Colorado isn’t planning financial bailout of Western Slope psychiatric hospital

Colorado state agencies aren’t riding to the rescue of a financially troubled psychiatric hospital on the Western Slope, saying the facility already has received significant help.

The Department of Health Care Policy and Financing, the Behavioral Health Administration and the Department of Public Health and Environment released a letter to 12 Western Slope lawmakers last week that said they had made “every effort” to assist West Springs Hospital in Grand Junction while also requiring necessary quality improvements.

The CEO of West Springs’ owner told The Denver Post in mid-April that the hospital could close in the coming weeks without a cash infusion. West Springs is the only one of Colorado’s 11 psychiatric hospitals located west of the Front Range.

Mesa County officials say they’re working on rounding up money to save the hospital and its psychiatric emergency room, which they consider a vital part of the mental health infrastructure on the Western Slope.

The state agencies’ letter alleged that West Springs and owner Mind Springs Health had benefited from more than $13 million in Medicaid overpayments over two years, but still failed to balance their books.

Mind Springs employs more than 550 people at its outpatient clinics on the Western Slope and the hospital.

“Like you, we do not want WSH to close. That said, the departments have exhausted their ability to provide financial support to WSH,” the letter, signed by the heads of the three agencies, said. “We are also concerned that MSH, as the parent of WSH, has consistently demonstrated poor financial management and an inability to produce a transparent sustainability plan.”

Last year, two rural Colorado hospitals that had cash crunches — Delta Health on the Western Slope and St. Vincent Health in Leadville — received help from the state when the Department of Health Care Policy and Financing advanced them some of the provider funds they were due to receive later. Psychiatric hospitals don’t pay into that fund, though.

Mind Springs CEO John Sheehan said the state agencies haven’t been responsive to West Springs’ financial problems. He said he believes the Colorado Department of Public Health and Environment’s decision to require Mind Springs to continue contracting with another entity for quality improvement was retaliation for seeking financial help.

The state health department said it determined Mind Springs needed closer monitoring than most behavioral health providers because of its financial instability.

“I have shared all of our financials with HCPF, CDPHE and anyone else who has asked to see them,” Sheehan said.

One of the few areas of agreement between the hospital and the agencies is that West Springs had asked the state for about $6.6 million in additional funds in December, which the agencies said they couldn’t provide. West Springs needs that amount because the hospital has lost about $500,000 per month in recent years and also faced expenses to show the state it was complying with quality regulations, Sheehan said.

The agencies’ letter alleged that Rocky Mountain Health Plans, a subsidiary of United Healthcare that administers Medicaid on the Western Slope, overpaid West Springs by $6.6 million in the fiscal year that ended in June 2023, and by at least $6.5 million in the current fiscal year.

In the previous fiscal year, Rocky Mountain Health Plans usually paid a monthly rate in advance based on how many members it expected would seek services from West Springs, but fewer showed up than they had expected, leading to overpayments. This year, it paid estimated claims one month in advance.

Sheehan confirmed that Rocky Mountain Health Plans overpaid in the previous fiscal year, but said that was because of its own decisions to denigrate the hospital, deny medically necessary care and direct patients to cheaper hospitals on the Front Range. The monthly rate was meant to preserve capacity, so the hospital didn’t have to lay off staff and close beds during slow times, he said. Mind Springs and the insurance plan currently are in arbitration over the $6.6 million.

“People weren’t coming, because you’re scaring them,” Sheehan said of Rocky Mountain Health Plans.

Sheehan also disputed the $6.5 million tally for the current fiscal year. The payment plan was different this year, with Rocky Mountain Health Plans paying one month ahead, based on how much care they think members will use. The state won’t know what West Springs owes until the end of June, when they add up all of the care provided and compare it to the advances, but the total is unlikely to be that high, he said.

It costs about $1,700 per day to treat a patient at West Springs, compared to about $900 per day at Denver-area hospitals, though the gap narrows when accounting for transportation and the cost of keeping someone in an emergency room if the metro hospitals don’t have a bed available, Sheehan said.

“If this hospital closes, it’s a windfall to them,” he said of the insurer.

Rocky Mountain Health Plans didn’t make anyone available for an interview, but said in a statement that it supported West Springs Hospital through pre-payments and follows state and federal laws in decisions about whether to pay claims.

