AUGUSTA -- The state must continue to fund programs for some people with severe and persistent mental illness, despite funding problems, a court master says.

Daniel Wathen, court master who administers the state's compliance with a 1990 consent decree that settled a class action lawsuit against the state, issued his recommendation on Wednesday.

Wathen's recommendation presents a "significant challenge," said Brenda Harvey, commissioner of the Department of Health and Human Services.

"If we need to find more resources to serve all those who have mental illness with all the services they desire and need, we would have to figure out what other groups of people we cannot serve and have that discussion with the Legislature," she said. "The costs of mental health services are not sustainable in this fiscal climate."

Maine has 25,000 to 45,000 people with major mental illness, based on the Centers for Disease Control estimate that between 2 and 4 percent of the population has a major mental illness, Harvey said.

Wathen had been asked by the state Department of Health and Human Services if it must continue to fund mental health services for people who had not been treated in the state's mental hospital and whose incomes are too high to qualify for MaineCare, which is the Medicaid program in Maine.

The question arose after the Legislature cut funding for the programs by $3 million during two fiscal years. The state said it would continue services for people covered by the consent decree. Wathen noted that the funding was cut to $25 million for fiscal 2009.

Wathen recommends that services be restored to people clinically eligible, and that the state resume funding, citing the current two-tiered approach for people needing services.

"Under the current funding formula, however, class members continue to receive state funding for services that are necessary for their discharge from institutional confinement, while non-class members are denied funding for similar services that may be necessary to prevent their involuntary admission to such an institution," he wrote.

Those services include "community integration, Assertive Community Treatment, daily living supports, skills development, outpatient services, medication management and residential treatment."

Wathen also noted in his recommendation that the department could assess a fee for services on people "who meet reasonable income thresholds."

Department documents presented in court in May showed approximately $125 million was appropriated from the state's General Fund for all adult mental health services for fiscal 2009.

Assistant Attorney General Katherine Greason, who represents the Department of Health and Human Services, said the department has 21 days to object and request a hearing before Justice Nancy Mills, otherwise Wathen's recommendation becomes binding.

Helen Bailey, an attorney with the Disability Rights of Maine, who represents people covered by the consent decree, said she was pleased with the recommendation.

"It's not in the class members' interests to have a tier-system that distinguishes between class and nonclass members," she said. "What members need is a sustainable system."

Harvey said the state serves about 12,000 people -- both patients treated at the state mental hospital and those treated elsewhere for major mental illness -- under the consent decree, and said the number of any others seeking state services would be a guess.

"Maine has done really well reaching out," Harvey said. "Our penetration rate of reaching out and being able to serve people who are eligible is as well or better than most states."

Betty Adams -- 621-5631

badams@centralmaine.com