Maryland Legislators Reject Plan To Boost Funding for State’s Mental Health Clinics

Members of the Maryland House Ways and Means Committee on April 2 rejected a bill (SB 10) that would have boosted funding for the state's psychiatric hospitals and clinics by increasing the taxes on health plans operating in the state, the Washington Post reports. The bill, sponsored by state Sen. Edward Kasemeyer (D), would have increased taxes on health plans by 2% to provide $45 million for the state's psychiatric clinics. The state Senate passed the legislation last month, but state House lawmakers had "balked" at approving it. Lobbyists for health plans and small businesses also had opposed the legislation. Advocates for the mentally ill, who had supported the bill, said that committee's decision to reject the legislation leaves state lawmakers, who will adjourn for the year next week, with "no firm resolution to Maryland's mental health crisis." State budget analysts estimate that the system this year faces a $20 million deficit, which could increase to $70 million in 2003.

Funding Problems
Maryland's mental health system has faced financial problems since 1997, when the state began to reimburse psychiatric clinics and hospitals for treatment provided to uninsured patients and Medicaid beneficiaries (Mosk, Washington Post, 4/3). Medicaid covers about half of the 80,000 people the clinics serve; Medicare covers the remainder of people, who either are elderly or have illnesses severe enough to qualify as a disability. Previously, the state paid the clinics flat, annual fees to provide services to a specific number of Medicaid beneficiaries. Four years ago, the state switched to a fee-for-service system in an effort to expand the number of people the system treats. Since that time, the number of people treated in clinics has doubled from 40,000 to 80,000; clinic operators maintain that although the state has increased funding for the system, it has not done so in proportion to the demand for services (Kaiser Daily Health Policy Report, 2/13). In the last four years, 13 outpatient mental health clinics and private psychiatric hospitals have closed because of funding problems. As a result, emergency rooms have faced an "influx of urgent psychiatric cases," according to state health officials. "Unfortunately, it's going to keep getting worse, and there's no relief in sight," Herbert Cromwell, executive director of the Community Behavioral Health Association of Maryland Inc., said, adding, "I think you can expect to see more of a meltdown" (Washington Post, 4/3).