Community mental health centers and the “Seed Money” concept: Effects of terminating federal funds

What happens to community mental health centers when federal funding ends? Analysis of the funding patterns of a cohort of “graduate” community mental health centers indicates that these centers remained fiscally viable subsequent to termination of basic federal grants. However, further analysis revealed two distinct funding patterns within the cohort. One group relied primarily on increased third-party reimbursements to offset the end of basic federal grants. The other sought more state funds and additional federal grants available through the Community Mental Health Center Amendments of 1975. As more centers “graduate”, federal “floor funding” may be necessary to insure the survival of some of them.