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NAMI Testimony on VA-HUD Appropriations

NAMI E-News April 4, 2001 Vol. 01-90

* Included below is the testimony of NAMI board member Dr. Fred Frese delivered to the House VA HUD Appropriations Subcommittee. Dr. Frese's testimony, on behalf of NAMI, covers FY 2002 funding requests for two critically important agencies for NAMI's interests: the Department of Veterans' Affairs and the Department of Housing and Urban Development. In his testimony Dr. Frese emphasizes the critical need for increased funding for research and services for veterans with severe mental illnesses. He also urges Congress to more effectively focus HUD funding on adults with severe mental illnesses who are homeless or are living in substandard housing. In the coming weeks, the House and Senate appropriations committees will begin work on the FY 2002 VA HUD appropriations bill. NAMI advocates are urged to contact their members of Congress to support a VA HUD bill that addresses the priorities set forth by Dr. Frese in his testimony.




March 28, 2001

Chairman Walsh, Representative Mollohan and members of the Subcommittee, I am Fred Frese of Akron, Ohio. I am pleased today to offer the views of the National Alliance for the Mentally Ill (NAMI) on the VA-HUD-Independent Agencies Subcommittee's FY 2002 bill. I would like to direct my testimony to two of the important federal departments that are within the Subcommittee's jurisdiction: The Department of Housing and Urban Development (HUD) and the Department of Veterans' Affairs (VA).

In addition to serving on the NAMI Board, I am a veteran myself. In 1966, I had been selected for promotion to the rank of Captain in the U.S. Marine Corps. That is when I was first diagnosed as having the brain disorder schizophrenia - perhaps the most severe and disabling mental illness diagnosis. Since my original diagnosis, I have been treated within the VA medical system, both as an inpatient at the VA hospital in Chillicothe, Ohio, and as an outpatient. Over the years, I have served on numerous advisory panels to the VA on care for the seriously mentally ill, including the VA's new National Psychosis Algorithm. I also currently serve as a member of NAMI's Consumer Advisory Council on veterans with severe mental illness.


NAMI is the nation's largest national organization, 220,000 members representing persons with serious brain disorders and their families. Through our 1,200 chapters and affiliates in all 50 states, we support education, outreach, advocacy and research on behalf of persons with serious brain disorders such as schizophrenia, manic depressive illness, major depression, severe anxiety disorders and major mental illnesses affecting children.

Mr. Chairman, for too long severe mental illness has been shrouded in stigma and discrimination. These illnesses have been misunderstood, feared, hidden, and often ignored by science. Only in the last decade have we seen the first real hope for people with these brain disorders through pioneering research that has uncovered both biological underpinnings for these brain disorders and treatments that work. From NAMI's perspective, this progress has been confirmed for all Americans through events such as - the White House Conference on Mental Health on June 7, 1999 and the release of the Surgeon General's Report on Mental health on December 13, 1999. Taken together, these two events brought together national leaders and the most comprehensive scientific report ever to substantiate what we have been saying for years - that severe mental illnesses are diseases are brain disorders that are treatable.

Both the White House Mental Health Conference and Surgeon General's report also established that a new generation of scientific discovery and treatment is changing our expectations for recovery for adults living with severe mental illness. The award of the Nobel Prize in Medicine to those scientists involved in brain and mental illness research provides further indication of the dramatic advances in understanding and treating severe mental illnesses. NAMI believes that this good news for the Subcommittee as you consider funding for both HUD and the VA. Recovery should mean more than just accessing treatment. It should mean access to community-based housing, services, rehabilitation and employment that help consumes move toward independence and dignity. NAMI believes that while treatment is central to recovery, it is not an end in itself. Housing and supports provided by agencies such as HUD and the VA play a critical role in this process. NAMI is therefore pleased to offer our views on the Administration's FY 2002 requests for these two cabinet level departments.


