    Mental Health: Community-Based Care Increases for People With Serious
    Mental Illness (Letter Report, 12/19/2000, GAO/GAO-01-224).

    Between 1987 and 1997, the growth in mental health spending in the
    United States roughly paralleled the growth in overall health care
    spending. However, federal mental health spending grew at more than
    twice the rate of state and local spending. This led to the federal
    government's share surpassing that of state and local governments, while
    the share attributable to private sources declined slightly. The ability
    to care for more people in the community has been facilitated by the
    continued development of new medications that have fewer side effects
    and are more effective in helping people manage their illness.
    Furthermore, treatment approaches such as assertive community treatment,
    supported employment, and supportive housing have been developed to
    provide the multiple forms of ongoing assistance that adults with
    Serious Mental Illness (SMI) often need if they are to function in the
    community. The Health Care Financing Administration (HCFA) has
    encouraged the use of community-based services for Medicaid
    beneficiaries with SMI by disseminating information on the use of new
    medications and treatment models, which can help people function better
    in the community. HCFA also supports states' use of Medicaid managed
    health care services. However, incentives associated with capitated
    payment can lead to reduced service utilization. HCFA is developing a
    set of safeguards for people with special health care needs enrolled in
    Medicaid managed health care and has indicated that it will devise a
    plan to implement these safeguards, such as through legislative or
    regulatory action or making changes in Medicaid administrative policies.

    --------------------------- Indexing Terms -----------------------------

     REPORTNUM:  GAO-01-224
         TITLE:  Mental Health: Community-Based Care Increases for People
    	     With Serious Mental Illness
          DATE:  12/19/2000
       SUBJECT:  Mental health care services
    	     Managed health care
    	     State-administered programs
    	     Community health services
    	     Disadvantaged persons
    IDENTIFIER:  Medicare Program
    	     Medicaid Program

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    GAO-01-224

    A

    Report to the Committee on Finance, U. S. Senate

    December 2000 MENTAL HEALTH Community- Based Care Increases for People With
    Serious Mental Illness

    GAO- 01- 224

    Letter 3 Appendixes Appendix I: Scope and Methodology 22

    Appendix II: Involuntary Outpatient Commitment 23 Appendix III: Selected
    SAMHSA Efforts to Help the Implementation

    of Community- Based Programs 24 Appendix IV: Selected Community- Based
    Approaches to Treating

    People With Serious Mental Illness 25 Appendix V: Selected HUD Programs That
    Can Assist Homeless

    People Who Have SMI 29 Appendix VI: Comments From the Substance Abuse and
    Mental

    Health Services Administration 30 Appendix VII: Comments From the Health
    Care Financing

    Administration 32 Appendix VIII: GAO Contact and Staff Acknowledgments 35

    Table Table 1: Community Mental Health Services Designed to Address Needs of
    Adults With SMI 13

    Figure Figure 1: Percentage of Total Mental Health Expenditures by Funding
    Source, 1987 and 1997 10

    Abbreviations

    ACT assertive community treatment APA American Psychiatric Association BBA
    Balanced Budget Act of 1997 CMHC community mental health center HCFA Health
    Care Financing Administration HHS Department of Health and Human Services
    HUD Department of Housing and Urban Development IPS Individual Placement and
    Support NASMHPD National Association of State Mental Health Program
    Directors NIMH National Institute of Mental Health SAMHSA Substance Abuse
    and Mental Health Services Administration SMHA state mental health agency
    SMI serious mental illness

    Lett er

    December 19, 2000 The Honorable William V. Roth, Jr. Chairman The Honorable
    Daniel Patrick Moynihan Ranking Minority Member Committee on Finance United
    States Senate

    Mental disorders take an enormous toll on the nation's families and
    finances. The indirect costs of mental illness, such as for lost
    productivity, were estimated at $78.6 billion in 1990. In 1997, $73 billion
    was spent on mental health services. The Surgeon General has estimated that
    about 20 percent of the U. S. population is affected by a mental disorder in
    a given year. 1 About 5 percent of the population are considered to have a
    serious mental illness (SMI). SMI, which includes, among other diseases,
    schizophrenia, bipolar disorder, and major depression, is a chronic
    condition that can substantially limit a person's ability to function in
    many areas of life such as employment, self- care, and interpersonal
    relationships. Effective treatment can reduce the severity of these problems
    for the majority of people with SMI. Much of this treatment can now be
    provided in the community rather than in institutions.

    Because of your long- standing concern with the availability and financing
    of mental health services, you asked us to review mental health services for
    people with SMI. Specifically, you asked us to (1) provide information on
    mental health spending and how it has changed since the 1980s; (2) identify
    the types of community- based services that are provided to adults with SMI,
    including people who are homeless, and difficulties in providing these
    services; and (3) determine how the Health Care Financing Administration
    (HCFA), which administers the Medicaid program, supports the provision of
    community- based services for adults with SMI who are eligible for Medicaid.

    To answer these questions, we interviewed and obtained documents from
    officials at the Department of Health and Human Services' (HHS) Substance
    Abuse and Mental Health Services Administration (SAMHSA), HCFA, and the
    National Institute of Mental Health (NIMH). We also visited

    1 Mental Health: A Report of the Surgeon General( Rockville, Md.: U. S.
    Department of Health and Human Services, 1999).

    state mental health and Medicaid officials and service providers in Michigan
    and New Hampshire, states that have been identified as operating exemplary
    community- based programs. In addition, we reviewed documents from the
    National Association of State Mental Health Program Directors (NASMHPD).
    Finally, we interviewed officials from several organizations concerned with
    mental health issues as well as individual experts on mental health. (For
    additional information on our methodology, see app. I.) We conducted our
    work between May and November 2000 in accordance with generally accepted
    government auditing standards.

    Results in Brief Between 1987 and 1997, the growth in mental health spending
    in the United States roughly paralleled the growth in overall health care
    spending. After

    adjusting for overall inflation, spending on mental health services grew by
    4 percent a year, on average, compared with 5 percent a year for spending on
    all health care. However, federal mental health spending grew at more than
    twice the rate of state and local spending. This led to the federal
    government's share surpassing that of state and local governments, while the
    share attributable to private sources declined slightly. Increasing Medicaid
    and Medicare expenditures accounted for the larger federal share, with
    combined federal and state Medicaid expenditures accounting for 20 percent
    of all mental health spending in 1997.

    The focus of care for adults with SMI has continued to shift from providing
    services in psychiatric hospitals to providing services in the community.
    The ability to care for more people in the community has been facilitated by
    the continued development of new medications that produce fewer side effects
    and are more effective in helping people manage their illness. Furthermore,
    treatment approaches such as assertive community treatment (ACT), supported
    employment, and supportive housing have been developed to provide the
    multiple forms of ongoing assistance that adults with SMI often need if they
    are to function in the community. These approaches can also help homeless
    people with SMI, whose treatment needs are additionally complex, partly
    because many of them also suffer from a substance abuse disorder.
    Coordinating and integrating services can be effective in treating people
    with multiple needs, and organizing care in this way is especially important
    for people making the transition from institutions to the community.

