Increasing numbers of nonprofit mental health clinics on Long Island are closing or being sold to other mental health networks, following years of declines in government funding and a growing demand for services.

In the past four years, at least four clinics have closed in Nassau and Suffolk, including one already closed and one about to close this year. Another four clinics have been acquired by other nonprofits.

The closures have prompted several local social service advocates to ramp up fundraising efforts while lobbying for increases in government aid. They say treatment options are dwindling for low- and middle-income patients who earn too much to qualify for Medicaid.

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"There is somewhat of a crisis in the system," said Jeffrey Steigman, chief administrative officer of the nonprofit Family Service League, of Huntington, which provides counseling services for children and families.

In February, the league acquired the Huntington clinic of Pederson-Krag, a social service agency founded in 1957. But "it's not just the clinic we took over," Steigman said. Mental health agencies "throughout the state are transferring their licenses or closing clinics because of the financial burden and the deficits that occur. The fiscal model is broken in certain ways," he said.

There are 18 licensed nonprofit mental health facilities in Nassau and 48 in Suffolk, according to the State Office of Mental Health Services. The clinics provide services, including family counseling and drug rehabilitation, for low- and middle-income residents who cannot afford private care.

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More than 10,000 individuals sought treatment at nonprofit clinics in Nassau last year, according to the county's Office of Mental Health, Chemical Dependency, and Developmental Disabilities Services.

Suffolk's Office of Mental Hygiene said it did not have overall figures. But state data show that nearly 4,000 Suffolk adults and 1,200 children enrolled in Medicaid sought mental health services in 2013. In Nassau, there were 3,600 adults and 850 children on Medicaid who received mental health services.


Freeport clinic forced shut

In May, Catholic Charities Outpatient Mental Health Clinic in Freeport, which has treated 550 patients a year, will shutter after more than 50 years in operation. Earlier this year, the 81-year-old nonprofit Federation Employment and Guidance Services, which provided mental health services throughout Long Island, announced it was closing.

The closures come as Peninsula Counseling Center, a Valley Stream nonprofit founded 102 years ago, and three clinics operated by Pederson-Krag were acquired by other nonprofit mental health agencies in recent months, after years of struggling to stay afloat financially.

Laura A. Cassell, CEO of Catholic Charities of the Diocese of Rockville Centre, said the organization decided it no longer could afford to run its Freeport clinic, because of insufficient reimbursement rates and declining government funding to subsidize care. Over the past three years, Catholic Charities had to raise $1.26 million in private donations to keep the Freeport office open, Cassell said.

"While Catholic Charities is blessed with generous donations to support our ministries, we cannot direct such a large portion to just one service site," Cassell said. "Many other mental health providers were forced to close their doors for the same reason."

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"Unfortunately, with no hope of permanent additional funding to match the real costs of providing quality services in the future and increasing unfunded government regulatory mandates, this painful decision had to be made," Cassell said.

In a newsletter to area mental health providers last month, Martha A. Carlin, director of the Long Island field office of the state Office of Mental Health, noted that with the closures and acquisitions, the "beginning of 2015 has been challenging for the Long Island region."

Declining reimbursements

Mental health providers say some of their fiscal strain is due to low reimbursement rates by private insurers.

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Under Medicaid, clinics are reimbursed an average of $130 per visit for an adult patient and $137 for a child, according to state figures.

Commercial insurance providers pay from 20 percent to 50 percent less, several local mental health providers said. Officials with the New York Health Plan Association, which represents commercial health insurance providers, said they could not provide data on reimbursement rates because each company negotiates rates with clinics.

The incentive to treat higher-paying Medicaid patients means that some clinics are opting to see fewer patients covered by commercial insurance, said Andrew Malekoff, executive director of the North Shore Child and Family Guidance Center in Roslyn Heights, a nonprofit that has about 5,000 clients annually.

Malekoff, who has testified before state lawmakers about the challenges faced by nonprofit mental health providers, said that with fewer clinics accepting privately insured patients, many families who earn too much to qualify for Medicaid are "left with nowhere to turn for affordable community-based outpatient mental health care."

The closure of one nonprofit clinic often causes a ripple effect among the small group of Long Island nonprofit clinics, where phones are "ringing off the hook," with queries from displaced patients looking for affordable care, said Jeffrey Friedman, CEO of Central Nassau Guidance Services in Hicksville.

"As a result of the closures, we've had an influx of people calling us," Friedman said. "I think for us the landscape is changing drastically because the reimbursement from insurance companies is not adequate. We're losing money on that visit."

Leslie Moran, spokeswoman for the New York Health Plan Association, said each provider negotiates reimbursement rates with clinics, aiming to control costs to keep plan rates down for consumers.

"The reality is, in our health care system, affordability is something we have to keep an eye on," Moran said.

In 2012, the nonprofit Family & Children's Association, of Mineola, closed its mental health clinics in Roosevelt and West Hempstead, after years of deficits stemming from services provided to low-income patients.

Jeffrey Reynolds, executive director of the association, said losses at both clinics in 2011 totaled $1.6 million. Keeping them open would have "threatened the livelihood" of other operations, including homeless shelters for seniors and runaways, Reynolds said.

"What happens when you lose these clinics is you're driving people into chemical dependency, ERs or jails," he said.

State taking steps to aid LI

State Office of Mental Health spokesman Ben Rosen, to whom Carlin referred questions, said the agency has "taken several steps to help Long Island's mental health clinics remain fiscally viable."

Rosen said $60 million has been allocated over the next three years to fiscally distressed clinics statewide, including seven in Nassau and Suffolk. The clinics, which include the former Pederson-Krag clinics, each were assigned "strategic planners" to improve their finances over the next three years, Rosen said.

The agencies acquiring some of the local facilities say the transition is going as seamlessly as possible.

Herrick Lipton, administrative and financial director of New Horizon Counseling Center, said that since taking over Peninsula, the agency has done repair work at the clinic and installed a flat-screen TV in the waiting room. New Horizon, which also runs clinics in Ozone Park, East Elmhurst and the Rockaways, is planning to add Saturday service hours at Peninsula, Lipton said.

"Peninsula was losing money. It didn't have the ability to invest in repairs . . . they were in dire straits," Lipton said. "Our goal is to create a sustainable solution for mental health services for Nassau County. In today's environment, many health care providers are struggling to survive."