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Minnesota’s Mental Health System
Programs, Funding and Regulations
Prepared for
BlueCross and BlueShield of Minnesota
Michael Scandrett
Deanna Mills
December 2002
TABLE OF CONTENTS
I. Overview of Minnesota’s Mental Health System ........................................................................... 1
II. Spending on Mental Health Services ............................................................................................. 6
III. Mental Health Programs and Activities ........................................................................................ 11
A. Publicly Funded Mental Health Programs and Activities ........................................................ 11
1. Public Mental Health Programs ...................................................................................... 18
a. Children’s Mental Health Programs .......................................................................... 18
b. Adult Mental Health Programs .................................................................................. 31
c. State Ombudsman for Mental Health and Mental Retardation ................................. 43
d. Facilities of DHS ....................................................................................................... 44
2. Public Health Insurance Programs .................................................................................. 44
a. Public Insurance: Fee-for-Service.............................................................................. 45
b. Prepaid Health Care Plan ........................................................................................ 46
c. State Children’s Health Insurance Program (SCHIP) ..................................................47
3. Other State Publicly Funded Mental Health Programs .....................................................47
a. Social Services ...........................................................................................................47
b. Public Health Services .............................................................................................. 48
c. Schools ..................................................................................................................... 50
d. Corrections ............................................................................................................... 50
e. Courts ........................................................................................................................53
f. Housing Programs .....................................................................................................53
g. Employment Support Services ..................................................................................53
h. Higher Education ...................................................................................................... 54
4. Mental Health Programs Administered by Federal Agencies .......................................... 54
a. Federal Department of Health and Human Services ................................................. 54
b. Centers for Medicare and Medicaid .......................................................................... 56
c. Substance Abuse and Mental Health Services Administration (SAMHSA) ................ 56
d. Veterans Services and Other Federal Agencies ......................................................... 59
B. Privately Funded Mental Health Programs ............................................................................ 60
IV. Mental Health Providers and Services ......................................................................................... 61
V. Eligibility of Individuals for Mental Health Programs ................................................................... 68
VI. Mental Health Regulation.............................................................................................................70
A. State and Federal Regulations ...............................................................................................70
B. Consumer Protections............................................................................................................ 75
C. Program Requirements ..........................................................................................................76
D. Accreditation and Certification Requirements........................................................................78
VII. Mental Health Issues and Trends ..................................................................................................79
VIII.Conclusion ................................................................................................................................. 83
i
APPENDICES
Appendix A-1: Programs and System Elements in Minnesota Mental Health System
Appendix A-2: Programs in Federal Mental Health System
Appendix B: Minnesota Mental Health Laws
Appendix C: Selected Minnesota Rules with Mental Health Related Provisions
Appendix D: Federal Laws Relating to Mental Health
Appendix E: Federal Regulations Relating to Mental Health
Appendix F-1: U.S. Surgeon General’s Report: Executive Summary
Appendix F-2: Chapter 6, Organizing and Financing Mental Health Services
Appendix G: A Guide to Mental Health Data in Minnesota
ii
TABLES
Table A: Public and Private Spending on Mental Health Services in Minnesota
Table B: Who Pays for Mental Health Services?
Table C: Which Public Program Pays for Mental Health Services
Table D: Funding Sources for Mental Health Services
Table E: Public Mental Health Spending in Minnesota FY 2001 (DHS)
Table F: Minnesota Department of Human Services Funding Flows: Children’s Mental
Health Services
Table G: Percent of SFY 2001 DHS Funding by Revenue Source: Children
Table H: Percent of SFY 2001 DHS Funding by Type of Service: Children
Table I: DHS Funding for Mental Health Services - Fiscal 2001 - Children Only
Table J: Minnesota Department of Human Services Funding Flows: Adult Mental Health
Services
Table K: Percent of SFY 2001 DHS Funding by Revenue Source: Adults
Table L: Percent of SFY 2001 DHS Funding by Type of Service: Adults
Table M: DHS Funding for Mental Health Services - Fiscal 2001 - Adults Only
Table N: Locations of Minnesota’s Correctional Facilities
Table O: Federal Department of Health and Human Services Operating Divisions Budget
FY 2002
Table P: SAMHSA Funding for Minnesota FY 2001/02
Table Q: Mental Health Providers
Table R: Eligibility for Coverage for Mental Health Services
Table S: Trend in Minnesota’s Adult Mental Health Funding by Major Source of Funding
iii
LIST OF ABBREVIATIONS
ADA Americans with Disabilities Act
ADHD Attention Deficit Hyperactivity Disorder
APNs Accountable Provider Networks
CADI Community Alternatives for Disabled Individuals
CD Chemical Dependency
CDC Centers for Disease Control and Prevention
CHS Community Health Services
CISNs Community Integrated Service Networks
CMHC Children’s Mental Health Collaboratives
CMS Centers for Medicare and Medicaid
CSSA Community Social Services Act
DHS Minnesota Department of Human Services
EBD Emotional Behavioral Disorder
ECPs Essential Community Providers
EJJ Extended Jurisdiction Juveniles
ERISA Employee Retirement Income Security Act
FEMA Federal Emergency Management Agency
FFS Fee-For-Service Payment System
GAMC General Assistance Medical Care
GRH Group Residential Housing
HMO Health Maintenance Organization
IED Individualized Education Program
IFSP Individualized Family Service Program
IMD Institutions for Mental Diseases
MA Medical Assistance
MDH Minnesota Department of Health
MH Mental Health
MR Minnesota Rule
MS Minnesota Statute
NIMH National Institute of Mental Health
OHI Other Health Impairment
OMB Office of Management and Budget
PATH Projects for Assistance in Transition from Homelessness
PHCP/PPHP Prepaid Health Care Plan
RTC Regional Treatment Center operated by DHS
SAMHSA Federal Substance Abuse and Mental Health Services Administration
SCHIP State Children's Health Insurance Program
SED Severe Emotional Disturbance
SOS State Operated Services administered by DHS
SPMI Serious and Persistent Mental Illness
VA Veterans Administration Services
iv
v
ABOUT THE AUTHORS
Michael Scandrett, J.D. has been a trusted advisor and policy
analyst for Minnesota’s health care leaders and policy makers for
20 years. He was an influential force in the formation of nearly all
of Minnesota’s major public policies and reforms in health care,
from managed care regulation to the MinnesotaCare program for
the uninsured, from health care quality measurement to long-
term care reimbursement policies. On the private side, he has
helped organizations and coalitions launch successful, innovative
programs in such challenging and unwieldy areas as community-
wide quality measurement, managed care for persons with disabilities, and violence
prevention. Both attorney and consultant, he is often called upon to bring his critical
thinking to bear on complex legal, policy, and regulatory challenges to help fashion
solutions that are both politically acceptable and administratively feasible, but which also
produce concrete and measurable results. Michael received his law degree from the
University of Minnesota Law School.
Deanna Mills, M.P.H. is an expert in community health, and has
over 20 years’ experience in building coalitions based on a broad
and inclusive concept of community health to address complex
health and social problems. Her passion has become reality
through such projects as the Healthy Learners Board, which
collaborates to give disadvantaged children the extra help they
need to begin the school day alert, nourished, and ready to learn.
As an adjunct faculty member at the University of Minnesota, her
involvement in the Community Health Intersection Program has
placed her at the keynote’s podium in Hong Kong and again in
Budapest, reporting the program’s progress and successes. As Executive Director of
Fremont Community Health Services, she directed all aspects of a multi-million dollar
nonprofit community health center for low-income patients. She received her Master of
Public Health degree from the University of Minnesota.
Halleland Health Consulting; 220 South 6th Street, 600 Pillsbury Center South,
Minneapolis, MN 55402-4501; Tel.: 612-338-1838; Fax: 612-338-7858
vi
Minnesota’s Mental Health System
Programs, Funding and Regulations
I. Overview of Minnesota’s Mental Health System
Mental illness has a profound effect in our community. The U. S. Surgeon General’s report1
estimated that 28 percent of the nation’s adults and 21 percent of children ages 9 to 17 have a
mental health or chemical dependency (CD) disorder. Three percent have both a mental health
and CD disorder. However, the rate of CD may be as high as 50 percent for persons with serious
mental illness. Using national trends as a rough indicator of Minnesota’s experience, this means
that over one million Minnesota adults and 140,000 Minnesota children have a mental health or CD
disorder.
In this report, “mental health system” means how mental health services are funded, organized,
delivered, and regulated. Minnesota’s mental health system is divided into two overlapping
sectors: public and private.
Public Mental Health System. The public mental health system is a complex network of funding,
services, and programs scattered across many public agencies, including schools, courts,
corrections, social service agencies, and public health departments, to name a few. Interagency
coordination of public sector activities has been a major challenge. Over the years, a number of
attempts have been made to promote greater collaboration between agencies, at both the state
and local levels. These attempts have produced mixed results, although recent efforts appear more
promising.
While many different public agencies, programs, and funding sources exist, there is one dominant
t public mental health system – a state-supervised, county-administered system for serving
primarily adults with Serious and Persistent Mental Illness (SPMI) and children with Severe
Emotional Disturbance (SED). The Minnesota Department of Human Services (DHS) is the lead
public agency for this system, but most services and programs are administered at the local level
through counties and local service providers. The public mental health system has spawned a
variety of specialized services and providers whose primary function is providing publicly funded
services to SPMI adults and SED children. These services and providers are subject to extensive
funding, program, and licensure requirements established by DHS and by the federal Department
of Health and Human Services.
Funding for this system comes from federal, state, and local governments through a variety of
channels, including mental health grants, social services funding, and community health funding.
Public health insurance programs (Medical Assistance (MA), General Assistance Medical Care
(GAMC), and MinnesotaCare) also provide a significant amount of funding for those mental health
1
U.S. Department of Health and Human Services. Mental Health: A Report of the Surgeon General Rockville, MD: U.S.
Department of Health and Human Services, Substance Abuse and Mental Health Services Administration, Center for Mental
Health Services, National Institute of Health, National Institute of Mental Health, 1999. See also Appendix F-1 and F-2.
Minnesota’s Mental Health System 1
Programs, Funding and Regulations, December - 2002
services that are provided through the health care system and covered by public health insurance
programs.
Private Mental Health System. The private mental health system is a combination of private
health coverage, individual out-of-pocket expenditures, and services provided by private,
nonprofit, and charitable organizations. The dominant source of funding is private health
coverage. Less detailed information is available about where and how money is spent in the
private sector, compared to the public sector. Licensed health care professionals, such as doctors,
psychologists, and health care facilities such as hospitals provide most mental health services in
the private sector.
Separate and Overlapping. The public and private mental health systems look very different from
each other. Each is subject to different funding mechanisms and incentives, regulatory
requirements, service delivery systems, and provider types. These differences arise primarily out of
the different histories and missions of the two systems. The public sector’s focus is on providing
publicly funded services to adults and children with the most serious mental health problems. The
public mental health system emerged in the social services sector of state government. In the
private sector, mental health services are only one component of the entire spectrum of health
care services that are funded through private insurance plans for groups or populations that include
both sick and healthy individuals.
MENTAL HEALTH
FUNDING
Health Care Human Services
$ $
Hospitals Support services
Physicians MH clinics Social services
Psychologists RTCs Outreach
Case mgmt Prevention
Health plans
Residential treatment
Minnesota’s Mental Health System 2
Programs, Funding and Regulations, December - 2002
Minnesota’s Mental Health System 3
Programs, Funding and Regulations, December - 2002
Even though the public and private mental health systems look very different, the line between
these systems is not clear -- instead, a large gray area exists where the two systems overlap. At
times, individuals are simultaneously eligible for both public and private services. Others find
themselves moving back and forth between the two systems as they go through changes in their
mental health condition, employment status, or enrollment in private health coverage. This
shifting creates the potential for disruption in individuals’ continuity of care and incentives for both
public and private organizations to cost-shift to the other. Additionally, some people end up in a
gap between the two systems where they have no coverage for mental health services. For
example, a person might lose a job and with it health coverage, but s/he might not be eligible for a
public program because of income or because s/he does not fit into a category of eligibility. In
some cases, s/he would not become eligible until the illness worsens to the point where s/he
becomes eligible as disabled or as seriously and persistently mentally ill.
ELIGIBILITY for
MH PROGRAMS
Health Care Human Services
Diagnosed SPMI or SED
mental health MH Clinics Treatment by
condition RTCs authorized and
Treatment by county approved
health care human services
professional or provider
facility
Minnesota’s Mental Health System 4
Programs, Funding and Regulations, December - 2002
Mental health services and activities are “regulated” in many different ways. First, there are state
and federal regulations that govern the activities of individuals and organizations engaged in
providing or administering mental health services. Second, government entities that provide
funding for mental health services and programs impose program requirements on those who
receive their funds or who deliver services using the funds. Program requirements are often very
similar in their substance, as well as their impact on laws and regulations. Finally, there are
accreditation and certification requirements that certain individuals and organizations “voluntarily”
meet in order to receive special recognition or privileges, or to meet the requirements of
purchasers or payors.
MENTAL HEALTH
REGULATION
Health Care Human Services
MDH Licensing MDH/DHS DHS
Boards MH clinics Group homes
Hospitals Physicians RTCs Residential treatment
Health plans Psychologists County mandates
Etc. Etc.
A Snapshot. The goal of this report is to provide a snapshot of Minnesota’s mental health system.
This task proved to be challenging for a number of reasons. First, there are several different ways
to examine the system, each providing a different perspective. A single snapshot of a house
cannot capture every interior and exterior feature of the house, nor can a single approach to
describing the mental health system provide complete understanding. This report describes the
system from several different perspectives in order to provide a more complete, three-dimensional
picture.
A second challenge is the overwhelming quantity of laws, programs, reports, and information on
mental health. A comprehensive report on all aspects of Minnesota’s mental health system would
require many volumes and thousands of pages. This report provides an overview of the major
Minnesota’s Mental Health System 5
Programs, Funding and Regulations, December - 2002
parts of the system and gives detailed information on only selected topics, including state laws and
public mental health programs.
The final challenge encountered in preparing this report is that a snapshot captures only a single
point in time. The mental health system is in constant motion. This report describes the system as
it currently exists, and also identifies the general trends that will help explain what came before
and what lies ahead.
Report Sections. This report is organized into the following sections:
1. Overview of Minnesota’s Mental Health System
2. Spending on Mental Health Services
3. Mental Health Programs and Activities
4. Mental Health Providers and Services
5. Eligibility of Individuals for Mental Health Programs
6. Mental Health Regulation
7. Mental Health Issues and Trends
8. Conclusion
9. Appendices
Scope. The Minnesota mental health system is very complex. Activities and funding are dispersed
across a wide array of public and private agencies, programs, and service providers. It is impossible
to identify every mental health dollar and activity. Some are too small to show up on the radar
screen, while others are a part of larger, non-mental health system where the mental health
portion is not broken out separately. The goal of this report is to cast a wide net and identify as
many programs and activities as possible. Even so, research for this report did not uncover
information on every aspect of the mental health system.
This report assumes that the reader has general knowledge of Minnesota’s health care system,
health care regulation in general, and public health insurance programs such as MA and
MinnesotaCare, and this report focuses specifically on the mental health aspects of Minnesota’s
health care system and public programs.
The mental health regulatory system is complex and extensive. Some regulations are specific to
mental health, others govern health plans and health care providers, generally. This report
concentrates on state laws and regulations that are specific to mental health treatment and
services.
Finally, this is a factual report. It describes the current state of affairs in mental health funding,
programs, and regulations, with a brief discussion of the major trends and issues that affect
funding, programs, and regulations. It does not include significant research on the following
topics, except in instances when they interface directly with the state mental health system:
1. Chemical dependency
2. Developmental disabilities, mental retardation, and related conditions
Minnesota’s Mental Health System 6
Programs, Funding and Regulations, December - 2002
Acknowledgements. This report draws heavily on reports and data provided by the staff of DHS
and other government agencies. The report could not have been completed without their
assistance.
Minnesota’s Mental Health System 7
Programs, Funding and Regulations, December - 2002
II. Spending on Mental Health Services
A total of more than $1,175,000,000 was spent on mental health services in Minnesota in 2001. In
comparison, total annual health care spending in Minnesota is about $14,750,000,000. However,
unlike the total health care spending figure, the mental health amount reflects more than just
health care expenditures; it also includes social services, housing, employment services and other
non-medical services. Of this amount, approximately $769 million, or two-thirds of the total, was
public dollars and $406 million, or one-third, was private dollars. These figures understate the real
amounts because specific dollar amounts were not available for mental health spending for several
public agencies that provide some mental health services and for mental health spending by
private charitable organizations.
Table A summarizes the major sources of public and private funding for mental health services.
Table B illustrates the proportion of mental health spending that comes from each funding source.
(Remainder of page intentionally left blank)
Minnesota’s Mental Health System 8
Programs, Funding and Regulations, December - 2002
TABLE A
Public and Private Spending on Mental Health Services in Minnesota
(2001 in millions)
PUBLIC FUNDING Subtotals Totals
Public Health Insurance Programs
Medicare $94.0
Medical Assistance 131.1
GAMC 11.4
MinnesotaCare 4.6
Prescription Drugs for State Programs 99.2
Subtotal Public Health Insurance 340.3
Public Mental Health Programs
State Payments 213.2
County Payments 139.1
Federal Payments 41.0
Subtotal Mental Health Programs 393.3
Other Public Funds
Corrections 5.0
Education Unknown
Indian Health Service Unknown
Public Health Unknown
Veterans Services 30.3
Subtotal Other Public Funds 35.3
TOTAL PUBLIC FUNDING 768.9
PRIVATE FUNDING
Health Insurance
Commercially Insured 174.4
Self-Insured 179.0
Subtotal Health Insurance 353.4
Out-of-Pocket Spending 52.4
TOTAL PRIVATE FUNDING 405.8
GRAND TOTAL PUBLIC AND PRIVATE SPENDING $1,174.7
Sources and assumptions for Table A:
These are rough estimates using available sources.