    Medicaid is a major source of support for people with SMI. HCFA has
    encouraged the use of community- based services for Medicaid beneficiaries
    with SMI by disseminating information on the use of new

    medications and treatment models, which can help people function better in
    the community. HCFA has also supported states' use of Medicaid managed care
    waivers to provide a wider array of community- based mental health services.
    However, incentives associated with capitated payment can lead to reduced
    service utilization. Recognizing the risks for people with special health
    care needs, such as serious mental illness, the Congress required HCFA to
    take steps to ensure that beneficiaries enrolled in managed care receive
    appropriate care. HCFA is developing a set of safeguards for such people
    enrolled in Medicaid managed care. The safeguards provide measures that
    states can take to better ensure that beneficiaries can obtain the services
    and supports they need to function. HCFA has indicated that it will devise a
    plan to implement these safeguards, such as through legislative or
    regulatory action or making changes in Medicaid administrative policies.
    Effective oversight to ensure that adequate safeguards are implemented will
    be essential to provide meaningful protection to this vulnerable population.
    SAMHSA and HCFA commented on a draft of this report and generally agreed
    with our findings.

    Background Historically, people with SMI were cared for primarily in
    hospitals. States developed a system of public mental hospitals, but by the
    1960s they were

    viewed as ineffective and inadequate because of overcrowding, staff
    shortages, and poor facilities. Advocates and reformers contended that long-
    term institutional care in the hospitals had been characterized by patient
    neglect and ineffective treatment. Improved medications that reduced some of
    the symptoms of mental illness allowed more people to live in the community
    with support.

    Certain legislative and judicial actions contributed to a changed focus of
    providing community- based rather than institutional care. In 1963, the
    Community Mental Health Centers Act authorized the development of a
    nationwide network of community mental health centers (CMHC) to replace
    state institutions as the main source of treatment for people with SMI and
    to decrease the incidence of mental illness in the broader population. 2 The
    act and amendments created federal grants for states to build the CMHCs and
    staff them for 8 years. Funds were intended to supplement existing state and
    local revenues to help communities develop the new services necessary for
    adequate community mental health care.

    2 Pub. L. No. 88- 164, title II, 77 Stat. 290.

    States and communities were expected to develop alternative funding sources
    to eventually replace the federal funds. CMHCs were required to provide a
    number of services, including inpatient, outpatient, emergency, and day care
    services; follow- up care for people released from mental health facilities;
    and transitional living facilities. CMHCs were also required to coordinate
    service delivery with other mental health and social service providers in
    the community.

    The vision of a national network of community mental health centers was not
    fulfilled. Many communities were unable to find the funds to match federal
    dollars to build the CMHCs or to provide all the required services; others
    were unable to find qualified professionals to staff the centers. 3 As of
    1980, only 768 of the projected 2,000 CMHCs had been funded. Moreover,
    implementation of the CMHC act did not adequately address the needs of
    people with SMI who were released from institutions. The CMHC program's
    regulations emphasized the prevention and treatment of mental disorders in
    the broader population, and CMHCs did not provide the intensive, more
    comprehensive services people with SMI required, such as housing, support
    services, and vocational opportunities in addition to treatment. Medication
    was the only service provided to many patients. Further, the extent to which
    CMHCs coordinated with mental hospitals concerning the release of patients
    to their communities varied. Section 901 of the Omnibus Budget
    Reconciliation Act of 1981 ended federal funding to states specifically for
    community mental health centers and replaced it with block grants to the
    states to support services for people with SMI. 4

    A series of court decisions in the 1970s establishing that
    institutionalization is a deprivation of liberty also played a role in
    moving people with SMI away from institutions into the community. States had
    previously exercised broad latitude in allowing an individual with mental
    illness to be involuntarily confined, but court rulings recognizing
    individuals' right to refuse treatment made it difficult to commit people to
    a psychiatric hospital without their consent. In 1975, the Supreme Court
    held that mentally ill individuals could not be committed involuntarily
    unless they were found to be dangerous to themselves or others. 5 This led
    to a reform

    3 Later amendments set out more specific requirements for CMHCs. Community
    Mental Health Centers Amendments of 1975, Pub. L. No. 94- 63, title III, 89
    Stat. 304, 308. 4 Pub. L. No. 97- 35, 95 Stat. 543.

    5 O'Connor v. Donaldson, 422 U. S. 563 (1975).

    of state laws, which now generally allow involuntary inpatient commitment
    only if persons present a clear danger or threat of substantial harm to
    themselves or others. Some state laws specify that inpatient commitment is
    appropriate only after full consideration of less restrictive alternatives,
    such as involuntary outpatient commitment. (See app. II for a discussion of
    involuntary outpatient commitment.) A recent Supreme Court opinion has
    brought additional pressure on states to offer community- based treatment to
    people with mental illness when such treatment is appropriate, the
    individuals do not oppose such treatment, and the placement can be
    reasonably accommodated, taking into account the state's resources. 6

    The public mental hospital population declined. Many people with SMI
    returned to communities without adequate mental health services and some of
    these people became homeless. Other major factors contributing to
    homelessness were unemployment, a decline in the supply of lowincome
    housing, and alcohol and drug abuse.

    The State and Federal Roles State mental health agencies (SMHA) have primary
    responsibility for

    in Supporting Mental Health administering the public mental health system,
    through their role as a

    Services purchaser, regulator, manager, and, at times, provider of mental
    health

    care. The public mental health system serves as a safety net for people who
    are poor or uninsured or whose private insurance benefits run out in the
    course of their serious mental illness. Many people with SMI are unemployed,
    and they are often poor and financially dependent on government support.
    SMHAs arrange for the delivery of services to more than 2 million people
    each year, most of whom suffer from a serious mental illness. Services are
    delivered by state- operated or county- operated facilities, nonprofit
    organizations, and other private providers. The sources and amounts of
    public funds SMHAs administer vary from state to state but usually include
    state general revenues and federal funds.

    The federal funds that SMHAs administer generally include Medicaid and
    Medicare payments for services provided in state- owned or state- operated
    facilities and other Medicaid payments when the state Medicaid agency has
    authorized the SMHA to control all Medicaid expenditures for mental health
    services. HCFA's Medicaid and Medicare programs pay for certain mental
    health services for eligible beneficiaries. States operate their own
    Medicaid programs within broad federal requirements. Medicaid pays for

    6 Olmstead v. L. C., 527 U. S. 581 (1999).

    mandatory services, such as physician services, and optional benefits that
    states may choose to provide, such as rehabilitation and targeted case
    management. Since Medicaid is an entitlement program, states and the federal
    government are obligated to pay for all covered services that are provided
    to an eligible individual. 7 Each state program's federal and state funding
    share is determined through a statutory matching formula, with the federal
    share ranging from 50 to 80 percent. 8

    In the 1990s, state Medicaid programs increasingly turned to capitated
    managed care plans to provide medical and behavioral health services as a
    way to control costs and improve services. Twenty- two states have
    “carved out,” or separated, mental health services from physical
    health services in contracting with managed care plans, placing them under
    separate financing and administrative arrangements. Some states create
    separate capitated arrangements and others use fee- for- service
    arrangements. 9

    Medicare covers elderly persons and persons who receive Social Security
    Disability Insurance, and it pays for a range of inpatient and outpatient
    mental health services. 10 The Medicare statute requires a 50- percent
    copayment from beneficiaries for outpatient care of mental disorders,
    compared with 20 percent for other medical outpatient treatment. 11
    Furthermore, the Medicare statute limits treatment in a freestanding
    psychiatric hospital to a total of 190 days in a patient's lifetime. 12

    7 For adults aged 22 to 64, Medicaid does not cover most services provided
    in institutions for mental disease, which are hospitals, nursing facilities,
    or other institutions of more than 16 beds primarily engaged in caring for
    people with mental illness. In addition, some states restrict the number of
    mental health services a person can receive in a year, require prior
    authorization for certain services, or both.

