Unfair Funding? GT County Seeks Answers On Mental Health Services

Grand Traverse County commissioners concerned about disproportionately high costs for county mental health services will consider hiring an outside firm Wednesday to help them analyze their agreement with Northern Lakes Community Mental Health (NLCMH).

Commissioners will vote on using a request-for-proposals (RFP) process to hire a certified public accountant with experience auditing mental heath authorities to evaluate Grand Traverse County’s services through NLCMH. The estimated cost for the audit is $25,000-$50,000. County Commission Chair Rob Hentschel says the one-time expense is justified by the tens or even hundreds of thousands annually the county could be saving on its mental health contract. Hentschel emphasizes that county leaders don’t intend to cut or reduce any mental health services for residents; rather, commissioners believe the county is overpaying for the same services other counties receive at a significantly lower rate.

“(We’re) paying heads and shoulders above what most counties are paying…including when you look at the 83 counties in Michigan,” says Hentschel. “Even in the counties we’re associated with together at NLCMH, we are paying the lion’s share. Not just because we have more people (in the county), but also when you look at per capita.” Hentschel says the higher costs don’t appear to be reflective of more or better services provided in Grand Traverse County than elsewhere. “Most other counties are providing similar or the same services at a much lower cost,” he says.

Grand Traverse County is one of six counties that entered a joint agreement in 2003 to provide mental health services to their residents by founding NLCMH. The organization serves adults with serious mental illness, individuals with intellectual and development disabilities, children with serious emotional disturbance, and individuals with co-occurring substance abuse disorder. Leelanau, Crawford, Missaukee, Roscommon, and Wexford counties join Grand Traverse County in contributing funds annually to receive mental health services through NLCMH. A majority of NLCMH’s $70 million budget comes from other sources, however, including the state of Michigan.

Last June, county commissioners raised concerns about the amount Grand Traverse County was contributing compared to the other five counties in the agreement and asked staff to investigate the county’s options for addressing the disparity. Grand Traverse County pays $682,000 annually to NLCMH. That figure is nearly five times more than the next highest contributor, Leelanau County at $139,700. From there, contributions drop to $76,543 annually in Wexford County, $57,425 in Roscommon County, and $35,000 annually in Missaukee and Crawford counties. Adjusting for populations, the contributions equal a range of $2.33-$2.53 per person in the four lowest-paying counties, while Leelanau County comes in at $6.48 per person and Grand Traverse County at $7.48 per person.

County Administrator Nate Alger says he’s met with NLCMH staff and attempted to find out why Grand Traverse County’s rate is high compared to other counties. “There’s nobody close to that (rate),” he says. “We’re trying to evaluate if we’re receiving the appropriate level of services as it relates to the cost to the county. We really don’t have a solid answer yet.” Annual CMH costs in other northern Michigan and Upper Peninsula counties also show lower per-person rates than Grand Traverse County, ranging from $4.09 per person in Emmet County ($135,000 annually) to $5.34 in Osceola County ($124,000 annually) to $5.66 per person in the U.P.’s Delta County ($206,000 annually).

NLCMH CEO Karl Kovacs addressed the issue when questioned about the higher rate by commissioners in June, saying he wasn’t certain as to its origins but believed “historic” factors influenced the contribution levels. When the six counties entered into their agreement in 2003, combining two community mental health authorities into one, each county’s past contribution level was “carried forward into the new enabling agreement,” Kovacs said. “How that was calculated historically, I’m not positive.”

Hentschel says Grand Traverse County has incurred additional expenses in recent years by paying for a supplemental contract to increase mental health services at Grand Traverse County Jail. That annual contract is $163,500 and is in addition to the $682,000 paid to NLCMH. But the enabling agreement states jail support is supposed to be included in the services provided to Grand Traverse County, Hentschel notes – an issue that's caused past county commissioners to also question the NLCMH contract. Because of the county's rising costs and lack of clarity around the contract, Hentschel says he is supportive of seeking an audit so the county can get an outside assessment of the services it's receiving.

Alger also supports the move, noting that an audit could potentially confirm that funding levels are appropriate for what Grand Traverse County is receiving and the agreement is an equitable one. But if not, the county has “a few different options,” Alger says. One of those would be going to the other five counties and attempting to renegotiate the enabling agreement to make each county’s contribution more equitable. Hentschel and Alger both agree it would be premature to begin negotiations without an independent audit, both for leverage and political reasons.

“Before I go to a negotiating table, I need to know what my options are,” Hentschel says. “We need to know that we have an alternative if no one wants to look at the agreement.” One of those alternatives could be Grand Traverse County withdrawing from NLCMH. The county is mandated to provide mental health services, but it could do so by either forming its own authority or by partnering with one or more other counties – such as Leelanau – to form a new community mental health entity. That would be a significant decision requiring careful analysis, says Alger, who adds that he hasn’t spoken yet with the other five counties about any of those options, preferring to see the results of an independent audit first. “We may be receiving the correct amount of services for the funding,” he says. “We need to get our questions and concerns in order before we go in and cause stress about potentially dissolving an agreement.”

Hentschel noted to his fellow commissioners in June that Grand Traverse County’s questions will ultimately need to be resolved with its five partner counties, not NLCMH. He told the board and Kovacs that protecting services for residents was a top priority. “Just to give assurance to you and the public, any changes I support have to first account for no interruption in services to our current clients,” Hentschel said to Kovacs. “A lot of people rely on your services, and they are our first priority.”