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MHANJ Policy on Lien Legislation
Introduction
A patient at a state or county psychiatric hospital is personally
liable for all costs of their maintenance and necessary expenses
incurred while in the institution and will have a lien filed against
them for the total amount of unpaid expenses. In some cases, family
members, spouses up to the age of fifty-five and parents of children
under the age of eighteen, may also be liable for the expense and
have a lien filed against them. Today, 2,700 of the 3,700 patients
admitted yearly to state and county psychiatric hospitals in New
Jersey are not covered by third party insurance and can expect a
bill of $12,300 per month of stay. Some children are covered by
Medicaid; seniors over sixty-five by Medicare and Medicaid. Patients
admitted involuntarily to community hospitals with no insurance are
covered by charity care. As people recover more successfully from
mental illness, they are increasingly hampered in their
normalization by liens placed against them.
Background and History
At the turn of the twentieth century, with the rapid population
growth came a corresponding increase in the number of chronic cases
of mental illness. Local entities such as almshouses became the
exception rather than the rule and, as a result, the role of the
state expanded. In addition to housing people with mental illness,
state mental hospitals also housed the terminally ill and increasing
numbers of the aged. In many cases, patients with terminal illness
were sent to mental hospitals because they did not charge for
services, which made them a better alternative than general
hospitals. This was particularly true because an overwhelming
majority of families were not covered by medical insurance plans
prior to 1940. Though the aged were neither a threat to himself or
herself nor the community nor in need of treatment, the mental
hospital became a haven, having no other housing alternatives than
this more expensive form of care.
During the nineteenth century most of the patient population in
mental hospitals was composed of a large number of acute cases,
institutionalized for less than twelve months. In the next century,
according to the 1904 census, two-thirds of patients were
institutionalized for one year or more, two-fifths for five years or
more. Recovery for the bulk of chronic cases was largely beyond the
realm of possibilities at this time and custodial care, rather than
treatment, was the paramount function of the institution.
The state was faced with overcrowding, physical plant deterioration,
and shrinking budgets for the state mental hospitals. It was in this
environment that the state of New Jersey adopted the statute of
1918, which permitted the state to impose a lien on patients’
property after their death for services rendered at a state or
county mental hospital. Lien payment is received on a first come,
first served basis. Though the state filed liens as the 1918 statute
directed, it was often too late to actually collect any compensation
since other claimants had filed first, prior to the persons death.
With the advent of the Depression and the fact that between 1904 and
1940 the numbers of mentally ill patients in state hospitals had
increased fourfold, the fiscal pressure and responsibility on the
state expanded. And in 1938 the 1918 statute was amended to allow
the state to impose a lien “attached to the estates of patients who
are financially able and willing to defray said cost” before the
death of the patient.
In the early to mid twentieth century, chronic patients in mental
hospitals appeared to be destined to remain institutionalized until
the end of their lives. The primary functions of the state hospital
were utilitarian and humanitarian, protection of the community from
harm and loss, relief for families, and primarily decent and humane
care of patients whose physical and mental conditions precluded the
possibility that they could care for themselves.
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Current Status
Today the prospects and possibilities for people with mental illness
are significantly different. With the advances in
psychopharmacology, neurology, psychiatry and psychology, most
people with mental illness can and do recover. People are now
admitted to state and county hospitals typically for a few months at
a time where they are treated and stabilized on medications, with
the goal of being discharged with community supports. Community
rehabilitation services further help mental health consumers to
recover from chronic and persistent mental illnesses. Recovery is
not only a possibility, it is a reality.
Many mental health consumers have worked hard in their recovery and
are now able to secure employment. In preparation for the new job
they try to take out a loan to buy a car and find that they have a
$30,000 lien on their credit from their three-month
institutionalization at a state mental hospital any number of years
prior. Liens have not only proven to be demoralizing but also
impediments to recovery for people with mental illness and may
ultimately increase rather than decrease their dependence on the
state for services.
