50th anniversary of the Community Mental Health Centers Act

Did you know that 2013 marks the 50th anniversary of the Community Mental Health Centers (CMHC) Act? In 1955, President Eisenhower appointed the Joint Commission on Mental Illness and Health. The final report of the Joint Commission, released in 1961, set the stage for passage of the CMHC Act of 1963.  The Act provided Indiana the opportunity to develop a state plan for community mental health, funded in large part by federal grants provided directly to the designated agency.  It was the goal of the federal government to establish a CMHC in designated catchment areas, which would be defined by a mixture of geography and population. In order to qualify for a grant, the application had to propose a continuum of care involving “five essential services”:  inpatient hospitalization, partial hospitalization, outpatient, 24/7 emergency services, and consultation services.  The “five essential services” would later be expanded to twelve essential services that included addictions treatment and services for children. (Stephens, 2010)

The Indiana Department of Mental Health (IDMH) decided to collaborate with local communities and the Mental Health Association by jointly developing a state plan for community mental health services.  As a result, within Indiana, communities established locally governed not-for-profit corporations designed to deliver those identified “essential services.”  In order to provide coverage for the entire Indiana population and meet federal requirements, thirty CMHCs were developed.

In 1971 the Indiana General Assembly passed Indiana Code 16-16-1, which governed community mental health centers. IC 16-16-1 required each county to provide financial support for that county’s designated CMHC, in an amount equal to four cents for each $100 of assessed property valuation. The statute provided that the Department of Mental Health would review and approve the operating budget of each CMHC and, after accounting for the required county funding, federal grants and service revenue, would contract with the CMHC for the amount of the operating deficit, utilizing funds appropriated by the Indiana General Assembly.  This type of funding became known as “so-called deficit financing methodology”. (Stephens, 2010)

Throughout the decades of the 1970s and 1980s, Indiana relied on the federal government to set policy for the governance of CMHCs, while the Department of Mental Health focused on the operation of state hospitals. When Jimmy Carter became President, he appointed a commission to review the development of community based mental health. Among the issues reviewed by the commission, was the problem of homelessness. Research into the causes of homelessness showed that many were individuals with a history of mental illness. (Stephens, 2010)

The Mental Health Systems Act, which resulted from the commission’s recommendations, required an additional seven “essential services”. These were: Child and Adolescent Services, Services to the Elderly, Alcoholism Services, Drug Abuse Services, Rape Crisis Services, Screening Services and Residential Services. The last two were directed toward the seriously mentally ill, who were at risk for homelessness. In 1981, Ronald Reagan became President and he offered a different view of the role of the federal government in mental health services. As a result, funding systems changed, and grants that had been provided directly to local community mental health centers were given to the states to administer. The policy-making role of the federal government was turned over to the states. (Stephens, 2010)

The community mental health system was designed as a safety net to ensure that the most seriously mentally ill would receive treatment. The resulting national industry that has grown up around this concept now consumes approximately three percent of the total United States annual health care expenditures. In FY 2012, the federal budget for health care expenditures was $866 billion.  For federal FY 13, health care expenditures are projected to become the largest single line item on the federal budget, even larger than defense.  (USGovernmentspending.com, 2013)

The following facts and figures were taken from the Indiana Council on Community Mental Health Centers (ICCMHC) web site.  ICCMHC is the state trade association for CMHCs operating in Indiana.  According to their “fast facts”, Indiana CMHCs do the following.

 “•Treat over 116,000 individual Hoosier Assurance Plan clients annually

•Employ over 8,900 individuals statewide

 •Provide services in each of Indiana’s 92 counties, ensuring critical access to mental health services to all eligible citizens statewide  

 •Utilize over $294 million in Medicaid Rehabilitation Option funds, including over $119 million in state funds and $32 million in county funds 

 •Reduce hospital stays and incarceration costs by providing a continuum of care within their communities 

 •Are the only providers of Medicaid services in the state required to help pay the federally required state “match” 

 •Indiana community mental health centers have played a critical role in Indiana’s decision to close state based mental health institutions by allowing clients to continue receiving services in a community based setting and thereby saving Indiana state government millions of dollars.” (ICCMHC, 2013)

The National Council for Community Behavioral Health (National Council) is the national trade association for behavioral health organizations. According to their web site, they represent 1,950 member organizations and “serve our nation’s most vulnerable citizens — more than 8 million adults and children with mental illnesses and addiction disorders.”  (National Council for Behavioral Health, 2013)

It’s been 50 years but we sure have come a long way.  Let us know what you think about the evolution of the CMHC Act by making comments on our Facebook page http://www.facebook.com/AspireIndiana

About the Author

Jerry Landers is the Vice President of Business Development for Aspire Indiana. While the beliefs and opinions expressed in this blog are solely those of Mr. Landers you can learn more about community mental health and how it intersects with business and media at http://www.facebook.com/AspireIndiana


Stephens, J (2010), Brief History of Community Mental Health Centers in Indiana, Retrieved from http://www.iccmhc.org/community_mental_health_history

Indiana Council on Community Mental Health Centers (2013), ICCMHC Fast Facts, Retrieved from http://www.iccmhc.org/facts

National Council for Behavioral Health (2013), About Us, Retrieved from http://www.thenationalcouncil.org/cs/about_us

USGovernmentspending.com (2013), US Health Care Budget, Retrieved from http://www.usgovernmentspending.com/health_care_budget_2012_1.html

About jerrylanders

Executive Director for Aspire Indiana Health and Vice President for Aspire Indiana. Doctorial Student at Columbia Southern University studying business. Married and father of three children. I blog about mental health, business, social media and how all three intersect.
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