Funding cuts could displace many with mental illness who live in adult foster homes

Statesman Journal, Jan. 31, 2016

About a dozen foster care providers held signs in front of the Oregon State Capitol on Tuesday, protesting a new payment system that they say would force closures.

About a dozen foster care providers held signs in front of the Oregon State Capitol on Tuesday, protesting a new payment system that they say would force closures.

Mentally ill residents of adult foster homes across Oregon are at risk of being displaced as providers face steep rate cuts.

The cuts, negotiated by the Oregon Health Authority and SEIU 503, were necessary to keep the program sustainable, officials said. The new rates became effective Jan. 1.

However, providers say the rate change amounts to a 60 percent decrease in payments, making it financially impossible for some of them to stay open.

The impact

Here is how the rate cuts are affecting one provider of mental health adult foster home services in Marion County:

Client Old
A. $2,433.33 $2,277 -156.33
B. $4,928.04 $3,195 -1,733.04
C. $4,911.04 $3,058 -1,853.04
D. $4,839.04 $2,277 -2,562.04
E. $5,334.13 $3,339 -1,995.13
F. $2,433.33 $2,200 -233.33
G. $5,132.81 $3,058 -2,074.81
H. $5,132.81 $3,339 -1,793.81
I. $2,815.60 $3,058 +242.40
Total:  37,960.13  25,801  -12,159.13

The owners of the homes are hoping lawmakers will respond to prevent that from happening. A hearing has been scheduled in the Senate Committee on Human Services and Early Childhood for Feb. 24.

Several years ago, the Oregon Health Authority (OHA) reassessed how the payment rates for residents in adult foster homes were being determined. They began using the Level of Care Utilization System, but the program began running at at deficit, OHA spokeswoman Patricia Feeny said in an email.

Because of the shortfall, OHA and the union negotiated a different rate-setting system: the Level of Service Inventory.

Feeny said the new system is more relevant to determining the type, level and frequency of care each resident requires, and the payments that should be paired with the care.

But providers say the Level of Service Inventory doesn’t address key aspects of care that their mentally ill residents need, including issues related to addictions, delusions or whether they pose risk of harm to themselves and others.

“OHA and the union both recognize the need for sustainability: this change is best for the program and its clients, and best for Oregon,” Feeny wrote in the email.

Mike Murdoch and his wife, Jen Murdoch, own five mental health adult foster homes in Marion County, housing 25 clients. He said the reduced rates are causing the business to run at about a $12,000 per month deficit.

“The money they are proposing to give us will not pay the bills,” Murdoch said.

Not only would the Murdochs have to displace 25 mentally ill clients, some of their employees who live in the homes would also be without jobs and shelter.

Sherri Jemison, who serves nine mental health clients in two homes, said she’d also have to give notice to her residents. Collectively, the nine clients will be funded $12,159.13 less in the new rate system, she said.

With clients who require one-on-one supervision, there is no way to make the new rates work, she said.

Holly Schmitz, 59, is one of Jemison’s residents and was the first to be asked to leave.

She found housing in Silverton, she said.

“I’m very sad,” she said of leaving Jemison’s home. “I’m very happy here.”

Teri Petre has two homes with capacity for 10 mental health clients. She said her plan is to shut down one home, then change the licensing of the other home to care for older and disabled adults.

Between Petre, Jemison and the Murdochs, 43 out of 73 available mental health beds in the county are at risk.

Robert Devenberg, who owns four homes and care for 24 mental health clients, said he is financially strong enough to operate on the new rates for one year.

But after that, “We will be looking at 24 mentally ill people without that housing option,” he said.

About 60 providers across the state have organized around Petre, their unofficial point person, to seek assistance from lawmakers.

Senate President Peter Courtney, D-Salem, who has championed mental health as one of his causes, said the providers’ concerns have been heard.

“I feel optimistic we’ll find a way” to address them during the February legislative session, he said, also noting that a new economic forecast is coming up.

Sen. Sara Gelser, D-Corvallis, who chairs the Senate human services committee, said she was especially concerned about how the new rate would impact clients.

“If there’s a change in rates that affect the ability of providers to serve the individual, where is that individual going to go to ensure their safety?” she said.

Scott Jackson, behavioral health division director for the Marion County Health Department, said adult foster homes are part of a spectrum of services in the mental health system that provides less support than institutions but more support than independent living.

People in adult foster homes may need assistance with daily living, medications and meal preparations. Ideally, the residents would eventually progress enough to move into independent living.

Jackson said at this point, it’s difficult to know what the impact of the new rate system could be, noting that not all clients will receive lower funding.

The federal government has long scrutinized Oregon’s mental health system, pushing it to make investments in community-based services and institutionalize fewer people. A federal investigation that was launched in 2006 centered on whether the state was violating provisions in the Americans with Disabilities Act by failing to provide mentally ill Oregonians with adequate community-based services.

State and federal officials reached an agreement to make reforms while avoiding legal action against the state.

In a status update letter dated March 11, 2015, the U.S. Department of Justice wrote that there is still a “dearth of supported housing.” The letter cited the 115 people who were discharged from the Oregon State Hospital in the first half of 2014. Only three or four of them were discharged to supported housing, while more than half were moved to another institutional setting. Two individuals were discharged to homelessness, the letter reads.

Providers say effectively shutting down their services through the rate cuts would be a significant step back in Oregon’s mental health goals.

“Our folks are able to live in the community and remain stable,” Devenberg said. “This type of care will not be available to so many people; they won’t qualify for institutional care and they’re just going to fall through the cracks. That means more homeless and mentally ill population.”