    8 In 1995, the average size of the federal match was 57 percent. 9 States
    may require people eligible for Medicaid to enroll in a managed care plan if
    the state receives a waiver from HCFA under section 1115 or 1915( b) of the
    Social Security Act (42 U. S. C. 1315 and 1396n( b)). In addition, section
    4701 of the Balanced Budget Act of 1997 (BBA) amended the Social Security
    Act to authorize states to establish Medicaid managed care programs simply
    by amending their state Medicaid plans. Pub. L. No. 105- 33, 111 Stat. 251,
    489 (classified at 42 U. S. C. 1396u- 2).

    10 After receiving Social Security Disability Insurance benefits for 24
    months, a person becomes eligible for Medicare. 11 42 U. S. C. 1395 l( c).

    12 42 U. S. C. 1395( d)( 3).

    SMHAs also administer the funds they receive from SAMHSA's Community Mental
    Health Services Block Grant program. Block grants are allocated to states
    according to a statutory formula that takes into account each state's
    taxable resources, personal income, population, and service costs. The
    grants give states and territories a flexible funding source for providing a
    broad spectrum of community mental health services to adults with SMI and
    children with a serious emotional disturbance. Funding for the block grant
    program totaled $356 million in fiscal year 2000; SAMHSA used about $18
    million for state systems development, including technical assistance, data
    collection, and evaluation. The remainder was awarded to the states and
    territories, with an average award of about $5.7 million. (See app. III for
    other SAMHSA programs that help implement community- based mental health
    services.)

    Federal Mental Health In 1997, the nation spent about $73 billion for the
    treatment of all mental

    illness, up from $37 billion in 1987. 13 Mental health spending grew at
    about Spending Grew Faster

    the same rate as overall health spending during this period. After adjusting
    Than State and Local

    for overall inflation, spending for all health care grew by 5 percent a
    year, Spending, and the Role

    on average, compared with 4 percent for spending on mental health services.
    14 In 1997, the public sector (that is, federal, state, and local of
    Medicaid and

    governments) provided 55 percent of mental health spending, in contrast to
    Medicare Increased

    providing less than half (about 46 percent) of overall health care spending.
    From 1987 to 1997, adjusted annual federal spending for mental health grew,
    on average, more than twice as fast as state and local mental health
    spending (6. 3 percent versus 2. 4 percent). This led to the federal
    government's share of total mental health expenditures increasing from 22 to
    28 percent during the period, while state and local governments' share of
    spending declined from 31 to 27 percent. 15 The proportion from private
    spending sources also declined slightly from 46 to 45 percent (see fig. 1).

    13 National information is not collected specifically on the amount of money
    spent to treat serious mental illness. HCFA, SAMHSA, and others collect
    information only on overall mental health spending.

    14 Growth rates are based on data in National Expenditures for Mental Health
    and Substance Abuse Treatment 1997( Rockville, Md.: U. S. Department of
    Health and Human Services, 2000). The gross domestic product deflator was
    used to adjust for inflation. 15 Federal expenditures included Medicaid's
    contribution, Medicare payments, and other federal expenditures, such as
    those from the Community Mental Health Services Block Grant and the
    departments of Defense and Veterans Affairs.

    Figure 1: Percentage of Total Mental Health Expenditures by Funding Source,
    1987 and 1997

    1987 1997 Other

    Other Private

    Private 3.6%

    2.6% Other State and Local Out- of- Pocket

    Other State Out- of- Pocket

    19.2% 19.8%

    and Local 17.8%

    24.4%

    State and State and

    Local: Local:

    27.1%

    State

    Private: 46.4% 31.3%

    Private: 44.8%

    Medicaid State

    7.9% Medicaid 6.9%

    Private

    Federal: 22.3%

    Private

    Federal: 28.1%

    Federal Insurance

    Federal Insurance

    Medicaid 23.0%

    Medicaid 24.4%

    11.8% 8.5%

    Other Medicare

    Other Medicare

    Federal 8.0%

    Federal 12.4%

    5.9% 3.9%

    Total Expenditures = $37.1 billion Total Expenditures = $73.4 billion

    Note: Percentages may not total 100 because of rounding. Source: National
    Expenditures for Mental Health and Substance Abuse Treatment 1997(
    Rockville, Md.: U. S. Department of Health and Human Services, 2000).

    Medicaid and Medicare played increasingly important roles in funding mental
    health services between 1987 and 1997. Medicaid's proportion of mental
    health spending (federal and state) rose from slightly more than 15 percent
    ($ 5. 7 billion) to about 20 percent ($ 14. 4 billion). Medicare's share
    rose from 8 percent to slightly more than 12 percent, with expenditures
    increasing from about $3 billion to $9 billion. HCFA and SAMHSA officials
    have suggested several reasons for Medicaid's increase. These include the
    trend toward Medicaid beneficiaries receiving their inpatient care in
    psychiatric units of general hospitals, where services are covered by
    Medicaid, rather than in psychiatric hospitals, where services are not
    covered; increased costs for psychiatric medications; and states' increased
    use of Medicaid to pay for community- based mental health services. The
    increase in Medicare spending may be associated in part with a 1990

    statutory change that expanded coverage to nonphysician professionals
    providing mental health services, such as psychologists, clinical social
    workers, and nurse practitioners. 16

    Community- Based Over the past 20 years, states have largely shifted the
    care of people with

    Services Are Designed SMI from institutions to the community. The continued
    development of

    psychotropic medications that both are more effective and produce fewer to
    Address the

    side effects has facilitated the ability to care for more people with SMI in
    Complex Needs of

    the community. Furthermore, treatment approaches such as ACT, Adults With
    Serious

    supported employment, and supportive housing can provide the multiple forms
    of ongoing assistance that adults with SMI often need to function.

    Mental Illness These approaches can also help homeless people with SMI, who
    have

    particularly complex treatment needs and who often have difficulty gaining
    access to the multiple services they need. Integration and coordination of
    services have been found to be effective in treating people with multiple
    needs.