Unless otherwise indicated, the source is the report of the legislative auditor, which is 1999 dollars trended forward to 2001
at an estimated growth rate of 14 percent over two years, the same growth rate as occurred in the prior two years.
Out-of-pocket for insured individuals based on legislative auditor’s report estimate of 20 percent for self-insured enrollees
($31M) and 10 percent for commercial enrollees ($15M), Legislative Auditor’s Report p. 23.
Corrections number from the Minnesota Department of Corrections.
Medicare spending was derived from total Medicare spending in Minnesota (3,137,000,000 according to Henry J. Kaiser
Family Foundation reports), using an assumption of mental health spending of 3 percent ($94,110,000). Academy for Health
Services Research and Health Policy. A Preliminary Analysis of Part A and Part B Medicare Expenditures for Mental Health
Services – 1996. Joan E. DaVanzo, PhD, Mary Jo Gibson, MA, Christina Kolich, MSW, Allen Dobson, PhD.
Veterans number was provided by Robert Rosenheck MD, Director VA Northeast Program Evaluation Center, Professor of
Psychiatry and Public Health, Yale Medical School, VA Connecticut Healthcare System, 950 Campbell Avenue, West Haven,
Connecticut 06516.
Public mental health program numbers also include money drawn from community social services and community health
block grant programs.
Minnesota’s Mental Health System 9
Programs, Funding and Regulations, December - 2002
TABLE B
Who Pays For Mental Health Services?
Other Public Funds
3%
Private Health Insurance
30%
Public Mental Health
Programs
34%
Out of Pocket
4%
Public Insurance
Programs
29%
Minnesota’s Mental Health System 10
Programs, Funding and Regulations, December - 2002
Public Funding. Forty-four percent of public funding is paid for by public health insurance
programs, such as Medicare and Medicaid, and 51 percent is from federal, state, and local mental
health programs. The remaining five percent comes from other governmental agencies.
Most public funding for mental health services is administered through the state-supervised,
county-administered mental health system established under state law. Within this system, public
health insurance programs generally pay for mental health services that are “medical” in nature,
such as hospital care, prescription drugs, and treatment provided by doctors and other licensed
health care professionals. State and federal governments are the primary source of funding for
these services. Other mental health services such as “halfway houses” and community support
services are generally paid for by dedicated mental health funding provided through the human
services system. Spending for these services come from a mix of county, state, and federal dollars.
For example, public health insurance programs funded by state and federal dollars pay for 97.7
percent of publicly funded acute care hospital mental health services for children. In contrast,
counties use human services money to pay for 67.1 percent of the cost of residential mental health
treatment for children.
The nature of funding depends on the mental illness of the patient. Adults with SPMI and children
with SED are eligible for the full range of mental health services mandated under the state mental
health acts. They are often also eligible for public health insurance programs based on their
income and/or disability status. Adults and children with less serious mental health problems
receive public funding if they are eligible for and enrolled in a public health insurance program for
low-income persons. Counties also provide publicly funded mental health services to persons who
do not have health coverage or who have coverage but need services that are non-medical in
nature.
In most parts of the state, non-disabled persons who are eligible for a public health insurance
program will generally be required to enroll in a Prepaid Health Care Plan (PHCP) and receive their
health care services, including mental health services, through a Health Maintenance Organization
(HMO). This means they are required to use the HMO’s contracted provider network and are
subject to the HMO’s requirements relating to referrals, prior authorization, and medical necessity
determinations. Disabled persons and persons with SPMI or SED, however, are not required to
enroll in PHCP. The state is expanding PHCP in phases and at this time disabled persons are
excluded from mandatory enrollment. They instead receive coverage through the state’s fee-for-
service system unless they opt to enroll in, or remain in, a PHCP.
Detailed information on different sources of public funding for mental health services is provided in
Section III on Mental Health Programs and Activities.
Minnesota’s Mental Health System 11
Programs, Funding and Regulations, December - 2002
Private Funding. An estimated $406 million a year is spent on mental health services from private
sources. Eighty-seven percent of private spending on mental health services is paid for by health
insurance and the majority of the remaining amount is paid for by individuals out-of-pocket. The
Legislative Auditor2 estimates that mental health services represent about 5.3 percent of total
health care spending by Minnesota’s private health plans.
Mental health spending is basically split evenly among public mental health programs, private and
public health insurance. The next section will break down these broad strokes into greater detail.
(Remainder of page intentionally left blank)
2
Insurance for Behavioral Health Care, February 2001. Evaluation reports can be obtained free of charge from the Legislative
Auditor's Office, Program Evaluation Division, Room 140, 658 Cedar Street, Saint Paul, Minnesota 55155, 651-296-4708.
Minnesota’s Mental Health System 12
Programs, Funding and Regulations, December - 2002
III. Mental Health Programs and Activities
Dozens and dozens of public and private mental health programs and activities exist in Minnesota,
ranging from small, targeted government programs designed to address specific needs to the
Minnesota comprehensive mental health system of public services and funding for adults and
children with the most serious mental health problems. Two tables in Appendix A list those we
have identified in Minnesota (A-1) and in federal government (A-2). The vast majority of mental
health programs and services are publicly funded. The main “program” in the private sector is
private health insurance, which covers the costs of mental health services as part of a larger
continuum of health care services.
A. Publicly Funded Mental Health Programs and Activities
The Minnesota Comprehensive Mental Health Act was enacted in 1987 to create an organized
framework for services to adults and children with serious mental health illnesses. This Act was
split into two acts in 1989, one for adults and one for children. At that time, DHS proposed to
establish a consolidated funding system similar to the CD consolidated treatment fund, but the
Minnesota Legislature did not enact the new funding system. The mental health acts create a
state-supervised and county-administered system, with the counties designated as the local
mental health authority for purposes of state and federal grants.
DHS is the lead agency responsible for administering the public system of direct services to adults
and children with the most serious mental health problems. County human services agencies are
responsible for ensuring availability and access to community mental health services for county
residents. Under this arrangement, Minnesota oversees the statewide system and provides grants
and funding streams of state and federal money that are tapped by the counties to provide services
to their residents. Counties may either provide services directly or contract with vendors to
provide mental health services.
The major funding sources for the public mental health system include:
Payments from public health insurance programs such as MA
Dedicated federal and state mental health block grants
Federal, state, and local social services funding administered under Minnesota’s
Community Social Services Act (CSSA)
Federal, state, and local public health funding administered under Minnesota’s
Community Health Services (CHS) funding
Direct appropriations for state-operated facilities
The source of funding depends on the type of mental health service and the mental illness of the
patient. If a patient is enrolled in a public health insurance program, the program pays for covered
health care services, including mental health services, when provided by a licensed health care
provider who is authorized to provide the service. If a mental health service is not covered by a
Minnesota’s Mental Health System 13
Programs, Funding and Regulations, December - 2002
public insurance program or the patient is not enrolled in a public insurance program, payment
must come from another source. If the patient is classified as SPMI or SED, the public mental
health system pays for or provides the service, although the patient may be required to contribute
to the cost of services according to a sliding fee scale matched to income. Table C illustrates which
public program pays for various mental health services. As the chart indicates, there are gray areas
where it may be unclear which program should pay.
(Remainder of page intentionally left blank)
Minnesota’s Mental Health System 14
Programs, Funding and Regulations, December - 2002
TABLE C
Which Public Program Pays for Mental Health Services
MH Serious MH Disabled
Diagnosis SPMI or SED SPMI or SED
No diagnosed mental Diagnosed mental illness Serious and persistent mental illness
illness or emotional or emotional disturbance or severe emotional disturbance
disturbance
Not Disabled Disabled
Public insurance Public insurance programs Public insurance programs: Public insurance programs
programs: Fee-for-service Fee-for-service Fee-for-service
No coverage beyond Prepaid health plans. Prepaid health plans are optional. In some cases, disabled
screening for a mental persons may voluntarily enroll
health problem. in a prepaid health plan
Mental health system:
Mental health system: Only limited services are Mental health system: Mental health system:
Provides general available through the Mental health system pays for Mental health system pays for
prevention, screening, public mental health services not covered by public services not covered by public
public awareness system. insurance insurance
services Case management services are paid Case management services are
for by FFS MA, even if recipient is paid for by FFS MA, even if
enrolled in a prepaid health plan. recipient is enrolled in a
prepaid health plan.
Minnesota’s Mental Health System 15
Programs, Funding and Regulations, December - 2002
Table D describes the major categories of funding for mental health services that are tracked by
DHS.
TABLE D
Funding Sources for Mental Health Services
Source Abbreviation Description
Medical Assistance (Medicaid) MA A fund composed of federal, state, and local shares,
which pays for medical services, including some mental
health services, for low-income persons. (Often referred
to by its federal name, Medicaid.)
General Assistance Medical Care GAMC A state fund for low-income adults not eligible for MA.
This includes adults living in IMDs, which include some of
the state’s adult residential treatment centers.
MinnesotaCare State health insurance for low income families and
children who are not eligible for MA.
Community Mental Health Comm MH State allocations and grants for CSP and FCSS services,
Funds community residential treatment, early
identification/intervention, enhanced housing support,
crisis services, and services to homeless persons.
Community Mental Health CMHS A federal grant to the state, some of which the state uses
Block Grant to fund demonstration projects. Most funds flow through
county governments, and are restricted to programs
serving the target population.
Regional Treatment Center RTC A state fund for the state-operated RTCs, with a small
Fund county match.
Group Residential Housing Fund GRH A state fund to cover the room and board costs for
persons in adult residential treatment facilities.
Community Social Services CSSA State block grants to counties for social services including
Fund most mental health services. County provides a 50
percent match.
Title XX Title XX A federal block grant to the state for social services,
including most mental health services, which the state
passes on to counties with the CSSA grant.
Title IVB and IVE Title IVB Federal grants for children’s social services. Some of
Title IVE these funds are for services and some go directly to the
mental health clients.
Pre-Paid Health Plans PPHP Federal and state Medicaid, GAMC, and MinnesotaCare
funds pre-paid on a capitation basis for eligible
populations.
Family Preservation Fund FPF State funds to support permanency planning for children.
Some go to mental health clients.
Minnesota’s Mental Health System 16
Programs, Funding and Regulations, December - 2002
DHS maintains detailed state level information on funding sources and where money is spent.
There are some important differences between the programs, services, and funding sources for
adults and for children. For this reason, DHS tracks funding separately for the two systems. Table
E summarizes the overall sources of public funding under the mental health acts for adults and
children. Further details on programs and funding for children and adults will be described in this
section of the report. Also refer to Appendix G for other sources of data in state agencies.
(Remainder of page intentionally left blank)
Minnesota’s Mental Health System 17
Programs, Funding and Regulations, December - 2002
TABLE E
Public Mental Health Spending In Minnesota FY 2001 (DHS)
State County Federal Other Total
Total Children $47,298,827 $50,723,339 $49,571,907 $6,395,216 $153,989,289
Total Adults $245,004,825 $64,635,331 $69,739,546 $8,708,374 $388,088,076
Total $292,303,652 $115,358,670 $119,311,453 $15,103,590 $542,077,365
Percentage 54% 21% 22% 3% 100%
The mental health acts create more than a funding system. They impose additional responsibilities
on state and local agencies, including needs assessments, service development, and quality
assurance. The law also requires service coordination at the state and local levels.
The publicly funded mental health system consists of many categorical programs and funds
administered by at least four different state agencies. Efforts are being made by the various state
agencies involved with mental health to better communicate and coordinate activities. In 2000, a
new multi-agency collaborative was formed called “Toward Better Mental Health: A Community
Approach.” This collaborative includes primarily the departments of Health, Human Services,
Corrections, and Children, Families and Learning, although other state departments participate.
The “Toward” collaborators sponsored public forums in 2001 and are working together to study
important policy areas. A citizen briefing book is available through DHS. The briefing book can be
downloaded at the following internet address:
http://www.dhs.state.mn.us/mental_health/tbmh/reports_pubs/default.asp
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Minnesota’s Mental Health System 18
Programs, Funding and Regulations, December - 2002
http://www.dhs.state.mn.us/mental_health/tbmh/about_tbmh/overview.asp
Minnesota’s Mental Health System 19
Programs, Funding and Regulations, December - 2002
1. Public Mental Health Programs
a. Children’s Mental Health Programs
The Minnesota Children’s Mental Health Act mandates “the creation of a unified, accountable,
comprehensive children’s mental health service delivery system” throughout Minnesota.
Minnesota Statute section 245.487, subd. 3 (2001). County boards are required to create
mechanisms for coordination, service, and advocacy.
DHS estimates that 33,000 of approximately 60,000 Minnesota children with SED are the
responsibility of the public children’s mental health system. The definition of SED as compared to
Emotional Disturbance is described below.
Definition of Severe Emotional Disturbance.
For purposes of eligibility for case management and family community support services, "child with
severe emotional disturbance” means a child who has an emotional disturbance and who meets one
of the following criteria:
(1) the child has been admitted within the last three years or is at risk of being admitted to
inpatient treatment or residential treatment for an emotional disturbance; or
(2) the child is a Minnesota resident and is receiving inpatient treatment or residential treatment
for an emotional disturbance through the interstate compact; or
(3) the child has one of the following as determined by a mental health professional: (i) psychosis
or a clinical depression; or (ii) risk of harming self or others as a result of an emotional
disturbance; or (iii) psychopathological symptoms as a result of being a victim of physical or
sexual abuse or of psychic trauma within the past year; or
(4) the child, as a result of an emotional disturbance, has significantly impaired home, school, or
community functioning that has lasted at least one year or that, in the written opinion of a
mental health professional, presents substantial risk of lasting at least one year.
Note: The statutes provide that the term "child with severe emotional disturbance" should be used
only for purposes of county eligibility determinations. In all other written and oral communications,
case managers, mental health professionals, mental health practitioners, and all other providers of
mental health services are required to use the term "child eligible for mental health case
management" in place of "child with severe emotional disturbance.”
Minnesota Statutes, section 245.4871, subdivision 6.
Minnesota’s Mental Health System 20
Programs, Funding and Regulations, December - 2002
Definition of Emotional Disturbance.
"Emotional disturbance" means an organic disorder of the brain or a clinically significant disorder of
thought, mood, perception, orientation, memory, or behavior that:
(1) is listed in the clinical manual of the International Classification of Diseases (ICD-9-CM),
current edition, code range 290.0 to 302.99 or 306.0 to 316.0 or the corresponding code in the
American Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders
(DSM-MD), current edition, Axes I, II, or III; and
(2) seriously limits a child's capacity to function in primary aspects of daily living such as personal
relations, living arrangements, work, school, and recreation.
"Emotional disturbance" is a generic term and is intended to reflect all categories of disorder
described in DSM-MD, current edition as "usually first evident in childhood or adolescence."
Minnesota Statutes, section 245.4871, subdivision 15.
Coordination and Children’s Mental Health Collaboratives. The law requires state-level
coordination through quarterly meetings of the major state agencies serving children and families
and local coordination through local coordinating councils. A 1993 law also provides for Children’s
Mental Health Collaboratives (CMHC) to coordinate services from multiple agencies to develop a
single plan of care for children with SED. Agencies required by law to participate in these
collaboratives include counties, school districts, mental health agencies, and juvenile correction
facilities. Collaboratives provide a way to assure that children with emotional disturbances and
their families receive coordinated, multi-agency services to meet their needs.
Mandated Services. The law requires each county to assure that the following 12 mental health
services are available:
Education and Prevention
Residential Treatment
Emergency
Outpatient
Acute Care Hospital Inpatient
Screening (residential or inpatient placement)
Early Identification and Intervention
Professional Home-Based Family Treatment
Case Management
Family Community Support Services
Day Treatment
Therapeutic Support of Foster Care
Minnesota has established detailed standards and requirements for each of these services in the
Children’s Mental Health Act. These requirements are examined in detail later in this section and in
Section VI on Mental Health Regulation.
Minnesota’s Mental Health System 21
Programs, Funding and Regulations, December - 2002
The children's mental health system is administered by DHS through its Children’s Mental Health
Division. The division establishes statewide policy and standards of care, and provides funding
through grants and to counties.
Advocacy. Both the state and the counties are required to convene advisory groups of consumers,
parents, and providers to advocate for the mental health needs of children.
Children’s Mental Health Funding. Public funding for the children’s mental health system comes
from a variety of sources, including state and federal mental health block grants, social services
block grants, direct appropriations, and public health insurance programs. Most of the grant
money flows to counties and local collaboratives, which in turn provide services or contract with
service providers. Until recently, Minnesota provided direct appropriations to the state-operated
regional treatment centers for services to SED children. Now the regional treatment centers no
longer receive direct appropriations but are operated with money from an enterprise fund financed
by fee-for-service payments from mental health programs and third-party payers. Direct
appropriations are still made for services to adults in the state-operated facilities. Mental health
services are also paid for through public health insurance programs for those patients who are
enrolled in them. Table F shows the flow of the major sources of mental health funding for children
through the state and counties to the various mental health services and providers.
