[Federal Register Volume 67, Number 247 (Tuesday, December 24, 2002)]
[Notices]
[Pages 78490-78496]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32304]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Substance Abuse and Mental Health Services Administration


Community Mental Health Services Performance Partnership

AGENCY: Substance Abuse and Mental Health Services Administration 
(SAMHSA), HHS.

ACTION: Notice: Request for comments.

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SUMMARY: Section 1949 of the Public Health Service Act as amended by 
Pub. L. 106-310 requires the Secretary of Health and Human Services to 
submit a plan to Congress detailing how the Secretary intends to change 
the current Community Mental Health Services (CMHS) Block Grant into a 
performance partnership. The plan, by statute, must include the 
following:

--A description of the flexibility that would be given to the States 
under the plan;
--The common set of performance measures that would be used for 
accountability;
--The definitions for the data elements to be used under the plan;
--The obstacles to implementation of the plan and the manner in which 
such obstacles would be resolved;
--The resources needed to implement the performance partnerships under 
the plan; and
--An implementation strategy complete with recommendations for any 
necessary legislation.

Section 1949 requires that the Secretary develop the plan in 
conjunction with the States and other interested parties. SAMHSA has 
been in discussion with the States for several years over this 
proposal. This FRN provides State and other interested parties an 
opportunity to comment on those discussions.

DATES: Comments on the information must be in writing and should be 
sent to: Joseph D. Faha, Director of Legislation/SAMHSA, 5600 Fishers 
Lane, Room 12-95, Rockville, Maryland 20857, by February 24, 2003.

FOR FURTHER INFORMATION CONTACT: Joseph D. Faha, Director of 
Legislation/SAMHSA, 5600 Fishers Lane, Room 12-95, Rockville, Maryland 
20857. Mr. Faha may be reached on (301) 443-4640.

SUPPLEMENTARY INFORMATION: SAMHSA seeks comments on its proposal to 
develop a plan for the changing of the CMHS Block Grant from its 
current emphasis on requirements, earmarks, and accountability based on 
expenditures to a system referred to as a ``Performance Partnership'' 
that offers States more flexibility in the expenditure of funds while 
basing accountability on how well the system is providing access to 
quality mental health services for adults with serious mental illness 
and children with serious emotional disturbance as measured by the 
appropriateness and the outcomes of services.
    The current CMHS Block Grant program had its origins in the 
Alcohol, Drug Abuse and Mental Health Services (ADMS) Block Grant first 
legislated in 1981. The ADMS Block Grant gave Federal funds to States 
based on a formula in statute for the purposes of providing substance 
abuse and community-based mental health services with minimal 
programmatic and reporting requirements. Over time, however, a number 
of requirements, earmarks and set asides were added to the statute. In 
mental health, though the requirements have traditionally been far less 
than those imposed for the use of substance abuse funding, the statute, 
at one time, required that States spend at least 50 percent of their 
allotment for mental health services on new programs, 10 percent of 
their mental health funds on children with a serious emotional 
disturbance, and services had to be provided through community mental 
health centers.
    In 1992, the ADMS Block Grant was replaced by two separate block 
grant programs, one for substance abuse and one for mental health 
services. At that time, some requirements were dropped, some changed 
and others were added. Very few changes were made in the 
reauthorization of the programs in 2000.
    A Performance Partnership for the CMHS program represents a new 
paradigm in Federal and State relations and cooperation. It is built on 
three principles:

--That the Federal Government and the State governments are partners in 
the provision of mental health services and that our shared goal is 
``continuous quality improvement.''
--That States understand the needs of their population and should be 
given more flexibility in the use of the funds.
--That accountability should be built on performance not entirely on 
expenditures.

    The first principle is reached in this proposal when both the 
Federal and State governments identify the strengths and weaknesses of 
various systems of service and work in tandem to improve those systems. 
The new partnerships will be built on incentives to improve services 
rather than penalties for non-compliance.
    The second principle is achieved in this proposal by reducing the 
number of requirements, simplifying the planning process, giving 
greater freedom in the use of the funds to States and reducing 
administrative costs and burden. States have tremendous flexibility in 
the use of the funds now which this proposal retains.
    The shift to mutually agreed upon performance measures provides a 
focus on the efficiency and effectiveness of services and, therefore, 
helps both the Federal and State governments to identify how to improve 
the system of services. For example, the measures will permit both the 
Federal and State governments to identify steps that need to be taken 
to further improve the system of care to increase favorable outcomes.