In NAMI's opinion, the lack of access to treatment and community supports for veterans with severe mental illness is the greatest unmet need of the VA. The Independent Budget reports 454, 598 veterans have a service connected disability due to a mental illness. Of great concern to NAMI are the 130,211 veterans who are service connected for psychosis-104,593 of them who were treated in the VHA in FY99 for schizophrenia, one of the most disabling brain disorders. Over the last five years the VHA has shifted its focus of serving veterans with severe and chronic mental illness from inpatient treatment to community based care. In FY 1999, out of the 191,606 veterans who were treated for a severe mental illness, only 33, 531 veterans received treatment in an inpatient setting. NAMI strongly supports treating veterans with severe mental illness in the community when the proper intensive community supports and treatment are available and easily accessible. However, we are very concerned that those veterans who need inpatient care are unable to access the needed treatment because of the limited inpatient beds and the dramatic shift to outpatient treatment.

NAMI has endorsed the FY 2002 Independent Budget (IB); the IB makes several recommendations for increasing the VHA's capacity to serve veterans with mental health needs. Moreover, NAMI endorses the IB recommendation that to simply achieve parity with other illnesses, the VA should be devoting an additional $300 million to mental illness spending. Congress should incrementally augment funding for veterans with severe mental illness by $100 million each year, beginning in FY 2002 through FY 2004.

Veterans Health Administration

As members of this Subcommittee know, the VHA has issued a directive for Mental Health Intensive Case Management (MHICM). MHICM is based on the Substance Abuse and Mental Health Services Administration's (SAMHSA) standards for assertive community treatment (ACT), which NAMI believes are proven, evidence-based approaches in treating the most severe and persistent mental illnesses. FY 1998 Compensation and Pension data show that almost 40,000 veterans with severe mental illness are in need of intensive community case management services. Further VHA data shows that assertive community treatment is cost-effective as well as effective in treating severe mental illness. However, a FY 98 survey by the Committee on Care of Severely Chronically Mentally Ill (SCMI) Veterans showed that just over 8,000 veterans are currently receiving some form of intensive case management, and that only 2,000 veterans were in treatment programs that met the SAMHSA standards. The SCMI committee also reports that intensive case management teams are operating at minimal staffing and some are facing further staff reductions. NAMI strongly recommends that Congress appropriate the funds necessary to provide the essential number of new intensive case management teams and to fully staff existing teams so that our nation's most vulnerable veterans receive appropriate and coordinated care.

NAMI is extremely grateful for the leadership this Subcommittee has provided in holding the VHA accountable for its inability to ensure that savings derived from the closure of inpatient psychiatric beds is transferred into community-based treatment services. We are especially pleased that the Subcommittee directed the VHA to produce a report on where these savings have gone and what the unmet needs are with respect to community-based treatment services. The VHA should not be allowed to make the same mistakes that so many states and communities have made over the past quarter century with deinstitutionalization. Dollars saved through the closing of state psychiatric hospitals were either never transferred into the community, or squandered on community-based services that lacked focus and accountability. From NAMI's perspective, it is obvious that this significant decrease in inpatient care has not resulted in a sufficient transfer of resources to community-based treatment and supports for veterans with severe mental illnesses.

NAMI would urge the Subcommittee to go further in FY 2002 and specifically direct the VHA to require that all savings from cuts in inpatient psychiatric beds be reinvested in intensive case management services for veterans with severe mental illnesses.

The VHA's 22 separate regional management centers, known as Veterans Integrated Service Networks (VISNs) - were instituted to administer the health services (including mental illness treatment) for VA hospitals and clinics. The idea of these VISNs was to decentralize services, increase efficiency and shift treatment from inpatient care to less costly outpatient settings. The VHA is in charge of allocating annual appropriations for each of these 22 VISNs, but does not specifically direct funds to be spent for mental illness treatment and services. Once funding is received, each VISN has authority to allocate resources to hospitals and clinics within their jurisdiction with broad autonomy.