    Care Emphasis Continues to The focus of mental health services for people
    with SMI has continued to

    Shift From Institutions to shift from providing care in psychiatric
    hospitals to providing communitybased

    Community Services care. From 1980 to 1998, the number of patients
    institutionalized in

    state and county mental hospitals decreased by almost 60 percent�by the end
    of 1998, about 57,000 people were in state or county psychiatric hospitals.
    17 Although nationwide expenditure data are not available, data from 33
    states show that state mental health agencies' expenditures for psychiatric
    hospitals dropped from 52 percent to 35 percent of total expenditures
    between 1987 and 1997, while community- based spending rose from 45 percent
    to 63 percent. 18

    The continued development of new antidepressant and antipsychotic
    medications has helped make it possible to care for more people with SMI

    16 Before 1990, generally only mental health services delivered by
    physicians were covered under Medicare. 17 Additions and Resident Patients
    at End of Year, State and County Mental Hospitals by Age and Diagnosis by
    State, United States 1998( Rockville, Md.: SAMHSA, Center for Mental

    Health Services, 2000). 18 Expenditure data were reported to NASMHPD by the
    33 states, representing 74 percent of the U. S. population in 1997, in state
    fiscal years 1987 and 1997.

    in the community. The newer medications further improve the ability of
    people with SMI to live in the community, receive care at a general hospital
    or in other clinical settings, and manage symptoms of their illness. The
    Surgeon General recently reported, for example, that the newer antipsychotic
    medications show promise for treating people with schizophrenia for whom
    older medications are ineffective, by reducing symptoms such as delusions,
    hallucinations, disorganized speech and thinking, and catatonic behaviors.
    19 Further, the Surgeon General reported that some of the newer drugs carry
    fewer and less severe side effects, generally resulting in better compliance
    with medication regimens, and that they may improve a person's quality of
    life and responsiveness to other treatment interventions. Patients using
    certain medications, however, require careful monitoring to ensure that they
    are receiving the appropriate dose and to minimize side effects. For
    example, in about 1 percent of patients, clozapine causes agranulocytosis, a
    potentially fatal loss of white blood cells that fight infection. Because
    this condition is reversible if detected early, weekly blood monitoring is
    critical.

    States have supported an array of community- based services that are
    designed to enable people with SMI to remain in their communities and live
    independently. States frequently provide services directly or contract with
    county or community mental health organizations to offer services. Although
    most care is provided on an outpatient basis, people with SMI sometimes
    experience periods when they are unable to care for themselves and need
    short- term hospitalization. Table 1 describes types of mental health
    services for adults with SMI provided in the community.

    19 Mental Health: A Report of the Surgeon General.

    Table 1: Community Mental Health Services Designed to Address Needs of
    Adults With SMI

    Service Description

    Ambulatory Services provided in an outpatient setting that may include the
    following: Counseling�individual, family, or group therapy that can be
    provided in an office or community setting, such as the person's home or
    employment site; Medication dispensing and monitoring�directly administering

    medications to an individual and observing the individual to identify both
    beneficial and inadvertent or undesirable side effects; Case
    management�helping clients obtain financial, housing, medical,

    employment, social, transportation, and other community resources; Crisis
    intervention�screening, psychiatric evaluation, emergency intervention, and
    stabilization; and Day treatment/ psychosocial rehabilitation�structured
    program activities including services such as social support, vocational
    training, and independent living skills

    Residential Services provided in group homes, independent or shared
    apartments, and single- room occupancies that may include training, support,
    medications, and supervision of routine activities, including community
    orientation, meal preparation, financial management, and transportation

    Inpatient Services provided in facilities such as a general hospital or
    inpatient unit of a community mental health clinic, including diagnosis and
    treatment services

    Many people with SMI need a range of services to help them function in the
    community. Several approaches to providing ongoing assistance and
    coordinated services have been developed to meet the varying needs of this
    population, such as ACT, supported employment, and supportive housing. ACT
    is a model of providing intensive care to people with the most severe and
    persistent mental illness. It is generally targeted toward people who have
    recently left institutions, typically do not schedule or keep appointments,
    or do not do well without extensive support. Under the ACT model,
    multidisciplinary teams are to be available to provide services around the
    clock in community settings, such as at the person's home. Services can
    include administering medications, interpersonal skills training, providing
    crisis intervention, and providing employment assistance and are intended to
    be available as long as the person needs them. Supported employment programs
    assist people who have SMI to work in competitive jobs. Some supported
    employment programs emphasize quick placement into regular jobs, rather than
    training people before job placement, and then help enable individuals with
    SMI to perform acceptably in their jobs. Supportive housing programs attempt
    to address the needs of people with SMI who have been homeless or who are at
    risk of

    becoming homeless by combining housing with other needed services, such as
    case management and substance abuse treatment. (For more detailed
    information on ACT, supported employment, and supportive housing, see app.
    IV.)

    Homelessness Complicates Approximately 1 in 20 adults with SMI are homeless;
    they account for an

    the Treatment of Adults estimated one- third of the approximately 600,000
    homeless adults in the

    With Serious Mental Illness United States. At least half of homeless people
    with SMI also have

    substance abuse disorders. Mental illness in combination with substance
    abuse may predispose individuals to homelessness, as their conditions often
    lead to disruptive behavior, loss of social supports, financial problems,
    and an inability to maintain stable housing. Homelessness adds to the
    complexity of treatment needs for people with SMI; beyond mental health
    services, they need a range of physical health, housing, and social
    services. Compared with other homeless people, those with SMI are generally
    in poorer physical health, are homeless for longer periods of time, and
    often reside on the streets.

    Homeless people with SMI have difficulty gaining access to the full range of
    health care, housing, and support services they need. Typically, they lack
    the income verification documentation necessary to enroll in entitlement
    programs, such as Medicaid; they have problems maintaining schedules; and
    they lack transportation. The Department of Housing and Urban Development
    (HUD) funds programs, including rental assistance and housing development
    grants, that have been used to help homeless people with SMI obtain housing.
    (See app. V.) Researchers and experts widely agree that the demand for low-
    income housing and housing subsidies far exceeds the supply. According to
    the National Coalition for the Homeless, many traditional mental health
    providers are neither equipped to handle the complex social and health
    conditions of homeless people nor typically linked to the range of services
    needed for their recovery and residential stability. Traditionally, separate
    systems have provided these services�such as the mental health, substance
    abuse, public housing, and social welfare systems�each of which has its own
    eligibility and program requirements. It is particularly difficult for
    people with SMI to negotiate systems in which services are separate and
    uncoordinated.

    Research indicates that coordinated service delivery is important for
    meeting the numerous and complex needs of homeless people with SMI. 20 One
    study found that homeless people with SMI who participated in programs using
    an integrated treatment approach- in which multiple services were provided
    through a single entity- spent more days in stable housing (such as an
    apartment or group home) and reduced their alcohol use more than those
    receiving services through multiple agencies. 21 SAMHSA's Access to
    Community Care and Effective Services and Supports program�an
    interdepartmental demonstration program integrating housing, mental health,
    substance abuse, employment, and social support services�found that service
    system integration was associated with improved access to housing services
    and better housing outcomes for homeless people with mental illness. 22

    Efforts are under way to coordinate services to reduce the number of
    homeless people with SMI who become incarcerated. 23 SAMHSA is funding a
    study of programs for diverting adults with mental illness and substance
    abuse problems from the criminal justice system to community- based
    treatment. According to SAMHSA, diversion programs are often the most
    effective way to integrate an array of mental health, substance abuse, and
    other support services to help people break the cycle of repeated
    incarceration. In some communities, mental health courts are designed to
    hear the cases of people with mental illness who are arrested for
    misdemeanors such as loitering or creating a public nuisance. In these

    20 We discuss the issues of coordination and integration of services for
    homeless people in more detail in Homelessness: Coordination and Evaluation
    of Programs Are Essential (GAO/ RCED- 99- 49, Feb. 26, 1999) and
    Homelessness: State and Local Efforts to Integrate and Evaluate Homeless
    Assistance Programs( GAO/ RCED- 99- 178, June 29, 1999).