Current Program

    In fiscal year (FY) 2002, $433 million was appropriated to assist 
States in providing community based mental health services for adults 
with serious mental illness and children with serious emotional 
disturbance. States are

[[Page 78491]]

eligible for their allotment under a statutorily prescribed formula if 
they submit an application that is approved by the Secretary. The 
application must include (1) assurances from the State that it will 
comply with the requirements of the statute; (2) a State mental health 
plan developed within the framework of five criteria that describe the 
community based system of care for adults with serious mental illness 
and children with serious emotional disturbance complete with goals and 
measures; and (3) an implementation report detailing the extent to 
which the State mental health plan for the previous year was 
implemented. The Secretary is required to review the application and 
determine whether the State ``completely implemented'' its plan. If a 
State failed to ``completely implement'' its plan for the year, the 
State may be subject to a 10 percent penalty against its allotment.
    The five criteria from section 1912(b) of the Public Health Service 
Act that provide the frame work of the State mental health plans are:
    ``(1) Comprehensive Community-Based Mental Health Systems--The plan 
provides for an organized community-based system of care for 
individuals with mental illness and describes available services and 
resources in a comprehensive system of care, including services for 
dually diagnosed individuals. The description of the system of care 
shall include health and mental health services, rehabilitation 
services, employment services, housing services, educational services, 
substance abuse services, medical and dental care, and other support 
services to be provided to individuals with Federal, State and local 
public and private resources to enable such individuals to function 
outside of inpatient or residential institutions to the maximum extent 
of their capabilities, including services to be provided by local 
school systems under the Individuals with Disabilities Education Act. 
The plan shall include a separate description of case management 
services and provide for activities leading to reduction of 
hospitalization.
    ``(2) Mental Health System Data and Epidemiology--The plan contains 
an estimate of the incidence and prevalence in the State of serious 
mental illness among adults and serious emotional disturbance among 
children and presents quantitative targets to be achieved in the 
implementation of the system described in paragraph (1).
    ``(3) Children's Services--In the case of children with serious 
emotional disturbance, the plan--
    (A) Subject to subparagraph (B), provides for a system of 
integrated social services, educational services, juvenile services, 
and substance abuse services that, together with health and mental 
health services, will be provided in order for such children to receive 
care appropriate for their multiple needs (such system to include 
services provided under the Individuals with Disabilities Education 
Act);
    (B) Provides that the grant under section 1911 for the fiscal year 
involved will not be expended to provide any service under such system 
other than comprehensive community mental health services; and
    (C) Provides for the establishment of a defined geographic area for 
the provision of the services of such system.
    ``(4) Targeted Services to Rural and Homeless Populations--The plan 
describes the State's outreach to and services for individuals who are 
homeless and how community-based services will be provided to 
individuals residing in rural areas.
    ``(5) Management Systems--The plan describes the financial 
resources, staffing and training for mental health providers that is 
necessary to implement the plan, and provides for the training of 
providers of emergency health services regarding mental health. The 
plan further describes the manner in which the State intends to expend 
the grant under section 1911 for the fiscal year involved.''
    States are permitted to use the block grant funds for the following 
purposes:

--Carrying out the State mental health plan;
--Evaluating programs and services carried out under the plan; and
--Planning, administration, and educational activities related to 
providing services under the plan.

    The block grant funds may not be used:

--To provide inpatient care;
--To make cash payments to patients;
--To purchase or improve land or to construct or provide major 
renovations to a facility and to purchase major medical equipment;
--To use the funds to satisfy any requirement for a State match against 
another Federal program; and
--To make grants to for-profit organizations.