The VHA has expanded the use of Community Based Outpatient Clinics (CBOCs) as primary care clinics. Many of the CBOCs were instituted in areas where VA health services were not easily accessible allowing many more veterans access to need health care. However, the SCMI committee reports that out of the 350 CBOCs operated, only 40% of these facilities offer treatment services for veterans with severe mental illness. NAMI is truly concerned that meaningful community-based capacity is not being developed to treat chronically mentally ill veterans in their communities; and agrees with the recommendation of the Committee on Care of Severely Chronically Mentally Ill (SCMI) Veterans committee for a $40 million dollar enhancement to mental health capacity to give the VHA options in bettering care and treatment for veterans with acute needs.

NAMI would also urge the Subcommittee to continue to monitor progress on implementation of restrictive drug formularies by VISNs that cover psychotropic medications. NAMI's Veterans Committee continues to hear reports of veterans with mental illness not getting access to the newest and most effective atypical anti-psychotic medications. Specifically, our members tell us about the VA imposing limited formularies that require veterans to fail first on older medications, or in extreme cases, include only a single medication within an entire classification of drugs for major disorders such as schizophrenia and depression. The SCMI committee reports that currently 17% of VA's total pharmacy budget is spent on psychotropic medications, however there is great variance in the use of the newest and most effective medications which have been proven effective in treating schizophrenia. NAMI feels strongly that veterans with mental illness deserve full access to the newest and most effective medications.

Homeless Veterans

NAMI applauds the Subcommittee's efforts to expand services for homeless veterans. As you know, severe mental illness and co-occurring substance abuse problems contribute significantly to homelessness among veterans. Studies have shown that nearly one-third (approximately 250,000) of homeless individuals have served in our country's armed services. Moreover, approximately 43% of homeless veterans have a diagnosis of severe and persistent mental illness, and 69% have a substance abuse disorder.

NAMI is pleased that the Subcommittee continues to support initiatives at the VA to support residential options for homeless veterans with mental illness through the Homeless Providers Grant and Per Diem Program and the new Loan Guarantee for Multifamily Transitional Housing for Homeless Veterans Program. NAMI would urge that these initiatives be expanded to offer clinical outreach, case management and support services in communities with high concentrations of homeless mentally ill veterans.


Even though the VA has made genuine progress in recent years in funding for psychiatric research at the VA, such research remains disproportionate to the utilization of mental illness treatment services by veterans. Veterans with mental illness account for approximately 25% of all veterans receiving treatment within the VA system. Despite this fact, VA resources devoted to research has lagged far behind those dedicated to other disorders. In 1998, only 11% of all research at the VA was dedicated to chronic mental illness, substance abuse and PTSD. This level has remained unchanged for the last 15 years, despite the fact the 22% of patients in the VA system receive mental illness treatment.

For FY 2002, NAMI urges the Subcommittee to support the recommendation of the Independent Budget to increase the overall VA research budget by $45 million. More importantly, NAMI urges that $30 million of this increase go toward severe mental illness research. This increase would double mental illness research within the VA, an amount that has remained flat over the past 15 years. Research is one of the VA's top missions and NAMI is pleased that the VHA is taking steps to increase the number of Mental Illness Research, Education and Clinical Center (MIRECCs), centers designed to serve as infrastructure support for mental illness research. Because medical research is so important to improved treatments for severe mental illnesses and ultimately the cure of these disabling brain disorders, NAMI recommends full funding of the MIRECCs.