    21 Robert E. Drake and others, “Integrated Treatment for Dually
    Diagnosed Homeless Adults,” The Journal of Nervous and Mental Disease,
    Vol. 185, No. 5 (1997), pp. 298- 305. 22 The departments of Agriculture,
    Education, Housing and Urban Development, Labor, and Veterans Affairs were
    also involved in this program. 23 In 1999, the Department of Justice
    reported that 60 percent of inmates with mental illness were under the
    influence of alcohol or drugs at the time of their offense and that 20
    percent of those with mental illness had been homeless at some time during
    the 12 months before they were arrested.

    programs, people with mental illness can have their case heard by the mental
    health court and can agree to follow a plan of mental health treatment and
    services instead of going to jail. 24

    HCFA Is Supportive of HCFA has disseminated information to states about the
    more effective

    New CommunityBased medications and treatments for adults with SMI and has
    supported states'

    use of Medicaid managed mental health care to provide a wider array of
    Services and Is

    services not covered by traditional fee- for- service Medicaid. HCFA is
    Developing Safeguards

    developing safeguards to help ensure that states that use managed care for
    the Use of Managed

    arrangements furnish appropriate services to people with special health care
    needs, including people with SMI.

    Care HCFA Has Encouraged

    HCFA has taken steps to encourage states to use new modes of care for States
    to Provide Advanced

    adults with SMI. In June 1999, HCFA issued a letter to state Medicaid
    Treatments

    directors noting that research had demonstrated that ACT is an effective
    strategy for treating persons with SMI. The letter stated that states should
    consider these positive findings in their plans for comprehensive approaches
    to community- based mental health services. 25

    HCFA has also encouraged the use of newer medications. In a letter to state
    Medicaid programs in 1998, it provided information on the effectiveness of
    new antipsychotic medications in treating schizophrenia. HCFA noted that

    24 A federal demonstration program to promote mental health courts has been
    authorized for fiscal years 2001 through 2004. Under the America's Law
    Enforcement and Mental Health Project, in consultation with the Secretary of
    HHS, the Attorney General is to make matching grants to states and
    municipalities to establish up to 100 such courts throughout the nation.
    These courts will hear cases involving individuals with SMI charged with
    misdemeanors or nonviolent offenses, with the purpose of diverting many of
    them into appropriate mental health treatment. Among other things, grant
    funds will also be used to provide specialized training of law enforcement
    and judicial personnel. Pub. L. No. 106- 515, 114 Stat. 2399 (2000) (to be
    classified at 42 U. S. C. 3796ii et seq.).

    25 HCFA is also jointly sponsoring a contract with SAMHSA to examine the
    factors that contribute to the successful implementation of ACT programs at
    the state level. HCFA states that this contract will also review how states
    are using Medicaid and other resources to support ACT programs, how programs
    are designed to meet the needs of people with serious and persistent mental
    illness, and the outcomes of services.

    some states and managed care organizations with formularies have already
    adjusted them to recognize these new medications. 26 HCFA suggested that all
    states consider the medications' advantages in reducing side effects,
    increasing patient compliance with treatment regimens, and possibly reducing
    psychiatric hospital readmissions.

    HCFA has used its waiver authorities to support some states' initiatives to
    use Medicaid managed care carveout programs to enhance their provision of
    mental health services. With a waiver, states may gain the opportunity to
    provide some community- based mental health services that are not usually
    covered by fee- for- service Medicaid, provided they do not increase overall
    spending. For example, while many ACT program services can be reimbursed
    under existing Medicaid policies, some services, such as family counseling
    and respite care, are typically not reimbursable through Medicaid's
    traditional fee- for- service program. A survey of states with mental health
    carveout waivers found that some states did use the waiver to add coverage
    for services not previously included in their Medicaid plans, most
    frequently psychiatric rehabilitation and case management. 27

    Safeguards Are Important to As HCFA has noted in a draft report on
    strengthening Medicaid managed

    Ensure Access to Care for care, managed care organizations are often not
    accustomed to serving

    Medicaid Beneficiaries in people with special health needs, such as adults
    with SMI, and may lack the

    expertise and provider networks required for treating them appropriately. 28
    Managed Care

    Moreover, while managed care arrangements can provide greater flexibility in
    the design and development of individualized services, capitated payment
    arrangements create incentives to limit access and underserve enrollees.

    In a previous study of Medicaid managed mental health care, we found that
    HCFA had provided limited oversight of mental health managed care

    26 A formulary is a list of drugs or classes of drugs a health care system
    or other organization has identified as appropriate for treating patients.
    27 Chris Koyanagi and Jennifer Stevenson, Assessing Approaches to Medicaid
    Managed Behavioral Health Care, prepared by the Bazelon Center for Mental
    Health Law

    (Washington, D. C.: Kaiser Commission on the Future of Medicaid, July 1997).
    28 This draft report was prepared for the Congress in response to the BBA
    requirement that HCFA develop a set of safeguards for individuals with
    special health needs who are enrolled in Medicaid managed care, including
    persons with SMI. Pub. L. No. 105- 33, sec. 4705( c)( 2), 111 Stat. 251,
    500.

    carveouts. 29 Most monitoring occurred when the waiver application was made
    or renewed, and it varied in content and intensity across HCFA's regional
    offices. This stemmed in large part from a lack of central office guidance
    on the type of program monitoring and oversight that HCFA staff should
    perform. HCFA officials told us that the agency has recently revised the
    monitoring guide that regional offices use when conducting site visits of
    managed care programs, including those that provide services to people with
    SMI. 30 In addition, SAMHSA now reviews all waiver applications to help HCFA
    ensure that waiver applications appropriately address issues such as the
    capacity of the proposed delivery system, the array of benefits covered, and
    quality of care.

    Recognizing the risks for vulnerable individuals with special health care
    needs, the Congress in the BBA required HCFA to determine what safeguards
    may be necessary to ensure that the needs of these individuals who are
    enrolled in Medicaid managed care organizations are adequately met. HCFA's
    draft report in response to its BBA mandate contains a series of
    recommendations for HCFA, states, and managed care organizations regarding
    safeguards to help ensure that adults with SMI obtain needed services. HCFA
    recommends, for example, that states take steps to ensure that necessary
    services and supports are reasonably available to beneficiaries whose
    ability to function depends on receiving them. For example, HCFA suggests
    that states require in their contracts that managed care organizations'
    medical necessity decisions not always require improvement or restoration of
    functioning but may also provide for services needed to maintain functioning
    or compensate for loss of functioning. The draft indicates that HCFA intends
    to develop plans to implement its recommended safeguards, such as through
    legislative or regulatory action or changes in Medicaid administrative
    policies. HCFA has taken comparable action to protect children with special
    needs, another vulnerable population, when they are enrolled in state
    Medicaid managed care programs. HCFA developed interim review criteria with
    mandatory safeguards, which the agency plans to use to review state waiver
    applications that include these children in managed care.