    Some of the statutory requirements include:

--The State must spend at least as much on community-based mental 
health services for children with serious emotional disturbance as it 
did in 1994; if the State relies on community mental health centers, 
those centers must meet certain requirements stipulated in Federal 
statute;
--The State must have and maintain a State Mental Health Planning 
Council that meets specific membership requirements and reviews the 
State mental health plan and implementation report providing 
recommendations for modifications to the plan when necessary; serves as 
an advocate for persons with mental illness; and monitors, reviews, and 
evaluates, not less than once each year, the allocation and adequacy of 
mental health services within the State;
--Unless waived for extraordinary economic conditions, the State is 
required to maintain State expenditures for community-based mental 
health services for adults with serious mental illness and children 
with serious emotional disturbance at a level equal to the average of 
what the State spent over the previous 2 years;
--The State must conduct an audit of the funds;
--The State is to ensure an opportunity for public comment; and
--The State is required to conduct an independent peer review of no 
less than 5 percent of entities receiving funding a year.

Proposal

    After considerable discussion with the States and the National 
Association of State Mental Health Program Directors, SAMHSA is seeking 
your comments on a proposal to implement a performance partnership by 
creating more flexibility for States and accountability based on 
performance. This proposal is offered in two parts. The first will deal 
with the operationalization of the program--how will it work? The 
second will present the performance measures that are currently under 
discussion.

Operationalization

    Under the performance partnership, the 50 States, the District of 
Columbia and the Territories would be eligible for direct funding and 
the current formula for distribution of the funds would still apply. 
(For the purposes of this discussion, the term ``States'' will include 
the District of Columbia and the Territories.) States would still be 
able to use the funds to carry out their mental health plan; to 
evaluate programs and services carried out under the plan; and to plan, 
administer, and carry out educational activities related to providing 
services under the plan.
    The current restrictions on the use of funds related to inpatient 
care, cash

[[Page 78492]]

payments, purchase and renovation of properties, matching against other 
Federal funds, and making grants to for-profit organizations would 
remain in place.
    Currently the funds must be spent on community-based mental health 
services for adults with serious mental illness and children with 
serious emotional disturbance. The terms ``adults with serious mental 
illness'' and ``children with a serious emotional disturbance'' were 
defined in the May 20, 1993, Federal Register on page 29422 and 
following. The new program would continue to focus on these 
populations.
    Under the new program, States would be required to submit yearly 
mental health plans but may opt to submit plans every 2 or 3 years. The 
plans may be modified with the Secretary's approval if the State or the 
Secretary believes circumstances dictate the need to revise the plan in 
the interim.
    The plans would include three sections, the first of which would 
describe the system of services using as a framework the five elements 
in current statute. SAMHSA does request your comments on how these 
elements might be made more meaningful to the system of care.
    SAMHSA is well aware that the single State agency for mental health 
does not necessarily provide for all of the services that may be 
detailed in the plan. This section is only intended to help SAMHSA and 
other policymakers on how mental health services are provided in each 
of the States.
    A second section would discuss the system using any State and/or 
Federal data that might be available including performance data that 
the State is collecting and an analysis of the data that describes both 
the strengths of the system and areas where improvement may be needed. 
This section would include the presentation and analysis of the basic 
measures which all States will be required to submit.
    A third section, based on an analysis in the second section, would 
propose for the Secretary's approval the areas the State wishes to 
focus on, the specific objectives/targets the State wants to achieve 
during the course of the plan and the measures that would be used to 
assess the State's progress on those objectives. For the purpose of 
assessing the progress and to inform both the Federal and State 
governments of such progress, the State is expected to choose basic 
measures as its performance indicators. If a State chooses to focus on 
a particular area not among those covered by the basic measures, then 
the Secretary would have to approve both the focus and the measures. 
Where a pattern develops of several States focusing on the same 
particular area, not measured by the basic measures, e.g., stigma, 
SAMHSA and the States will work to develop a common measure for that 
area.
    A State would be required to submit annual reports to the Secretary 
detailing how it has complied with the requirements that would continue 
in statute and how well it met its objectives. The performance 
measurement data that is submitted annually to the Secretary would be 
used by the Department to help the State further improve its system of 
care. The Secretary has no interest in comparing and contrasting one 
State against another. A comparison report would create an unhealthy 
and unnecessary competition based on the comparison of divergent 
systems and divergent populations. SAMHSA will in using the data abide 
by four rules:

--When presenting data, States must be given the opportunity to provide 
explanatory notes regarding the data presented.
--States should have a respective protocol to address notifications 
and/or approvals needed with certain parties before data is released to 
the public. (There could be a specific internal process for States to 
review and comment upon data before release to the public.)
--If a State is not able to report on certain data requirements, 
reasons should be cited as to why it is not available.
--It is recommended that a standard statement of disclaimer be adopted 
and cited to explain issues around comparability to serve as a warning 
or caution when readers attempt to make State comparisons.

    The Secretary would use the information from the State annual 
reports in preparing an annual report to Congress summarizing the 
programs in each State and their progress in meeting their objectives.
    In the spirit of partnership and continuing quality improvement, 
SAMHSA proposes to eliminate the penalties for non-compliance except in 
the case of maintenance of effort choosing instead to work with the 
States to improve services. This will significantly change the agency's 
relationship with the States and cause SAMHSA to consider how the 
agency provides assistance to the States. SAMHSA's responsibility for 
technical assistance and dissemination of best practices will replace 
much of its current monitoring role. To meet the requirements of its 
changing role, SAMHSA staff will have to be trained in their new 
responsibilities and funding for technical assistance and continued 
performance measurement support will be needed.
    With regard to some of the particular requirements listed above, 
the proposal would retain the set-aside for children's services but 
change it to require States to maintain funding for children with 
serious emotional disturbance at a level that is equal to the average 
of what the State spent over the previous 2 years. To create an 
incentive for States to increase funding, SAMHSA proposes to grant the 
Secretary authority to remove from the calculation one-time infusions 
of State funds that are for a non-recurring purpose. The change in the 
requirement is being made to be consistent with the general maintenance 
of effort requirement in the statute.
    The proposal would require States to use only appropriate qualified 
community programs to provide the services as described in current law.
    The State Planning Councils would be retained in their current form 
and continue to provide the State with recommendations on how to 
improve services. The Planning Councils remain a critical element of 
the planning and reporting process.
    SAMHSA proposes to keep the Maintenance of Effort requirement along 
with the waiver and penalty authority and the new authority to remove 
certain expenditures from the calculation of the Maintenance of Effort 
requirement. The proposal also would retain the limit on State use of 
funds for administrative expenses to 5 percent.
    With the implementation of Performance Partnership, SAMHSA is 
considering requiring States to use a certain percentage of any new 
funds to increase the use of evidence-based practices in the community-
based mental health service system and would appreciate your comments.
    SAMHSA proposes to eliminate the requirement that States 
independently peer review 5 percent of facilities under the program 
each year to assess the quality, appropriateness and efficacy of 
treatment services. The rationale for this decision is explained later 
in this FRN.

Performance Measures

    All States will be required to submit data on a set of basic 
measures as part of their annual report to the Secretary which are 
intended to give a ``snapshot'' of how well the system of care is 
performing in the State. In developing this set of basic measures, 
several principles are taken into consideration. First, it is difficult 
to reach agreement

[[Page 78493]]

on what such a basic set of measures should be, what specific data 
elements should be collected and what the definitions should be for 
those data elements. Fortunately, SAMHSA has the benefit of several 
years of work with the States in the development and testing of such 
measures both through the Community Mental Health Services Block Grant 
and the current 16 State Pilot Study on Performance Measures. Second, 
basic measures that are identified today may need revision or 
replacement. It may also be found that the measures need to be expanded 
to improve the snapshot of the system. Third, it is costly and 
administratively burdensome to collect and report data. Outcome data 
requiring post-treatment measurement is particularly expensive. The 
more data required the greater the cost and less money for services is 
available.
    This remains an issue of critical importance. Without improved data 
infrastructures in States, many will not be able to collect and report 
on performance measures. States will begin to submit performance data 
according to their ability to do so. Their ability to do so, in many 
cases, will be dependent on the resources available to develop the data 
infrastructure needed to collect and report on such data.
    There are now two categories of measures: basic and developmental. 
The difference is the degree to which the measures have been worked out 
and to which the States have agreed and are prepared to submit them. 
With regard to the basic measures, while they remain subject to further 
clarification and evaluation, most of the work has been completed and 
States have agreed and are prepared to submit data.
    With regard to the developmental measures, there remains a great 
deal of work to clarify the intent of these measures and the 
definitions of terms. States will not be required to submit this data 
until this work has been completed. It is expected that most of this 
work will be completed in fiscal year 2003 and, if so, then States 
would submit the data in their fiscal year 2005 applications which 
would be submitted to SAMHSA in September of 2004.
Basic Measures
    With these understandings SAMHSA proposes the following basic 
measures be used:

--What is the estimated number of adults with serious mental illness 
(SMI) and children with serious emotional disturbance (SED) in each 
State for the reporting year and 3 years into the future?
--What is the total number of individuals in the State who received 
public mental health services in institutional and community settings 
in the reporting year?
--What are the living arrangements of individuals (homeless or other) 
served by the State public mental health system (institutional and non-
institutional settings) in the reporting year?
--What is the employment status of adult clients served in the 
reporting year by age and gender?
--How many people received services supported by Medicaid funding 
sources in the reporting year? What are their gender, and race/
ethnicity?
--What is the rate of client turnover in State hospitals and community 
programs by age in the reporting year?
--What are the expenditures for public mental health services for the 
State and the source of funding in the reporting year?
--What are the community mental health block grant expenditures for 
non-direct service activities in the reporting year?
--What is the range of services provided or funded by the State mental 
health agency in the reporting year?
--What are the agencies receiving community mental health block grant 
funds directly from the State mental health agency in the reporting 
year?
--What are the State findings for client perceptions of care in the 
reporting year on the following:

    [sbull] Percentage of clients reporting positively about access to 
care.
    [sbull] Percentage of clients reporting positively about quality 
and appropriateness of care.
    [sbull] Percentage of clients reporting positively about outcomes.
    [sbull] Percentage of family members of children reporting 
positively about care received by their children.

--For the following topics, what is the State mental health agency 
profile?

    [sbull] Percentage of adults with SMI and children with SED meeting 
the Federal definitions.
    [sbull] Percentage of adults with SMI and children with SED with a 
dual diagnosis of mental illness and substance abuse.
    [sbull] State responsibilities for mental health services provided 
through Medicaid/Medicaid managed care.
    [sbull] State capacity to report unduplicated data.
    These basic measures have been scrutinized and are generally 
accepted by the States and SAMHSA. They have also been subject to 
review and comment by the public when they were published as part of 
the revised block grant application for fiscal years 2002 through 2004.
Developmental Measures
    There is also a list of additional measures that will be 
scrutinized for the next year that are not ready for inclusion in the 
basic list of measures but are expected to be added if the scrutiny 
bears them out. They include the following:

--What is the estimate of unmet need for services in the State in the 
reporting year? (Unmet need is defined as adults with serious mental 
illness and children with serious emotional disturbance who need mental 
health services now and who will need to rely on the public sector for 
assistance but who are not yet being served.)
--How many adults with SMI and children with SED are served by the 
public mental health system in the reporting year? What is their 
profile by age, gender and race/ethnicity?
--How many children served by the State Mental Health Agency have 
family-like living arrangements or other 24-hour residential care in 
the reporting year and what are their ages and gender? How many adults 
served live independently and/or in other 24-hour residential care in 
the reporting year and what are their ages, gender and race/ethnicity?
--How many adults received supported housing services in the reporting 
year and what are their ages and race/ethnicity?
--What is the rate of client turnover in general hospitals and in high 
priority services such as assertive community treatment, new generation 
medication, supported housing, supported employment, and therapeutic 
foster care?
--For the following outcomes, what are the State findings for client 
perceptions in the reporting year?

    [sbull] Percent of children with SED who have an increase in the 
level of school attendance.
    [sbull] Percent of children with SED who have had contact with the 
juvenile justice system.
    [sbull] Percent of adults with SMI who have had contact with the 
criminal justice system.

