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Lebanon County will no longer provide targeted case management (TCM) services for local residents through their Mental Health/Intellectual Disabilities/Early Intervention(MH/ID/EI) department beginning July 1.

The move to privatize TCM services with Service Access and Management (SAM), a Berks County business based in Reading, will lead to the elimination of 16 full-time county jobs (and an additional seven unfilled positions) while reducing the county’s annual deficit for this program by approximately $350,000 to $400,000 in the first year, according to Holly Leahy, Administrator, MH/ID/EI.

“We believe SAM will bring expansive knowledge, experience and quality targeted case management services to the mental health service line in Lebanon County,” Leahy told the county commissioners at their May 6 meeting. “We look forward to SAM providing the same quality of TCM services delivered by Lebanon County MH/ID/EI TCM program throughout the years.”

How much SAM will be paid is still to be determined since reimbursement rates have not yet been established for fiscal year 2021-2022. Over the past several years, however, the county has been running an annual deficit since program costs exceeded the amount that was reimbursed by state and federal funding, said Jamie Wolgemuth, County Administrator. (The annual deficit was approximately $350,000 annually, according to Leahy.)

“It is our program, so we have to pay for what we were doing as the provider of that service,” Wolgemuth said. “As our own provider, there was only so much that we could get for it. For example, if it cost us $20 to provide a service, we were only getting back $15 for that service.”

The reason the county ran a deficit was because state and federal reimbursements typically only cover the time spent with a client, which are billed in 15-minute increments called units, said Leahy.

That meant the county was losing money for costs that were not being reimbursed to them, said Wolgemuth.

“If an employee spends half an hour traveling to go see an individual, that half hour is not reimbursable,” Wolgemuth said. “So there are stipulations that only a certain portion of a staff member’s time is billable. Over and above that, all other costs have to be absorbed by the system (provider). And personnel costs are a big part of that. Everything goes up – benefits, costs and other expenses.”

Although Lebanon County has been a licensed provider of mental health TCM services since the 1980s, a 2013 decision by the Pennsylvania General Assembly to lower reimbursements by 10 percent signified the beginning of the end for many counties as licensed TCM service providers, according to Wolgemuth.

“At some point this made sense to be a licensed provider because our costs were being covered,” Wolgemuth said. “In 2013, the state cut 10 percent across the board all reimbursable services for mental health and it has never come back. In that period of time, over the past seven or eight years, costs have gone up while that (reimbursement) has stayed stagnant. At some point, you either have to get out or keep kicking in (county money).”

It was a case of the county’s mental health department’s resources being stretched thinner and thinner over the past seven to eight years, according to Leahy.

“In actuality, we were being asked to do more with less,” Leahy said. “Now we’ll be able to stretch that (funds) out over all the other services we provide.”

As part of the move towards privatization, county commissioners did unanimously approve covering over $98,000 in start-up expenses for the new provider. Those costs are coming from state block grants and not county taxpayer dollars, according to Wolgemuth.

“Concerning start-up costs, those are typical for a start-up expense for providers and this happens quite often,” said Wolgemuth in reference to a question as to why a private company is not providing funding for its own start-up expenses. “The state allows it and these requests will typically cover overhead, setting up technology, getting office furniture and supplies and setting up shop.”

State law prohibits those costs being embedded in charges for services provided, Wolgemuth added.

“The fee for service that we pay cannot include that, so we are going to pay allowable costs,” Wolgemuth said, “that are closely accounted for, strictly accounted for. If an agency is transitioning from one kind of accounting to another, the state provides funding for the transition, so we were able to tap into that pot of money for the start-up costs.”

The decision to eliminate 23 county positions was not an easy one to make, according to Commissioner Jo Ellen Litz, who serves as the county representative on the mental health department’s 10-member advisory board.

“It’s important that everyone knows that this wasn’t a decision that was made lightly,” Litz said. “From what I understand, long before Holly came here, the state quite some time ago requested that we do it this way but also said if you want to continue with your current style of management, then that’s fine too.”

Of the 16 people to lose their jobs in the county’s mental health department, three are non-union supervisors while the other 13 were members of the local union.

Seven individuals have accepted new positions with Children and Youth Services (CYS), three have decided to retire, two have resigned to take jobs with non-county mental health agencies, two are transferring to the Prothonotary’s office and Lebanon County Area Agency on Aging and two workers are undecided, according to Leahy.

“All were given several options for employment but we also made it clear that they could transfer to the new provider unless they wished to remain as a county employee,” Leahy said. “This process started back in March and we’ve been very transparent with the employees during this time.”

The need for additional employees in CYS is partly due to ongoing new mandates that have occurred over the past several years in the wake of the Jerry Sandusky child sex abuse scandal, according to Wolgemuth.

“There has been a larger demand on CYS agencies, and the state is providing funding for that,” says Wolgemuth. “We did not create these (CYS) positions in anticipation of this happening. This was a prior need.”

Given the severity of eliminating county jobs, Litz sees a positive outcome for a county department in need of employees.

“There is a silver lining since we were able to transfer seven employees over to Children and Youth,” said Litz. “Throughout this time, we have truly been looking out for the best interest of all concerned. I know that sounds cliche, but we didn’t want to leave anyone hanging. We want to make sure that they have employment if they so choose to have it.”

As far as the delivery of services that are currently being provided to TCM clients, the county is working to ensure a smooth transition – although there will be challenges. Administrators like Leahy will handle incoming calls and case management through June 30, when the county will no longer be licensed as a TCM provider.

After July 1, county mental health department managers will oversee the work of SAM to ensure client needs continue to be met.

“We will still maintain the management positions to manage the caseworkers who are hired through SAM,” Leahy said. “This will be high-quality service that will be the same quality of service that has always been provided. SAM is also licensed and accredited…They must report on a regular basis, and those reports are scrutinized, there is a high level of scrutiny concerning the services that are provided.”

SAM is not a new entity to Lebanon County. The company has been doing business across Pennsylvania since 1987 and since 2016 in Lebanon County as a provider of Intellectual Disabilities (ID) Supports Coordination, according to Leahy.

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James Mentzer

James Mentzer is a freelance writer whose published works include the books Pennsylvania Manufacturing: Alive and Well; Bucks County: A Snapshot in Time; United States Merchant Marine Academy: In Service to the Nation 1943-2018; A Century of Excellence: Spring Brook Country Club 1921-2021; and Lancaster...