    29 Medicaid Managed Care: Four States' Experiences With Mental Health
    Carveout Programs (GAO/ HEHS- 99- 118, Sept. 17, 1999). 30 Although the
    guide is in draft, it was distributed to HCFA regional offices in August
    2000.

    Concluding As people with SMI increasingly receive their care in the
    community, it is

    Observations important that they have access to the variety of mental health
    and other

    services they need. Because of the nature of SMI, people with this condition
    are often poor and must rely on the public mental health system for their
    care. Recently, states have stepped up their efforts to provide community-
    based services that give ongoing support to adults with SMI. These services
    are especially critical for people making the transition from institutions
    to the community, to help prevent their becoming homeless or returning to
    institutions. Homeless people with SMI especially need to receive a range of
    mental health, substance abuse, social support, and housing services to
    function in the community, and it is important for providers to link these
    services effectively.

    The use of managed mental health care by some state Medicaid programs has
    resulted in the flexibility to provide a wider array of services. However,
    given the potential for managed care providers reducing access to needed
    services, it is important for HCFA and state Medicaid programs to ensure
    that beneficiaries enrolled in managed care receive appropriate care. HCFA's
    current effort to identify safeguards recognizes the importance of people
    with SMI receiving the necessary services and continuity of care that are
    fundamental to their well- being. The agency has indicated that it will
    devise a set of actions to implement these recommended safeguards.
    Identifying the appropriate actions and effectively implementing them will
    be essential if the safeguards are to provide meaningful protection to this
    vulnerable population.

    Agency and Other We provided a draft of this report to SAMHSA and HCFA for
    comment.

    Comments SAMHSA generally agreed with the report's information on
    communitybased

    mental health services for people with SMI. SAMHSA noted two developments
    that it considers important�an increase in the number of people with SMI who
    are treated in the criminal justice system because of inadequate resources
    for community mental health supports and states' support of consumer- run
    services and increasing solicitation of consumers' views on the delivery of
    community- based services. We did not evaluate the link between the number
    of people with SMI treated in the criminal justice system and the adequacy
    of community mental health resources or assess the participation of people
    with SMI in the operation of community- based services. In its technical
    comments, SAMHSA highlighted several efforts on which SAMHSA and HCFA work
    collaboratively. For example, SAMHSA staff have accompanied HCFA staff on
    site visits to monitor various states'

    waiver programs, and a joint workgroup is developing indicators that states
    can use to predict problems or ensure success in their managed care
    programs.

    In its comments on the draft report, HCFA summarized additional efforts by
    the Medicaid and Medicare programs to serve the needs of people with SMI.
    For example, HCFA has made grant money available for states to test
    demonstration projects that focus on removing barriers to employment for
    people with disabilities, including people with SMI. SAMHSA and HCFA
    provided technical comments, which we incorporated where appropriate.
    (SAMHSA's and HCFA's comments are in apps. VI and VII.)

    We are sending copies of this report to the Honorable Donna E. Shalala,
    Secretary of HHS; the Honorable Joseph Autry, Acting Administrator of
    SAMHSA; the Honorable Robert A. Berenson, Acting Administrator of HCFA;
    officials of the state mental health and Medicaid agencies we visited;
    appropriate congressional committees; and others who are interested. We will
    also make copies available to others on request.

    If you or your staffs have any questions, please contact me at (202) 512-
    7119. An additional GAO contact and the names of other staff who made major
    contributions to this report are listed in appendix VIII.

    Janet Heinrich, Director Health Care�Public Health Issues

    Appendi Appendi xes xI

    Scope and Methodology To do our work, we interviewed officials at the Health
    Care Financing Administration (HCFA), the Substance Abuse and Mental Health
    Services Administration (SAMHSA), the National Institute of Mental Health
    (NIMH), and the National Association of State Mental Health Program
    Directors (NASMHPD), and we reviewed documents such as SAMHSA's National
    Expenditures for Mental Health and Substance Abuse Treatment 1997, SAMHSA's
    Center for Mental Health Services 1998 Survey of Mental Health Organizations
    and General Hospitals with Separate Psychiatric Services, and NASMHPD
    reports and data regarding the funding sources and expenditures of state
    mental health agencies. Although other federal agencies, such as the
    Department of Defense and the Veterans Administration, provide services to
    people with mental illness, we generally restricted our scope at the federal
    level to the Department of Health and Human Services (HHS) because HHS
    programs account for most federal mental health spending.

    We conducted site visits to Michigan and New Hampshire, where we interviewed
    state mental health and Medicaid officials and administrators of selected
    treatment programs. We selected these states for site visits because experts
    identified them as implementing exemplary programs. We also reviewed several
    states' Center for Mental Health Services monitoring reports, annual
    implementation reports, and Community Mental Health Services Block Grant
    applications.

    We also reviewed relevant literature and obtained information from
    individual experts as well as a number of organizations interested in mental
    health issues such as the American Psychiatric Association (APA), the
    American Psychological Association, the Bazelon Center for Mental Health
    Law, the International Association of Psychosocial Rehabilitation Services,
    the National Alliance for the Mentally Ill, the National Mental Health
    Association, and the Treatment Advocacy Center.

    We conducted our work between May and November 2000 in accordance with
    generally accepted government auditing standards.

    Appendi xII

    Involuntary Outpatient Commitment Most states have laws authorizing
    involuntary outpatient commitment, also referred to as mandatory or assisted
    outpatient treatment. APA defines mandatory outpatient treatment as court-
    ordered outpatient treatment for patients who suffer from severe mental
    illness (SMI) and who are unlikely to comply with such treatment without a
    court order. 1 APA considers this a preventive treatment for people who do
    not meet criteria for inpatient commitment and who need treatment in order
    to prevent relapse or deterioration that would predictably lead to their
    meeting inpatient commitment criteria in the foreseeable future. Some states
    have adopted standards for involuntary outpatient commitment that reflect
    this approach, but most have adopted the criterion of individuals presenting
    danger to themselves or others, the same standard they use for involuntary
    inpatient commitment. Mandatory outpatient treatment may also be used as
    part of a discharge plan for persons leaving inpatient facilities or as an
    alternative to hospitalization.

    Although 41 states and the District of Columbia have adopted involuntary
    outpatient commitment laws, they are rarely used in many of these states.
    The approach of using involuntary outpatient commitment has generated some
    controversy. 2 People who support it believe that it helps ensure treatment
    for people who need services but whose very illness prevents them from
    recognizing their need, thus enabling them to remain in the community
    instead of deteriorating in ways that could result in their being
    institutionalized. Those who oppose it are concerned that it threatens civil
    liberties, diverts scarce resources, and undermines the relationship between
    people with mental illness and service providers. Some states have preferred
    to take other approaches, such as the use of advance directives. These legal
    documents allow individuals to express their choices about mental health
    treatment or appoint someone to make mental health care decisions for them
    in case they become incapable of making their own decisions.

