Responding to funding shortfall, Kent County’s mental health provider begins cuts, service reviews

The Kent County Family and Children’s Coordinating Council heard a presentation by Scott Gilman, executive director of Network180, on Jan. 2. (Supplied by Kent County)

By K.D. Norris

Kent County’s community mental health provider, Network180, has already made internal staffing reductions and will likely cut funding from several community-service groups and projects after a now-started period of review and decision-making.

Combined, Network180 and a spectrum of independent groups provide support to persons with developmental disabilities, mental and behavioral health problems including addiction and substance use, and the family members who access services for those needing mental health assistance.

The bad news for Network180 employees, with more than 30 full-time equivalent positions cut — and the potential of more bad news of other providers — was detailed during a presentation Jan. 2 at the Kent County Family and Children’s Coordinating Council by Scott Gilman, executive director of Network180.

The basic cause of the funding shortfalls, according to Gilman, is the difference in state funding between two Medicaid programs: the older, established Disabled, Aged and Blind (DAB) program and Michigan’s newer Healthy Michigan. Healthy Michigan provides $24 per person versus the $270 received from DAB. That leads to a $9.7 million shortfall for Network180.

The scheduled and potential cuts will also be part of the agenda at a meeting of Network180’s Board of Directors, which is chaired by County Commissioner Harold Mast, whose district includes portions of both Wyoming and Kentwood.

Kent County Commissioner Harold Mast, right, at a recent Wyoming-Kentwood area Chamber of Commerce Government Matters meeting. (WKTV)

“We are going to be facing with roughly $11 million deficit for this fiscal year, which started in October, or we are going to start running out of cash in May and June,” Mast said Monday to the Wyoming-Kentwood Area Chamber of Commerce’s Government Matters meeting. “It is a complicated issue, (state) Sen. (Peter) MacGregor and, I know, (state) Sen. (Dave) Hildenbrand and a lot of other government officials, are trying to figure out what we can do to help it. But we are at a stage where we can’t continue to operate the way we are.

“It is not just our county, it is the seven counties in West Michigan, the Lakeshore Regional Entity. It is throughout the state,” Mast said Monday. “It is an issue of funding, the way the funding is given from the department of (Michigan Department of) Health and Human Services (MDHSS) for Medicaid eligible individuals. That has changed dramatically in the past year, and it just needs to get fixed. But in the meantime, we are running out of cash, so we are going to start cutting back some services.”

The Lakeshore Regional Entity manages a contact with MDHHS to provide services to Kent, Allegan, Lake, Mason, Muskegon, Oceana, and Ottawa counties.

“It is difficult for us because at the same time we are in a cost-cutting mode, we are also in a reinvention mode,” Mast said. “We really need to move forward … with an integration of physical and mental health, because that is what we need to perform better mental health services.”

And while funding for Network180, and groups and programs it funds, flow through the Kent County Commission, Mast admitted that, while there will be discussions on the situation, there is likely little the county can do to blunt the likely service cutbacks.

Mast said that likely only the state can solve the problem.

“Over the course of the last couple of months, as we saw it coming … we were confident until probably October, that the state was going to rectify what we thought was an easily solved issue,” Mast said to WKTV at the Jan. 2 meeting.

But “they have not recognized the discrepancy in the reimbursement rate. First of all they have resisted any acceptance of our study … they said even with that, you still have enough money. You should have enough money in your reserves. Well, we don’t … So we are at the cusp of a worse problem. All of a sudden its has come to a head, we have got to take some action, because we (Network 180) are going to run out of money … we are not going to be able to pay our bills.”

An independent study — funded by Lakeshore Regional Entity and eight of the state’s other nine Prepaid Inpatient Health Plans (PIHPs) — by the Grand Rapids based Rehmann Group estimated a $97 million state-wide revenue shortfall, and a $7.8 million loss for the Lakeshore Regional Entity.

And, Mast says, there is likely nothing the county commission can do to rescue Network180, and the Lakeshore Regional Entity it is a member of.

“We (the county commission) have not had that discussion, that would be a difficult discussion, I think, whether the county would be willing to ante up,” Mast said. “I our case, it would be $10 or $11 million. We would have to have some pretty good guarantees because that is local tax money. We have not had that discussion.”

The County Commission has not had any discussions on this issue, according to a Jan. 9 statement from the county. “There are still a number of regulatory issues that would need to be addressed (i.e. we may not be able to use County funds to supplant Medicaid funding). We continue to work with the State to find a resolution.”

There is some discussion, Mast added, that the Lakeshore Regional Entity might be able to get a commercial loan of some sort in the short term with the promise of state funding flowing in and paying the loans back. “But there is not guarantee of that,” he added.

For a more detailed discussion on the topic, see additional story here.