National Alliance on Mental Illness
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NAMI Summary of the American Recovery and Reinvestment Act of 2009

1) $87 billion in additional federal Medicaid matching funds over the next 27 months

This is by far the most important piece of the economic stimulus legislation for people living with mental illness.  These funds will begin flowing to states within the next few months and will be critical in helping states avoid further deep cuts to mental health services this year and next year. 

Currently, states in every region of the country are experiencing unprecedented shortfalls in state revenues that are forcing deep cuts in mental health services – particularly those funded by Medicaid.  In addition to the increase in federal Medicaid matching funds (known as FMAP), the new law also provides $53.6 billion for a "State Stabilization Fund" -- with $39.5 billion earmarked for education and $8.8 billion for other services. 

This infusion of federal resources will be critical in helping NAMI advocates at the state level beat back additional cuts in public mental health funds in 2009 and 2010.  In order to cut Medicaid funding for community-based mental health services, governors and legislatures will be forced to give an even higher level of federal match than they normally would.  In other words, cuts to Medicaid services (including optional services to mandatory populations such as those on SSI) will cost the state much more in federal funds than savings in state dollars. 

The additional $87 billion in FMAP in the new law will be allocated as follows:  65% of these additional federal funds will go to an across the board increase in each state’s federal Medicaid match rate (boosting each state’s rate by an expected 6.2%), while 35% will be allocated to states based on the increase in the state’s unemployment rate resulting from the current economic recession.  

How much will your state be receiving?  The Center for Budget Policy and Priorities (CBPP) has prepared initial estimates of each state’s share of these federal Medicaid funds.   Click here to view this chart.

It should be noted that the increased Medicaid FMAP comes with a "maintenance of effort" provision that will require states to maintain current eligibility standards for the next 2 years.

Finally, the new law includes a 3-month extension (through June 1, 2009) of the current legislative moratoria freezing 7 different Medicaid regulations, including those for rehabilitation, school-based services and case management.

2) $8.5 billion in additional funds for biomedical research at the National Institutes of Health (NIH) and the National Institute of Mental Health (NIMH)

Each NIH Institute, including NIMH, will be allocated funds to finance research proposals that were submitted last year and scored just below the Institute’s "payline."  Each year, each NIH Institute and Center (including NIMH) is not able to fund every scientifically meritorious proposal submitted.  This means that every year hundreds of basic scientific, advanced clinical studies on serious mental illness, as well as training grants critical to attracting the best new scientists and researchers, are rejected.  This trend of the declining "payline" has accelerated in recent years as NIH funding has leveled off. 

This new infusion of funding for NIH will allow NIH and NIMH to fund many of these grants in 2009 and 2010.  The new law directs the NIH Director to allocate these funds proportionately among the 27 Institutes and Centers at NIH.  In addition to the $8.5 billion for research grants, the new law allocates $1.5 billion to upgrade research facilities at NIH, including completion of the John Edward Porter Neuroscience Center that will house major parts of the NIMH Intramural program.

3) Economic Recovery Payment to Recipients of Social Security, SSI, Railroad Retirement and Veterans Disability Compensation Benefits

The new law finances an extra payment of $250 for all SSDI, SSI beneficiaries, as well as veterans receiving disability compensation.  The original House bill would have provided an extra monthly check for all SSI beneficiaries in 2009 and 2010.  However, the final bill adopted the Senate’s proposal for an extra $250 added as a one-time payment in 2009. 

In addition, the final bill also allocates $1.02 billion for the administrative budget of the Social Security Administration (SSA) to address the current backlog in claims for SSI and SSDI eligibility and upgrade its outdated and overwhelmed computer systems.  Specifically, $500 million is address the current claimant appeals backlog -- which in many regions leaves disability claimants waiting as long as 3 years to get a hearing.  In addition, $500 million is allocated for upgrading computer systems, $40 million of which is for health information technology (IT) for SSI claimant records.