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Minnesota’s Mental Health System 22
Programs, Funding and Regulations, December - 2002
TABLE F
Minnesota Department of Human Services Funding Flows:
Children’s Mental Health Services
Children’s Federal CSSA Family Title MA/GAMC/
MH Integrated MH Block Title XX Preserv IVE MinnesotaCare
Fund Grant / Title For Eligible
Rule 78 Special IVB Providers/
Grants Services
TEFRA
Alternative
COUNTIES/COLLABORATIVES
CSSA
Regional Treatment Centers
CSSA and Title IVE
Rule 5 Facilities
CSSA and Rule 78
County-Operated Services
CSSA and Rule 78
Family Community Support
CSSA
Community Hospitals
CSSA and Fed Block Grant Community Mental
Health Centers
CSSA and Fed Block Grant
Private Practitioners and Clinics
Managed Care Organizations
*
Source: Minnesota Department of Human Services.
Minnesota’s Mental Health System 23
Programs, Funding and Regulations, December - 2002
The largest single source of funding for children’s mental health services is state and local social
services, encompassing 42 percent of the total. Thirty-six percent comes from public insurance
programs and 16 percent from comprehensive mental health block grant funds. Tables G and H
show a breakout of the major sources of funding for mental health services for children.
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Minnesota’s Mental Health System 24
Programs, Funding and Regulations, December - 2002
TABLE G
Percent of SFY 2001 DHS Funding By Revenue Source: Children*
Total Funding: $154,000,000
Other
2%
Title IV-E/Resid Fees
4%
Com MH Funds
16%
MA
35%
MinnesotaCare
1%
Social Serv
42%
Revenues not included are Education, Health, Corrections, and Private Insurance.
*
Source: Minnesota Department of Human Services.
Minnesota’s Mental Health System 25
Programs, Funding and Regulations, December - 2002
TABLE H
Percent of SFY 2001 DHS Funding By Type of Service: Children*
Total Funding: $154,000,000
Other* Incl. Admin
4%
Early Ident. RTC Inpatient
3% 4%
Outpatient Tx
4% Comm. Inpatient
8%
Home-Based
12%
Comm. Residential
26%
Case Mgmt
16%
FCSS/Day Tx
23%
Revenues not included are Education, Health, Corrections, and Private Insurance.
*
Source: Minnesota Department of Human Services.
Minnesota’s Mental Health System 26
Programs, Funding and Regulations, December - 2002
The two largest categories of spending for services on children’s mental health are community
residential and family community support services, including day treatment. Table I shows a
detailed breakout of the types of publicly funded mental health services for children and the
sources of funding for those services. The breakout of funding sources varies significantly for each
type of children’s mental health service. For example, the largest source of funding for inpatient
hospital and outpatient treatment is public health insurance, but the largest source of funding for
case management services is county social services dollars.
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Minnesota’s Mental Health System 27
Programs, Funding and Regulations, December - 2002
TABLE I
DHS Funding for Mental Health Services – Fiscal 2001 – CHILDREN ONLY
Service - Funding Source STATE COUNTY FEDERAL OTHER TOTAL
Education & Prevention
State & Federal MH Grants & Gambling $630,960 $0 $39,506 $0 $670,466
LCTS-Federal $0 $0 $150,000 $0 $150,000
CSSA $19,736 $164,609 $22,339 $24,399 $231,083
Sub-Total $650,696 $164,609 $211,845 $24,399 $1,051,549
Early Identification & Screening-(I&R)
State & Federal MH Grants $1,964,955 $0 $161,399 $0 $2,126,354
LCTS-Federal $0 $0 $200,000 $0 $200,000
CW-TCM-Federal $0 $0 $570,012 $0 $570,012
CSSA $98,628 $822,623 $111,638 $77,019 $1,109,908
Sub-Total $2,063,583 $822,623 $1,043,049 $77,019 $4,006,274
Emergency Services
State & Federal MH Grants $271,864 $0 $22,331 $0 $294,195
CSSA $75,076 $626,184 $84,979 $17,857 $804,096
Medical Assistance $2,826 $0 $2,966 $0 $5,792
Gen. Assist. Med. Care $0 $0 $0 $0 $0
MinnesotaCare- PPHP est. $532 $0 $558 $204 $1,293
Sub-Total $350,298 $626,184 $110,833 $18,061 $1,105,376
Outpatient Services
State & Federal MH Grants $1,007,975 $0 $82,794 $0 $1,090,769
Compulsive Gambling Grants $0 $0 $0 $0 $0
CSSA $427,463 $3,565,312 $483,846 $337,083 $4,813,704
Medical Assistance-FFS $2,876,988 $0 $3,018,480 $0 $5,895,468
Medical Assistance-PPHP est. $3,067,880 $0 $3,218,760 $0 $6,286,640
Gen. Assist. Med. Care-FFS $0 $0 $0 $0 $0
Gen. Assist. Med. Care-PPHP est. $0 $0 $0 $0
MinnesotaCare- PPHP est. $242,001 $0 $253,951 $92,715 $588,667
Sub-Total $7,622,308 $3,565,312 $7,057,830 $429,798 $18,675,248
Case Management
State & Federal MH Grants $4,678,094 $0 $384,254 $0 $5,062,348
CSSA $1,100,709 $9,180,615 $1,245,895 $723,970 $12,251,189
Gen. Assist. Med. Care $0 $0 $0 $0 $0
Medical Assistance-County Admin. $0 $0 $0 $0 $0
Medical Assistance-Rule 79 $0 $0 $5,384,169 $0 $5,384,169
Medical Assistance-CWTCM $0 $0 $1,132,324 $0 $1,132,324
Sub-Total $5,778,803 $9,180,615 $8,146,642 $723,970 $23,830,030
Community Support, Incl. Day Trtmt.
State & Federal MH Grants $11,669,968 $0 $958,559 $0 $12,628,527
Homeless Services - R78/Fed. $0 $0 $0 $0 $0
State Operated Community Services $0 $0 $0 $0 $0
LCTS-Federal $0 $0 $6,287,960 $0 $6,287,960
CW-TCM-Federal (FCSP&Day Tx) $0 $0 $3,730,983 $0 $3,730,983
CSSA $727,539 $6,068,140 $823,503 $748,599 $8,367,782
Medical Assistance-FCSS $410,686 $0 $430,884 $0 $841,570
Minnesota Care-FCSS $0 $0 $0 $0 $0
Minnesota’s Mental Health System 28
Programs, Funding and Regulations, December - 2002
DHS Funding for Mental Health Services – Fiscal 2001 – CHILDREN ONLY
Service - Funding Source STATE COUNTY FEDERAL OTHER TOTAL
Minnesota Care-Day Tx $60,463 $0 $63,449 $23,165 $147,077
Gen. Assist. Med. Care-Day Tx $0 $0 $0 $0 $0
Medical Assistance- Day Tx-FFS $1,924,489 $0 $2,019,136 $0 $3,943,625
Medical Assistance- Day Tx-PPHP est. $438,508 $0 $460,161 $168,000 $1,066,669
Sub-Total $15,231,653 $6,068,140 $14,774,635 $939,764 $37,014,192
Professional Home-Based Family Trtmt.
State & Federal MH Grants $1,297,995 $0 $106,616 $0 $1,404,611
CW-TCM-Federal $0 $0 $566,882 $0 $566,882
CSSA $98,155 $818,674 $111,102 $67,647 $1,095,578
MinnesotaCare- PPHP est. $0 $0 $0 $0 $0
Medical Assistance-FFS $1,113,433 $0 $1,168,191 $0 $2,281,624
Medical Assistance-PPHP est. $8,238 $0 $8,645 $3,156 $20,040
Sub-Total $2,517,821 $818,674 $1,961,436 $70,803 $5,368,735
Therapeutic Support of Foster Care
State & Federal MH Grants $118,153 $0 $9,705 $0 $127,858
CSSA $41,402 $345,315 $46,862 $6,343 $439,922
Medical Assistance $322,499 $0 $338,359 $0 $660,858
Sub-Total $482,053 $345,315 $394,927 $6,343 $1,228,638
Residential Treatment
State & Federal MH Grants $58,681 $0 $4,820 $0 $63,501
State Operated Community Services $0 $0 $0 $0 $0
Rule 36 - CSSA $0 $0 $0 $0 $0
Rule 36 - GRH $0 $0 $0 $0 $0
Rule 36 - Other Fees $0 $0 $0 $0 $0
Rule 36 - SSI/SSDI $0 $0 $0 $0 $0
Rule 5 - IVE & Fees $0 $0 $2,521,212 $3,872,344 $6,393,556
Rule 5 – MA $0 $0 $0 $0 $0
Rule 5 – CSSA $3,293,156 $27,467,014 $3,727,529 $0 $34,487,699
Sub-Total $3,351,837 $27,467,014 $6,253,561 $3,872,344 $40,944,756
Acute Care Hospital
State Grant for Contract
Beds & Gambling $0 $0 $0 $0 $0
CSSA $4,605 $38,408 $5,212 $0 $48,225
Medical Assistance-Contract Beds $0 $0 $0 $0 $0
Medical Assistance-FFS $3,740,027 $0 $3,923,962 $0 $7,663,989
Medical Assistance-PPHP est. $1,169,806 $0 $1,227,338 $0 $2,397,144
MinnesotaCare-PPHP est. $587,529 $0 $616,541 $225,093 $1,429,162
Gen. Assist. Med. Care-FFS $0 $0 $0 $0 $0
Gen. Assist. Med. Care-PPHP est. $0 $0 $0 $0 $0
Sub-Total $5,501,966 $38,408 $5,773,053 $225,093 $11,538,520
Regional Treatment Center
RTC State $ - Co. Match $1,408,182 $156,465 $0 $0 $1,564,647
Medical Assistance $1,282,108 $1,282,108 $2,564,217 $0 $5,128,433
Medicare $0 $0 $0 $0 $0
First Party $0 $0 $0 $0 $0
Third Party/Other incl. H.O. $0 $0 $0 $0 $0
Sub-Total $2,690,290 $1,438,573 $2,564,217 $0 $6,693,080
Other MH Services – CSSA $22,525 $187,872 $25,496 $7,622 $243,515
Minnesota’s Mental Health System 29
Programs, Funding and Regulations, December - 2002
DHS Funding for Mental Health Services – Fiscal 2001 – CHILDREN ONLY
Service - Funding Source STATE COUNTY FEDERAL OTHER TOTAL
Other MH Services – State Grants
& FBG $198,738 $0 $16,325 $0 $215,063
Federal Block Grant Projects
Indian MH services $0 $0 $492,479 $0 $492,479
Self-Help $0 $0 $265,000 $0 $265,000
Training/Toward Better MH $0 $0 $57,367 $0 $57,367
Other (Report Card, Parent Liaison) $0 $0 $0 $0 $0
Sub-Total $0 $0 $814,846 $0 $814,846
State Admin. (Incl. Planning & Eval.) $836,254 $0 $423,213 $0 $1,259,467
TOTAL DHS FUNDING $47,298,827 $50,723,339 $49,571,907 $6,395,216 $153,989,289
Minnesota’s Mental Health System 30
Programs, Funding and Regulations, December - 2002
Children’s Mental Health Grants. Services such as inpatient hospital and outpatient treatment
are funded primarily through public health insurance payments; however, other types of services
are supported by state and federal block grant funds and county funding. The following is a list of
the major grant programs that support children’s mental health services in Minnesota.
Grants Allocated by Formula
Children’s Mental Health Federal Block Grant
The federal government provides grants for provide community-based mental health
services to children with SED. The money cannot be used for inpatient services, cash
payments to recipients, or capital improvements. Public Law 102-321.
Children’s Mental Health Community Based Services (Rule 78)
These grants support community-based mental health services for children with SED.
Minnesota Statute section 245.4886, subd. 1. Services designated as priorities by state
law include case management, community support, day treatment, professional home-
based treatment, and therapeutic support of foster care.
Children’s Mental Health Combined Grant
This is a “hybrid” block grant that gives more flexibility to the counties in the use of
funds. The grant program combines money from both competitive and non-
competitive categorical grants into a single grant. Counties remain responsible for
providing the services required by all of the grant programs but have discretion on how
to manage the budget. Counties who participate in this program must participate in an
outcome-based evaluation. DHS Bulletin #97-73-2.
Local Share of Mental Health Targeted Case Management
Due to MA funding changes effective July 1, 1999, Minnesota now allocates to each
county’s mental health grant an amount based on the former state share of mental
health case management services provided under MA and GAMC. DHS Bulletin #99-
53-4.
TEFRA Restructuring Grants
The purpose of these grants is to meet the needs of children and families adversely
affected by the restructuring of MA eligibility under the so-called TEFRA option. DHS
Bulletin #95-53-3.
Small County Supplement
These grants are available to small counties to increase the state funding floor.
Counties are encouraged to use the money for difficult-to-serve children and families,
especially those at risk of out-of-home placement. Provider Reference Tool for
Minnesota’s Publicly Provided Mental Health Services, p. 34.
Minnesota’s Mental Health System 31
Programs, Funding and Regulations, December - 2002
Children’s Mental Health Collaborative Implementation Grants
These grants support the development of local mental health collaboratives authorized
under Minnesota Statute sections 245.491 to 245.496.
Collaborative Wraparound Funds
These funds are for use as collaborative integrated funds to support interagency family
service plans served through the so-called “wraparound process.” Minnesota Statute
section 245.492, subd. 7; Minnesota Statute section 245.4931.
Grants Allocated on a Competitive Basis
Mental Health Screening of Children in the Courts
These grants are for mental health screening for children and youths in the court
system due to delinquency or child protection proceedings. Minnesota Statute
section 260.152 and DHS Bulletin #97-73-3.
Crisis Services
This funding is for emergency mental health crisis response services to children.
Funding comes from the Federal Community Mental Health Services block grant.
Minnesota Statute section 245.4879.
Children’s Mental Health Screening of Homeless Children
These grants are for identification, outreach, and service coordination for homeless
children and youth with emotional disturbances. The first priority is children and youth
in homeless families; the second priority is youth who are “on their own.” DHS Bulletin
#97-73-3.
Respite Services for SED Children
These grants are for short-term respite care services for families with children with
SED. DHS Bulletin #97-73-3.
Adolescent Services Grants
These grants support mental health and supportive services for adolescents and pre-
adolescents with SED and violent behavior. Minnesota Statute section 245.4886, subd.
3.
Children’s Mental Health Service Capacity Building Grants
These grants are administered outside the regular children’s mental health grants and
must be targeted to families whose needs are not met by the local system of care.
Grantees develop formal and informal means to meet these unmet needs. DHS
Bulletin #97-73-4.
Mental Health Transition Services. DHS is currently developing transition services to help bridge
the gap between the children’s mental health system and the adult mental health system. Because
the children’s and adult public mental health systems operate quite independently of each other,
children who receive mental health services are at risk of "falling through the cracks" as they move
Minnesota’s Mental Health System 32
Programs, Funding and Regulations, December - 2002
into adulthood. The services provided to children are no longer appropriate but the services
provided to adults aren't necessarily appropriate either. Age appropriate services need to be
developed in a coordinated approach by both of the public systems for this critical passage through
young adulthood.
This continuity issue is coined “transition services” and is defined in the Children's Mental Health
Act as: mental health services designed with an outcome oriented process, that promotes the
movement from school to post-school activities, including post-secondary education. Vocational
training, integrated employment including supported employment, continuing and adult
education, adult mental health and social service, other adult services, independent living or
community participation are types of transition activities. DHS is currently developing transition
services to help bridge the gap between the children's mental health system and the adult mental
health system.
b. Adult Mental Health Programs
The Minnesota Comprehensive Adult Mental Health Act, Minnesota Statute sections 245.461 to
245.4861, establishes standards for a statewide adult mental health system. DHS estimates that 75
percent of adults with SPMI are the responsibility of the public system. Similar to the children’s
mental health system, it is also state-supervised and county-administered. The county is the
designated local mental health authority and is required to provide certain specified services to its
residents. These services must be provided to persons with SPMI.
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Minnesota’s Mental Health System 33
Programs, Funding and Regulations, December - 2002
Definition of Serious and Persistent Mental Illness.
(a) "Mental illness" means an organic disorder of the brain or a clinically significant disorder of
thought, mood, perception, orientation, memory, or behavior that is listed in the clinical
manual of the International Classification of Diseases (ICD-9-CM), current edition, code
range 290.0 to 302.99 or 306.0 to 316.0 or the corresponding code in the American
Psychiatric Association's Diagnostic and Statistical Manual of Mental Disorders (DSM-
MD), current edition, Axes I, II, or III, and that seriously limits a person's capacity to
function in primary aspects of daily living such as personal relations, living arrangements,
work, and recreation.
(b) An "adult with acute mental illness" means an adult who has a mental illness that is
serious enough to require prompt intervention.
