PHOENIX (Arizona Republic) - Fewer and fewer people in the Phoenix area are entering the state's mental health system under the category of "seriously mentally ill."

A crackdown in eligibility by state officials is swamping mental health advocates - paid by the state to police the system - and forcing advocates to turn people away, a possible violation of state law.

Under an increasingly rigid process, even people ordered by Superior Court judges to be hospitalized or treated are not being considered seriously mentally ill, or SMI.

People previously considered SMI by Arizona have been turned down, as have people who have qualified for Social Security disability and those diagnosed as SMI by psychiatrists of Value Options, a state-funded, bu private, mental-health provider.

SMI status means patients can receive medications for free or at a greatly reduced rate. They may be able to get onto a list for subsidized housing. They also can get added help through the court monitor's office.

The Arizona Department of H.alth Services says it realizes rules have been rigorously applied, but their intent is to prevent fraud.

However, a monitor appointed by Maricopa County Superior Court to oversee mental-health issues says the new process has been overzealous to the point of violating state laws.

The department disagrees with that assessment, but it nevertheless is making some fixes, said Michael Franczak, the state agency's head of SMI services.

Improvements can't come soon enough for Mary Ann Black, director of advocacy services for Advocates of the Seriously Mentally Ill, a non-profit agency paid by the state to be a patients' rights watchdog.

Because advocates are getting flooded with calls from people trying to get into the system, it's difficult for them to work on other issues, Black said.

In November, the office got 58 calls from people recently denied SMI status. In the past, they have received as few as a dozen.

Black and other mental health advocates started hearing more complaints when Value Options, a Tennessee-based corporation, began in February as the managed-care company for mental-health services in Maricopa County.

For example, in May 1997, 514 people applied for SMI services at Value Options' predecessor ComCare. Of those, 180 were approved. In contrast, during May 1999, 368 applied and 62 were approved.

On average, about 450 people apply every month to be considered SMI. Those seeking help may come by themselves or be referred by physicians, the jails or homeless shelters.

A Value Options employee interviews them and sends their information to a Value Options psychiatrist, who determines whether they meet the criteria.

The state's Franczak believes that many of the Phoenix area's 12,000 seriously mentally ill don't belong on the rolls. Many were lured into the system because of the benefits, especially as funds for less-serious mental illness and substance-abuse programs dried up.

"SMI is a special club and a lot of people want to belong to it," he said.

"There is no way in hell that some of these guys are SMI." The state spends about $11,000 per year on each seriously mentally ill person in the system. That's not enough to meet their needs, and the money shouldn't be wasted on people who don't need it, he said.

One of the most contentious issues between the state and the advocates has been "dual-diagnosis" patients, those who have substance-abuse problems as well as mental illness.

Franczak agrees that the state has been "pretty rigid" and Value Options has been "very rigid" in those cases, in some cases saying that if a person has both problems, then it's probably alcohol or drug abuse - not mental illness - that is the overriding issue.

The state now is looking at a plan in which people with both symptoms will be allowed 30 to 60 days of counseling before Value Options tries to determine their status.

The state also wants to give patients more time to get their medical records. Current policy requires a decision to be made in seven days after the application is turned in. Frequently, people can't meet the deadline because their records are out of state. Without those, people can't prove they have a long-standing illness and they are denied.

Value Options also plans to improve how people collect data from prospective patients.

Anne Ronan, an attorney with the Arizona Center for Disability Law, said she was glad that the state recognized the problem, but it should change its overall policy rather than make minor fixes.

"They should be looking at ways to bring people into the system rather than reasons for excluding (them) from services," she said.

People who have been turned down can always reapply, Franczak said.

But increasingly, they have been going to people like Black and her advocates to fight their case through three levels of administrative and court hearings.

Black said her office doesn't have the staff to prepare for the hearings.

As it is now, with two full-time employees and five part-timers, Black says she doesn't have the staff mandated by state law. She has two part-timers to handle 11,000 Maricopa County clients, while the state requires one advocate for every 2,500 patients.

One of the reasons for the short staffings is that the advocates' agency gets $87,000 a year. When the state ran the advocates' office, instead of contracting out the services, it had a $500,000 budget, Black said.

Black is trying to negotiate for additional staff. But because of the crunch, her staff will only take the first five new eligibility cases each week.

"It's something that we certainly don't want to do, but there comes a point when you can't do anymore," she said. "The numbers have just skyrocketed, and (there is) no way were we prepared for it."

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