US/NC/health/mental/government services/2001 reform

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Most of this information comes from the N&O articles linked below. Overall, the article sounds like it could easily be cherry-picking a relatively simple, clear-cut story from what must in reality be much more complicated; information is needed from other sources – but the situation appears to be every bit as bad as the series portrays it.


In 2001, the North Carolina mental health care system underwent sweeping changes designed to decrease costs overall, but with the opposite actual effect; as of 2008-02-24 the cost had more than doubled, to $1.5 billion per year. The N&O theorizes that this is because standards are being applied with extreme unevenness: some people are receiving services they don't really need, while others who desperately need service are receiving nothing, or the wrong services. (The example they cite, however, may make sense in context; the article doesn't give enough details to tell for sure – but the pay rate of $61/hour was clearly much too high for the type of service.) Too much money went to "community support", it says, and not enough to critical services.

The 2001 reform apparently planned to shift care responsibility away from centralized institutions and out to community facilities; unfortunately, the counties were told to unload their responsibilities before the funding for the local groups was approved by the federal government. Federal approval finally arrived in late December 2005, and the new services were launched 2006-03-20.

In February 2007, the Health and Human Services (DHHS) accountability team started an audit; in November, DHHS declared a moratorium on new services. On 2007-04-04, the "community support" rate was slashed to $40/hour and then raised back to $51 on 2007-04-26.

Many new service providers were formed to take advantage of the restructured funding; Dominion Health Services, a Raleigh-based company with about 1000 employees which went door to door looking for customers for the new "community support" services, was among those – and has now been asked to return $1.5 million (of a total of $59 million from companies which DHHS says broke the rules).

In 2008-9, the US (and global) economy went into a recession, making a further mess of the already-broken system. CAP-MR/DD funds were frozen in early 2009 (no slots were released all year), and many services were cut.