State’s Lack Of Funding Hits Behavioral Health Care Providers With Double Whammy

Cascadia Behavioral Healthcare walk in Lynne Terry.JPG

In 2017, Oregon scored a rare win in its efforts to reform the state’s heavily criticized behavioral health care system.

Oregon became one of just eight states nationwide to join a federal pilot program for community behavioral health care clinics. The program offered providers a chance to oversee patient care holistically, coordinating treatment for primary medical care, substance abuse and behavioral health needs. Oregon community mental health providers want the program to become the state’s model so people can get treatment and recover sooner without scuttling through a maze of different providers and risk falling through the cracks.

But behavioral health providers have struggled since early 2020 to get the state to provide money for the program to fund the necessary increased staffing. As a result, providers like Cascadia Behavioral Healthcare have faced a double-whammy: They must keep the program staff and clinicians afloat without state help and also deal with the financial fallout of the pandemic. Cascadia, for example, has tapped nearly $4 million in reserves to keep the program running and deal with pandemic-related expenses.

About a dozen providers across the state have participated in the pilot program, from heavyweight Cascadia Behavioral Healthcare in Portland to mental health clinics in Klamath Falls. The federal pilot program gives the providers an enhanced four-to-one Medicaid matching rate, meaning that Oregon providers receive $4 of federal dollars for every state or local dollar spent on the program’s Medicaid clients. The program positions Oregon to reap a windfall of matching federal dollars and have the flexibility to try different approaches to care.

Advocates point to the program’s benefits for people who face mental health and substance abuse challenges. The program puts all of a patient’s medical needs and care in a coordinated model so that they can access health care quickly. The model also gets care to people sooner who may worry about the stigma of mental illness and avoid seeing a provider. 

But Gov. Kate Brown has shied away from committing state money to the program. Brown did not include matching state funding in her budget proposal for 2021-2023, even though her own behavioral health advisory council recommended $33 million in state funding. That would leverage about $133 million in federal money for behavioral health care in Oregon. 

Providers saw a ray of hope last Friday, when the Legislature’s joint emergency board approved $6 million to fund the program for the rest of the current fiscal year, which ends June 30. 

The financially shaky journey has lasted nearly a year. The program ran out of state funding in 2020. Lawmakers had a bill to put more money into the pilot program last year, but it died along with most other bills during the GOP-led walk out to kill Brown’s carbon emissions bill.

"This program within Oregon has just had one misfire after another to keep this program alive and operating,” said Derald Walker, chief executive officer of Cascadia.

The lack of state funding has forced providers to find other sources to keep programs afloat, such as using reserves or county funding. Three providers temporarily stopped their programs.

Charles Boyle, a spokesman for the governor’s office, said Brown has “faced a number of difficult decisions in balancing the budget, and prioritized pandemic response and protecting the Oregon Health Plan –– which has added 150,000 Oregonians since the beginning of the pandemic.” The Oregon Health Plan is the state’s Medicaid program that provides health coverage to low-income residents..

Brown is relying on more federal money to meet that need. Boyle said that since Brown’s budget came out, more federal funding is available for the Legislature due to the COVID-19 relief package from Congress. Boyle said the office anticipates legislators will find funding for the pilot program. Rep. Rob Nosse, D-Portland, who serves on the Joint Committee on Ways and Means, which sets the budget, said there is definitely an interest in funding the program, though it’s too soon to say how that will play out. He said the emergency board’s approval of temporary funding is a good sign.

Cascadia’s Financial Challenges 

Walker said the pandemic and lack of program funding has hit the nonprofit organization hard. Cascadia has gone through nearly $4 million in reserves.

“It’s a race against time as we burn through cash,” he said in a recent interview. 

Cascadia has a workforce of nearly 1,000 with a monthly payroll of $4 million and offers residential and outpatient services in the Portland metro area.  Cascadia serves more than 18,000 people each year who include the homeless, people with behavioral health needs and those in crisis.

Walker said he welcomes the state’s move to fund the program through June, though providers still need a solution for the next biennium. 

Cascadia’s reserve account has dwindled to about $1 million. Cascadia continues to get revenue from other sources but it cannot continue to spend down its reserves indefinitely. 

Walker said the reserves are intended for emergencies, adding that officials did not expect the pandemic would continue this long. Cascadia decided to continue to provide integrated services without the pilot funding and kept physicians, nursing staff and others on board as if the agency were still receiving the funding.

Cascadia gets about $8 million to $9 million from the pilot program annually. Cascadia’s gross revenue approaches $73 million.

Roughly, the federal pilot makes up slightly more than 10% of Cascadia’s revenues.

Pandemic Hits Hard 

The pandemic has created unplanned expenses. For example, staff receive hazard pay for working in an environment with potential exposure to COVID-19. 

Staff who come into contact with outside people or patients get an extra $15 per shift. If they work on a unit with a positive COVID-19 patient, they get an extra $50 per shift. 

That costs Cascadia about $140,000 a month.

It’s an expense that Cascadia hopes to stem, though. Employees will stop receiving the hazard pay after they are all vaccinated.

Cascadia started vaccinating its employees this week. So far, about 350 workers have received the first of the required two doses of the vaccine. To curb costs, Cascadia did a round of layoffs in 2020, eliminating about 40 positions. Walker said the company wants to avoid a repeat of that. 

In the years since Oregon joined the pilot, there are signs it will continue to grow nationally. Two more states joined it, and 10 are now involved in the pilot program.

Providers are watching and waiting for Oregon to make a commitment for the next biennium.

“It’s been recommended repeatedly,” Walker said. “It just somehow insistently seems to miss the mark in getting into the governor’s budget, which is obviously disconcerting. It’s not like a luxury item. It should be a source of pride.”

Other Providers Weigh In

LifeWorks NW is another Portland area provider that participates in the program. LifeWorks has four sites in the pilot program. 

Mary Monnat, chief executive officer of LifeWorks, said the organization is thankful the e-board approved money for the rest of the fiscal year and hopes to see a solution for the next budget cycle. 

“It was so essential to get this lifeline through June, and now we’ll turn our efforts to working with the Legislature to get the match for the ongoing pilot,” Monnat said.

The program allows people to get treated for medical and mental health care sooner with better access and a holistic approach to their care with wellness specialists, doctors and nurses, Monnat said. With coordinated care, that helps patients get the help they need sooner, she said.

At LifeWorks, the program grew from nearly 4,400 new clients in 2017 to 6,540 in 2019. 

In one example, a patient diagnosed with schizophrenia for decades was able to get primary care and wellness checks at the clinic. Before, he mistrusted primary care providers. After he was hospitalized, the patient’s care coordination included the hospital, his primary care doctor and his psychiatrist, with the outpatient care all in one place to make consultation easier.

Monnat said she was disappointed the program didn’t make it in the governor’s budget. But she stressed she understands the “competing demands” of a challenging budget cycle.

But like last year, they’ll make a push again for funding.

“That won’t stop us,” Monnat said. “It wasn’t in the budget last time either.”

You can reach Ben Botkin at [email protected] or via Twitter @BenBotkin1.


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