Explanation

    The performance partnership for the CMHS program is built on three 
principles:
    [sbull] That the Federal Government and the State governments are 
partners in the provision of mental health services and that our shared 
goal is ``continuous quality improvement.''

[[Page 78494]]

    [sbull] That States understand the needs of their population and 
should be given more flexibility in the use of the funds.
    [sbull] That accountability should be built on performance not 
entirely on expenditures.
    The first principle is reached in this proposal when both the 
Federal and State governments identify the strengths and weaknesses of 
various systems of service and work in tandem to improve those systems. 
The new partnerships will be built on incentives to improve services 
rather than penalties for noncompliance.
    The second principle is achieved in this proposal by reducing the 
number of requirements, simplifying the planning process, giving 
greater freedom in the use of the funds to States and reducing 
administrative costs and burden. States have tremendous flexibility in 
the use of the funds now which this proposal retains.
    The shift to performance measures provides a focus on the 
efficiency and effectiveness of services and therefore helps both the 
Federal and State governments to identify how to improve the system of 
services. For example, the measures will permit both the Federal and 
State governments to identify steps that need to be taken to further 
improve the system of care to increase favorable outcomes.
    The States, Territories and the District of Columbia will continue 
to be the only eligible entities for PPG funds and there is no attempt 
in this proposal to change the distribution of the funding. This 
proposal addresses a new paradigm in the relationship between the 
Federal Government and eligible entities.
    The use of funds will remain as flexible as it is in current law. 
The restrictions will be retained to ensure that the funds will be used 
for community based mental health services.
    Plans will have a slightly different twist. While States will 
continue to discuss their respective programs for the provision of 
community-based mental health services, and provide data on that 
system, there will be a requirement that States examine the system and 
establish objectives for improving the system. The objectives will be 
targeted improvements in certain basic measures or in areas not 
addressed by the basic measures for which the State will offer 
measures.
    States will continue to be responsible for providing the Secretary 
with annual reports detailing their progress in meeting their goals and 
for providing necessary expenditure data to demonstrate compliance with 
such provisions as maintenance of effort and the set aside for children 
with serious emotional disturbance.
    The Annual Report to Congress is not part of current law. SAMHSA 
and its predecessor agency, the Alcohol, Drug Abuse and Mental Health 
Administration were on occasion required to submit a report to 
Congress. The last such report was in 1994 but it only dealt with the 
Substance Abuse Prevention and Treatment Block Grant. The report will 
serve to demonstrate to Congress that the funds are being used 
efficiently and effectively and to show how the State systems are 
improving. The reports will not compare and contrast State systems. 
SAMHSA believes this would be counterproductive to our goal of 
continuing quality improvement as States would present themselves in 
the best of light. The reports will be responsive to the needs of 
Congress and the submission will coincide with the appropriation 
process.
    States are currently required to ensure that individuals have an 
opportunity to review and comment on the State plan. SAMHSA proposes to 
continue this requirement but at the same time to elicit ways of 
improving public participation.
    Current statute authorizes the Secretary to penalize States for 
non-compliance. Penalties, however, serve only to remove funds from the 
mental health system of the State and grip both the staff of the State 
and the Federal government in a bureaucratic process that keeps both 
from carrying out their mission and goals. Instead, SAMHSA requests 
ideas on an incentive to encourage States to improve their service 
system.
    Maintenance of effort presents an economic burden on States 
especially in these times where the State budgets are running in the 
red and they are looking for ways to reduce spending. SAMHSA, however, 
proposes to retain the requirement to ensure continuation of services 
for those in need of community-based mental health services.
    SAMHSA proposes to eliminate the requirement that States 
independently peer review 5 percent of facilities under the program 
each year to assess the quality, appropriateness and efficacy of 
treatment services. While this specific provision was added with the 
Anti-Drug Abuse Act of 1988, there had always been a provision in 
statute requiring States to evaluate the performance of facilities 
receiving funds under the Block Grant program. The Department has 
monitored the usefulness of the requirement and believes that it has 
not achieved the purpose for which it was included in statute largely 
because the States, while they fulfilled their obligation under the 
provision, did not use it to improve performance. In addition, the 
Department believes that this provision not only requires that it be 
done but that it stipulates the way it should be done when there is 
nothing to suggest that an independent peer review is the best way to 
accomplish the goal of the provision.
    The Department is extremely interested in improving the quality of 
services. This is one of the purposes of the whole Performance 
Partnership program--continuous quality improvement. It is our belief, 
however, that the State analysis that has to be done as part of the 
second section of the plan will identify where the State, as a whole, 
needs to improve if the system is to improve. The only way that States 
have of improving their system is to work with the individual 
providers. As an example, the analysis may very well identify that 
programs are not using evidenced based practices. If this is true, the 
Department can work with the States to share the findings from the 
National Institute on Mental Illness services research programs, 
knowledge gained from other States or communities, findings from the 
Department's own programs, information from the technical assistance 
centers that the Department supports and from other sources. It would 
naturally be in the best interest of the State to ensure that the 
providers are actually then using those practices. The end result is 
that the State undertakes activities in support of its own interests 
and not because of a requirement in statute.