    1 APA, Mandatory Outpatient Treatment: A Resource Document of the American
    Psychiatric Association( Washington, D. C.: 1999). 2 See also National
    Health Policy Forum, “Outpatient Commitment in Mental Health: Is
    Coercion the Price of Community Services?” Issue Brief 757
    (Washington, D. C.: 2000).

    Selected SAMHSA Efforts to Help the Implementation of Community- Based

    Appendi xI II

    Programs Program Description Funding

    Community Action Grants for Awards community groups grants of less than
    $150,000 to sponsor a best

    $18.9 million over Services Systems Change practice targeted toward adults
    with SMI or adolescents and children with serious

    fiscal years 19972001 emotional disorders.

    Employment Intervention An eight- site demonstration program to learn about
    the most effective approaches

    $15.5 million over Demonstration Program for helping adults with SMI find
    and maintain competitive employment. fiscal years 19972001

    Knowledge Exchange Network Uses various media to provide information about
    mental health to users of mental $9. 3 million over

    health services, their families, the general public, policymakers,
    providers, and fiscal years 1997

    researchers. 2001

    National GAINS Center for A partnership with the National Institute of
    Corrections, the Office of Justice

    $4. 7 million, People with Co- Occurring

    Programs, and the Office of Juvenile Justice and Delinquency Prevention,
    this including $200,000

    Disorders in the Justice program collects information about effective mental
    health and substance abuse

    from the System

    services for people with co- occurring disorders who come in contact with
    the Department of

    justice system and disseminates it to states, localities, and criminal
    justice and Justice, over fiscal

    provider organizations. Its goals include assessing which services work for
    which years 1995- 2000

    people, interpreting information, putting it into a useful form, and
    stimulating the use and application of information.

    Center for Mental Health A nine- site program to examine the relative
    effectiveness of pre- and post- booking

    $11 million over Services' Jail Diversion

    diversion to community- based services for people with mental illness and
    fiscal years 1998 Program

    substance abuse disorders in the justice system. 2001 Access to Community
    Care

    A demonstration program that is testing the hypothesis that integrating $93
    million over and Effective Services and

    fragmented service systems will substantially help end homelessness among
    fiscal years 1994 Support Program

    people with SMI. 2000 Projects for Assistance in

    Annual formula grant that provides states and territories with a flexible
    funding $31 million in fiscal

    Transition From Homelessness source specifically to serve homeless
    individuals with SMI, including those with year 2000

    substance abuse problems. The program is designed to provide services that
    will enable homeless people with a mental disorder to find appropriate
    housing and mental health treatment.

    Consumer- Operated Services Eight- site program to evaluate the extent to
    which services operated by people

    $19.6 million over Program with SMI are effective in improving outcomes of
    adults with SMI when used as an

    fiscal years 1998 adjunct to traditional mental health services.

    2001

    Selected Community- Based Approaches to

    Appendi xI V

    Treating People With Serious Mental Illness The development of varied
    community- based treatment models has increased the ability to meet the
    complex needs of adults with SMI. Following are descriptions of several
    approaches and examples of how they are implemented in New Hampshire and
    Michigan.

    Assertive Community Assertive community treatment (ACT) is designed to
    provide

    Treatment comprehensive community- based services to people with SMI. ACT is

    intended for people with the most severe and persistent illnesses, including
    schizophrenia and bipolar disorders. It is also appropriate for persons who
    are significantly disabled by other disorders and have not been helped by
    traditional mental health services. Experts report that ACT is a good
    approach for people with SMI who have recently left institutions, typically
    do not schedule or keep appointments, or do not do well without a lot of
    support. ACT programs use a variety of treatment and rehabilitation
    practices, including medications; behaviorally oriented skill teaching;
    crisis intervention; support, education, and skill teaching for family
    members; supportive therapy; cognitive- behavioral therapy; group treatment;
    and supported employment.

    Under the ACT model, services are delivered by a mobile, multidisciplinary
    treatment team. Unlike traditional case management, in which the case
    manager often brokers services that others provide, the ACT staff are to
    work as a team to provide services directly. These services are to be
    available 24 hours a day, 365 days a year. The majority of ACT services are
    to be provided in the community, including the person's home, employment
    site, or places of recreation rather than in an office setting. The
    treatment team is to adapt and individually tailor interventions to meet the
    specific needs of the person with SMI rather than requiring the person to
    adapt to the team or the rules of a treatment program. Under the ACT model,
    services are to be designed to continue indefinitely, as needed.

    In order to provide the type and intensity of services required, ACT, as a
    program model, has a number of staffing requirements. First, the ACT team
    typically includes 10 to 12 mental health professionals, depending on the
    number needed to be able to provide services around the clock. All teams
    have a full- time leader or supervisor, a psychiatrist, a peer specialist,
    and a program assistant. ACT programs are designed to have a ratio of no
    more than 10 clients for each staff person, not counting the psychiatrist
    and program assistant. As a result, the typical maximum caseload is 120 for
    urban teams and 80 for rural teams.

    A provider we visited in New Hampshire operates three types of ACT teams.
    Two of these teams, one of which works exclusively with people who have both
    mental illness and a substance abuse disorder, are designed for people with
    SMI who generally reject treatment and need care available to them around
    the clock. These teams do not routinely operate in the evenings or on
    weekends, but staff are on call at all times. People are moved from these
    programs as their need for intensive services decreases, partly because the
    programs are very expensive to operate. The third team operates during
    normal business hours and is designed for individuals who have been
    institutionalized but accept treatment and do not require 24- hour care.

    Michigan offers ACT services statewide. Its program delivers a comprehensive
    set of treatment, rehabilitation, and support services to persons with SMI
    through a team- based outreach approach. A provider we visited in Michigan
    offers ACT services to persons who have been repeatedly hospitalized and who
    have failed to become stabilized on their medications. The provider
    generally does not offer ACT services until less intensive services have
    been tried and have failed. After 15 years of operation, about 65 to 70
    percent of the original participants continue to receive ACT services.

    Studies have found that ACT may be associated with reduced hospital
    admissions, shorter hospital stays, better social functioning, greater
    housing stability, fewer days homeless, and fewer symptoms of thought
    disorder and unusual activity. 1 Studies have also found that ACT services

    1 Anthony F. Lehman and others, “Cost Effectiveness of Assertive
    Community Treatment for Homeless Persons With Severe Mental Illness,”
    British Journal of Psychiatry, Vol. 174 (1999), pp. 346- 52. Anthony F.
    Lehman and others, “A Randomized Trial of Assertive Community
    Treatment for Homeless Persons with Severe Mental Illness,”
    presentation at the Annual Meeting of the American Psychiatric Association
    (Miami, Fla.: May 1995). Gary Morse and others, “An Experimental
    Comparison of Three Types of Case Management for Homeless Mentally Ill
    Persons,” Psychiatric Services, Vol. 48, No. 4 (1997), pp. 497- 503.
    Jerry Dincin and others, “Impact of Assertive Community Treatment on
    the Use of State Hospital Inpatient Bed- Days ,” Hospital and
    Community Psychiatry, Vol. 44, No. 9 (1993), pp. 833- 38. Gary R. Bond and
    others, “Assertive Community Treatment for Frequent Users of
    Psychiatric Hospitals in a Large City: A Controlled Study,” American
    Journal of Community Psychology, Vol. 18, No. 6 (1990), pp. 865- 87.

    cost less than other services, especially inpatient and emergency room care.
    2

    Supported Supported employment is an approach to help people with SMI
    succeed in

    Employment regular work settings by providing them ongoing training and
    support as

    needed. In supported employment, participants generally earn money for their
    work (usually at the prevailing wage) and work as regular employees
    alongside nondisabled employees (not segregated with other employees with
    disabilities, either mental or physical).

