Ruling affects victims fund

Grief counseling will be more accessible under the state Crime Victims Compensation Fund because of a recent state Supreme Court decision in a Spokane case. Hospitalization for indigent victims will not.

Administrators of the relatively small program say a court order increasing access to counseling will have much less effect than an ongoing crisis in hospitalization costs.

A fund spokesman said counseling eligibility rules already are being changed to reflect the Supreme Court’s decision in April. The court said the program improperly limited claims for counseling costs to cases in which the counseling began within a year of the crime that created the need.

Now, the counseling must begin within a year of the time a crime victim recognizes the need for counseling.

“We don’t know how much impact it’s going to have (on costs), but we don’t think it’s going to be huge,” said Robert Nelson, spokesman for the Crime Victims Compensation program. “Counseling is not nearly our most expensive category.”

Counseling-related cost increases would pale next to spiraling hospitalization costs, caused by elimination of a state Department of Social and Health Services program that pays medical costs for indigent people.

The Crime Victims Compensation Fund has been administered by the state Department of Labor and Industries since it began 31 years ago. The program operates similarly to the state workers’ compensation program, also administered by Labor and Industries, and until recently has paid the same rates of compensation.

Last year, according to tentative calculations, the crime victims fund spent just $530,000 for mental health treatment, compared with $1.85 million for hospitalization.

The counseling bill that sparked the Supreme Court ruling was $350 for a 14-year-old girl to have five sessions with Larry Cronin, a partner in Grief Counseling Program of Spokane. The girl was referred to Cronin five years ago by the psychiatric ward of Sacred Heart Medical Center because she was suicidal.

The girl’s condition was caused by the murder of her brother four years earlier, Cronin said.

He said she “was really feeling guilty” because she had planned to have dinner in her adult brother’s home on the night he was killed, but she didn’t go. The girl felt she might have prevented her brother’s death or might have died in his place, Cronin said.

To require crime victims to seek counseling within a year of a crime is “rather crazy,” Cronin said.

The need for counseling often isn’t apparent that soon, particularly with children, Cronin said. A 6-year-old can’t have a 10-year-old’s feelings, and a 10-year-old can’t have the feelings of a 14-year-old, he said.

When the Department of Labor and Industries refused to pay his bill, Cronin appealed to the Board of Industrial Insurance Appeals and won, but a Superior Court judge and the Washington Court of Appeals overturned the ruling. With assistance from Gonzaga Law School Professor Alan McNeil and law student Jim Merson, Cronin won a 9-0 Supreme Court decision that the Labor and Industries rule misinterpreted an underlying law.

Merson, a legal intern for Gonzaga’s University Legal Services, received special permission to present oral arguments to the Supreme Court. McNeil oversees University Legal Services, which provides free legal assistance to indigent clients.

Nelson said the victory Merson won will cost the Crime Victims Compensation Fund a lot less than the Legislature’s decision to eliminate, in June 2003, a state program that paid medical bills for indigent people.

The decision apparently didn’t anticipate that costs would be shifted to the crime victims fund, which is the payer of last resort for indigent crime victims. The crime victims fund pays a portion of whatever is left after all other sources have been exhausted.

The fund’s hospitalization payments jumped from $375,092 in 2002 to $602,000 in 2003 after the Department of Social and Health Services’ medical indigence program was eliminated. Hospitalization costs soared to $1.85 million last year.

“You can end a program, but that doesn’t mean people are going to stop going to the hospital,” Nelson said. “Somebody’s going to have to pay for it.”

The relatively small – $15 million a year – Crime Victims Compensation Fund was in danger of going broke.

A special $3.7 million state appropriation bought some time for the program, which has operated since July 1974 on a combination of federal grants, state money and court-ordered payments from criminals.

Even with the bailout, cuts were needed to keep the fund solvent. Medical reimbursement rates were reduced last fall by substituting a Department of Social and Health Services formula for the one Labor and Industries uses in workers’ compensation cases.

The result was cuts ranging roughly from 35 percent to 50 percent in individual cases, Nelson said.

For Spokane hospitals, payments already were limited to 42.3 percent to 48.3 percent of the amount they bill to the Crime Victims Compensation fund under a complicated regulatory scheme. With the cuts, payments can be as low as 20 cents on the dollar, according to Corey Shank, director of operations for Pacific Medicaid Services Inc., which helps Spokane hospital patients find financial aid.

Nelson said he heard “a collective sigh” when the new rates were introduced at a meeting of hospital administrators.

Fortunately, the Crime Victims Compensation Fund constitutes a very small portion of the hospital’s so-called regulatory payments, said business managers for Sacred Heart Medical Center.

Hospitals are legally obligated to treat everyone and to accept whatever payments state and federal programs authorize for qualified patients, but doctors aren’t.

Nelson said Labor and Industries officials worry that specialists, such as neurologists, may refuse to treat patients who rely on the Crime Victims Compensation Fund.

“We’re just starting to notice it,” he said.

If the program can’t increase its revenues, some benefit categories may have to be eliminated to ensure adequate medical coverage, Nelson said.

He said examples of categories that might be eliminated include funeral costs, lost wages and pensions for victims who can no longer work.

But counseling services probably would not be eliminated.

“I don’t see any way on earth we could even consider that,” Nelson said.