Performance Measures

    The performance measures used in this program have been developed 
after considerable consultation with experts in the field and State 
commissioners. Their acceptance, however, is largely based on what we 
know today. In 1 or 2 years after some experience, SAMHSA and the 
States may find that the measures do not measure what we thought they 
would or that what they measured was not critical to understanding the 
service system. Therefore, the performance partnership program must 
have built into it the ability to change the basic measures.
    SAMHSA has also considered the practicality of the measures that it 
has been and will be developing. The collection and reporting of data 
on individuals, much of which will have to be gathered from individuals 
not living in facilities, is a very expensive undertaking and 
administratively

[[Page 78495]]

burdensome. So while SAMHSA is interested in getting a picture of the 
system, SAMHSA wants to accomplish this without requiring the States to 
incur a significant financial and administrative burden. SAMHSA 
believes that it has accomplished that goal. In giving comments, SAMHSA 
asks that you keep this criterion in mind.
    Critical to the collection and reporting on performance measures is 
the ability to upgrade the data infrastructure of the State. This 
involves ensuring that each mental health program begins to collect 
standardized data and has the infrastructure to record and report it. 
It also assumes that States have the ability to receive and analyze 
that data. While some States are in a good position as far as data 
infrastructure is concerned, many are not and will need further 
financial assistance to bring their data infrastructure in line. SAMHSA 
and the States accept shared responsibility for this financial burden.

Questions for You To Consider in Making Your Comments

In General

    1. Please comment, if you care to, in general about the benefits 
and challenges of converting to performance partnerships. What areas of 
greater flexibility are needed in the administration of the CMHS BG and 
what measures of accountability are needed in the performance of the 
program and for the overall community based system of care?
    2. Please comment, if you care to, on the use of a ``continuous 
quality improvement'' model instead of a penalty structure?

Operationalization

    1. Please comment, if you care to, about the continuation of the 
flexibility in the use of funds under the program for carrying out the 
mental health plan, to evaluate programs and to plan and administer the 
program.
    2. SAMHSA is proposing new elements for the mental health plan. 
Please comment, if you care to, about those elements and make 
recommendations for their improvement.
    3. SAMHSA proposes to maintain the current restrictions on the use 
of funds as are in current statute. Please comment, if you care to, on 
both the proposal and the value of the restrictions themselves.
    4. SAMHSA is proposing to retain the set aside for children's 
services but is simplifying it to ensure that States maintain their 
level of support for children with serious emotional disturbance at a 
level equal to the average expenditures of the previous 2 years. Please 
comment, if you care to, on retaining the provisions and the change in 
the maintenance of effort requirement on children's services.
    5. States would be required to submit yearly reports showing their 
progress in meeting their objectives under the program. SAMHSA would 
then use this information to create a report for Congress to 
demonstrate how each State is using the funds efficiently and 
effectively to provide access to quality care. The report to Congress 
would not be a comparison of States but a presentation on the programs 
in each State and what steps the States are taking to further improve 
their system of services. Please comment, if you care to, on the annual 
State report and the report to Congress.
    6. Please comment, if you care to, on SAMHSA's proposal to continue 
the current maintenance of effort requirement including the exclusion 
from the calculation funds for one time expenditures of a singular 
purpose.