(c) For purposes of case management and community support services, a “person with serious
and persistent mental illness” means an adult who has a mental illness and meets at least
one of the following criteria: (1) the adult has undergone two or more episodes of inpatient
care for a mental illness within the preceding 24 months; (2) the adult has experienced a
continuous psychiatric hospitalization or residential treatment exceeding six months’
duration within the preceding 12 months; (3) the adult: (I) has a diagnosis of schizophrenia,
bipolar disorder, major depression, or borderline personality disorder; (ii) indicates a
significant impairment in functioning; and (iii) has a written opinion from a mental health
professional, in the last three years, stating that the adult is reasonably likely to have
future episodes requiring inpatient or residential treatment, of a frequency described in
clause (1) or (2), unless ongoing case management or community support services are
provided; (4) the adult has, in the last three years, been committed by a court as a person
who is mentally ill under chapter 253B, or the adult’s commitment has been stayed or
continued; or (5) the adult (I) was eligible under clauses (1) to (4), but the specified time
period has expired or the adult was eligible as a child under section 245.4871, subdivision
6; and (ii) has a written opinion from a mental health professional, in the last three years,
stating that the adult is reasonably likely to have future episodes requiring inpatient or
residential treatment, of a frequency described in clause (1) or (2), unless ongoing case
management or community support services are provided.
Minnesota Statutes, section 245.462, subdivision 20
Mandated Services. Under state law, counties are required to ensure that the following eight
services are available to their residents:
Education and Prevention
Emergency Services
Outpatient
Community Support Programs
Residential Treatment
Acute Care Hospital Inpatient
Regional Treatment Centers
Case Management
Minnesota’s Mental Health System 34
Programs, Funding and Regulations, December - 2002
Minnesota has established detailed standards and requirements for each of these services. These
requirements are examined in more detail later in this section and in Section VI on Mental Health
Regulation.
The adult mental health system is administered by DHS through its Adult Mental Health Division in
the Continuing Care Administration. The division establishes statewide policy, standards of care,
and provides funding through grants to the counties.
Adult Mental Health Initiative Projects. DHS is shifting policy for adult mental health services
away from categorical funding to flexible, community-based systems. The new emphasis is on
developing multi-county or regional service delivery systems that involve collaboration, integration
of funding and the use of state hospital staff in the provision of community-based services. The
goal is to move adults with SPMI out of institutions into communities and independent living. All
87 Minnesota counties, through 15 projects, are involved in redesigning the mental health systems.
Funding for Adult Mental Health Services. Public funding for the adult mental health system
comes from a variety of sources, including state and federal mental health block grants, social
services block grants, direct grants, and public appropriations and public health insurance
programs. Most of the grant money flows to counties, which in turn provide services or contract
with service providers. The state provides direct appropriations to the state-operated regional
treatment centers. Mental health services are also paid for through public health insurance
programs. Table J illustrates the flow of the major sources of mental health funding for adults
through the state and counties to the various mental health services and providers.
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Minnesota’s Mental Health System 35
Programs, Funding and Regulations, December - 2002
TABLE J
Minnesota Department of Human Services Funding Flows: Adult Mental Health Services
Community Federal CSSA Group Regional MA/GAMC/
MH Grants MH Block Title XX Residential Treat- MinnesotaCare For
Rule 12 Grant / Housing ment Eligible Providers/
Special (GRH) Centers Services
Rule 78
Grants
MH
Integrated
Fund
COUNTIES
CSSA
Regional Treatment Centers
CSSA Rule 12 & GRH
Rule 36 Facilities
CSSA & Rule 78
County-Operated Services
CSSA & Rule 78 Community Support
Programs
CSSA & Special Grants
Community Hospitals
CSSA & Fed Block Grant Community Mental
Health Centers
CSSA & Fed Block Grant Private Practitioners and
Clinics
Prepaid
Managed Care Organizations Plans
Minnesota’s Mental Health System 36
Programs, Funding and Regulations, December - 2002
*
Source: Minnesota Department of Human Services.
Minnesota’s Mental Health System 37
Programs, Funding and Regulations, December - 2002
The mix of funding sources for adult mental health services differs significantly from the mix for
children’s mental health services. The major sources of funding for adult mental health services are
social services dollars (20%), state payments to regional treatment centers (27%), mental health
block grants (20%), and public health insurance programs (27%). Tables K and L show a breakout
of the major sources of funding for mental health services for adults.
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Minnesota’s Mental Health System 38
Programs, Funding and Regulations, December - 2002
TABLE K
Percent of SFY 2001 DHS Funding By Revenue Source: Adults
Total Funding: $388,000,000
Other
3%
MA
Community MH Funds 23%
20%
GAMC/MNCare
4%
RTC Fund Social Services
27% 20%
GRH/SSI
3%
Revenues not included are Medicare, Veterans Administration, Vocational Rehabilitation,
Housing, Nursing Home, Corrections, and Private Insurance.
*
Source: Minnesota Department of Human Services.
Minnesota’s Mental Health System 39
Programs, Funding and Regulations, December - 2002
TABLE L
Percent of SFY 2001 DHS Funding By Type of Service: Adults
Total Funding: $388,000,000
Other* Incl. Admin
3.9%
Outpatient
10.5%
RTC Inpatient
Case Mgmt 34.7%
10.9%
CSP/Day Trtmt
15.4%
Comm Inpatient
Comm Resid 14.4%
10.3%
Revenues not included are Medicare, Veterans Administration, Vocational Rehabilitation,
Housing, Nursing Home, Corrections, and Private Insurance.
*
Source: Minnesota Department of Human Services.
Minnesota’s Mental Health System 40
Programs, Funding and Regulations, December - 2002
The largest category of spending for adult services, representing 34.7 percent, targets inpatient
regional treatment center services. Table M provides a detailed description of public funding for
the various types of mental health services for adults and the sources of those funds.
(Remainder of page intentionally left blank)
Minnesota’s Mental Health System 41
Programs, Funding and Regulations, December - 2002
TABLE M
DHS Funding for Mental Health Services - Fiscal 2001 - ADULTS ONLY
Service – Funding Source STATE COUNTY FEDERAL OTHER TOTAL
Education & Prevention
State & Federal MH Grants
& Gambling $1,017,085 $0 $19,352 $0 $1,036,437
LCTS-Federal $0 $0 $0 $0 $0
CSSA $62,226 $519,006 $70,434 $37,686 $689,352
Sub-Total $1,079,311 $519,006 $89,786 $37,686 $1,725,789
Early Identification & Screening
State & Federal MH Grants $27,037 $0 $596 $0 $27,633
LCTS-Federal $0 $0 $0 $0 $0
CW-TCM-Federal $0 $0 $0 $0 $0
CSSA $114,206 $952,548 $129,270 $40,696 $1,236,719
Sub-Total $141,243 $952,548 $129,866 $40,696 $1,264,352
Emergency Services
State & Federal MH Grants $647,152 $0 $10,866 $0 $658,018
CSSA $259,151 $2,161,484 $293,333 $60,361 $2,774,329
Medical Assistance $13,347 $0 $14,003 $0 $27,350
Gen. Assist. Med. Care $7,747 $0 $0 $0 $7,747
MinnesotaCare-PPHP Est. $2,209 $0 $0 $0 $2,209
Sub-Total $929,606 $2,161,484 $318,203 $60,361 $3,469,653
Outpatient Services
State & Federal MH Grants $655,473 $0 $14,443 $0 $669,916
Compulsive Gambling Grants $1,010,000 $0 $0 $0 $1,010,000
CSSA $1,622,659 $13,534,006 $1,836,690 $2,103,879 $19,097,234
Medical Assistance-FFS $6,546,412 $0 $6,868,367 $0 $13,414,779
Medical Assistance-PPHP Est. $1,556,608 $0 $1,633,163 $0 $3,189,771
Gen. Assist. Med. Care-FFS $1,347,269 $0 $0 $0 $1,347,269
Gen. Assist. Med. Care-PPHP Est. $1,070,924 $0 $0 $0 $1,070,924
MinnesotaCare-PPHP Est. $1,101,488 $0 $0 $0 $1,101,488
Sub-Total $14,910,833 $13,534,006 $10,352,663 $2,103,879 $40,901,381
Case Management
State & Federal MH Grants $7,959,237 $0 $178,172 $0 $8,137,409
CSSA $1,477,455 $12,322,912 $1,672,334 $726,938 $16,199,639
Gen. Assist. Med. Care $0 $0 $0 $0 $0
Medical Assistance-County Admin $0 $0 $757,742 $0 $757,742
Medical Assistance-Rule 79 $0 $0 $17,012,757 $0 $17,012,757
Medical Assistance-CWTCM $0 $0 $0 $0 $0
Sub-Total $9,436,692 $12,322,912 $19,621,005 $726,938 $42,107,547
Community Support, Incl. Day
Treatment
State & Federal MH Grants $20,456,545 $0 $450,741 $0 $20,907,286
Homeless Services - R78/Fed. $789,376 $0 $300,000 $0 $1,089,376
State Operated Community
Services $13,449,133 $1,494,348 $0 $0 $14,943,481
LCTS-Federal $0 $0 $0 $0 $0
CW-TCM-Federal (FCSP & Day Tx) $0 $0 $0 $0 $0
Minnesota’s Mental Health System 42
Programs, Funding and Regulations, December - 2002
DHS Funding for Mental Health Services - Fiscal 2001 - ADULTS ONLY
Service – Funding Source STATE COUNTY FEDERAL OTHER TOTAL
CSSA $1,035,873 $8,639,836 $1,172,506 $614,017 $11,462,232
Medical Assistance-FCSS $0 $0 $0 $0 $0
MinnesotaCare-FCSS $0 $0 $0 $0 $0
MinnesotaCare-Day Tx $0 $0 $0 $0 $0
Gen. Assist. Med. Care-Day Tx $708,881 $0 $0 $0 $708,881
Medical Assistance-Day Tx-FFS $4,849,968 $0 $5,088,491 $0 $9,938,459
Medical Assistance-Day Tx-PPHP $291,295 $0 $305,620 $0 $596,915
Est.
Sub-Total $41,581,070 $10,134,184 $7,317,359 $614,017 $59,646,630
Housing Subsidies
Crisis Housing $354,000 $0 $0 $0 $354,000
Adult Integrated Fund $930,541 $0 $28,304 $0 $958,845
CSSA $12,546 $104,644 $14,201 $16,291 $147,683
Sub-Total $1,297,087 $104,644 $42,505 $16,291 $1,460,528
Professional Home-Based Family
Treatment
State & Federal MH Grants $0 $0 $0 $0 $0
CW-TCM-Federal $0 $0 $0 $0 $0
CSSA $0 $0 $0 $0 $0
MinnesotaCare-PPHP Est. $1,194 $0 $0 $0 $1,194
Medical Assistance-FFS $21,629 $0 $22,693 $0 $44,322
Medical Assistance-PPHP Est. $0 $0 $0 $0 $0
Sub-Total $22,823 $0 $22,693 $0 $45,516
Therapeutic Support of Foster
Care
State & Federal MH Grants $0 $0 $0 $0 $0
CSSA $0 $0 $0 $0 $0
Medical Assistance $16,607 $0 $17,423 $0 $34,030
Sub-Total $16,607 $0 $17,423 $0 $34,030
Residential Treatment
State & Federal MH Grants $20,268,862 $0 $259,401 $0 $20,528,263
State Operated Community
Services $4,472,709 $496,968 $0 $0 $4,969,677
Rule 36 - CSSA $254,164 $2,119,890 $287,689 $0 $2,661,743
Rule 36 - GRH $9,279,844 $0 $0 $0 $9,279,844
Rule 36 - Other Fees $0 $0 $0 $509,706 $509,706
Rule 36 - SSI/SSDI $0 $0 $1,900,000 $0 $1,900,000
Sub-Total $34,275,579 $2,616,858 $2,447,090 $509,706 $39,849,233
Acute Care Hospital
State Grant for Contract Beds
& Gambling $1,316,000 $0 $0 $0 $1,316,000
CSSA $327,046 $2,727,770 $370,184 $0 $3,425,000
Medical Assistance-Contract Beds $2,677,768 $0 $2,809,462 $0 $5,487,230
Medical Assistance-FFS $14,366,366 $0 $15,072,909 $0 $29,439,275
Medical Assistance-PPHP Est. $2,187,725 $0 $2,295,318 $0 $4,483,042
MinnesotaCare-PPHP Est. $1,447,039 $0 $417,170 $348,502 $2,212,711
Gen. Assist. Med. Care-FFS $7,222,087 $0 $0 $0 $7,222,087
Gen. Assist. Med. Care-PPHP Est. $2,274,683 $0 $0 $0 $2,274,683
Sub-Total $31,818,714 $2,727,770 $20,965,042 $348,502 $55,860,028
Minnesota’s Mental Health System 43
Programs, Funding and Regulations, December - 2002
DHS Funding for Mental Health Services - Fiscal 2001 - ADULTS ONLY
Service – Funding Source STATE COUNTY FEDERAL OTHER TOTAL
Regional Treatment Center
RTC State $ - Co. Match $103,043,002 $16,450,920 $0 $0 $119,493,922
Medical Assistance $4,616,041 $0 $4,843,059 $0 $9,459,100
Medicare $0 $0 $902,245 $0 $902,245
First Party $0 $0 $0 $1,419,758 $1,419,758
Third Party/Other Incl. H.O. $0 $0 $518,506 $2,706,669 $3,225,175
Sub-Total $107,659,043 $16,450,920 $6,263,810 $4,126,427 $134,500,200
Pre-Petition and Other Screening
CSSA $328,679 $2,741,391 $372,032 $123,871 $3,565,973
State & Federal MH Grants $14,693 $0 $14,296 $0 $28,989
Medical Assistance (PASSARR) $21,361 $0 $22,412 $0 $43,773
Sub-Total $364,733 $2,741,391 $408,740 $123,871 $3,638,735
Other MH Services – CSSA $44,314 $369,608 $50,159 $0 $464,082
Other MH Services - State Grants
& FBG $130,450 $0 $2,874 $0 $133,324
Federal Block Grant Projects
Indian MH Services $0 $0 $652,822 $0 $652,822
Self-Help $0 $0 $290,500 $0 $290,500
Training/Toward Better MH $0 $0 $146,106 $0 $146,106
Other (Report Card, Parent
Liaison) $0 $0 $180,000 $0 $180,000
Sub-Total $0 $0 $1,269,428 $0 $1,269,428
Other Special Projects
Time-Limited Grants (Disaster) $0 $0 $0 $0 $0
Public Education $0 $0 $0 $0 $0
Compulsive Gambling Education
& Research $115,000 $0 $0 $0 $115,000
Training Projects $0 $0 $0 $0 $0
Other-(Child Homeless) $73,000 $0 $0 $0 $73,000
Sub-Total $188,000 $0 $0 $0 $188,000
State Admin. (Incl. Planning $1,108,720 $0 $420,902 $0 $1,529,622
& Evaluation)
TOTAL DHS FUNDING $245,004,825 $64,635,331 $69,739,546 $8,708,374 $388,088,077
Minnesota’s Mental Health System 44
Programs, Funding and Regulations, December - 2002
The breakout of funding sources varies significantly for each type of mental health service. The
largest source of funding for acute care inpatient hospital treatment is public health insurance, and
the largest source of funding for outpatient services is CSSA dollars.
DHS provides grants to counties to support the adult mental health system. Money is used for
services which are not covered under MA or private health insurance, and for MA-covered services
for uninsured individuals.
Adult Mental Health Integrated Fund. As part of the new Adult Mental Health Initiatives
described above, counties may request integration of the various adult mental health grants listed
below. Most of the grants are now integrated.
Adult Mental Health Grants
Adult Residential Grants (Rule 12)
These grants pay for staffing of group homes, halfway houses, and other local
residential facilities. Counties apply for these grants on behalf of local facilities. State
grants are the primary source of funding for these facilities, although some counties
also provide supplementary funding. The facilities do not generally receive MA
funding, with some limited exceptions. To be eligible to receive services in these
facilities, a person must have a mental illness as defined in the Mental Health Act.
Some counties go further and require a diagnosis of SPMI. Minnesota Statute section
245.73.
Federal PATH Grants
The federal Center for Mental Health Services of the Substance Abuse and Mental
Health Services Administration awards grants to states under the McKinney Homeless
Assistance Amendments Act of 1990 Public Law 101-645, 42 USC 290cc-21 et seq. In
Minnesota, the grants have been used for contracts with Clay, Hennepin, Polk, Ramsey,
and St. Louis Counties to hire professional mental health staff to locate and assist
homeless persons with serious mental illness.
Alternatives to Institutions for Mental Disease
The federal government has prohibited the use of MA funds for Institutions for Mental
Diseases (IMD). An IMD is a residential facility for the mentally ill with more than 16
beds or a nursing home that specializes in care for the mentally ill. In response to this
prohibition, grants are provided to help facilities which meet the definition of an IMD in
downsizing or developing non-IMD alternatives for residents. Minnesota Statute
section 245.466, subd. 7.
Community Support Services Grants (Adult Rule 78)
These grants are made to counties for services for adults with SPMI, including outreach,
medication monitoring, independent living skills development, employability skills
development, and psychosocial rehabilitation. Day treatment or case management can
Minnesota’s Mental Health System 45
Programs, Funding and Regulations, December - 2002
also be paid for if MA is unavailable or inadequate. Funds are allocated by formula
based on county population. Minnesota Statute section 256E.12.
Local Share of Mental Health Targeted Case Management
Due to MA funding changes effective July 1, 1999, Minnesota now allocates to each
county’s mental health grant an amount based on the former state share of mental
health case management services provided under MA and GAMC. DHS Bulletin #99-
53-4.
c. State Ombudsman for Mental Health and Mental Retardation
Minnesota Statute sections 245.91 to 245.97, establishes the office of the Ombudsman for Mental
Health and Mental Retardation within DHS. The office can receive complaints from any source,
investigate the complaints, and make recommendations for resolving the issue. The office has
extensive investigative powers but no regulatory authority to enforce its recommendations. The
office has the following specific powers relating to mental health services:
The office may mediate or advocate on behalf of a patient.