According to research done by the National Mental Health Association
for this policy paper, other states in the northeast either do not
or rarely impose liens on property for services received at a state
or county hospital by mental health consumers. While New Jersey
appears to have the most aggressive policy toward placing liens on
property, only $2 million minus the administrative costs of running
the program was collected last year.
In 1918 placing a lien on property did not impede the treatment goal
of humane care for those who could not do so for themselves. Today
liens are impeding the twenty-first century treatment goal of
recovery and independence for people with mental illness. The state
must have a goal for its citizens who have mental illness today,
taking into consideration the progress in treatment that leads to
recovery.
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Position
The Mental Health Association in New Jersey is calling for the
repeal of New Jersey’s institutional lien laws as they apply to
people with mental illness, which date back to 1918. These laws
impose upon people with mental disabilities and certain members of
their families, regardless of their ability to pay, liens for the
entire cost of their care at state and county psychiatric hospitals.
The state’s policy of recording institutional liens upon all persons
discharged from these facilities creates an impediment to their
ability to obtain credit and otherwise become financially
self-supporting. An adult admitted to a state or county psychiatric
hospital for a year can expect a lien in the amount of $150,000.
The issue of parity between mental illness and other illnesses has
become a focal point of advocacy for those concerned with justice
and reduction of stigma surrounding mental illnesses. New Jersey
adopted parity law in 1999, which guarantees equal insurance
coverage for treatment of certain biologically based mental
illnesses and treatment of physical illnesses. The existing lien law
points to a parity issue which does not deal with insurance coverage
but, rather, with those who do not have any form of insurance.
Currently, if someone with no insurance is admitted to a community
psychiatric hospital unit, charity care will cover the cost. That
same person, admitted to a county or state psychiatric hospital,
will have a lien placed against them and carry that burden for the
rest of their lives. The old system and the new need to be
reconciled with a view to creating parity between how involuntary
psychiatric treatment is paid for in our society.
In an era in which community integration of people with mental
disabilities has been recognized as both an important social policy
and a constitutionally protected right, it is incumbent upon the
state to eliminate these liens.
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Documented Consumer Experience
I have been a Mental Health Consumer-Survivor for twenty years,
almost half of my life. In 1996, I was admitted to a psychiatric
hospital for mania, and two weeks later, for depression. I was first
admitted to Elizabeth General, now known as Trinitas Hospital, and
then involuntarily committed to Runnels Hospital for further care.
So, I did my “time” at the joint--what felt like a jail complete
with locked doors and a “key-keeper” warden (the doctor).
In 1996 my parents retired to Florida and I was left wondering where
I would live. For almost a year I lived in an apartment with my
boyfriend. In 1998, with the help of a gift of a $10,000 down
payment from my boyfriend’s father, we purchased a duplex in
Elizabeth, New Jersey. His father also helped us buy a refrigerator,
washer and dryer. . With my boyfriend’s and my social security, and
my income, we can just about afford to pay our bills. My boyfriend’s
entire family continues to help us with money and food on a monthly
basis, otherwise, we would have no food
In 1999 I applied for a Discover Credit Card and was declined due to
a “poor credit history.” I thought, “How can this be? I had bought a
car in 1996 and had had to finance part of it for three years with
no problem. My credit has always been excellent.”
When I received my credit report, there was a lien for $30,000 from
Mercer County. I had no idea what this was about. It did not occur
to me that it had anything to do with my hospitalization at Runnels
Hospital in Union County, which after a phone call, I discovered it
was. I called Runnels several times about the situation.
I do not have a spare $30,000 lying around. I am presently below the
poverty level. However, I do own a car and a house, which enable me
to get to work and have shelter and warmth, respectively. Must I be
denied these two simple pleasures in life? I have suffered and
struggled with my mental illness for over twenty years.
Our house was purchased for $69,000; minus the $10,000 we will
return to my boyfriend’s dad, minus the $30,000 lien, and divide by
two (my boyfriend and I) and I am left with virtually nothing, if we
are to sell it. Will they take away my home or half of its value?