Performance Measures

    1. Under the proposal, 12 basic measures and 6 developmental 
measures are identified. Please comment, if you care to, about the 
benefits and challenges of using this information to describe 
performance by individual States and to describe the overall capacity, 
accountability and effectiveness of the systems of community based 
services for the Nation.
    2. How would you improve the measures if you could? Which measures 
do you believe should be kept, which ones dropped, and which ones 
amended and how? Are there other measures that you believe should be 
added that do not appear?
    3. This notice suggests that States will be ready to submit basic 
measurement data in time for their applications for FY 2005 funds. Do 
you believe that this time table is realistic?
    4. SAMHSA has developed a matrix of program priorities and cross 
cutting principles that now guides the agency's daily operations and 
overall program and management decisions. Programs and issues 
prioritized in this matrix include: co-occurring disorders; substance 
abuse treatment capacity; seclusion and restraint; prevention and early 
intervention; children and families; New Freedom Initiative (including 
the President's Mental Health Commission); terrorism/bio-terrorism; 
homelessness; aging; HIV/AIDS and Hepatitis C; and criminal justice. As 
we move forward in measuring the extent to which the agency has been 
successful in these 11 areas, we are asking the public to comment on 
how to begin work on ways to measure progress by the States in these 
and other program areas.

Economic Impact

    We have examined the impact of this notice as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review), as 
amended by Executive Order 13258 (February 2002, Amending Executive 
Order 12866 on Regulatory Planning and Review) and the Regulatory 
Flexibility Act (RFA) (September 19, 1980; Public Law 96-354), the 
Unfunded Mandated Reform Act of 1995 (Public Law 104-4), and Executive 
Order 13132 (August 1999, Federalism). Executive Order 12866 (the 
Order), as amended by Executive Order 13258, which direct agencies to 
assess all costs and benefits of available regulatory alternatives and, 
if regulation is necessary, to select regulatory approaches that 
maximize the benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in 1 year). We 
have determined that the proposed rule is consistent with the 
principles set forth in the Order, and we find that the proposed rule 
would not have an effect on the economy that exceeds $100 million in 
any one year. In addition, this rule is not a major rule as defined at 
5 U.S.C. 804(2). In accordance with the provisions of the Order, the 
rule was reviewed by the Office of Management and Budget.
    It is hereby certified under the RFA that this proposed regulation, 
will not have a significant economic impact on a substantial number of 
small entities. This proposed rule applies only to States.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditure in any 1 year by State, 
local, or tribunal governments, in the aggregate, or by the private 
sector, of $100 million. As noted above, we find that the proposed rule 
would not have an effect of this magnitude on the economy.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or

[[Page 78496]]

otherwise has Federalism implications. We have reviewed the proposed 
rule under the threshold criteria of Executive Order 13132, Federalism, 
and have determined that this proposal does not impose substantial 
direct requirement costs on State and local governments, preempt State 
law, or otherwise has Federalism implications. On the contrary, the 
proposal provides for more flexibility for the States in the use of 
Federal funds, and establishes a working relationship between the 
Federal and State governments that will help the States improve access 
to quality care for those individuals in need of substance abuse or 
mental health services.

Paperwork Reduction

    This proposal would assume information collection requirements that 
would be subject to review by the Office of Management and Budget under 
the Paperwork Reduction Act of 1980. This Federal Register notice, 
however, is only seeking comment on proposed information collection and 
is not establishing a collection requirement. Therefore, doing a 
Paperwork Reduction Act analysis would be premature. The Department 
will comply with the requirements of the Paperwork Reduction Act when 
determinations have been made on the information to be collected and in 
advance of requiring the submission of that information.

    Dated: November 18, 2002.
Charles G. Curie,
Administrator, Substance Abuse and Mental Health Services 
Administration.

    Dated: December 18, 2002.
Tommy G. Thompson,
Secretary.
[FR Doc. 02-32304 Filed 12-23-02; 8:45 am]
BILLING CODE 4162-20-P