1

Guidance for Revision of the 

FY2016-2017 Block Grant Application for the new 10 percent set-aside

February 8, 2016

The Substance Abuse and Mental Health Services Administration (SAMHSA) is directed by 

Congress through its FY 2016 Omnibus bill, Public Law 114-113, to set aside 10 percent of the

Mental Health Block Grant (MHBG) allocation for each state to support evidence-based 

programs that provide treatment for those with early serious mental illness (SMI) and a first 

episode psychosis (FEP) – an increase from the previous 5% set aside. This additional 5 percent 

increase to the set-aside is over the FY 2015 level. The appropriation bill specifically requires

the 10 percent set-aside to fund only those evidence-based programs that target FEPi. The law 

specifically stated:

“.....the funds from set-aside are only used for programs showing strong evidence of 

effectiveness and targets the first episode psychosis. SAMHSA shall not expand the use 

of the set-aside to programs outside of those that address first episode psychosis”. 

Previous appropriation language (P.L. 113-76 and P.L. 113-235) allowed the use of set aside 

funds for individuals with early SMI, including those without psychosis. However, the new 

language specifically requires states to focus their efforts only on FEP.

States that are currently utilizing FY 2016 set-aside funds for early SMI other than psychosis 

must now refocus their efforts to service only those with FEP. SAMHSA will allow states that 

already signed a contract or allocated money to their providers using the FY 2016 funds to 

complete these initiatives through the end of their contract or by the end of September 30, 2016, 

whichever comes first. States may continue to support these efforts using the general MHBG 

funds; however, the set-aside allocation must be used for efforts that address FEP. Nothing 

precludes states from utilizing its non-set-aside MHBG funds for services for individuals with 

early SMI.

If states have other investments for people at high risk of SMI, they are encouraged to coordinate 

those programs with early intervention programs supported by the MHBG. This coordination 

will help ensure high risk individuals are swiftly identified and engaged in evidence-based 

services should they develop into diagnosable SMI. Please note that the MHBG funds cannot be 

used for primary prevention or preventive intervention for those at high risk of SMI.

States can implement models which have demonstrated efficacy, including the range of services 

and principles identified by National Institute of Mental Health (NIMH) via its Recovery After 

an Initial Schizophrenia Episode (RAISE) initiative. Utilizing these principles, regardless of the 

amount of investment, and by leveraging funds through inclusion of services reimbursed by 

Medicaid or private insurance, every state should be able to begin to move their system toward 

earlier intervention, or enhance the early intervention services already being implemented. 
2

SAMHSA and NIMH in conjunction with National Association of State Mental Health Program 

Directors (NASMHPD) will continue to ensure that technical assistance and technical resources 

are available to states as they develop and implement their plan. 

SAMHSA proposes to implement this 10 percent set-aside through a “request for revision of the 

2016-17 MHBG plan.” States will be required to revise their two-year plan to propose how they 

will utilize the 10 percent set-aside funding to support appropriate evidence-based programs for 

individuals with FEP. Upon submission, SAMHSA will review the revised proposals and 

consult with NIMH to make sure they are complete and responsive. If a state chooses to submit 

a plan to utilize the set-aside for evidence-based services other than the services/principles 

components of Coordinated Specialty Care (CSC) approach developed via the RAISE initiative,

SAMHSA will review the plan with the state to assure that the approach proposed meets the 

understanding of an evidence-based approach. With consultation with NIMH as needed, the 

proposals will be either accepted, or requests for modifications to the plan will be discussed and 

negotiated with the State. SAMHSA will notify each State once the revised proposals are 

approved. 

This initiative also includes a plan for program evaluation and data collection related to 

demonstrating program effectiveness. SAMHSA is also required within six months of the 

appropriations statute enactment to provide a detailed table showing at a minimum each State’s 

allotment, name of the program being implemented, and a short term description of the program.

Additional technical assistance and guidance on the expectations for evaluation, data collection 

and reporting will follow. 

States must submit their plan revision request proposal into the FY 2016-2017 Block Grant 

Application under the following section:

Section III. Behavioral Health Assessment and Plan, C. Environmental Factors and Plan, #5. 

Evidence-Based Practices for First Episode Psychosis. The state must revise the following for 

the 10 percent set-aside for first episode psychosis:

1. An updated description of the states chosen evidence-based practice for the 10 percent 

set-aside initiative.

2. The planned activities for 2016 and 2017, including priorities, goals, objectives, 

implementation strategies, performance indicators, and baseline measures.

3. A budget showing how the set-aside and additional state or other supported funds, if 

any, will be utilized for this purpose.

4. The states provision for collecting and reporting data, demonstrating the impact of this 

initiative.

5. Any foreseen challenges.
3

States should also complete activity number 3. Evidence-Based Practices for First Episode 

Psychosis (10% of total award) in Table 2 State Agency Planned Expenditures under Section B: 

MH BG Activities

 

i The following resources are few examples of FEP Evidence Based Programs and information that States may find 

pertinent to service design, implementation and monitoring: 

http://www.nimh.nih.gov/health/topics/schizophrenia/raise/index.shtml

http://www.nimh.nih.gov/news/science-news/2015/team-based-treatment-is-better-for-first-episode-psychosis.shtml

http://www.nasmhpd.org/sites/default/files/Rural-Fact%20Sheet-_1.pdf

http://www.nasmhpd.org/sites/default/files/Building-Fact%20Sheet-_1.pdf