4) $1.1 billion for Comparative Effectiveness Research (CER)

These funds will be allocated to NIH and the Agency for Healthcare Research and Quality (AHRQ) to conduct studies comparing two or more therapies for a given medical condition.  Specifically, the new law allocates $400 million for the NIH and $300 million for AHRQ, and an additional $400 million at the discretion of the HHS Secretary – all for new CER grants.  Some of this will be clinical trials comparing 2 or more treatments for specific disease or medical condition, while some will be for analyzing existing studies (including NIMH sponsored trials for treatment of schizophrenia, bipolar disorder and major depression).  The Institute of Medicine (IOM) is to be allocated $1.5 million to issue a report recommending priorities for CER.   

The final agreement includes a number of provisions designed to ensure that this research is conducted and disseminated in a way that ensures clinical effectiveness and quality outcomes are promoted, instead of research designed only to promote the least expensive treatment options.  NAMI and colleague patient advocacy groups raised concerns that the original House bill posed significant risk of CER emphasizing cost savings over clinical effectiveness and the federal government restricting access to certain treatments based on studies with significant limitations. 

The final agreement contains numerous improvements over the original House bill.  For example, the accompanying legislative report specifically states that CER funding shall not be used "to mandate coverage, reimbursement or other policies for any public or private payers" and that funding shall used to evaluate "the clinical outcomes, effectiveness, risk and benefits of two or more medical treatments and services."  The report also notes that "a 'one size fits all' approach to patient treatment is not the most medically appropriate solution to treating various conditions."

The final bill also contains language clarifying that all research funded by this appropriation should meet standards for inclusion of women and racial minorities.  In addition, the Secretary is also required to disseminate research to all stakeholders, including patients.  Finally, the new "Federal Coordinating Council" for CER authorized in the new law will have a more limited role in terms of setting priorities for CER.

5) $19 billion for Health Information Technology (HIT) and development of electronic medical records

The new law contains a major federal investment in the promotion of health information technology (health IT), such as electronic health records, by requiring the government to take a leadership role to develop standards by 2010 that will allow for the nationwide electronic exchange and use of health information to improve the quality and coordination of care. 

Specifically, $19 billion is allocated for health information technology infrastructure grants from HHS and Medicare and Medicaid incentives to encourage doctors, hospitals, and other providers to use health IT to electronically exchange patients’ health information.  The new law also contains provisions designed to strengthen federal privacy and security law to protect identifiable health information from misuse and abuse as the health care sector increases use of health IT. 

The final agreement includes language making community mental health centers eligible for both grants from HHS and incentive payments under Medicare and Medicaid.  Specifically, the language references Section 1913(b)(1), which includes the following as eligible to receive grants from HHS and incentive payments to upgrade health IT:  Community Mental Health Centers (organizations that meet CMHC criteria), child mental-health programs, psychosocial rehabilitation programs, mental health peer-support programs, and mental-health primary consumer-directed programs.

6) Funding for Housing and Emergency Shelter

This is one major area of disappointment in the final package.  The new law excludes any major investment in development of affordable rental housing for households with extremely low-incomes.  In addition, the original allocation of $2.5 billion for retrofitting and upgrading existing supportive housing units for the elderly and people with disabilities (through the HUD Section 202 and 811 programs) was cut to $250 million.  These retrofit funds are to be used for “green technologies” such as energy efficiency. 

However, the final agreement does include a $1.5 billion allocation for the HUD Emergency Shelter Grant (ESG) program with added flexibility for grantees to assist individuals and families at risk of falling into homelessness (through short-term rent payments, security deposits, and other measures to avoid eviction).   Click here for more information on how these additional ESG funds will be allocated.

7) $12.2 billion for IDEA grants to the states for special education

The final bill allocates $12.2 billion for grants to the states for Special Education through the federal IDEA program to increase the federal share of these costs, and prevent these mandatory costs from forcing states to cut other areas of education.