Finally, in the area of medical research, NAMI would like to thank the Subcommittee for ensuring that the Institutional Review Boards (IRBs) that oversee VA-funded clinical research involving human subjects include representation of stakeholders - including veterans with mental illness and their families. However, NAMI is concerned that the VHA is not providing medical center research staff with adequate training and guidance on protecting human subjects. A September 2000 General Accounting Office (GAO) report concludes that the VA has not ensured that the funds needed for human subject protections are being allocated for the purpose of protecting the rights and welfare of human subjects. Further GAO states that officials at these medical centers report insufficient resources to accomplish their mandated responsibilities. NAMI is hopeful that increased funding and future inclusion of properly trained consumers and families on IRBs can go a long way toward ensuring that protections are adequate for vulnerable human subjects with mental impairments and that standards for consent are established and complied with.


As a member of the Consortium for Citizens With Disabilities (CCD) Housing Task Force, NAMI works closely with allied organizations to increase housing opportunities for non-elderly adults living with severe disabilities. NAMI endorses CCD's findings that people with disabilities - including severe mental illnesses - are increasingly "priced out" of the rental housing market. This has occurred both as the "buying power" of Supplemental Security Income (SSI) benefits has eroded and as federally subsidized housing for people with disabilities has continued to disappear due to "elderly only" housing policies. CCD's 1998 "Priced Out" report found, the national average median income for a head of household living on SSI is only 24.4%. Moreover, on a national average, the cost of 1-bedroom apartment is 69% of monthly SSI income, and more than an individual's total monthly SSI income in 125 of the housing market areas across the country.

CCD is now in the process of updating this 1998 and report and the initial findings are even more disturbing. The key findings of Priced Out in 2000 document that people with disabilities have lost more "buying power" in the rental housing market during the past two years, and are still the low-income group with the highest levels of unmet need for housing assistance. Among the new report's key findings are:

- People with disabilities continue to be the poorest people in the nation. As a national average, SSI benefits in 2000 were equal to only 18.5 percent of the one-person median household income, and fell below 20 percent of median income for the first time in over a decade.

- In 2000, people with disabilities receiving SSI benefits needed to pay - on a national average - 98 percent of their SSI income in order to be able to rent a modest one-bedroom apartment at the published HUD Fair Market Rent.

- Cost of living adjustments to SSI benefit levels have not kept pace with the increasing cost of rental housing. Between 1998 and 2000, rental housing costs rose almost twice as much as the income of people with disabilities.

- In 2000, there was not one single housing market in the country where a person with a disability receiving SSI benefits could afford to rent a modest efficiency or one-bedroom apartment.

Clearly, people with severe disabilities are among the most deserving of assistance from HUD. Unfortunately, our nation's affordable housing system has only mixed record in serving the needs of people with disabilities. In NAMI's view this is the result of a range of factors: a lack of understanding about the needs of disabilities on the part of agencies such as Public Housing Authorities, discrimination, and the absence of federal policy from HUD (particularly in recent years). NAMI is anxious to work with this Subcommittee and the new HUD Secretary Mel Martinez to make the affordable housing system more responsive to the needs of people with disabilities and to improve the track record of HUD's programs in meeting their needs.

HUD Section 811

NAMI is grateful for the leadership of this Subcommittee in recent years to increase funding for the Section 811 Supportive Housing for Person with Disabilities program, increasing funding in FY 2001 by 9%, up to $217 million. This Subcommittee also directed HUD to limit the tenant-based portion of the program ("Mainstream" vouchers) to 25% of total funding - a limitation NAMI strongly supports. NAMI believes strongly that tenant-based rental assistance is not the answer for all people with disabilities, especially those with severe mental illnesses who typically need intensive services and supports to live in the community. Further, given the future need for permanent community-based supportive housing which will result from the Supreme Court's 1999 Olmstead decision, the production of new and accessible housing for people with the most severe disabilities (including severe mental illness) must be a high priority.

For FY 2002, NAMI recommends increasing the funding for the Section 811 Program to $346 million - the same amount appropriated by Congress in the final years of last Bush Administration (FY 1992). Further, NAMI recommends that no more than 25 percent of this funding for tenant-based rental assistance and that non-profit disability organizations be allowed to apply directly to HUD for these funds (with a requirement that HUD be barred from converting 811 tenant-based vouchers to Section 8 vouchers). For FY 2000, the capital/project-based portion of the Section 811 program produced only 1,600 units of housing for people with severe disabilities. Housing production goals for people with disabilities must be increased and the Section 811 is a proven model to accomplish this goal.

