Mental health community based funding: Ohio's experience in revising its funding allocation methodology

Over the past 20 years, states have increasingly moved away from centrally financed, state-operated facilities to financing models built around community-based service delivery mechanisms. This paper identifies four important broad factors to consider when developing a funding formula to allocate state funding for community mental health services to local boards in an equitable manner, based on local community need: (1) funding factors used by other states; (2) state specific legislative requirements; (3) data availability; and (4) local variation of factors in the funding formula. These considerations are illustrated with the recent experience of Ohio using available evidence and data sources to develop a new community-based allocation formula. We discuss opportunities for implementing changes in formula based mental health funding related to Medicaid expansions for low income adults scheduled to go into effect under the new Patient Protection and Affordable Care Act.