The office may investigate the quality of mental health and mental retardation
services.
At the request of a patient, or upon receiving a complaint or other information
affording reasonable grounds to believe that the rights of a patient who is not
capable of requesting assistance have been adversely affected, the office may
gather information about and analyze, on behalf of the patient, the actions of
an agency, facility, or program.
The office may examine records of an agency, facility, or program on behalf of a
patient. If the records are private and the patient is capable of providing
consent, the ombudsman shall first obtain the patient’s consent, but the
ombudsman is not required to obtain consent for access to private data on
patients who were receiving services for mental illness, mental retardation or a
related condition, or emotional disturbance.
The ombudsman may subpoena a person to appear, give testimony, or produce
documents or other evidence that the ombudsman considers relevant to a
matter under inquiry.
The ombudsman may, at reasonable times in the course of conducting a review,
enter and view premises within the control of an agency, facility, or program.
The ombudsman may attend DHS review board and special review board
proceedings; proceedings regarding the transfer of patients or residents
between institutions operated by DHS; and, subject to the consent of the
affected patient, other proceedings affecting the rights of patients. The
ombudsman is not required to obtain consent to attend meetings or
Minnesota’s Mental Health System 46
Programs, Funding and Regulations, December - 2002
proceedings and have access to private data on patients with mental
retardation or a related condition.
d. Facilities of DHS
In addition to supervising the comprehensive mental health system under the mental health acts,
DHS also operates state mental health facilities through its State Operated Services (SOS)
department. The SOS consists of an array of campus and community-based programs serving
people with mental illness, developmental disabilities, CD and traumatic brain injury. It includes
regional treatment centers in Anoka, Brainerd, Fergus Falls, St. Peter, and Willmar; Ah-Gwah-
Ching, the state nursing home in Walker; and Eastern Minnesota State Operated Community
Services and Northern Network East, a group of programs in Northeastern Minnesota for people
with mental illness, CD, and developmental disabilities. SOS Forensic Services serve the entire
state and include the Minnesota Security Hospital in St. Peter, the Minnesota Sex Offender
Program in Moose Lake and St. Peter, and the Minnesota Extended Treatment Options program in
Cambridge. SOS also administers the Health Source clinic which provides dental services in
Cambridge, and the Southern Cities Clinic, which provides dental and psychiatric services in
Faribault.
2. Public Health Insurance Programs
Several different public health insurance programs exist. The Medicare program is administered by
the federal government and funded by federal funds and enrollee premiums and copayments. The
MA or Medicaid program is administered by the State of Minnesota with a substantial contribution
from the federal government. The MinnesotaCare Program and the GAMC program are primarily
state-administered, state-funded programs, although the federal government contributes
financially on behalf of some people enrolled in the MinnesotaCare program under a MA waiver.
This section of the report focuses on the state public health insurance programs. The federal
Medicare program is discussed later in this report.
NOTE: This report assumes the reader has a solid, basic understanding of the three
public insurance programs and how they are administered through either a fee-for-
service system or prepaid contracts with health plans. General information on this
topic can be found in DHS’ Provider Reference Tool or through DHS website. The
remainder of this section focuses on the mental health aspects of these programs.
DHS administers three programs of public health insurance: MA, GAMC, and the MinnesotaCare
Program. To be eligible for public insurance, a person must meet eligibility conditions such as
income and asset limits, and residency requirements. Public insurance programs are administered
through either a fee-for-service system, under which the state directly pays providers for services
delivered to eligible individuals, or through the PHCP, under which the state contracts with
licensed HMOs to provide services to eligible individuals. When persons are enrolled in a PHCP,
they are required to use the health plan’s provider network and comply with the health plan’s
requirements relating to referrals, prior authorization and medical necessity.
Minnesota’s Mental Health System 47
Programs, Funding and Regulations, December - 2002
Private health insurance is the primary payor, compared to public health insurance. This means the
state will not pay for services through a public health insurance program if the services could have
been covered by a private health plan if the rules of the private health plan had been followed.
There are additional criteria for coordinating benefits provided by various public and private health
plans and payors.
a. Public Insurance: Fee-for-Service
Under the fee-for-service system, DHS pays mental health service providers directly for covered
mental health services provided to eligible individuals.
Covered Services. State law and DHS rules contain a long list of health care services that are
covered by state public insurance programs, including mental health services. In addition to
“traditional” mental health services such as inpatient and outpatient treatment and drugs, the
state authorizes MA payments for additional services such as home-based community support
services for families and adult rehabilitative services including independent living skills training and
crisis services. Additionally, the state recently authorized expansion of community-based
alternative MA services for persons with mental illness under the federal waiver program known as
CADI (“Community Alternatives for Disabled Individuals”). This program pays for community-
based services for persons who otherwise would be admitted to a nursing home and would be
eligible for MA benefits in that setting. Minnesota Statute sections 256B.0623, 256B.0624,
256B.0625, and 256L.032.
Mental Health Targeted Case Management Services. In addition to mental health services
provided to eligible recipients, such as counseling or drugs, DHS will pay for case management
services for targeted populations under a special option allowed states by the federal government.
One targeted population covered under Minnesota’s option is children with SED and adults with
SPMI. Case management services are defined in state law. Examples include developing a service
plan, coordinating and monitoring services, or meeting with the client or the client’s family. The
only eligible providers of targeted case management services are counties or county-contracted
vendors. Minnesota Statute sections 245.4871 and 245.4881 and DHS Bulletin #99-53-4.
Mental Health Services Provided by Schools. Effective July 1, 2000, state law requires schools to
bill public and private payors for health-related Individualized Education Program (IEP) or
Individualized Family Service Program (IFSP) services. To be eligible, children must be enrolled in
MA or MinnesotaCare, have an IEP or IFSP, and receive a covered service. Families and students
are not required to give information about their health coverage to the school and schools must
obtain informed consent prior to billing. More information is contained in DHS Individualized
Educational Program Services Technical Assistance Guide. Minn. R. 9505.0323. However, other
professionals and practitioners may provide reimbursable services within an agency or clinic under
the supervision of a qualified professional.
Medical Assistance Mental Health Providers and Agencies. The following health professionals
and agencies are eligible to enroll as providers under the MA program and other state public
insurance programs.
Minnesota’s Mental Health System 48
Programs, Funding and Regulations, December - 2002
Health Professionals
Licensed Psychologist (LP). Minnesota Statute sections 148.88 to 148.98.
Licensed Psychological Practitioner (LPP). Minnesota Statute section 148.925.
Licensed Independent Clinical Social Worker (LICSW). Minnesota Statute section
148B.21, subd. 6.
Psychiatrist. Minnesota Statute section, chapter 147.
Clinical Nurse Specialist Mental Health. Minnesota Statute sections 148.171 to
148.285.
Marriage and Family Therapist. Minnesota Statute section 148B.29 to 148B.39.
Mental Health Practitioner. (May qualify to provide MA billable services in limited
circumstances, under the supervision of a mental health professional.)
Mental Health Practitioner. Minnesota Statute section 245.4871, subd. 26, 245.462,
subd. 17.
Agencies. (Each of the following has special qualifying rules to be enrolled as a DHS
provider.)
Child and Teen Checkup Clinic
County Human Service Agency
Day Treatment Facility
Hospital
Public Health Nursing Clinic
Special Children’s Health Clinic
School District
County Approved Agency
Community Mental Health Center
Outpatient Hospital
Rehabilitation Agency
b. Prepaid Health Care Plan
DHS contracts with licensed HMOs to provide services to persons enrolled in public insurance
programs. The state pays PHCP a predetermined amount per enrollee and the PHCP in turn
reimburses health care providers for services provided to enrollees.
In most areas of the state, DHS contracts with a PHCP for all public health insurance programs for
low-income elderly persons and families with children who are enrolled in MA, MinnesotaCare or
GAMC. When the state contracts with a PHCP for coverage under public insurance programs, the
state’s fee-for-service system of reimbursing health care providers is no longer used. Instead, the
person enrolled in a PHCP must use providers authorized by the health plan to provide services.
Additionally, the person is subject to the utilization review and managed care requirements of the
PHCP.
Minnesota’s Mental Health System 49
Programs, Funding and Regulations, December - 2002
Persons with mental health problems who are eligible for public insurance and enrolled in a PHCP
receive mental health services through the PHCP to the extent those services are covered by the
public insurance program, determined to be medically necessary, provided by an authorized health
care provider and satisfies the health plan’s utilization review and managed care requirements.
Adults with SPMI and children with SED may also be eligible for additional mental health services
mandated under the mental health acts. These additional services must be authorized by the local
county and would be paid for by local, state, or federal mental health funds. In addition, state law
requires counties to provide targeted case management services to these adults and children
which are paid for through the state’s fee-for-service payment system.
Unlike other recipient groups, disabled persons and persons with SPMI or SED are not required to
enroll in a PHCP. If already enrolled in a PHCP at the point they are determined to be disabled,
SPMI or SED, a patient may disenroll from the PHCP and enroll in the states’ fee-for-service health
care system instead. The process for informing patients who are determined to be SPMI, SED, or
disabled of their option to disenroll from a PHCP or the availability of additional mental health
services such as targeted case management is unclear and often not effective. In fact, the process
for making SPMI, SED, and disability determinations is itself often unclear despite the importance
of these designations in terms of a patient’s eligibility for additional services and health coverage
options. Additionally, there is often very little communication and coordination between county
agencies and PHCPs regarding the respective services that each is obligated to provide the patient.
PCHP are subject to extensive regulations both in the contracts entered into with DHS and in state
and federal laws and rules regulating insurance companies and managed care plans. These
regulations are described in more detail in Section VI: Mental Health Regulations.
c. State Children's Health Insurance Program (SCHIP)
In October 2002, the federal Health and Human Services Department announced that it had
approved Minnesota’s request to use federal money from SCHIP to provide mental health
screenings and other services to approximately 18,000 children from low income families.
Minnesota will provide funding to local service agencies to do outreach to homeless children and
provide health-screening services to them. Minnesota is the first state to provide such services
through a health services initiative, which allows states to use money available for administrative
expenses to improve the health of children from low income families -- including some who would
not otherwise receive SCHIP benefits.
3. Other State Publicly Funded Mental Health Programs
a. Social Services
Mental health is a major component of the state and local social services system. DHS has the
overall responsibility of assuring an accountable social services system in Minnesota. DHS provides
health care, economic assistance, and other services for people who do not have the resources to
meet their basic needs. The Children and Adult Mental Health Services of DHS are but one aspect
of DHS's overall social services responsibilities.
Minnesota’s Mental Health System 50
Programs, Funding and Regulations, December - 2002
CSSA establishes a system of planning for and providing community social services administered
by each county. Each county or group of counties must develop a social services plan every two
years. The county plan provides information on:
Individuals or Groups to be Served
Social Services Available
An Estimate of Cost of These Services
Eligibility and Fee Criteria
Counties’ mental health activities are one component of their social services plan. Further, the
mental health acts designate the counties as the lead agencies for administering mental health
services under state supervision for adults with SPMI and children with SED.
Social services funding for mental health is described above in the Public Mental Health Programs
and Activities section.
For more general information about community social services and provisions for the
administration of social services in Minnesota, see Minnesota Statutes, chapter 256E and
Minnesota Rules, chapter 9550.
b. Public Health Services
Minnesota's public health system is structured much like social services, in that it is a state-
supervised, county-administered system. Each county has a local public health authority, referred
to as the Community Health Board. And like DHS and the CSSA plans, the Minnesota Department
of Health (MDH) uses a similar planning and delivery structure called CHS. Any public health
related mental health functions would be included in this plan. The Healthy Minnesotans Public
Health Improvement goals, which drive the public health system, include Goal 5: "Promote,
protect and improve mental health."
http://www.health.state.mn.us/divs/chs/phg/pdf/download.html
MDH has adopted a community-based public health approach to mental health and illness. This
means working with all people, all communities, and in a variety of systems and uses prevention
and health promotion as its primary tools. In the area of mental health, public health plays a
unique role in early intervention, often focusing effort upstream to prevent mental health problems
early on and to ensure the best possible likelihood for successful recovery from or effectively living
with mental disorders.
MDH is engaged in the following activities in the area of mental health:
Mental Health Promotion, Intervention, and Prevention Grant Activities. MDH is
involved in the following grant-based and other activities that have an impact on
children's mental health: 1) Family Home Visiting Program; 2) Maternal and Child
Health; 3) Youth Risk Behavior Funds; 4) Fetal Alcohol Syndrome; 5) Suicide
Prevention; and 6) Minnesota Children with Special Health Needs Program.
Minnesota’s Mental Health System 51
Programs, Funding and Regulations, December - 2002
Rural Health and Primary Care. MDH administers federal and state programs for
mental health professional recruitment and loan repayment to enhance service
capacity in rural areas.
Licensing and Inspection of Facilities. MDH licenses and inspects hospitals, nursing
homes, and other health care providers. It also certifies health care facilities and other
providers who take part in the federal Medicare and Medicaid programs. In this
capacity, MDH can: 1) issue correction orders for violations of state licensing
requirements; 2) notify providers of certification deficiencies that potentially affect
their participation in Medicare and Medicaid; 3) take appropriate legal action against
facilities that fail to come into compliance with state or federal law; and 4) handle
consumer complaints involving neglect or abuse of patients covered by Minnesota's
laws regarding vulnerable adults as well as possible violations of the state's patients'
and residents' bill of rights.
Managed Care Systems Section. The Managed Care Systems section of MDH licenses
and regulates managed care systems operating in Minnesota, which include HMOs,
Community Integrated Service Networks (CISNs), County-Based Purchasing Entities,
Accountable Provider Networks (APNs) and Essential Community Providers (ECPs).
Regarding complaints leading to an investigation, MDH can issue an order to provide a
service or pay a bill if the department finds a violation of law or rule. Corrective action
plans are developed by HMOs if the department finds a pattern of difficulties. After
approval of the plan, the department monitors to verify that changes were made. If a
corrective action plan has not been followed, MDH is authorized to remove the license
or take other action.
Health Occupations Regulation. MDH also regulates unlicensed mental health
practitioners, alcohol and drug counselors, and others. Minnesota Statutes section
148B.60 - 71 creates an Office of Mental Health Practice in MDH. Activities include
examining applicants and credentialing occupations, approving continuing education
programs and credits, investigating allegations of illegal conduct, taking disciplinary
action through administrative proceedings, and referring to criminal authorities when
appropriate. Sanctions might include limiting, suspending, or revoking the offending
party’s right to practice, civil penalties up to $10,000, ordering the practitioner to
perform public service, imposing censure or reprimand, assessing proceedings costs
against the practitioner, or requiring the individual to enroll in a training program.
Collection of Data. MDH collects Health Plan Employer Data and Information Set
(HEDIS) data. The data is collected by each of six population groups (commercial,
Prepaid Medical Assistance Program, GAMC, MinnesotaCare, Minnesota Senior Health
Options Program, Medicare) and includes data on aggregate service utilization in those
groups. For example, two categories of data are Antidepressant Medication
Management (a certain number and type of provider visits for patients diagnosed with
depression and treated with anti-depressants) and inpatient utilization data for mental
illness. HEDIS data is collected based upon audited procedures for administrative or
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chart-review data. It is used to verify that HMOs conduct quality evaluation and quality
improvement initiatives. The aggregate data is also shared with other state agencies,
public health groups, and others that are involved in quality improvement, as well as
provided to the public upon request.
Research for this report uncovered only limited specific spending data for mental health
expenditures within the public health system: $850,000 is devoted to MDH’s Suicide Prevention
program, while approximately $80,000 is spent annually on Minnesota Children with Special
Needs. The remaining MDH programs contain a mental health component, but the percentage of
total funds devoted to that aspect of the programs cannot be readily isolated.
c. Schools
The mental health service needs of SED children remain the responsibility of each county;
however, schools play an important supporting role in providing appropriate education services for
these children. CMHC, described earlier, require that the local school district(s) in the county are
mandatory partners in the CMHC. Most SED children are eligible for special education services.
However, some only receive special accommodations according to the Americans with Disabilities
Act (ADA). Children who qualify for special education receive an IEP. In 2000, schools were
required to bill MA for the health services provided to the child receiving special education services
as discussed earlier.
Schools and the state’s Department of Children, Families and Learning are careful to point out that
they do not provide mental health treatment or refer to a student as having a mental illness.
Schools put the child's education first and foremost, and identify barriers to learning in terms of
behavior challenges and/or developmental delays and refer to these issues as
Emotional/Behavioral Disorder (EBD) or Other Health Impairment (OHI) respectively. Educational
interventions are used to change a child's behavior or focus on developmental delays. These
techniques may very well solve the behavior/developmental issue. However, if there is an
underlying mental health issue, such as ADHD (attention deficit hyperactivity disorder) which goes
untreated, the educational intervention may never be as effective as it could be without the
complementary professional mental health interventions, such as drug therapy and/or family
psychotherapy.
Schools generally sponsor mental health promotion and prevention activities under the auspices of
education, as with early childhood family education, school readiness, and suicide prevention
programs. Some school districts, such as the Minneapolis Public Schools, screen for behavior
issues in younger children entering school. There is at least one school district in Western
Minnesota that conducts a mental health screening as part of the required pre-school screening to
enter a public school. If an underlying mental health condition is suspected, schools will notify the
parents to contact their family physician or a mental health professional for further evaluation.
