Kansas Community Mental Health Centers See Lottery As Potential Funding Source

Jan 6, 2017

In tight budget times, Kansas mental health advocates are turning to the lottery for some financial help.

Kyle Kessler, executive director of the Association of Community Mental Health Centers of Kansas, said the association will ask the Legislature to commit an additional $31 million over the next two fiscal years for the centers. That $31 million — pulled from Kansas lottery proceeds — would return funding for the 26 centers across the state to the 2007 fiscal year level.

Community mental health centers have served more people since the 1990s, when the state began reducing its psychiatric hospital beds amid plans to increase funding for community-based services, Kessler said.

They could do that as long as the state provided enough money to serve people who didn’t have insurance, but that hasn’t been the case in the years since the Great Recession and mental health centers are feeling the financial pinch, he said.

Kansas appropriated about $35.7 million for the 26 community mental health centers in the current fiscal year. The centers also receive varying amounts from Medicaid, private insurance payments, grants and local contributions.

The centers were able to make do with Medicaid dollars for a while, Kessler said, but the three managed care organizations administering the program known as KanCare have reduced reimbursements and the state imposed a 4 percent cut last year to help fill its budget hole.

“It compounded an already existing problem,” he said. “The current Medicaid rates don’t always cover the cost of service.”

Greg Hennen, executive director of Four County Mental Health Center in Independence, said more than 40 percent of its adult clients with severe mental health conditions don’t have insurance. Without adequate state funding, the center can’t afford to provide all of the services that allow clients to live independently, such as assistance with budgeting, employment and education, he said.

“We’ll ration what we can give,” he said. “It becomes more maintenance than rehab.”

The state faces a roughly $342 million shortfall for the current fiscal year after tax revenues came in below projections, with a larger gap looming when the new fiscal year starts in July. Kessler thinks identifying the lottery as a funding source will make it easier for legislators to get behind the association’s plan during their session that begins Monday.

“That doesn’t hit the state general fund,” he said.

State law requires the lottery to pay out 45 percent of its proceeds as prizes, according to the Kansas Lottery Commission. In fiscal year 2016, the most recent year with data available, it paid out about 58 percent of proceeds to winners. If Kansas had paid out only 45 percent as proceeds in the most recent fiscal year, about $34 million would have been available for other uses.

Rep. Dan Hawkins, a Wichita Republican who chairs the House Health and Human Services Committee, said he supports increased funding for community mental health centers but isn’t sure if using lottery funds is the best way to do it. The House Appropriations and Senate Ways and Means committees must set the overall direction on spending before the health committees know what they can recommend, he said.

“I’m sympathetic with getting more money into the mental health system,” Hawkins said. “This is certainly going to be a tough budget year.”

Any new funds will have to wait until the Legislature deals with the current budget gap, said Sen. Carolyn McGinn, a Sedgwick Republican who heads the Ways and Means Committee. She said she hopes lawmakers will pass a bill of spending cuts to close the budget hole within the first month so they then can consider budget requests for the 2018 fiscal year, which starts in July.

“It’s going to be difficult to restore (funding) early on, trying to rectify our current year budget,” she said.

The association’s plan would require the state to commit an additional $11 million to community mental health centers in fiscal year 2018 and another $9 million the following year for a combined total of $31 million. The funding would be distributed based on a formula, including the number of clients served and other factors.

Download The Association of Community Mental Health Centers of Kansas Proposal

The plan also calls for the state to allocate $550,000 in the coming fiscal year for four more psychiatry residents at the University of Kansas School of Medicine. Eventually, that would rise to a $3.1 million commitment to fund 10 more residents each year than the program currently produces, Kessler said.

The association also hopes to see the state add $5.4 million to fund crisis centers next year, with a commitment to supply at least some of their operating costs indefinitely, Kessler said. The crisis centers benefit the state by diverting people from psychiatric hospitals, he said.

“This has such a direct benefit to the state hospital census,” he said.

Meg Wingerter is a reporter for KMUW’s Kansas News Service, a collaboration of KMUW, Kansas Public Radio and KCUR covering health, education and politics in Kansas. You can reach her on Twitter @MegWingerter.