Shalom House says Maine’s stagnant Medicaid reimbursement rates have forced the Portland nonprofit to shut down a support service it provides to 170 mental health patients.

The service – called community integration or case management – helps adult mental health patients participate more fully in society by assisting them with tasks they can find daunting, such as applying for housing, managing medication, arranging transportation to social events or making appointments.

Shalom House offered the service for 27 years before officials said they were forced to end the program on Jan. 10 because of the mounting losses it incurred. Seven employees were laid off.

“We are continuing to erode community mental health services in Maine,” said Mary Haynes-Rodgers, executive director of Shalom House. “This is horrible.”

Case management is a prevention program that in the long run should save the state money, she said.

“We help them learn skills so they can operate safely in the community,” Haynes-Rodgers said. “It keeps them from having an episode, and out of our jails and emergency rooms.”


Shalom House is working with clients to transition to other similar programs, but some of the programs have less comprehensive services, and about 30 to 50 patients will refuse to go into other programs, Haynes-Rodgers said.

The Maine Department of Health and Human Services is working with clients to transfer them to other, similar mental health support programs, spokeswoman Jackie Farwell said.

Proposals to significantly increase reimbursement rates for case management – under Section 17 of the Medicaid program – have stalled for years. Though there have been small adjustments over time, the rate is nearly identical to 2008, when the Maine’s minimum wage was $7 per hour.

To attract employees, Haynes-Rodgers said, Shalom House paid $19 per hour, $7 per hour more than the state’s current minimum wage. Even so, it’s challenging work and the nonprofit had difficulty finding employees, fueled in part by Maine’s overall workforce shortage. Also, because the reimbursement rate didn’t match what they paid employees, the service lost money.

The DHHS announced Tuesday that it would conduct a comprehensive reimbursement rate study of a wide range of Medicaid programs, including for mental health services. The study is expected to be done by November, with recommendations to follow.

DHHS officials acknowledge that reimbursement rates are too low in many areas of Medicaid, but say they want to complete the study so they can adjust the rates fairly and improve efficiency. However, if a service is determined to be in crisis, DHHS said it will consider increasing the rates before the study is completed.


In the meantime, patients can be served by a similar program under Section 17 called Behavioral Health Homes, Farwell said.

“Both (case management) and Behavioral Health Homes services assist individuals with serious mental illness with ensuring their behavioral health and social needs are met, and that all of their providers are on the same page,” Farwell said in a statement. “A special focus of Behavioral Health Homes is to work with the (patient) and primary care practices to ensure that members receive needed preventive care.”

The reimbursement rate also may be a better fit for agencies that use the health homes model. Health care providers “have expressed satisfaction with the more flexible payment model” that “ties a portion of payment to quality,” Farwell said.

The total number of mental health patients served by Section 17 statewide has dipped slightly since 2016 – from 12,221 in March 2016 to 11,731 in March 2019. However, while case management patients plummeted from 8,870 in 2016 to 4,161 in 2019, Behavioral Health Homes patients increased from 3,351 in 2016 to 7,570 in 2019.

Haynes-Rodgers said Shalom House’s case management program has been bleeding money for years, and her agency can’t wait a year or longer for rate increases. Haynes-Rodgers said she knows many other nonprofits have closed or cut back on case management services.

“When a service is in a crisis, you can’t wait until November for a study,” Haynes-Rodgers said, adding that she’s disappointed in Gov. Janet Mills’ administration for not stepping up with timely rate increases. “The truth is, this doesn’t seem any better than the LePage administration.”


The program, which had an $800,000 budget, lost money for years, Haynes-Rodgers said. The program was $144,000 in the red in 2018, $34,000 in 2019 and a projected $85,000 loss in 2020 before deciding to close.

Shalom House is not closing and will continue to provide other mental health services and supportive housing programs, she said.

Betsy Sweet, legislative advocate for the Behavioral Health Community Collaborative and a Democratic candidate for U.S. Senate, said that it doesn’t make sense to shortchange preventive programs like case management.

“We know what happens when people who need supports – often for just a few hours a day or week – don’t get them,” Sweet said.  “Their condition deteriorates. They often lose their housing, whether it is independent or supported, become homeless, or end up in jail, don’t access needed services, health care or medication and require emergency care or full time residential care.

“Then we end up spending vastly more money on vastly less effective services.”


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