These children will also be enrolled in programs that might be available in the school, e.g., school
counselor, behavior modification groups, peer mediation, etc. Some older students will identify
themselves as experiencing a mental illness and then will be referred to school programs or to the
high school clinics. Unfortunately, very few high school clinics exist in Minnesota outside of the
Twin Cities.
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The education system spends money on a continuum of education-related services for students
with mental health problems but these expenditures are not classified or tracked as mental health
services and, therefore, no spending estimates were discovered during research for this report.
d. Corrections
The Minnesota State Department of Corrections includes eight adult prisons, a juvenile corrections
facility in Red Wing, and Thistledew Juvenile Camp in Northern Minnesota.
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TABLE N
Locations of Minnesota’s Correctional Facilities
http://www.doc.state.mn.us/organization/adultservices/adult/facilities/facilitylocals.htm
Minnesota’s Mental Health System 55
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There are also forensic facilities in Minnesota for persons who are mentally ill and considered
dangerous. These facilities are operated by DHS in its SOS department. SOS Forensic Services
serve the entire state:
The Minnesota Security Hospital, a maximum-security psychiatric hospital located
in St. Peter, serves people who have been committed by the court as mentally ill
and dangerous
The Minnesota Sex Offender Program in Moose Lake provides inpatient services
and treatment to people who are committed by the court as a sexually
psychopathic personality or a sexually dangerous person
Minnesota Extended Treatment Options in Cambridge serves people who are
developmentally disabled and present a risk to public safety
Some counties also operate residential correction services, such as the Hennepin County Home
School and the Hennepin County Jail, but local county programs were not within the scope of this
report.
Minnesota's Department of Corrections Health Services Unit is responsible for management of
inmate health care delivery systems and administration, as well as providing leadership. It
oversees clinical supervision for medical, dental, and mental health services, and supervises the
directors of nursing, mental health services, dental, and medical, as well as administrative and
contract managers. The department advises the commissioner, deputy commissioners, and
institution heads on policy matters related to the delivery of health care to the inmate population.
Corrections employs its own psychologists and contracts for psychiatric hours.
Youth in the juvenile justice system experience substantially higher rates of mental health
disorders than youth in the general population. It is estimated that at least one of every five youth
in the juvenile justice system suffers a serious mental health problem, and many with mental illness
also have a co-occurring substance abuse disorder. In recognition of these circumstances, Red
Wing Juvenile Correctional Facility houses the Berglin Mental Health Center – a special mental
health unit for residents unable to adjust in the general residential unit. These residents have been
diagnosed with a serious mental illness, require psychotropic medication, and have demonstrated
difficulty functioning in a group setting due to mental illness or neuro-psychiatric issues. The
center provides day treatment and a means to stabilize a resident who then can be integrated into
the general facility living units and eventually into the community.
In FY 2002, approximately $4 million was appropriated for mental health services in correctional
facilities. The Department of Corrections also administers a $1 million grant to provide a broad
range of services to juveniles between the ages of 14 and 21 who are at risk of becoming Extended
Jurisdiction Juveniles (EJJ) or who are EJJ under a county's jurisdiction. Each county by law must
include juvenile justice as part of the CMHC.
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e. Courts
Courts continuously encounter mental health issues from the civil commitment laws to child abuse
proceedings. Courts often order mental health assessments or treatment, which are generally
provided by the local county services, the correctional system, public health programs, or private
insurance. Other parts of this report cover the laws and legal proceedings that relate to mental
health.
f. Housing Programs
The Mental Health Act requires the commissioner to ensure that housing services are provided as
part of the comprehensive mental health system. Efforts are made to secure federal housing
assistance for adults with mental illness, but often there is a waiting list. The “Bridges Program”
provides a housing subsidy until the participant obtains a federal or other housing subsidy. Bridges
housing subsidies are available when at least one adult member of the household has a SPMI and
the household gross income is under 50 percent of the area median. The Minnesota Housing
Finance Agency works in conjunction with DHS to monitor and evaluate housing agencies and local
mental health authorities involved in administering the Bridges Program.
The Crisis Housing Fund is a pool of money used to provide short-term housing assistance to
individuals receiving inpatient psychiatric care. The program provides funding to pay a patient’s
housing expenses in situations where the patient is unable to cover these bills because of inpatient
psychiatric treatment. The program is administered by the Minnesota Housing Partnership under
a contract with DHS.
g. Employment Support Services
1999 legislation enabled DHS and the Minnesota Department of Economic Security to work
together to ensure supported employment services for persons with mental illness. Minnesota
Statute sections 268A.13 and 245.4705. Rehabilitation Services of the Minnesota Department of
Economic Security administers two programs which provide employment services to persons with
mental illness and other disabilities: 1) The Vocational Rehabilitation and; 2) The Extended
Employment programs. Last year, the Vocational Rehabilitation program served over 9,000
persons with serious mental illness consisting of 34 percent of the total population served by the
Vocational Rehabilitation program. The Extended Employment program served approximately
7,000 persons with severe disabilities, with approximately 50 percent of the persons having a
primary disability of mental illness.
The Minnesota Department of Economic Security receives two specific state appropriations for
employment services for persons with serious mental illness. First, an annual appropriation of
$470,000 is provided for innovative employability projects for persons with serious mental illness in
the Vocational Rehabilitation program. These funds are granted to community rehabilitation
providers to start new employment programs for persons with serious mental illness that work in
collaboration with local mental health systems. There are currently eight projects funded. Since
1992, the Vocational Rehabilitation program has started 34 new projects using these resources, 30
of which continue to be in operation today. Second, another annual appropriation of $1.3 million is
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given to the Extended Employment program. These funds are granted to community
rehabilitation providers who have successfully completed four years of Vocational Rehabilitation
grant funding (currently 24 projects) to provide ongoing employment support to persons with
serious mental illness who are working in supported employment.
The outcomes of these projects, as well as a summary of the background and history are in the
Minnesota Department of Economic Security legislative report, released in 2000, can be found at:
http://www.mnworkforcecenter.org/rehab/ee/reports/spmi2000.pdf
h. Others
Other state agencies have unique roles in the mental health system, e.g., higher education,
agriculture, public safety, and commerce. These agencies were not included in the research for this
report.
4. Mental Health Programs Administered by Federal Agencies
a. Federal Department of Health and Human Services
While this report focuses on Minnesota’s mental health programs and activities, the federal
government, through the federal Department of Health and Human Services, provides leadership,
programs, financing and research. Because federal mental health activities were beyond the
primary scope of this report, only a brief discussion is included here; however, refer to the following
for further information.
Table O lists the federal Department of Health and Human Services’ Operating Budgets
for FY 2002
Section VI of this report, Mental Health Regulation, contains some highlights of federal
law
Appendix A-2 describes federal programs
Appendix C provides a lengthy list of federal laws and regulations relating to mental
health
Appendices F-1 and F-2 includes the Executive Summary of the Surgeon General’s
Report on Mental Health 1999 and chapter 6 which explains the organizing and
financing of mental health services
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TABLE O
Federal Department of Health and Human Services
Operating Divisions Budgets FY 2002
Total
Spending
(Billions)
Centers for Medicare and Medicaid (CMS) $ 374.5
Administration for Children and Families (ACF) $ 44.6
National Institutes of Health (NIH) $ 20.9
Health Resources and Services Administration (HRSA) $ 6.5
Centers for Disease Control and Prevention (CDC) $ 3.7
Indian Health Service (IHS) $ 2.9
Substance Abuse and Mental Health Services Administration (SAMHSA) $ 2.9
Food and Drug Administration (FDA) $ 1.3
Administration on Aging (AOA) $ 1.3
Agency for Health Care Research and Quality (AHCRQ) $ 1.0
Agency for Toxic Substance and Disease Registry (ATSDR) Unknown
TOTAL $ 459.6
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b. Centers for Medicare and Medicaid
The Centers for Medicare and Medicaid (CMS) play a critical role in the nation's efforts to prevent,
diagnose, and treat mental illness. Through the Medicare and Medicaid programs alone, the
federal Department of Health and Human Services spends more than $17 billion each year on
beneficiaries' mental health care.
Medicare. The Kaiser Family Foundation State Health Facts Online estimates that a total of
$3,137,000,000 was expended in Minnesota for Medicare beneficiaries for FY 2001. Using national
trend figures, it is estimated that 3 percent or $94 million of Minnesota Medicare spending was for
mental health services. The Medicare program does not provide coverage for prescription drugs.
As mental health treatment evolves toward greater reliance on drugs, Medicare enrollees with
mental illness are left with a major gap in coverage. Additionally, Medicare provides less coverage
for mental illness than for other medical conditions. Medicare coverage of hospitalization for
mental illness is subject to a 160 day lifetime cap which does not apply to other conditions, and
Medicare requires a 50 percent patient copayment for outpatient mental health treatment
compared to a 20 percent copayment for treatment for other conditions.
Medicaid. Millions of Americans with severe mental illnesses rely on the Medicaid program to pay
for the care and treatment they receive. To encourage states to make the most effective services
available to treat mental health needs, CMS provides ongoing guidance to state officials on how to
make optimal use of Medicaid funding for mental health services.
c. Substance Abuse and Mental Health Services Administration (SAMHSA)
The focal point of federal mental health activities is SAMHSA, but it coordinates with other federal
Department of Health and Human Services’ divisions to expand mental health programs as noted
below. SAMHSA will spend an estimated $2.9 billion in FY 2002 on mental health services and
programs. Of this, $11,481,910 is spent in Minnesota as shown on Table P.
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TABLE P
SAMHSA Funding For Minnesota FY 2001/02
Formula and Discretionary Grant Allotments
Substance Abuse Prevention and Treatment Block Grant: $ 22,206,440
Community Mental Health Services Block Grant: 5,897,230
Projects for Assistance in Transition from Homelessness (PATH): 507,000
Protection and Advocacy Formula Grant: 408,347
Total Formula Funding: $ 29,019,017
Discretionary Funding
Mental Health: $ 4,669,333
Substance Prevention: 2,439,893
Substance Abuse Treatment: 150,000
Total Discretionary Funding: $ 7,259,226
Total Mental Health Funds: $11,481,910
Total Substance Abuse Funds: $24,796,333
Total Funds $36,278,243
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Mental Health Services Block Grants. SAMHSA's Mental Health Services Block Grant supports
state and territorial governments' efforts for a broad range of programs – chosen by the states
themselves – to serve adults with serious mental illness and children with serious emotional
disturbances.
Services for Children. SAMHSA's Comprehensive Community Mental Health Services for Children
and their Families program supports the development of community-based, family-centered
systems of care to meet the mental health and other service needs of children with serious
emotional disturbances and their families.
Promoting Community-Based Services. In FY 2002, SAMHSA will award almost $230 million in
grants to identify and implement services focused on issues such as employment, school violence,
homelessness, consumer empowerment, HIV/AIDS and the development of culturally competent,
integrated care for people of all ages with or at risk for mental illnesses and their families.
Serving Homeless People with Mental Illness. The federal Department of Health and Human
Services agencies support outreach, housing, treatment, employment, and other needs of
homeless individuals with mental illnesses, many of whom also have substance abuse disorders.
SAMHSA provides $39 million to states to serve homeless persons.
Mental Health and Disaster. SAMHSA works with the Federal Emergency Management Agency
(FEMA) to ensure people in federal disaster areas receive immediate crisis counseling and ongoing
support. The federal Department of Health and Human Services provided economic support and
personnel to make available short- and long-term mental health services to areas most directly
affected by the September 11, 2001, terrorist attacks.
Eliminating Discrimination and Stigma. SAMHSA has ongoing campaigns on children's mental
health, school violence, and a national awareness campaign aimed at reducing the stigma of
mental illness. SAMHSA also manages the National Mental Health Information Center, accessible
through a toll-free line.
Serving People with HIV/AIDS. SAMHSA is developing and assessing AIDS-specific mental health
education and training for traditional and nontraditional mental health services. In addition,
Health Resources and Services Administration's HIV Multiple Diagnosis Initiative identifies and
responds to the personal needs of people with HIV, including mental health status and substance
abuse problems.
Training Mental Health Professionals. The federal Department of Health and Human Services '
Health Resources and Services Administration works to recruit and train clinical psychologists,
clinical social workers, psychiatric nurse specialists, licensed counselors, and marriage and family
therapists to improve access to mental health services in underserved communities. In addition,
SAMHSA supports programs to increase the availability of mental health professionals of different
racial and ethnic backgrounds.
Safeguarding Legal Rights. As part of the President's New Freedom Initiative, the federal
Department of Health and Human Services works to help people with mental illness and other
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disabilities move from institutional settings -- including the criminal justice system -- to
community-based settings. The federal Department of Health and Human Services’ Office for Civil
Rights engages in outreach, technical assistance, public education, and enforcement activities to
safeguard the rights of people with mental illness and other disabilities to receive services in the
most integrated setting appropriate to their needs. SAMHSA's Protection and Advocacy for
Individuals with Mental Illness Program provides grants to states to investigate allegations of
human and civil rights violations involving people residing in or recently discharged from inpatient
mental facilities.
Preventing Youth Violence. The federal Department of Health and Human Services and the
departments of Education and Justice support Safe Schools/Healthy Students, a $185 million
initiative providing grants to 97 school districts to work with local mental health and law
enforcement agencies to promote healthy child development and prevent violent behaviors. The
federal Department of Health and Human Services' Centers for Disease Control and Prevention
(CDC) also maintains the National Youth Violence Prevention Resource Center to provide
information about youth violence and suicide.
Older Americans and Mental Health. The federal Department of Health and Human Services'
Administration on Aging supports grant programs to expand the availability of diagnostic and
support services for people with Alzheimer's disease, their families and caregivers, and to educate
the elderly, health care professionals, and other service providers about the signs, symptoms, and
risk factors for depression.
American Indian and Alaskan Native Mental Health. The federal Department of Health and
Human Services’ Indian Health Service works with tribes, tribal organizations, other federal
Department of Health and Human Services’ agencies, and the departments of Interior, Justice, and
Education to enable tribes and tribal organizations to develop innovative strategies to provide
behavioral health and education services.
Mental Health Research. Primarily through National Institute of Health, the federal Department
of Health and Human Services invests in a wide array of research related to mental health and
disorders, including research into basic sciences, clinical treatments, and health services. In FY
2002, the National Institute of Health will spend an estimated $1.6 billion on mental health
research and related efforts -- mostly at the National Institute of Mental Health (NIMH).
d. Veterans Services and Other Federal Agencies
Other federal agencies are also engaged in activities relating to mental health, including the
Veterans Administration. The Veterans Administration through its health administration provides
mental health services for veterans across a continuum of care, from intensive inpatient mental
health units for acutely ill persons to residential care settings, outpatient clinics, day hospital and
day treatment programs, community-based outpatient clinics, and intensive community case
management programs. Minnesota has two Veterans Administration Medical Centers,
Minneapolis and St. Cloud, and contracts with approximately 25 clinics for outpatient services.
According to the Veterans Administration, $30.3 million was spent on mental health services in
Minnesota in FY 2001.
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This report does not go into significant detail about other federal programs -- education, justice,
etc. -- except to the extent that the federal programs and funding are administered by or
channeled through Minnesota state agencies (for example, Medicaid and federal block grant funds
for mental health, community social services, and public health). These federally subsidized
programs are described in the sections above on public programs and public insurance.
B. Privately Funded Mental Health Programs
Private Health Insurance Plans. The second largest source of funding for mental health services,
after public funding, is private health insurance. About $353 million was paid for by private health
plans, about one-third of the total mental health spending in Minnesota.
Employee Assistance Programs. Many employers offer employee assistance programs that
provide a variety of services, including some related to mental health problems. Employee
assistance programs do not provide mental health treatment directly but may identify potential
mental health problems in the course of providing other services, in which case the employee
would be referred to a qualified provider for appropriate care.
Nonprofit and Charitable Organizations. Many nonprofit and charitable organizations provide
mental health services. These programs, services, and funding sources are beyond the scope of
this report.
For adults, the majority of public mental health spending occurs at the state level, while state,
county, and federal spending represent nearly equal shares of spending on children’s mental
health. Revenue for DHS funding to adult programs comes equally from several directions, but
social services and MA comprise the lion’s share of DHS funding revenue for children’s programs.
While public funding is complex and of significant size and scope, it’s important to note that private
health insurance represents fully one-third of Minnesota’s mental health spending. It bears
repeating, as well, that there are many other mental health resources, whether charitable
organizations or components of larger preventive health programs, working to address
Minnesotans’ mental health needs. We just can’t quantify their contribution.
Typified by the multi-agency “Toward Better Mental Health,” collaboratives are beginning to form
among the numerous programs and agencies throughout Minnesota, with a goal of sharing
resources, information, and skills in a more streamlined fashion. Our discussion now turns to the
providers and services underpinning this considerable funding for mental health.
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IV. Mental Health Providers and Services
Many different types of individuals, organizations, and institutions provide mental health services
in Minnesota. The role of service providers and how they receive payments varies significantly
depending on the mental illness of the patient, eligibility for public programs, and the source of the
patient’s health coverage.
State licensing laws and rules prescribe the types of persons and organizations that are permitted
to provide mental health services in Minnesota. These laws specify minimum qualifications and
standards for licensure and impose regulations governing how services are provided. In order for a
mental health provider to receive payments or funding for services they provide, they may be
required to meet additional program requirements beyond state licensing laws and regulations.
