State Health Department officials met with mental health providers this afternoon to talk about how it plans to slash spending to avert a $25 million deficit.

Cost-saving measures, set to start Dec. 15, include putting a cap on reimbursements for the number of case management services that can be billed monthly per mental health client and taking clients with private insurance off state-funded health care.

"In the past few years, under federal oversight, our state has seen a tremendous expansion of mental health services for individuals with severe and persistent mental illness," said Health Department Director Chiyome Fukino.

"It is now time for us to refine and hone our system of care to ensure that the needs of our most vulnerable can be met in the most effective and efficient way possible. The DOH has been working toward creating a sustainable system of care long before our current budget situation."

The state Health Department Adult Mental Health Division is projecting the $25 million budget shortfall for this fiscal year.

Service providers said the budget cuts will hurt the neediest Hawaii residents.

"We're all on tight budgets already," said Marya Gramb, executive director of the Mental Health America of Hawaii. "There is a big need."