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In this file photo, a view of an observation room in Larch Hall at Ancora Psychiatric Hospital in Winslow Township. The state Department of Human Services has ordered mental health housing providers to take patients cleared for discharge from all state hospitals or risk losing some of their pay. (NOAH ADDIS | THE STAR-LEDGER)

TRENTON — In a move that would cut the population of New Jersey's three publicly run psychiatric hospitals by 30 percent, the Christie administration has given community mental health providers an ultimatum: Find new places to live for 430 patients by March 16, or the state won't pay you.

The plan, which would cover patients psychiatrists say are no longer dangerous to themselves or others, has come under fire from critics who are using words like "irresponsible" and "reckless" to describe it. Mental health providers say it's a bureaucratic solution that can do more harm than good for these patients.

Letters obtained by NJ Advance Media show the state first issued the ultimatum on Feb. 9. Dissatisfied with the agencies' progress, Human Services officials notified several dozen state-contracted agencies they could lose out on money if they don't comply. The state will allow for an extension to May 1 if providers have a good reason why they can't meet the March 16 deadline.

"By keeping individuals in the hospital when they no longer meet the commitment standard and there is an available housing option that has been assessed to meet their needs is a clear violation of their rights," according to another letter sent Feb. 19 by Roger Borichewski, an assistant director in the department to Debra Wentz, president of the N.J. Association of Mental Health and Addiction Agencies, a trade group.



In response, Wentz sent a letter asking the department to reconsider. "Placing arbitrary deadlines for discharge could be harmful to patients that are not prepared," according to her letter. Wentz declined to comment for this report.



James Cooney, CEO of Ocean Mental Health Services, said just because patients no longer pose a danger doesn't mean they are ready for life outside a psychiatric hospital.



"The road to recovery is not linear," Cooney said. "At some point a psychiatrist decided a patient is ready to live in the community and tells the court. That doesn't mean the situation does not change the next week or next month."



Patients who have setbacks are typically not re-evaluated once a decision has been made to discharge them, he added.



"If they don't make it in the community, it's devastating for the patient and not good for the community at large. Some of these people have been known to become dangerous," Cooney said.



Robert Davison, executive director for the Mental Health Association of Essex County called the ultimatum "irresponsible, reckless and just plain stupid."



"It's not that easy. They are not cattle. They are people - people with a disability," said Davison, whose nonprofit is not affected by the deadline because it is not contracted to accept any of the 430 patients.



There might be a few providers "dragging their feet," he conceded, but worries that the deadline could prompt some agencies to make hasty decisions because they can't afford to forfeit the money.



"This type of policy is more interested in the patients' rights than their well-being, and that is fundamentally what I wrong with the system," Davison said. "The focus on the patients' rights is also an opportunity to cut costs."

The main building, of Ancora Psychiatric Hospital in Winslow Township in this file photo. (Noah Addis | Star-Ledger

A patient that spends a year at the psychiatric hospitals - Greystone Park in Parsippany, Ancora in Winslow and Trenton and Ann Klein Forensic Center in Ewing and Trenton -- costs the state and federal government about $209,000 a year. Most people are there because they are involuntarily committed, or can't afford inpatient treatment. By comparison, the cost of treating and housing a discharged patient is about one-half of that price or less, mental health professionals say. New Jersey's institutionalized population is shrinking fast under the Christie administration. Last year, there was an average of 1,641 psychiatric patients compared to the average of 1,788 patients in 2011, according to the Human Services website.

There were 1,604 patients in the state's four psychiatric hospitals on Friday, Human Services spokeswoman Ellen Lovejoy said.



The biggest drop can be attributed to the 2012 closing of Hagedorn Psychiatric Hospital in Lebanon Township, Hunterdon County, which specialized in care for the elderly.



The Christie administration has taken the same approach to shrinking the number of people with developmental disabilities in state institutions, closing two facilities last year, and channeling more government funding into smaller and less expensive community housing.

"The goal always is to move patients back into the community. If this can1t be facilitated, the division is requiring its hospitals and contracted agencies to provide an explanation," Lovejoy said. All 430 patients are classified as "CEPP" which means Conditional Extension Pending Placement, "so the patients are stable and ready for discharge to an appropriate community setting," she said.

The Department has been contacted by 23 mental health housing providers saying they won't be able to meet the March 16 deadline, Lovejoy said.



The state faces serious legal pressure to reduce its hospital population. A disability rights advocacy group sued New Jersey a decade ago for letting as many 1,000 patients languish in the public hospitals - some for years - because the state did not fund enough supervised homes where they could safely live and pursue their treatment.



Joseph Young, executive director for Disability Rights New Jersey, the organization that filed the lawsuit, was pleased to hear the Christie administration was taking a hardball approach to discharging patients who legally have the right to be free.



"One of our concerns is there is always a promise someone is going some place but they never go. This is putting people's feet to the fire," Young said. "There will be consequences for them, which hasn't happened in the past generally."



One of the plaintiffs in the case was Brian B., a 38-year-old man whom a psychiatrist and a judge said was ready to leave one of the state hospitals and move to a group home in 2003. A judge kept him at the hospital under a legal status known "conditional extension pending placement" until a group home meeting his needs could be found. But by 2005, Brian was still hospitalized "in an extremely volatile ward. . .where his safety and security are in jeopardy on a regular basis," according to the lawsuit.



Disability Rights and the Corzine administration finally reached a settlement in 2009. The state agreed that 297 patients who had been waiting to leave for more than a year would be discharged, and that by 2014, future patients would be discharged within four months after they were deemed no longer dangerous, or six months if they had a criminal history.



The state also agreed it would award contracts to private community housing groups that specialized in serving people with mental illness to create 1,065 new rental homes, according to the settlement.



Young said the Christie administration, which took over the settlement the following year, met the housing quota ahead of schedule and discharged the 297 patients. But discharges are running behind. Disability Rights gave the state another 18 months to move discharges along faster, he said.



Patients on average are waiting six months to leave a hospital after a judge has legally cleared them to go, Human Services spokeswoman Lovejoy said.

Phillip Lubitz, associate director for the National Alliance on Mental Illness of New Jersey, a family advocacy organization, said he knows some agencies feel the state doesn't pay them enough. But he can also understand why the state is putting pressure on them, because they are getting paid while the patient is in the hospital.



"It is a difficult to justify vacancies in programs that are being funded" by the state," he said.

Carolyn Beauchamp, president and CEO of the statewide patient advocacy group the Mental Health Association in New Jersey, said she could see how both the department and the providers have legitimate concerns.



Discharges are often delayed for legal and logistical reasons, Beauchamp said. Patients may be missing their social security cards or driver's licenses, or may need to contend with outstanding criminal or immigration matters. State hospital officials sometimes leave these issues for the mental health housing providers to handle and they can take a long time to sort out.



"More frequent communication would help the process. It's hard for either side to know what's holding things up," she said.

Packing up at Hagedorn Psychiatric Hospital 15 Gallery: Packing up at Hagedorn Psychiatric Hospital

Susan K. Livio may be reached at slivio@njadvancemedia.com. Follow her on Twitter @SusanKLivio. Find NJ.com Politics on Facebook.