Health and Social Services officials disagree over which department should control money designated for "active treatment" of the mentally ill and mentally retarded.

Medicaid, under the Health Department, administers funding for active treatment, but the legislative fiscal analyst's proposed budget would transfer those funds to the Department of Social Services - specifically the divisions of Mental Health and Services to the Handicapped - to contract for appropriate treatment.Federal regulations don't clearly define active treatment, but it is generally considered to be a high level of care, including therapies and activities, for the most seriously mentally retarded or ill.

The Omnibus Reconciliation Act of 1987 mandates substantial changes in long-term care of the mentally ill and the mentally retarded. It also lies at the heart of the dispute.

The act requires the state mental health and mental retardation authorities (in Utah, the divisions of Mental Health and Services to the Handicapped) to assess whether a patient should be in a nursing facility or if he would be better off in another environment.

Those requiring active treatment could be placed in either a nursing home or in the community under a community-based waiver. But federal funds cannot be used to pay for active treatment in a nursing home, so the state must pay for it.

The governor's proposed budget estimated $1.5 million for the mentally ill and $860,000 for the retarded, although that estimate was made before it was learned that federal funds will not cover active treatment in nursing facilities. The funding would stay in the Division of Health Care Financing, which administers Medicaid. And that suits the division just fine.

"This is not a patient-care issue," said Rod Betit, director of Health Care Financing. "The division is responsible to monitor active treatment in a waiver or a nursing home. It has experience and expertise doing that. And 90 percent of the people will be in the nursing home, not on waiver.

Betit agreed that, should someone leave the nursing home for another placement, the funds should follow him, as recommended by the analyst. But the reverse should also be true, he said.

"This is not an issue of whose idea of active treatment is best or if the client receives it, but rather what services Medicaid will pay for. For whom, when and who is to have that responsibility on behalf of the state. The (division) has that responsibility, so the transfer is not a good recommendation," he said.

Dr. Suzanne Dandoy, Health Department director, cautioned members of the Social Services and Health Appropriations Committee that the governor's budget resulted from months of study and public comment, while the analysts' budget did not have the benefit of that input. "With active treatment, there are pitfalls," she said, "and it needs more discussion."

During a short period of public comment, at least one organization spoke in favor of the transfer.