This lien has been hanging over my head for quite some time causing
me constant stress and a daily, on-going, migraine headache. I
really need the stress and headaches to go away. With my illness,
stress can land me in the hospital. I am doing well and do not want
to ruin things by going “one step forward and two steps back” by
revisiting a psychiatric hospital again. Please help me.
Thank you.
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Documented Consumer Experience
I am 40 years old. I have a very expensive psychiatric history. The
first time I was hospitalized, I was approximately 16 years old.
From then on, my mental illness reaped havoc on my life. It effected
my friends and family. From 1979 –1995, I was admitted to Marlboro
Psychiatric Hospital over twenty-five times. My longest stay, which
was my last, was for two and a half years. Prior to this admission,
my mom had informed me that the state of New Jersey had placed a
lien on me for nearly $250 million. This for the quality of care I
received as a client at a state psychiatric hospital.
My mom was informed of the lien by a letter in the mail. “The state
could take everything from me!” I felt like, “why should I even try
to live a normal life. In the end I would have nothing.” I had no
hope of a future. I thought about my own mortality and that of my
parents. I could not be named as a beneficiary on anyone’s will.
Anything and everything could be taken. This left me confused and
concerned. It effected my recovery from both, as a psychiatric
consumer and an addict. I felt worthless and a burden to my family.
I continuously got high to escape my reality, which looked very
bleak.
Somehow, with medication I have not been in any institution for the
last five years. I have a part-time job at a major super-market
chain and I’ve been there for almost a year.
I wonder if my strides and advances are really a good thing; if it
can all be taken away? Psychiatric consumers without insurance
should not be penalized for their illness, which is through no fault
of their own. As a legal voter, I would suggest that any amendments
that are beneficial to consumers should be taken and acted upon.
Thank you.
Documented Consumer Experience
In 1986 I was diagnosed with schizophrenia and depression. For the
next ten years I was in and out of the hospital three times because
I was not compliant with my psychiatric medications. My last
hospitalization was at Ancora State Psychiatric Hospital from
October of 1997 through January of 1998. I learned how to manage my
illness and was discharged to a boarding home. For two years I
attended a partial day program where I continued to learn how to
stay clean and how to manage my illness. The program gave me more
and more responsibilities and I finally realized that the
responsibility for my health and life was my own, my choice. In June
of 1999 I graduated from the program and was offered and took a full
time job at CSP as a food shopper/driver. For one and a half years I
picked up fellow consumers and drove them to the bank and assisted
them in shopping. In November of 2001, I was offered and accepted a
position as a full time support service worker for CSP. I now take
mental health consumers to the doctor, do home visits, assist in
legal/administrative issues, and operate as a peer advocate when
necessary. I am a recent graduate of Consumer Connections which has
helped me improve my professional skills as a consumer/provider.
Last year, about the time I got my new job, I realized that I might
be able to get my own home. This has always been a dream of mine, to
purchase and own my own home. I applied for a loan and was accepted.
In the process the mortgage agency took a final check and discovered
that the State of New Jersey had a lien against me from Ancora State
Psychiatric Hospital. This was the first I heard of this in the
three years since my discharge. In addition, the amounts I was
reported to have owed were conflicting – from $20,000 to $36,000. It
turns out it is $36,000. Despite this and because of my good credit
rating the mortgage company agreed to the loan on the condition that
I try to work out a payment proposal with Ancora. I wrote to Ancora
and asked for a payment plan of $25/month. I am waiting to see if
this is acceptable to them. In the meantime, I was able to purchase
a house in December of 2001.
I take great pride in my ability to pay my bills on time and take
responsibility for my life. This is how others view me too –
responsible and dependable. Having a lien over my head makes me feel
bad about myself. I owe someone money, and I haven’t the means to
pay them off until I sell my house.
I feel stuck too. I can’t sell my house to move somewhere else if I
wanted or needed to. After the lien is paid off I wouldn’t have
enough money for another down payment.
What really upsets me was that I was never notified, that I didn’t
even know about it. I am thankful that the mortgage company didn’t
discriminate against me because I am a mental health consumer.
I must say, I am managing it pretty well. I am six years clean, no
relapse. Every day though, I wish it wasn’t there.
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