served, but Monadnock Family Services falls in the middle of the group, having lost $436,000 this year.

Other centers are located in Derry, Nashua, Dover, Laconia, Manchester, Conway, Concord, Portsmouth and Lebanon.

The 10 centers served 41,353 people in 2006, according to the New Hampshire Community Behavioral Health Association’s Web site.

The association was formed in 2001 to coordinate efforts to inform the state Legislature and Department of Health and Human Services about the issues and financial difficulties faced by the centers, Lamy said.

Lamy said financial shortfalls have been gradually building at centers all over the state, stemming mostly from unmet Medicaid and commercial health insurance deductibles.

With Medicaid reimbursement rates, set by the state and matched by the federal government, holding steady and health-care costs climbing, the centers are absorbing more expenses for services, Lamy said.

“It’s a dramatic issue and I think we’ll see more strain and stress on the centers all over the state,” Lamy said. “Across the board, they are looking at what they have to do to remain financially viable.”

So far, Monadnock Family Services is the only center in the state to make cuts this year, according to Lamy.

“It’s a very difficult decision to make, but when you reach the threat of having to close your doors or make these decisions you have to take care of the most needy,” Lamy said.

Changes implemented this month in federal case-management regulations may compound the financial difficulties the centers face, Lamy said.

As a requirement of Medicaid regulations, the centers create plans for treatment for all patients covered by Medicaid. The centers are then paid by Medicaid for providing these services.

The regulation changes will affect the type of treatment covered under the plans, as well as how the centers are paid for these services, Lamy said.

New York, Tennessee, Kentucky, Maine, Maryland, Oklahoma and New Jersey have filed a lawsuit seeking to block the Medicaid regulation changes, according to a report by the Associated Press.

The association of community mental health centers is working with the Department of Health and Human Services to define the changes to the regulations, but the full financial effect on the centers probably won’t be clear until after mid-May, according to Lamy.

“This rule came upon us pretty suddenly and it has a significant impact on the system of care,” Lamy said.

Monadnock Family Services is overhauling its computer coding system to meet the new regulations, Jue said.

Jue said he fears the changes will only add to the growing financial strain on the organization.

“We’re just going to have to wait and see what happens,” Jue said.

Casey Farrar can be reached at 352-1234, extension 1435, or cfarrar@keenesentinel.com.

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Mental-health group faces cuts

Monadnock Family Services projects $500K shortfall; jobs and programs will be lost

Published AprilĀ 16, 2008 in The Keene Sentinel
By Casey Farrar
Caught in a perfect storm of rising health care costs, tightening insurance and Medicaid benefits and a faltering economy, Monadnock Family Services announced major staffing and service cuts Monday.

The organization says it is facing a $500,000 deficit this fiscal year, and will have to cut pay and benefits for employees and reduce counseling services for people in Monadnock Region communities.

With more people unable to pay rising insurance and Medicaid deductibles, the nonprofit organization, which primarily offers mental-health services, attributes its financial woes to absorbing unpaid fees for services, CEO Kenneth Jue said.

It’s a problem seen at varying levels in all of the 10 community mental health centers in the state, according to Jue.

“All of the centers are struggling with the deductible issue,” Jue said. “Across the state we’re talking millions of dollars and shifting that cost into a community and its provider system.”

To rein in shortfalls, in May the Keene-based organization will cut the work week of its 260 employees from 37.5 to 35 hours, translating to an annual pay drop of nearly 7 percent. The organization will also discontinue payments to employee retirement funds at least through June 2009, Jue said.

This reduction in office hours also means nearly a third of the group’s 3,330 adult outpatient counseling clients may have to find help elsewhere, Jue said.

The organization already shaved expenses by eliminating eight positions earlier this year, Jue said.

But it wasn’t enough, and Jue predicts that if the restructuring announced Monday doesn’t fix the mounting expenses more job cuts may be on the way.

The number and type of cuts would depend on the restructuring process, but could amount to six full-time positions, Jue said, calling this the worst financial crisis the organization has faced.

The last time Monadnock Family Services faced such financial difficulties was 25 years ago, when it had to lay off employees because of deficits, Jue said.

An increase in the number of people covered under a form of Medicaid that includes monthly deductibles as high as $1,000 is a significant contributor to the organization’s bulging expenses, according to Jue.