The line between licensing laws and program requirements is not clear. Some mental health
providers, such as community mental health centers, receive most of their funding through grants
and payments of public money and are subject to extensive program requirements that are
essentially licensing requirements even though they emanate from program and funding
requirements.
As is so often the case with many aspects of the mental health system, there are two overlapping
systems of “licensure” and “regulation”:
1. Health Care System: Health care provider licensing and regulations (hospitals,
doctors, nurses, psychologists); and
2. Public Mental Health System: Human services licensing and regulations, plus
program requirements (community mental health centers, foster care programs,
regional treatment centers).
Some mental health providers are subject to both health care licensing requirements and program
requirements of the public mental health system. Section VI of this report, Mental Health
Regulation, provides more detailed information on regulations and program requirements for
mental health providers.
The following are the major types of health care providers that provide mental health services in
Minnesota, listed by category. These categories are overlapping and somewhat arbitrary.
Health Care Professionals
Medical Doctor (including psychiatrist)
Psychologist
Psychological Practitioner
Nurse (including psychiatric nurse practitioner)
Social Worker
Unlicensed Mental Health Practitioner
Marriage and Family Therapist
Alcohol and Drug Counselor
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Health Care Facilities and Programs
Hospital
Outpatient Clinic
Human Services Facilities and Programs
Community Mental Health Center
Regional Treatment Center
Foster Care Program
Residential Treatment Facility
Group Home
Family Community Support Service
Adult Mental Health Rehabilitative Service
Crisis Service
Details regarding each of these mental health providers are contained in Table Q below.
(Remainder of page intentionally left blank)
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TABLE Q
Mental Health Providers
Provider Type Description Regulatory Citations
Agency
HEALTH PROFESSIONALS
Medical Doctor A medical doctor has satisfied the training and practice Board of Medical MS Chapter 147
requirements for licensure established by state law and Practice
the Board of Medical Practice. Medical doctors can
provide the full range of health care diagnosis and
treatment, including prescribing medication.
Psychiatrist A medical doctor who meets special additional Board of Medical MS Chapter 147
requirements and is board-certified or eligible for board Practice
certification as a psychiatrist. Doctors and psychiatrists
are the only mental health professionals who can
prescribe medication.
Physician Assistant A person who meets requirements for registration as a Board of Medical MS Chapter 147A
physician assistant and practices under the supervision of Practice
a licensed physician.
Psychologist A person engaged in the practice of psychology and who Board of Psychology MS 148.88 to
meets the requirements for a licensed psychologist, 148.98
which includes obtaining a doctoral degree and post-
doctoral practice under supervision and passing an
examination.
Psychological A person engaged in the practice of psychology and who Board of Psychology MS 148.88 to
Practitioner or meets the requirements for licensure as a psychological 148.98
Mental Health practitioner, which includes obtaining a master’s or
Counselor doctoral degree, and passing an examination.
Nurse A person who meets nursing licensing requirements. Board of Nursing MS 148.171 to
148.285
Advanced A registered nurse who meets special additional Board of Nursing MS 148.171 to
Practice Nurse requirements and is authorized to engage in specialty 148.285
practices. Psychiatric nursing is one category of nursing
specialty.
Social Worker Persons engaged in “social work practice” as specified in Board of Social Work MS 148B.18 to
MS 148B.18, subdivision 11. 148B.289
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Programs, Funding and Regulations, December - 2002
Provider Type Description Regulatory Citations
Agency
Independent A social worker who meets special additional Board of Social Work MS 148B.21
Clinical Social requirements to practice independently in clinical
Worker settings. Psychiatric social work is one category of social
work specialty.
Unlicensed Mental Persons who provide mental health services but are not Office of Mental MS 148B.60 to
Health Practitioner licensed under other laws. These professionals are not Health Practice 148B.71
issued a license but are subject to basic regulatory
standards and a mental health client bill of rights.
Unlicensed A person who practices any of a broad array of Commissioner of MS Chapter 146A
Complementary and complementary and alternative healing methods and Health, Office of
Alternative Health treatments. These professionals are not issued a license Unlicensed
Care Practitioner but are subject to basic regulatory standards and a client Complementary and
bill of rights. Alternative Health
Care Practice
Alcohol and Drug Persons who provide counseling for abuse of or Commissioner of MS Chapter 148C
Counselor dependency on alcohol or other drugs. Health
(Alcohol and Drug
Counselors Licensing
Advisory Council)
Marriage and Family Persons who provide professional marriage and family Board of Marriage MS 148B.29 to
Therapist psychotherapy to individuals, married couples and family and Family Therapy 148B.39
groups, either singly or in groups.
HEALTH CARE FACILITIES (MDH)
Acute Care Hospital Acute care hospitals are required to be licensed by MDH. Commissioner of MS Chapter 144
Health
Outpatient Health In general, outpatient health care clinics are not licensed Health Licensing See citations
Care Clinic or regulated independently but operate under the Boards above
(see also mental authority of licensed health care professionals such as
health centers in DHS doctors or psychologists. They may also be subject to
section below) credentialing or contract requirements imposed by
health plans as a condition of receiving insurance
reimbursement.
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MENTAL HEALTH AND HUMAN SERVICES
PROVIDERS (DHS)
Community Mental Community mental health centers must satisfy Commissioner of Rule 29 MR
Health Centers treatment, staffing and quality assurance requirements Human Services 9520.0750 to
of DHS and be approved by the department in order to 9520.0870
qualify to provide certain outpatient mental health
services under the mental health act and under private
health insurance policies.
Regional Treatment Regional treatment centers are owned and operated by Commissioner of MS Chapter 253
Center DHS to provide services to persons with mental illness Human Services
and developmental disabilities (mental retardation and
related conditions). Regional treatment centers are
located in Anoka, Brainerd, Fergus Falls, St. Peter, and
Willmar. The state also operates the Ah-Gwah-Ching
nursing home, a Moose Lake facility for psychopathic
personalities, and a state-operated facility in Eveleth.
State-Operated State-operated, community-based programs are owned Commissioner of MS 253.28
Community-Based and operated by DHS, to provide community-based Human Services
Programs for Persons residential services to persons with mental illness and
with Mental Illness developmental disabilities.
Foster Care Program Foster care programs for children that meet state Commissioner of Rule 1
for Children licensure requirements. Human Services MR 9545.0010 to
9545.0260
Residential Residential treatment programs for children with SED. Commissioner of Rule 5
Treatment Facility Human Services MR 9545.0905 to
for Children 9545.1125
Group Home for Group homes that provide staffed foster care on a 24- Commissioner of Rule 8
Children hour basis for no more than ten children. Human Services MR 9545.1400 to
9545.1480.
Residential Residential facilities that serve adults with mental illness Commissioner of Rule 36
Treatment Facility through state and county grants. These facilities are Human Services MR 9520.0500 to
for Adults typically referred to as group homes or halfway houses. 9520.0690
Adult Day Care Programs operating less than 24 hours a day to provide Commissioner of Rule 223
services to functionally impaired adults with mental Human Services MR parts
illness or other impairments. 9555.9600 to
9555.9730
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Programs, Funding and Regulations, December - 2002
Adult Foster Care Programs providing food, lodging, supervision and other Commissioner of Rule 13
services to no more than four functionally impaired Human Services
adults. MR parts
9543.0010 to
9543.0140
Rule 203
MR parts
9555.5105 to
9555.6265
Residential Residential facilities operated by DHS primarily for Commissioner of Rule 26
Treatment for persons committed as sexual psychopathic personalities Human Services MR 9515.3000 to
Psychopathic or sexually dangerous. 9515.3110
Personality
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Programs, Funding and Regulations, December - 2002
The following are the major ways in which a mental health service provider receives funding or
reimbursement for mental health services provided:
1. A vendor contract with a county mental health authority
2. Fee-for-service provider contract with DHS for public insurance program
3. Contract with a health plan for a public or private insurance plan
4. Out-of-pocket payments made by patients
5. Federal or state grants
6. Private grants or charitable donations
The conditions for receiving money vary for each of the six different funding streams.
As is the case with many aspects of this report, there are “shared spaces” where systems and
requirements overlap, if anything making for more stringent standards for care. By and large,
though, mental health professionals are subject to the regulations set forth by their specialty’s
board, while treatment facilities generally answer to the Commissioner of Human Services. In the
next section we’ll look at the flip side of the coin: the eligibility requirements applying to
individuals seeking treatment.
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V. Eligibility of Individuals for Mental Health Programs
Most Minnesotans who need mental health services will have some form of “coverage” that will
pay most or all of the cost for basic inpatient and outpatient mental health treatment and drugs.
Only a small number of uninsured who are not eligible for any public program will not have a
source of third-party payment for mental health services. However, health coverage often does
not cover supplemental or non-medical services such as case management, intensive subacute
crisis services or non-hospital residential treatment. A person’s eligibility for public payments for
these services depends on their income and the seriousness of their mental health condition.
Charitable organizations may fill this gap.
The major forms of coverage for mental health services include:
Private Health Insurance Through a State-Licensed HMO, Insurer or Health Plan
Private Health Coverage Through a Self-Insured Employer
Public Health Insurance Program (MA, GAMC and MinnesotaCare)
Public Mental Health Program
Veterans Administration Services
Indian Health Service
Medicare
In addition to these major sources of coverage, individuals may receive some mental health
services in specialized settings such as correctional facilities, schools, or free clinics.
Table R describes the general eligibility requirements and coverage for each program or form of
coverage listed above.
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TABLE R
Eligibility for Coverage for Mental Health Services
Type of Coverage Eligibility Services Covered
Public Mental Health (1) Adults with serious and A comprehensive array of services must be provided
System persistent mental illness to persons with serious mental health problems.
These are specified in state law and agency rules.
(2) Children with serious Patients who have resources may be required to
emotional disturbance contribute to the cost of care according to a sliding
fee scale.
Public Health Must meet “categorical” criteria Comprehensive coverage of health services, including
Insurance Programs (e.g. elderly, disabled, family mental health services. Medicare does not cover
Medicare with children) for some prescription drugs and imposes a 50 percent copay on
MA programs as well as income outpatient mental health treatment and has special
GAMC requirements for some limits on mental health services. If enrolled in a public
MinnesotaCare programs. program through a prepaid health plan, coverage is
subject to the health plan’s requirements such as use
of network providers, utilization review requirements
and medical necessity review.
Private Health Enrolled in the health plan. All medically necessary health care services are
Insurance covered, including mental health services, subject to
HMO plan requirements such as deductibles and
Indemnity copayments, use of network providers, utilization
Insurance review requirements, etc. The state’s mental health
Nonprofit Health parity law requires private health insurers to provide
Service Plan mental health benefits and coverage limitations that
are comparable to those that apply to other medical
services.
Self-Insured Health Enrolled in the health plan Coverage is determined by employer, subject to a
Plan offered by a self-insured limited number of federal requirements. Self-insured
employer. employers are not required to offer mental health
coverage, but if they do, the federal mental health
parity law provides that they cannot impose
differential coverage limitations for mental health
services compared to other services.
Veterans Must be an eligible veteran. Comprehensive health care services, including mental
Administration health services, are provided through veterans health
Services care facilities. Service covered may depend on
whether the illness is service related.
Indian Health Service Enrolled American Indian. Health care services, including mental health services,
are provided through the Indian Health Service and
other sources.
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VI. Mental Health Regulation
There are an overwhelming number of state and federal laws and regulations that relate to mental
health. Because virtually thousands of mental health citations appear in statutes and rules, this
report provides a general overview of the regulatory framework, and gives special attention to the
most important categories of regulation. Additionally, Appendices B through E contain lists of
federal and state statutes and rules relating to mental health issues.
This report takes a broad view of the term “regulation.” The major categories of mental health
“regulation” covered in this report are:
State and federal regulations that govern the activities of individuals and organizations
engaged in providing or administering mental health services
Program requirements imposed by funders as a condition of receiving money
Accreditation and certification requirements that certain individuals and organizations
“voluntarily” meet in order to receive special recognition or privileges
A. State and Federal Regulations
“State and federal regulations” refers to state and federal laws and agency rules that impose
mandatory requirements on individuals and organizations. The regulations relating to mental
health are numerous and complex. They include:
Regulations that govern individual health professionals such as doctors and
psychologists
Regulations that govern institutions and facilities such as hospitals and half-way houses
Regulations that govern health plans such as HMOs, insurance companies and third-
party health plan administrators that administer health coverage programs that
provide or pay for mental health services among other health care services
Consumer protections, such as privacy laws
Regulation of Individual Health Professionals. Minnesota regulates individuals who engage in
certain professional activities where there is perceived to be a public interest in protecting people
from the potential harm that could be caused by incompetence, abuse, fraud or other forms of
“unprofessional conduct.” The dominant model for state regulation of health care professionals is
through licensing requirements administered by licensing boards typically made up of members of
the profession and public members.
Minnesota also uses an unusual approach to regulating certain types of mental health professionals
that does not rise to the level of full licensure. Unlicensed mental health service providers are
required to adhere to some basic regulatory standards specified in state law, including a “mental
health patient bill of rights” in Minnesota Statutes, section 148B.71, but are not issued a license.
The following is a list of health care professionals who may be involved in providing mental health
services.
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Licensed Health Professionals Who May Provide Mental Health Services.
Marriage and Family Therapist
Nurse, including Advanced Practice Nurse
Physician, including Psychiatrist*
Physician Assistant
Psychologist
Psychological Practitioner
Social Worker, including Independent Clinical Social Worker*
Alcohol and Drug Counselor
Unlicensed Complementary and Alternative Health Care Practitioner
Unlicensed Mental Health Practitioner
Section IV contains more detailed information on health care professionals and other mental
health providers.
Regulation of Institutions and Facilities. Many institutions and facilities that provide mental
health services are required to be licensed under state law, as a condition of providing services or
receiving state payments. Either DHS or MDH licenses agencies and institutions involved in
providing mental health services.
The following is a list of the major categories of regulated institutions and facilities that may be
involved in providing mental health services. Table Q contains more detailed information on
health care institutions and facilities, and other mental health providers.
Regulation of Institutions and Facilities That May Provide Mental Health Services.
Hospital
Mental Health Clinic
Regional Treatment Center
State-Operated Community-Based Program
Foster Care Program
Residential Treatment Program
Group Home
Day Care Facility
* Within some of these categories of mental health professionals, a professional can obtain specialty certification by meeting
additional requirements.
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Regulation of Health Plans.
Note: This report assumes a basic understanding of general regulations of all types of health
plans. This report focuses on health plan regulations that are specific to mental health
services.
The regulation of private health plans depends on the nature of the health plan and the type of
license held. MDH, in coordination with the Minnesota Department of Commerce pursuant to an
interagency memorandum of understanding, regulates HMOs. Other types of health plans,
including indemnity health insurance plans and insurance plans offered by nonprofit health service
plan corporations such as BlueCross and BlueShield of Minnesota, are regulated by the Minnesota
Department of Commerce.
Many employer-sponsored and union-sponsored health coverage plans are not subject to state
insurance regulations because they are “self-insured.” These plans are subject to some basic
regulations in federal law, and their third-party administrators may be subject to state laws
governing utilization review organizations.
Mandated Coverage of Mental Health Services.
HMOs (Minnesota Statutes, Chapter 62D and Minnesota Rules, Chapter 4685).
All HMOs are required to cover inpatient and outpatient mental health services.
Nonprofit Health Service Plans.
All Nonprofit Health Service Plan companies, such as Blue Cross and Blue Shield of
Minnesota, must comply with the following mandated coverage requirements:
1. Outpatient Mental Health Treatment (Minnesota Statutes, section 62A.152).
Group contracts with 100 or more certificate holders of which 90 percent or more
are Minnesota residents must cover at least 10 hours of outpatient mental health
diagnosis and treatment at 80 percent of the usual and customary charge.
Coverage must also be provided for an additional 30 hours at 75 percent of the usual
and customary charge for serious or persistent conditions with prior authorization.
(Hour and day limits no longer apply - see below.) If the patient is a minor and the
treatment plan includes family therapy, this treatment is covered if recommended
by the patient’s physician. Coverage includes outpatient services by hospitals,
community mental health clinics, licensed and approved mental health clinics (Rule
29 facilities), and such mental health professionals as psychiatrists, licensed
psychologists, psychiatric registered nurses, clinical social workers, and family and
marriage therapists. For group therapy, benefits are based upon two group
treatment sessions being equal to one individual treatment hour, for a total of 80
group therapy visits per year with prior authorization.
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2. Treatment of Emotionally Handicapped Children (Minnesota Statutes, section
62A.151). Treatment of emotionally handicapped children in a licensed residential
treatment facility must be covered the same as any other inpatient hospital medical
coverage under group contracts.
All Licensed, Insured Health Plans: Mental Health and CD Parity (Minnesota Statutes, section
62Q.47).
All health plans that provide coverage for mental health or CD services must not
place a greater financial burden on the insured or be more restrictive than those
requirements and limitations for inpatient and outpatient medical services under
the plan. The hour and day limitations provided in 62A.149 and 62A.152 may no
longer be applied. (See also mental health parity section below.)
Federal and State Mental Health Parity Laws. The Mental Health Parity Act of 1996 (Public Law
104-204) was signed into law on September 26, 1997. The federal parity law requires that those
insurers and self-insured plans who provide coverage for mental health services must offer mental
health benefits that are comparable to the benefits offered for other health care services. The
federal law does not mandate that mental health coverage be provided.
