Oregon health officials announced Friday how they will spend more than half-a-billion dollars set aside for behavioral health services in the state.

The $517 million spending package is divided into three main areas. About $132 million will pay for grants to help behavioral health providers with staffing shortages. Another $155 million will pay for rate increases for service providers. The remaining $230 million will go toward supportive housing and residential treatment programs.

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The ambitious spending package is the result of legislative initiatives to help the state improve its behavioral health services. Oregon has the fifth-highest unmet need for mental health services, according to federal data, with more than 10% of adults saying they can’t get the help they need.

One of the biggest challenges Oregon faces is a shortage of mental health workers, according to a February report by the Oregon Health Authority — a problem that was exacerbated by the pandemic. That’s why lawmakers this year allocated $132 million toward grants for providers to bolster staffing. The program, slated to begin next week, will provide grants to 159 organizations to hire and retain employees. Most of the money will go toward wages, benefits and bonuses.

Meanwhile, the $155 million for provider rate increases will put an extra $109 per Medicaid member into the behavioral health system. That program is slated to begin July 1, although it awaits final legislative and federal approval.

The money for supportive housing services includes $100 million in direct awards to counties, then $112 million toward a competitive grant program for residential mental health and substance use services. The grant program will support long-term projects, including new construction and renovation for supportive housing programs. The remaining funds will go to federally recognized tribes to fund housing and residential treatment projects.

“This will ensure that people are supported in settings that best meet their needs and will create more equitable and effective housing alternatives for people with serious and persistent mental illness, requiring a higher standard of care,” reads an OHA press release.

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