State agencies that have already cut their budgets to the bone are now facing the prospect of lopping off limbs. Last week, the agencies that depend on Montana’s general fund were notified that they have until Sept. 8 to submit suggestions for further reducing spending by as much as 10 percent.
The cuts are needed to make up for a projected $227 million shortfall over the next two budget years. They would be in addition to the $70 million in cuts already made this fiscal year, which began July 1.
Identifying budget reductions is no easy task for any state agency, but when it comes to the Department of Public Health and Human Services, cuts can be especially painful. This is the agency charged with ensuring that Montana’s most vulnerable residents, and their communities, are able to live safe and healthy lives. They do this by supporting foster care, senior assistance, mental health care, addiction treatment and many other critical programs throughout the state.
These programs weave together to make up Montana’s social safety net. The department’s proposed budget cuts would take scissors to it, leaving more Montanans to fall on local police departments, hospitals and institutions.
Any cuts made to the Department of Health and Human Service’s budget must be made with extreme care to preserve the critical services vital to the lives of those they serve. Unfortunately, it does not appear that such care has been taken with the agency’s budget proposals so far.
For years now, the department has seen an onslaught of rising need. Montana has experienced spikes in drug abuse, rising numbers of children in foster care and an aging population in need of long-term care and nursing home services. A significant portion of these services are funded through Medicaid, which has been reimbursing providers at diminishing rates, making it harder and harder to maintain staff and continue to offer the same level of services.
Medicaid covers 216,000 people in Montana with a combination of state and federal dollars. Given the low reimbursement rates, however, many providers will not accept Medicaid patients. Those that do know they will be reimbursed for less than patients with private insurance.
The result is that hundreds of Montanans are on waiting lists to receive services: some 1,100 individuals are waiting for developmental disability services; about 500 more elderly or disabled individuals are waiting for home and community-based services. The wait to receive addiction services in some communities is months along; in Montana’s most rural communities there is no addiction treatment available whatsoever.
The 2017 Legislature recognized this growing problem and took bipartisan action to correct it. Among other measures, legislators approved House Bill 17, sponsored by Hamilton Republican Rep. Ron Ehli, to boost the reimbursement rates for assisted living providers and increase the number of slots for home and community-based services. They also passed a bill specifically to increase wages for direct care workers. Both were passed with strong majorities and signed into law by Gov. Steve Bullock.
Yet both were essentially undone by Senate Bill 261, the 11th-hour legislation passed in late April that contains automatic budget reductions if revenue levels came in lower than projected. The Department of Health and Human Services was immediately forced to identify cuts worth $8.6 million – and set about doing so in the most painful way possible.
The department proposed to reduce Medicaid reimbursement rates by nearly 3.5 percent, with targeted case management for severely mentally ill adults slashed by 37 percent and emotionally disturbed children by 41 percent, for a total of $3.8 million in savings.
The proposed cuts left providers across the state who were also struggling to meet demand for their services reeling. These are the nonprofit organizations that help those with physical or developmental disabilities remain in their homes, instead of being institutionalized. They also allow older adults to receive help in their own homes or in assisted living instead of a nursing home. They provide crisis management, run jail diversion programs, offer family support and myriad other programs that keep people employed, housed, out of jail and with their families.
Without community care, the number of people in jails, the state prison and the state mental hospital will increase. There will be more homelessness, alcohol- and drug-related crime, and more children will be removed from their families into state care.
The proposed cuts are also a poor financial decision, given that federal money matches each Medicaid dollar roughly 3-to-1. If it insists on these cuts, the department actually stands to lose $26 million when federal funding is taken into account.
It’s not yet too late for the department to re-evaluate its planned budget reductions, and Director Sheila Hogan and Gov. Steve Bullock should not forge ahead as though it were. The Department of Public Health and Human Services ought to waste no time calling on the vast wealth of experience and expertise offered by Montana’s many service providers, and enlist their help in identifying creative budget solutions. They have ideas, and now more than ever is the time to listen.
The legislative interim committee that oversees the health department, for one, is all ears. One recent meeting brought dozens of people from every corner of Montana to talk about the devastating effects of proposed budget cuts, leading the committee to vote to delay the cuts until Oct. 1.
Its next meeting to discuss the department’s budget is coming up Sept. 11. If the committee votes to object to the proposed rate cuts again, the new rates may not go into effect until 2018. And if that happens, the cuts will need to be even steeper to make up for the lack of budget reductions now.
DPHHS should immediately set to work identifying ways to lessen the impact of painful budget cuts. And they should work with providers to find solutions that ensure they are able to continue to provide services for the Montanans who literally cannot live without them.