Key Provisions
Aggregate lifetime limits and annual limits for mental health benefits must be the same
as aggregate lifetime limits and annual limits for medical and surgical benefits.
The law covers "mental health services" as defined under the terms of individual plans;
it does not cover treatment of substance abuse or CD.
Existing state parity laws are not preempted by the federal law.
The law applies only to employers that offer mental health benefits; it does not
mandate coverage of mental health benefits.
The law allows for many cost-shifting mechanisms, such as adjusting limits on mental
illness inpatient days, prescription drugs, outpatient visits, raising co-insurance and
deductibles, and modifying the definition of medical necessity.
The law applies to both fully insured state-regulated health plans, and self-insured
plans that are exempt from state laws under the Employee Retirement Income Security
Act (ERISA), which are regulated by the Department of Labor.
The law has a small business exemption that excludes businesses with 50 employees or
less.
The law allows an increased cost exemption; employers that can demonstrate a one
percent or more rise in costs due to parity implementation are allowed to exempt
themselves from the law.
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Federal Regulations Implementing the Parity Law. The Clinton Administration issued interim
final regulations in the Federal Register (December 22, 1997) that set forth the guidelines for
implementing the Mental Health Parity Act. The White House and the Office of Management and
Budget (OMB) ruled that employers must first comply with the law in 1998 and develop a cost
history of at least six months (retrospective data) before seeking an exemption, with some
exceptions.
Comparison of Minnesota and Federal Parity Laws. Minnesota law also contains a mental health
parity requirement, but there are significant differences between the state and federal parity laws.
Federal parity law only requires parity of aggregate lifetime limits and annual limits. Minnesota
law requires parity in all areas. Minnesota law applies only to insured health plans; federal law
covers both insured and self-insured health plans. Federal law contains exemptions for small
businesses and for employers who can demonstrate that the law will increase their costs by one
percent or more; Minnesota law does not.
Geographic Accessibility. Minnesota Statute section 62D.124, subdivision 1, requires HMOs to
ensure that enrollees have access to mental health services within 30 miles or 30 minutes, with
some exceptions.
Court-Ordered Mental Health Services. In 2001, the Minnesota Legislature enacted a law
requiring health plans to pay for court-ordered mental health services under the following
circumstances (Minnesota Statutes, section 62Q.535):
The services are otherwise covered by the plan.
The court order is based on behavioral care evaluations performed by a licensed
psychiatrist or a doctoral level licensed psychologist, which includes a diagnosis and an
individual treatment plan for care in the most appropriate, least restrictive
environment.
The care is provided by a participating provider of the health plan company, or by
another provider if appropriate care is not available through the plan, or if another
provider is required by state law or rule.
The court-ordered covered individual must not be subject to a separate medical necessity
determination by a health plan company under its utilization review procedures. The health plan
must pay for the clinical evaluation used by the court if it is performed by a health plan
participating provider. This requirement does not apply to self-insured plans, which are exempt
from state insurance requirements under the federal ERISA law.
Medical Necessity for Mental Health Services. Minnesota Statutes, section 62Q.53, establishes a
special definition of “medical necessity” for mental health services. Health plans are prohibited
from using medical necessity criteria that are more restrictive than the following statutory
definition:
"Medically necessary care" means health care services appropriate, in terms of type,
frequency, level, setting, and duration, to the enrollee's diagnosis or condition, and
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diagnostic testing and preventive services. Medically necessary care must be
consistent with generally accepted practice parameters as determined by health care
providers in the same or similar general specialty as typically manages the condition,
procedure, or treatment at issue and must:
(1) help restore or maintain the enrollee's health; or
(2) prevent deterioration of the enrollee's condition.
This requirement does not apply to self-insured plans, which are exempt from state insurance
requirements under the federal ERISA law.
Coverage for Antipsychotic Drugs. Minnesota Statutes section 62Q.527 requires health plans
that cover prescription drugs to cover antipsychotic drugs regardless of the plan’s drug formulary if
the health care provider certifies that the prescribed drug will best treat the patient’s condition. An
enrollee receiving a prescribed drug for a diagnosed mental illness or emotional disturbance may
continue to receive the prescribed drug for up to one year without any special payment
requirements, when a health plan’s drug formulary changes or an enrollee changes health plans
and the medication has been shown to effectively treat the patient’s condition. This requirement
does not apply to self-insured plans, which are exempt from state insurance requirements under
the federal ERISA law.
Attorney General’s System for Independent Review of Mental Health Denials. As part of a
settlement of an investigation undertaken by the Attorney General, an external review panel, the
Administrative Review Committee, has been established to review cases when a request for certain
types of mental health services is denied by the health plan. The Attorney General has asked other
health plans to voluntarily agree to submit denials to the review panel.
HEDIS Quality Data. MDH requires licensed HMOs to submit quality information using the
nationally recognized HEDIS method. Two categories of data required are antidepressant
medication management (the number and type of provider visits for patients with depression who
are being treated with antidepressant medication) and inpatient utilization data.
Expanded Provider Networks. Minnesota law requires health plans that limit coverage to
specified network providers to offer enrollees the option of choosing a plan that includes an
expanded provider network of all “allied” providers, such as chiropractors and psychologists, who
are willing to meet the health plan’s provider participation requirements. Health plans with fewer
than 50,000 enrollees are exempt. This requirement does not apply to self-insured plans, which are
exempt from state insurance requirements under the federal ERISA law. Minnesota Statutes,
section 62Q.095.
B. Consumer Protections
For purposes of this report, “consumer protections” means general laws and regulations that are
intended to protect consumers in certain circumstances but are not imposed directly on regulated
individuals or organizations in the form of traditional licensing requirements or business
regulations. Many health care related consumer protections exist.
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Privacy Laws. Privacy laws protect a patient’s medical records or patient's health care information
from being disclosed to persons other than those who have a legitimate right to the information
under state and federal law. Privacy protections exist in both state and federal law.
Bills of Rights. Bills of Rights have the effect of granting individuals certain rights that they can
enforce against a person who violated their right. The following Bills of Rights are relevant to
persons receiving mental health services.
Patients and Residents of Health Care Facilities Bill of Rights. Persons and residents
in inpatient and residential health care facilities. Minnesota Statute section 144.651.
Mental Health Patient Bill of Rights. Persons receiving services from an unlicensed
mental health practitioner.
HMO Bill of Rights. Persons enrolled in an HMO.
ADA. ADA provides protection against discriminatory practices for disabled individuals, including
people with mental illness. Protection extends to employment, access to public programs and
services and public accommodations. A person has a disability if s/he has a physical or mental
impairment that substantially limits one or more major life activities. Under the employment
provisions of the ADA, a disabled person who is otherwise qualified for a position may request a
reasonable accommodation to enable her/him to perform the duties required for the position.
Tort Laws. General tort laws and professional malpractice laws apply to mental health issues. In
addition, Minnesota law creates another legal remedy for persons who have been sexually
exploited by a psychotherapist. Minnesota Statute sections 148A.01 to 148A.06 create a legal
cause of action against health professionals who provide psychotherapy services if the health
professional exploits the therapeutic relationship to engage in sexual contact with the patient.
Vulnerable Adults Act. The Vulnerable Adults Act provides various protections for vulnerable
adults and requires reporting of abuse or neglect of a vulnerable adult. The definition of
“vulnerable adult” includes a person who “possesses a physical or mental infirmity or other
physical, mental, or emotional dysfunction.” Minnesota Statutes, sections 626.557 and 626.5572
Mental Health Commitment Laws. The mental health civil commitment laws are used when a
person with mental illness indicates by words or actions that s/he is likely to be dangerous to self or
others, or is unable to provide for basic human needs. Minnesota Statutes, Chapter 253A.
C. Program Requirements
“Program requirements” refers to requirements imposed by a funder or program administrator as a
condition of receiving payments or providing services under a particular program or activity.
Minnesota Mental Health Program Requirements. The two categories of mental health program
requirements are: 1) funding requirements, which must be satisfied in order to receive federal and
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state mental health funds or public health insurance program payments; and 2) service
requirements, which are mandated mental health services that counties must provide under the
Adults and Children’s Mental Health Acts.
The major categories of program requirements are listed below. More information about some of
these programs is provided in the description of mental health programs in Section III of this
report.
Funding Requirements for State Mental Health Programs or Public Insurance.
Mental Health Clinics (approval required for private insurance reimbursement).
Minnesota Statute section 62A.152; Minnesota Statute sections 245.61 to 245.69; Rule
29; Minnesota Rule 9520.0050
Standards for Mental Health Reimbursement under MA. Rule 47 or Minnesota Rules
9505.0170 to 9505.0327
Family community support services. Minnesota Rule 9505.0326
Home based mental health services. Minnesota Rule 9505.0324
Therapeutic support of foster care. Minnesota Rule 9505.0327
Mental Health Program Grants. Minnesota Rule Chapter 9535
Family Community Support Services. Rule 15 or Minnesota Rules 9535.4000 to
9535.4070
Administration of Community Social Services. Rule 160 or Minnesota Rules
9550.0010 to 9550.0092
Early and Periodic Screening, Diagnosis and Treatment (EPSDT), or Child and Teen
Checkup (C&TC) Services. Rule 61 or Minnesota Rules 9505.1500 to 9505.1690
Surveillance Utilization and Review Services. Rule 64 or Minnesota Rules 9505.1750
to 9505.2150
Service Requirements Under the Mental Health Acts. (Minnesota Rule Chapter 9520)
Community Mental Health Centers. Minnesota Statute sections 245.61 to 245.69;
Minnesota Rule 9520.0040
Education and Prevention Services. Minnesota Statute sections 245.468 (adults) and
245.4877 (children)
Mental Health Identification and Intervention (children). Minnesota Statute section
245.4878
Emergency Services for Adults. Minnesota Statute sections 245.469 (adults) and
245.4879 (children)
Outpatient Services for Adults. Minnesota Statute sections 245.470 (adults) and
245.488 (children)
Employment Support Services. Minnesota Statute section 245.4705 (adults)
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Mental Health Case Management Services. Minnesota Statute sections 245.4871
(adults) and 245.462 (children); Rule 79 or Minnesota Rules 9520.0900 to 9520.0926
Community Supports and Day Treatment (adults). Minnesota Statute section
245.4712; Rule 78 or Minnesota Rules 9535.2000 to 9535.3000
Case Management and Community Family Support (children). Minnesota Statute
section 245.4881
Residential Treatment. Minnesota Statute sections 245.472 (adults) and 245.4882
(children)
Acute Care Hospital Inpatient Treatment. Minnesota Statute sections 245.473
(adults) and 245.4882 (children)
Regional Treatment Centers. Minnesota Statute sections 245.474 (adults) and
245.490 (children)
Screening For Inpatient and Residential Treatment. Minnesota Statute section
245.476 (adults) and 245.4885 (children)
State-Operated, Community-Based Services. Minnesota Statute section 253.28
D. Accreditation and Certification Requirements
Accreditation and certification requirements are those requirements imposed by a private
organization as a condition of accreditation or specialty certification by that organization. For
example, many health plans seek accreditation from the National Committee on Quality Assurance
as a method of demonstrating to purchasers and customers that they maintain a higher level of
quality and performance. No further research was conducted on the mental health related
requirements of various accreditation and certification agencies.
The sea of regulations is navigable, but we only chart the waters here. Although the regulatory
realm is much too vast to actually traverse in this report, it is helpful to remember that program
requirements are included here as well, to be as inclusive as possible. The final section, to follow,
takes us from precision to broad brush strokes as we paint an outline of some of the issues and
trends identified during this research process.
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VII. Mental Health Issues and Trends
The sampling of issues and trends touched on below represents only the tip of the iceberg. There is
a vast amount of exciting research and an evolving set of best practices ready for dissemination
throughout the country; however, the majority of these great resources are not in widespread use.
Antiquated public policy, not to mention the differing approaches of the state agencies, ill equips
the public mental health system to take advantage of the progress. The lack of coordination
between the public and private systems further constricts the system as a whole, negatively
impacting health outcomes for people suffering from mental illness. It is important to remember,
in contemplating these trends, that they are provided to suggest a diagnosis of and improvement
for Minnesota's mental health services. The modernization of public policy, systemic
encouragement for upcoming health professionals to consider the mental health field, and
methods to reduce the stigma associated with mental health could be major first steps.
Spending Growth. Spending on mental health services is increasing rapidly, although some
studies suggest that it has been growing at a slower rate than overall health care spending.
Legislative Auditor’s Report, p 37, citing two studies. More information on spending trends can be
found in the Legislative Auditor’s Report and the U. S. Surgeon General’s Report.
State Spending Increasing in Proportion to Local and Federal. State spending on mental health
services is increasing rapidly as compared to county and federal spending. Table S illustrates this
trend.
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TABLE S
Trend In Minnesota’s Adult Mental Health Funding
By Major Source of Funding
State County Federal
245
$300
216
182 196
$250 167
$200
Millions
136
$150 70
57 54 54 66 65
51 51 53
$100 45 45 45
$50
$0
FY 91 FY 93 FY 95 FY 97 FY 99 FY 01
Expenditures by State Fiscal Year
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Private Coverage of Mental Health Services Has Grown Rapidly. Mental health benefits have
expanded significantly under public and private insurance programs (Legislative Auditor’s Report
p. 8). Public health insurance plans cover mental health services along with other health care
services. Nearly all private health insurance plans also cover mental health treatment as a result of
both market demand by employers and consumers, and state and federal mandates and parity
laws.
Mental Health System Is Not Meeting Needs. The Surgeon General’s report concluded that
about only one-third of adults and one-half of children with a diagnosable mental health or CD
disorder received treatment in any given year. Ironically, the report also found that nearly half of
the people who did receive behavioral health services in a year did not have a diagnosable mental
health or CD disorder.
Deinstitutionalization. During the 1950’s, deinstitutionalization became the trend. That trend
has now evolved toward community-based services, not just away from institutions, to allow
people to live as normal a life in the community as possible. Development of drugs to help manage
mental illness played a part in this evolution. New public programs and funding sources are
springing up in support of these community-based services.
Adolescent Mental Health. Mental health problems among adolescents are either increasing or
being identified and/or acknowledged at a greater rate.
Drugs. In keeping with the advancement in pharmacology mentioned above, the trend in
treatment appears to be toward a significant increase in the use of drugs to complement
psychotherapy.
Managed Care. Most experts seem to agree that managed behavioral health care, if implemented
properly, has the potential to both control cost and improve care. Studies show that managed
behavioral health care does control cost, but there are mixed reports on its impact on quality of
care. This may be because increased regulation and a market trend toward open access health
coverage limits the effectiveness of tried and true quality improvement methods.
Lack of Coordination. The chasm between public and private programs, funding, and services is
significant. Therefore, true continuity of care remains a vision for the future. As might be
expected, cost-shifting shoots back and forth across the chasm. Besides recognition of the
public/private gap, attention must be focused on better collaboration of state and local agencies.
Capacity. Recent years reflect a shortage of mental health treatment capacity, which may affect
patients’ ability to access needed services in their communities. The capacity problem appears
most acute for inpatient psychiatric treatment. In other words, the toughest arena of mental
health care is understaffed.
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Best Practices. Mental health providers have access to a number of evidence-based best
practices borne of extensive research--but few take advantage of them. Primary care
providers are reluctant to employ these practices, few public policies directly support them,
and few incentives exist to motivate mental health providers to improve services through these
models.
Dual Diagnosis of Mental Illness and Chemical Dependency. DHS estimates that about 50
percent of persons with a serious mental illness also have a substance abuse problem. Integrated
mental health and CD treatment may be more effective than parallel but separate treatment. For
these individuals, disruptions in continuity of care and changing insurance coverage remain
obstacles to optimal treatment.
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VIII. Conclusion
Here is what’s supposed to happen: Taken as a whole, the public system is supposed to function in
a coordinated manner based on the Adult and Children's Mental Health Acts. The private system is
supposed to include mental health services as part of the continuum of health delivery, functioning
within the laws and regulations of the state and federal government. Both sectors in full swing are
supposed to result in the best possible treatment, services, and supports for Minnesotans. But
that’s not what’s happening.
Minnesota's mental health system as a whole often falls short -- because there is no “whole.”
These failings result not from lack of commitment and skill of those who administer, supervise or
provide for the delivery care, but from the layering on of multiple, well-intentioned programs
without overall direction, coordination, or consistency. The system is fragmented and overlaid,
leading to unnecessary and costly duplication of services in some areas, while elsewhere people are
falling through the cracks between programs. Recent grass-roots collaboratives reflect a growing
instinct toward addressing this problem, but changes must be made at a policy level to simplify,
focus, and project this kaleidoscope of efforts and resources throughout the state.
Funding, while ample, is complicated to coordinate, and difficult to track. The financing of care,
which amounts to something like $1.2 billion annually, comes from at least one of these myriad
sources: Medicaid, Medicare, Veteran's Administration, DHS or another state agency, any of the
87 Minnesota counties, foundations, or private insurance -- or out of consumers’ own pockets.
Each funding source has its own complex, sometimes contradictory set of rules. This overlapping
of the systems can make patients eligible for both care systems simultaneously -- or potentially
ineligible for either one.
Minnesota's plentiful but splintered mental health programs, professionals, and dollars must pull
together. Picture a giant drawstring bag into which all efforts go and out of which all needs are
met. The Surgeon General's Report has set the stage for a call to action from every aspect of our
current mental health system. Minnesota awaits strong leaders to compose and orchestrate a plan
to make our mental health system whole -- much greater than the sum of its parts.
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