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On January 1, 2017, the KHI News Service became part of KCUR public radio’s new initiative, the Kansas News Service. The Kansas News Service will continue to cover health policy news and broaden its scope to include education and politics. All stories produced by the former KHI News Service are archived here. Stories and photos may be republished at no cost with proper attribution and a link back to KHI.org.

Added funding for state hospitals will replace lost federal payments

Budget includes $1.75 million for salary increases at Osawatomie, Larned facilities

By Meg Wingerter | May 03, 2016

Added funding for state hospitals will replace lost federal payments
Photo by Megan Hart/KHI News Service More than two-thirds of the $17 million in extra funds the Legislature appropriated for state hospitals will be used to replace federal funding or to pay contract facilities to assist when Osawatomie State Hospital is at capacity. The mental health hospitals in Osawatomie and Larned serve patients who are determined to be a danger to themselves or others due to mental illness.

While the Kansas Legislature’s final budget bill did increase spending on mental health hospitals by $17 million, more than two-thirds of that funding will be used to maintain the status quo.

That’s because $11.7 million — or 69 percent of the $17 million in extra funds the Legislature appropriated early Monday in Senate Bill 249 — will be used to replace federal funding the state hospitals lost or pay contract facilities to assist when Osawatomie State Hospital is at capacity.

Some of the funds will benefit state hospital employees, however. Osawatomie will receive $1.3 million to increase pay for registered nurses and mental health technicians in fiscal year 2017, and Larned State Hospital will receive $450,000 to raise mental health technician pay. Both state hospitals serve patients who are determined to be a danger to themselves or others due to mental illness.

A memorandum from Gov. Sam Brownback said the $1.75 million would be used to increase pay by 10 percent for registered nurses and 12 percent for mental health technicians at Osawatomie. The Larned increase would raise pay for mental health technicians by 2.5 percent, which is the same increase that corrections officers received.

“Due to the fact that two (Kansas Department of Corrections) facilities are located on the same campus as LSH, the facilities already compete for qualified employees,” the memo said. “Providing a raise for employees of the correctional facilities without providing a similar increase for those employees at LSH will exacerbate the staffing shortfalls the hospital is experiencing as LSH employees are likely to move to KDOC employment at higher pay.”

Larned and Osawatomie face staffing issues that have raised concerns about patient safety among federal inspectors.

The Legislature prioritized funding for the state hospitals from the beginning of the session, even when the Kansas Department for Aging and Disability Services hadn’t decided if it would ask for more money, said Sen. Molly Baumgardner, a Louisburg Republican whose district includes part of the city of Osawatomie. Still, work needs to be done to improve the state’s mental health system, she said.

“We must demand that there is a plan in place, that there is a timeline in place,” she said during a Monday interview.

Replacing federal funds

About $7.8 million of what the Legislature appropriated will replace lost federal funds for the state hospitals. Osawatomie lost $5.9 million from Medicare and other federal funding after the Centers for Medicare and Medicaid Services determined the hospital had major safety issues and decided to end payments.

Larned lost $1.9 million in federal payments for hospitals that care for a disproportionate number of uninsured patients because officials determined offenders in its violent sexual predator treatment program shouldn’t be counted.

Another $3.9 million will go to continue paying for contracted psychiatric beds at private facilities to reduce the pressure on Osawatomie, which has 60 beds offline during renovations.

Continuing to fund the contracted beds was important, because those have been consistently full since Osawatomie limited admissions in mid-2015, Baumgardner said.

Hold on privatization

The Legislature gave KDADS one change its leaders had testified for, but it held off on changes that could lead to privatization of the state hospitals.

The budget bill included a provision that any newly hired staff at the state mental health hospitals would be unclassified, meaning they wouldn’t have certain protections against being fired.

Arguments for unclassifying staff include making it easier to remove unproductive employees and reward good ones beyond the salary steps in the classified system. Opponents, however, said that removing classified protections makes it easier to fire employees for frivolous or political reasons.

The budget also included a provision forbidding the administration to privatize Osawatomie State Hospital or Larned State Hospital without legislative approval.

Tim Keck, interim secretary of KDADS, had testified that the department needed flexibility to consider privatization as an option to address staffing shortages and other issues at the hospitals. Some members of the Legislature expressed distrust, however, and wanted to ensure they had a vote before the hospitals could be privatized.

Angela de Rocha, spokeswoman for KDADS, said the limit on privatization wouldn’t affect the path forward for Osawatomie.

“Right now we are concentrating, to the exclusion of all else, on recertification,” she said in an email. “That is our current overarching goal.”