The Transylvania Times -

State Has Funds For Mental Health


Last updated 3/12/2020 at 10:54am

It’s becoming a recurrent theme: government agencies that are seeing an increase in services are receiving less funding. Last month we reported the U.S. Forest Service in North Carolina has fewer employees but the number of people using our national forests has increased dramatically.

Now we are informed that the number of people needing mental health, substance abuse and intellectual/developmental services is increasing but funding to provide those services has been decreasing.

Those services are administered in North Carolina’s 22 Western counties, including Transylvania, by Vaya Health, a state approved Local Management Entity-Managed Care Organization (LME/MCO). Transylvania County Commissioner Page Lemel, who also serves on Vaya’s Board of Directors, recently said Vaya is under “severe financial stress.”

According to Vaya CEO Brian Ingraham, there have been “multiple years of cuts made in state budget appropriations that have come down to us.” In the last five years, Vaya has seen a reduction of $41 million from the state to pay for people who need these services but are uninsured or under-insured and ineligible to receive Medicaid.

These cuts to mental health services are occurring at a time when the need for these services is rising dramatically, particularly among our youth.

County Manager Jaime Laughter said, “The growing needs in our community for mental health services and the increasing severity of needs at younger ages is increasingly taxing on an anemic system of mental health services.”

Local pediatric psychologist Dr. Will Dalton said, “We are observing more significant behavior problems younger and younger in the preschool setting that require one-to-one attention…” and “... we see increased rates of trauma beginning at infancy, increased rates of severe behavior problems at school and home, and increased rates of teen anxiety and depression.”

Yet, there are not nearly enough licensed counselors and therapists to meet the demand. Walton, who sees about 150 new families a year, refers people to Meridian Behavioral Health Services and two other therapists, but the latter two have four to six month waiting lists. The local school system has day treatment services for elementary school students, but not for middle school students. The providers of these services are simply overwhelmed.

There does not need to be a shortage of mental health providers. The state has the money.

Some state officials point to Vaya having $47.8 million in its Medicaid Risk Reserve Fund. However, according to Larry Hill, Vaya’s chief financial officer, “The Medicaid Risk Reserve funds may be spent only in the case of insolvency to pay claims of providers and must receive the prior written approval of the N.C. Department of Health and Human Services.”

According to the state’s solvency standards as reported to the General Assembly in October of 2017, “a Medicaid Risk Reserve Fund would be used to accumulate and protect funds equal to 15 percent of the total managed care contract, to preserve payments to providers in the event an LME/MCO experienced a catastrophic loss or failure.”

Holding 15 percent in reserve to cover “a catastrophic loss or failure” is reasonable, but the Medicaid Risk Reserve Fund currently comprises more than half of Vaya’s total cash and investments. If Vaya’s reserves were just 15 percent of its total cash and investments, then it would have nearly $319 million in total. At the end of 2019, however, Vaya had approximately $93.2 million. Thus, based upon the state’s own Medicaid Risk Reserve Fund percentage, the state is woefully underfunding Vaya.

The 2017 report also said LME/MCOs “should maintain the spendable fund balance at an amount no more than the equivalent of forty-five (45) days of operating expense.”

This is a tremendous amount of money. The state, however, has it. As of Jan. 30 of this year, the state Controller’s Office reported the state’s total unreserved cash balance is $2.15 billion. This does not include the state’s $1.2 billion rainy day fund. The state does not need to spend all of the unreserved cash balance. However, it could send an additional $30 million to $50 million to Vaya without making much of a dent in that surplus.

The state has the money. It needs to start appropriating it to meet the increasing mental health needs of the residents in Western North Carolina.


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