After efforts by the state in the 1970s and 1980s to scale back the number of people living in state mental hospitals, more people with mental illnesses are working and contributing to Social Security than in previous decades, Jue said.

But if a person is no longer able to work due to mental illness, he or she qualifies for a form of Medicaid that doesn’t cover all medical expenses, said Sandra M. Metivier, Medicaid specialist for Monadnock Family Services.

“It’s that period of time before they go back to work where we absorb a huge cost for providing those individuals services who have very serious mental illness,” Metivier said.

The number of people with Medicaid deductibles treated by the organization grew to 185 last year, from 50 in 2006, Jue said.

When people are unable to pay the deductibles, the organization absorbs those costs, which has taken a bite out of its $11.5 million budget.

With Medicaid reimbursement rates – set by the state and matched by the federal government – holding steady and health care costs increasing, the organization is spending more to provide services, Jue said.

Medicaid also sets limits for how many visits customers can make for a specific illness, Metivier said. Most adults in the outpatient counseling department are limited to 18 visits, unless they are approved by Medicaid for expanded care.

“In many cases, however, that’s not possible,” Metivier said. “For a lot of people – for example for a parent who loses a child – the act of being in therapy for 18 visits doesn’t cover such a severe loss. So what does that individual do who’s getting up and working every day?”

Once a person reaches this limit, Medicaid coverage ends and the client is responsible for paying for further care. If they can’t pay, the organization takes a loss, Jue said.

Unmet deductibles from clients with commercial health insurance have added to the burden, costing the organization $436,000 last year, Jue said.

“Since the 1990s commercial health insurances have been increasing their costs, employers have been cutting back on their share of the costs and passing more and more of that to the employees and their families,” Jue said, adding that the higher costs have left some people unable to pay their bills.

This has put the organization in a tough spot.

“We have been reluctant to tell people to stop coming,” Jue said. “We’ve tried to absorb those losses for a number of years now. We’ve made adjustments in our own benefit levels for our employees so that we could afford to continue to serve people.”

A residential treatment facility for people living with mental illnesses run by the organization is another example of a program that costs more to run than it earns, Jue said.

Designed as a transitional facility meant to teach participants independent living skills, the program costs the organization $123 per day for each of the nine people who live at the center, but Medicaid covers only $94 per day, according to Metivier.

Jue expects a Medicaid rate increase, to nearly $100 per day, next January. But even then, the organization will fall short of its daily expenses, Jue said.

With offices in communities including Keene, Peterborough, Winchester, Walpole and Jaffrey, the organization receives about 60 percent of its funding through a contract with the state Bureau of Behavioral Health. The state pays half of this money, with the other half coming from federal funds, Jue said.

The other 40 percent of the organization’s operating budget comes from grants, client fees, donations, contracts with other state agencies and fees to insurance companies, according to Jue.

Jue said the organization’s children’s department, which has four child psychologists on staff, might be emphasized in the restructuring to help bring extra money.

By increasing the number of clients in this program, which is becoming a rare resource in the country, the organization may be able to make up for some shortfalls, Jue said.

The organization could also be forced to consider cutting some of its contracts, most notably with the Wyman Way Cooperative, which provides maintenance services in two of the organization’s buildings, Jue said.

The cooperative is a program that employs people with mental illnesses.

Francis Silvestri, former CEO of Monadnock Family Services, proposed starting the program in Keene after visiting a cooperative in Trieste, Italy.

A Bureau of Behavioral Health grant in 1985 got the program off the ground.

The program is funded by grants, donations and contracts for various services, including those with Monadnock Family Services.

Jue said the organization will be reviewing contracts and may have to eliminate services to one or both of its offices.

“It would be a crippling blow depending upon how much we cut back,” he said. “If we cut the maintenance contracts in both buildings, that would have a good chance of putting them under. If we only change it in one building, they may still be able to function but probably at a reduced level.”

Jue said he hopes all programmatic and staffing changes will be in place by July 1, the start of the new fiscal year. Then the full impact of the restructuring will become clearer.

“I think that so many of the communities are used to feeling like they can turn to us,” Jue said. “And they still may, but we might have to redirect some of them.”