The agencies pushed back on Sheehan’s assertion that Rocky Mountain Health Plans was improperly denying care and steering patients toward Front Range hospitals. West Springs’ care denials, which are based on whether the insurer believes the patient needs hospital-level care, are about 21% lower than at other behavioral health hospitals in the state, they said, and the decision of where to seek care is up to patients and the providers treating them.

Financial crunch follows other troubles

West Springs’ financial instability follows more than two years of questions about the quality at the Grand Junction hospital.

In 2022, Mind Springs faced allegations of serious prescription errors and falsifying patient records. The hospital also temporarily lost the ability to bill Medicaid in late 2022, though it regained that right in January 2023 after the state determined it had fixed all of its major problems.

The state agencies’ letter to lawmakers laid out additional allegations from 2021 and 2022, including that the hospital:

Didn’t ensure staff members were appropriately trained
Billed Medicaid incorrectly
Didn’t protect patient confidentiality
Didn’t notify parents when it secluded, restrained or involuntarily medicated underage patients
Failed to protect patients from self-harm
Didn’t have a program to prevent infections from spreading through the facility

In May 2023, West Springs and the state reached an agreement that the hospital could continue receiving payments if it hired a management company to help it improve. That company was Intermountain Health, which owns St. Mary’s Regional Hospital in Grand Junction, and inspections have come back clean since the management agreement, meaning the state found the hospital remedied those previous issues.

West Springs has not only fixed the problems the state identified but expanded care, including opening new medical detox and residential treatment beds, Sheehan said.

“The quality concerns have been eliminated. We’re in compliance,” he said.

Support, and doubts

The Colorado Behavioral Health Council wrote to the Behavioral Health Administration and the Department of Health Care Policy and Financing on April 16 to express support for West Springs, raising concerns that closing the only psychiatric hospital west of the Front Range could exacerbate geographic disparities in access to care.

“Ensuring the continued existence of this essential facility is not just a matter of financial assistance but a commitment to safeguarding the well-being of our community members who rely on its services,” the letter said.

If the hospital were to shut down, it would have a ripple effect on the county’s co-responder program, through which a mental health professional goes along with a sheriff’s deputy on crisis calls, Mesa County Commissioner Janet Rowland said.

“One of the components is having a place to take people other than the jail,” she said.

Mesa County Sheriff Todd Rowell said West Springs’ psychiatric emergency room has helped reduce the jail population, along with other changes to try to divert people in crisis if the victim doesn’t want to press charges. In 2023, the jail averaged 426 inmates per day, but that’s down to 385 per day so far this year, he said.

Deputies dropping someone off at the psychiatric emergency room typically can be back on the road in about 20 minutes, which is a significant improvement over sometimes spending hours trying to get someone to an appropriate place, Rowell said. While they try to offer behavioral health support in the jail, the environment isn’t therapeutic, and people often end up back there shortly after release, usually for minor crimes, he said.

“With a psych emergency room, criminal charges can be avoided,” he said. “Jail is not the right place for these people to be.”

The traditional emergency room would remain an option, but isn’t ideal, because the patient often has to wait there for a bed in a facility equipped to help them, said Lisa Mills, Mesa County’s behavioral health director. They tend to get the best results when they can take the patient directly to somewhere that’s set up for psychiatric care in the local community, because that makes it easier to coordinate follow-up care, she said.

St. Mary’s Regional Hospital didn’t make anyone available for an interview, but said people in crisis can seek care there. “We are committed to working with stakeholders to ensure the community’s behavioral health care needs are met,” the hospital said in a statement.

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However, not everyone believes that West Springs has benefited people in crisis.

Meighen Lovelace, mental health policy coordinator for the Colorado Cross-Disability Coalition, said patients have told her that the hospital sometimes let adult patients mingle with youth, or men with women, in ways that weren’t safe. Some also have raised concerns the hospital let patients leave before they were stable, she said.

“People on the Western Slope drive to Denver to seek (psychiatric) care,” she said. “Rural communities across Colorado, including the Western Slope, deserve the same high-quality care that Coloradans on the Front Range have access to.”

Communities see value in having a psychiatric hospital nearby, and the cities of Grand Junction and Aspen have reached out about possibly offering some funding to help maintain the hospital, but they haven’t settled anything yet, Mind Springs’ Sheehan said.

Rowland said she and others are reaching out to the other Western Slope counties, to see if each could chip in something to help get West Springs through the fiscal year that ends in June. Mesa County can’t afford to do it alone, and the other counties haven’t yet said if they will participate, she said.

“It’s certainly not going to be easy,” Rowland said.

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