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2000 Jordan Institute
for Families

Vol. 4, No. 2
May 1999

Understanding North Carolina's Mental Health System

Social services and mental health are two of the biggest care systems in North Carolina. Understanding the pressures that the mental health system faces will help you promote a better working relationship between the two systems and, ultimately, provide better service to the families and children who use them.

Overview of Mental Health

The public system of mental health treatment and services in North Carolina is provided by 40 area programs. Each area program must provide services for people with mental illness, developmental disabilities, and substance abuse problems. However, services are strictly voluntary and provided on the basis of "medical necessity" and clinical judgement.

All area programs have one or more mental health centers where these services are provided, and/or they may contract with other entities to provide some services. In general, area programs provide a range of services that may include:

  • Assessment, diagnosis, and a treatment plan

  • Individual or group therapy

  • Case management, which may include helping individuals locate housing, apply for SSDI (Social Security Disability Income) or SSI (Social Security Income), manage their personal finances, or periodic follow-up on an individual's condition (NAMI of NC, 1998). It is important to note that not all clients receive case management to this extent.

  • Psychosocial day programs (clubhouses)

  • Medication management

  • Crisis services

  • Partial hospitalization/day treatment programs

  • Other in-home services, such as high risk interventions for children

In addition, four state psychiatric mental hospitals also provide treatment for people with mental illness. Admission to a state hospital (whether it is for long- or short-term treatment) usually requires an evaluation at one of the area programs.

Mission Statements

The mission of the North Carolina Division of Mental Health, Disabilities, and Substance Abuse Services is to "enable North Carolina's most vulnerable and disabled persons with mental, developmental and substance abuse problems to exercise their rights and responsibilities as citizens" (NC Div. of MH, 1998). The North Carolina Division of Social Services mission reads, "we are dedicated to assisting and providing opportunities for individuals and families in need of basic economic support and services to become self supporting and self reliant" (NC Div. of SS, 1998).

Despite the difference in focus found in these mission statements, the approaches of these two agencies are not completely different. The differences that do exist, however, sometimes cause tension or misunderstanding that obscures the fact that mental health and DSS often work with and care about the same families. Closer collaboration between child welfare and mental health workers is one way to get beyond misunderstanding and improve outcomes for families and children.

Understanding the pressures on the mental health system should make this collaboration easier.

Pressure on the System

Following a budget crisis in 1991, state mental health officials were desperate for other sources of money and encouraged area program directors to go after federal funds, particularly Medicaid money. Although the federal money funded an expansion of services, it required a state "match." In a match arrangement the state and county pay approximately 30 percent of all claims and the federal government pays the remaining 70 percent.

A federal investigation regarding Medicaid billing by the mental health centers between 1995 and 1997 revealed that North Carolina owes the federal government $17.5 million for improper billing. The "improper billing" reflects the extra charges area programs attached to some services in order to cover expenses for services to clients (including children) without insurance of any type. "Center directors and their advocates say they plowed the money they saved into services for people without Medicaid or any other health insurance, many of them substance abusers" (Heath & Clabby, 1998). The result of the $17.5 million payback will be a reduction in the Medicaid flow to the centers by up to $40 million a year.

The pressure to pay back funds while providing quality services has put a strain on the mental health system throughout the state. Child welfare workers need to recognize that as mental health resources become more scarce, local collaboration between mental health and child welfare is critical.

In the years to come, strong, collaborative relationships will be essential if families and children in need of care are to have continued to access the services they need.

What You Can Do

  • If child welfare and mental health workers in your area aren't meeting already, organize or suggest a meeting. Use the meeting to discuss the changes occurring and ways you might work together to best serve clients.

  • Use staff meetings and supervisory time to raise the issue of collaboration between the two systems.

  • Keep up with the changes. Pay attention to news stories about the mental health system so you know what is happening.

  • Use every opportunity you have to make connections with workers in the mental health system.


Heath, J. & Clabby, C. (August 16, 17, & 18, 1998). Fractured care, fragile lives. Raleigh News and Observer [Online]. <> [December 5, 1998].

N.C. Division of Social Services [Online]. <> [1998, August 4]. (Web address no longer functional.)

N.C. Division of Mental Health [Online]. <> [1998, August 4]. (Web address no longer functional.)

National Alliance for the Mentally Ill in North Carolina. (1997). Getting treatment for mental illness in North Carolina [Online]. <>.

University of North Carolina at Chapel Hill Family and Children's Resource Program. (1993). Family-centered practice curriculum. Chapel Hill, NC: UNC-CH School of Social Work.

1999 Jordan Institute for Families