    Individual Placement and Support (IPS), the most studied supported
    employment approach, focuses on finding adults paid work in regular work
    settings and providing them training and support as long as necessary after
    placement, in contrast to more traditional approaches that provide testing,
    counseling, training, and trial work experiences before they seek
    competitive employment. IPS focuses on integrating clinical and vocational
    services, performing minimal preliminary assessments, conducting rapid job
    searches, matching people with jobs of their choice, and providing ongoing
    supports, such as helping with transportation or finding a substitute for
    the position if the person is having trouble with illness symptoms. Studies
    have found that participants in IPS programs have had higher employment
    rates than people involved in traditional programs. For example, an early
    study of IPS found that 56 percent of IPS participants had competitive jobs
    during their first year in the program, compared with 9 percent of those who
    stayed in a day treatment program that emphasized skills training groups,
    socialization groups, and sheltered work within the mental health center. 3

    The provider we visited in New Hampshire began offering IPS in 1995 because
    staff found it was effective at getting persons with SMI back to work.
    Further, they had earlier found that participants were not able to apply the
    skills learned in the provider's prior sheltered vocational training program
    to jobs outside that sheltered environment. The provider serves

    2 Anthony F. Lehman and others, “Cost Effectiveness of Assertive
    Community Treatment for Homeless Persons With Severe Mental Illness.”
    Daniel Chandler and others, “Cost Effectiveness of a Capitated
    Assertive Community Treatment Program,” Psychiatric Rehabilitation
    Journal, Vol. 22, No. 4 (1999), pp. 327- 36.

    3 Robert E. Drake and others, “Rehabilitative Day Treatment vs.
    Supported Employment: I. Vocational Outcomes,” Community Mental Health
    Journal, Vol. 30, No. 5 (1994), pp. 519- 32.

    225 people at a time in its IPS program and told us that about half of those
    have jobs at any given time.

    Supportive Housing Supportive housing addresses the needs of people with SMI
    who are homeless or at risk of becoming homeless. This approach combines

    housing with access to services and supports, such as case management
    services, substance abuse treatment, employment assistance, and daily living
    supports. Supportive housing refers to a range of housing interventions that
    can be transitional or permanent. Transitional housing is typically group
    housing, where the person can live for a predetermined period of time, with
    services and supports provided on- site. Permanent supportive housing, which
    includes single room occupancy hotels and apartments, has no predetermined
    time limits and generally includes access to services in the community.
    There appears to be no single housing model that is most effective for
    people with SMI. Experts have stated that linking housing and supportive
    services is crucial for helping people with SMI live independently and that,
    because of the varying needs of people with SMI who are homeless, a range of
    housing and service options is necessary.

    Selected HUD Programs That Can Assist

    Appendi xV

    Homeless People Who Have SMI Program Description Funding

    Section 8 Rental Certificate and Provides rental assistance to very low-
    income families,

    $10 billion in fiscal year 1999 Voucher Program elderly persons, and
    disabled persons for decent, safe, and

    sanitary housing in the private market. Single Room Occupancy Program
    Provides rental assistance to homeless individuals to obtain

    $17 million in fiscal year 1999 permanent housing in single- room occupancy
    units. Shelter Plus Care Provides rental assistance, together with
    supportive services

    $152 million in fiscal year 1999 funded from other federal, state, local,
    and private sources, to homeless people with disabilities. Program grants
    provide rental assistance payments through (1) tenant- based rental
    assistance, (2) sponsor- based rental assistance, (3) building owner- based
    rental assistance, or (4) single room occupancy assistance.

    Supportive Housing Program Provides grants to states, local governmental
    entities, private $581 million in fiscal year 1999

    nonprofit organizations, and community mental health associations to develop
    supportive housing and supportive services to assist homeless persons in the
    transition from homelessness and to enable them to live as independently as
    possible. Program funds may provide (1) transitional housing, (2) permanent
    housing for homeless persons with disabilities, (3) supportive services for
    homeless persons not living in supportive housing, (4) housing that is, or
    is a part of, an innovative development of alternative methods designed to
    meet the long- term needs of homeless persons, and (5) safe havens. a

    a Safe havens are designed to provide safe residences for homeless people
    with SMI who are living on the street and unwilling or unable to participate
    in mental health or substance abuse treatment programs or to receive support
    services. Safe havens are intended to reach homeless people who are
    suspicious or afraid of more structured supportive housing.

    Comments From the Substance Abuse and

    Appendi xVI Mental Health Services Administration

    Comments From the Health Care Financing

    Appendi xVII Administration

    Appendi xVI II

    GAO Contact and Staff Acknowledgments GAO Contact Helene F. Toiv, (202) 512-
    7162 Staff

    Other major contributors to this report were Renalyn Cuadro, Nila
    GarcesOsorio, Acknowledgments

    Brenda R. James, Janina R. Johnson, Carolyn Feis Korman, and Craig Winslow.

    (201071) Lett er

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    GAO United States General Accounting Office

    Page 1 GAO- 01- 224 Mental Health

    Contents

    Contents Page 2 GAO- 01- 224 Mental Health

    Page 3 GAO- 01- 224 Mental Health United States General Accounting Office

    Washington, D. C. 20548 Page 3 GAO- 01- 224 Mental Health

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    Appendix I

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    Appendix II

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    Appendix III

    Page 25 GAO- 01- 224 Mental Health

    Appendix IV

    Appendix IV Selected Community- Based Approaches to Treating People With
    Serious Mental Illness

    Page 26 GAO- 01- 224 Mental Health

    Appendix IV Selected Community- Based Approaches to Treating People With
    Serious Mental Illness

    Page 27 GAO- 01- 224 Mental Health

    Appendix IV Selected Community- Based Approaches to Treating People With
    Serious Mental Illness

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    Appendix V

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    Appendix VI

    Appendix VI Comments From the Substance Abuse and Mental Health Services
    Administration

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    Appendix VII

    Appendix VII Comments From the Health Care Financing Administration

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    Appendix VII Comments From the Health Care Financing Administration

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    Appendix VIII

    United States General Accounting Office Washington, D. C. 20548- 0001

    Official Business Penalty for Private Use $300

    Address Correction Requested Bulk Rate

    Postage & Fees Paid GAO Permit No. GI00
    *** End of document. ***