Section 8

NAMI urges the Subcommittee to appropriate $50 million to support 9,000 new Section 8 tenant-based rental assistance funding for people with disabilities. Through the leadership of this Subcommittee - especially Representative Rodney Frelinghuysen - a federal policy has been established and funded to ensure that non-elderly people with disabilities who have lost (and continue to lose) access to public and assisted housing are protected. While a host of problems have hindered the effective distribution of these subsidies by HUD and PHAs, all of the funds have been allocated and the need is still critical. Each year, more PHAs are designating "elderly only" public housing, and more than 58 percent of HUD assisted housing providers have implemented "elderly only" designation policies, according to a recent study published by Abt Associates. NAMI supports CCD's recommendation that PHAs requesting the designation of "elderly only" public housing be required to set-aside 33 percent of their Section 8 turnover for people with disabilities.

In addition, NAMI urges the Subcommittee to halt HUD's misguided effort - launched in the waning days of the Clinton Administration - to divert 400 vouchers from this account to the "Access Housing 2000" program. NAMI believes that HUD did not have legal authority to divert these resources and failed to provide a valid policy rationale. While NAMI supports HUD's stated objective (supporting transition from nursing homes into the community) we believe that the criteria and standards for distributing these vouchers discriminates against certain people with disabilities - especially people with severe mental illnesses who are already living in substandard housing in the community.

Shelter Plus Care & Permanent Supported Housing Programs

NAMI would like to thank the Subcommittee for proactively addressing the emerging crisis in the Shelter Plus Care (S+C) program last year. The new $100 million account within the McKinney-Vento Homeless Assistance program for renewal of expiring S+C rent subsidies is a major step forward in protecting the interests of formerly homeless individuals with severe disabilities. Your continued efforts to ensure renewal of rent and operating subsidies under the S+C and SHP permanent housing programs are critical to helping states and localities effectively use federal homeless dollars. Formerly homeless adults with severe disabilities (including people with severe mental illnesses) should not be placed at risk of losing their housing through no fault of their own.

NAMI urges that the Subcommittee continue its support for stable funding of renewal for both S+C and SHP permanent housing rent subsidies. NAMI believes that the best way to accomplish this goal is to shift the budget impact of future renewals to the Section 8 program. If this is not possible, then NAMI wold urge the Subcommittee to continue to fund a separate account for renewals within the overall McKinney-Vento Homeless Assistance program. Finally, NAMI urges the Subcommittee to continue its support for the 30% permanent housing set-aside within the McKinney-Vento program. NAMI believes that this minimum threshold for permanent housing is essential to federal efforts to support policies that move toward ending homelessness - as opposed to building a permanent infrastructure of service programs that result in maintaining a permanent homeless population.

Data from the Urban Institute and the University of Pennsylvania indicate that people with severe mental illnesses are disproportionately represented in the "chronically" homeless population. Numerous studies have demonstrated that permanent supportive housing is needed to end the difficult and costly cycle of jail, the streets, shelters and hospitals they too often experience. NAMI urges the Subcommittee to keep the permanent housing set aside in place to continue the efforts to further a federal policy designed to end homelessness. Further, we urge you to work with your colleagues on the Labor-HHS-Education Appropriations Subcommittee to hold agencies at HHS accountable for providing the services this populations needs move toward recovery and stable, independent lives that prevent them from ever returning to homelessness.


Mr. Chairman, on behalf of NAMI 220,000 members, 1,200 affiliates, and the members of the NAMI Veterans Committee, I would like to thank you for the opportunity to share our views on the Subcommittee's FY 2002 bill.