KHI News Service

Budget cuts lead to fewer children admitted for psychiatric treatment

But cost savings sought by state may vanish, according to some

By Dave Ranney | June 07, 2011

As a result of state budget cuts, there has been a quick and dramatic drop in the number of children admitted to Kansas psychiatric treatment facilities.

The state Medicaid program works with 18 psychiatric residential treatment facilities, which mental health professionals call PRTFs for short.

“In a three-month time period, the PRTF census has dropped by 30 to 50 percent,” said Trish Bryant, vice president for family preservation, foster care homes, and residential services at St. Francis Community Services in Salina. “My question is: What has changed in the community that makes it so that all of a sudden there are this many kids who no longer need this level of services?”

In January, according to data recently compiled by facility operators, about 575 children were residing at the facilities. By May, there were fewer than 400.

The sharp decline, most agree, was driven by state budget cuts, though some say the facilities historically were admitting more children than necessary and that the cuts have simply made community mental health centers more careful about referrals.

The PRTFs specialize in treating children known to be a danger to themselves or others and whose behaviors are so disruptive they can’t be cared for at home or in a community setting.


For children dependent on Medicaid, admissions to the PRTFs are limited to those who have been screened and referred by a community mental health center.

The referrals typically stem from a crisis in the home and after parents have concluded they no longer can handle their child’s aberrant behavior, which may include cutting themselves, setting fires, sexual aggression or other forms of violent defiance.

Often the children are taking multiple mental health drugs and it is not unusual for them to be sent to a PRTF after a change, planned or unplanned, in their medications.

“These are kids whose needs are very complex and very challenging,” Bryant said. “We’re not talking about kids who have a single diagnosis. These are kids who, most of them, have three or four diagnoses and who’ve been in and out of state hospital-level care multiple times.”

In recent years, most of the seriously mentally ill children screened by the centers for referral to a PRTF have been placed in a facility where the typical stay is for about 90 days.

But in February, PRTF officials began noticing a decline in the number of referrals. And they began hearing from parents who complained that their local mental health center had either refused to screen their child or had denied them referral to a PRTF.

“We didn’t know what was going on,” said Cheryl Rathbun, vice president of clinical services for St. Francis Community Services, which has a 33-bed PRTF in Salina and a 34-bed facility in Ellsworth.


Special Provider Notice

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"Savings plan goal"

Then, last month, Rathbun and other PRTF officials learned that Kansas Health Solutions had given each community mental health center a, “savings plan goal,” a move that was described in an April 5 "special provider notice," issued to the centers.

Kansas Health Solutions is a non-profit managed care company that oversees Medicaid-funded services for the mentally ill under contract to the state welfare agency, the Kansas Department of Social and Rehabilitation Services.

Kansas Health Solutions told mental health center officials that if they didn’t meet their cost-cutting goals then their Medicaid reimbursements would be cut by up to 25 percent.

Almost immediately, the treatment facilities began noticing fewer referrals.

“We had 15 referrals in March, 10 in April,” said Vicki Englen, admissions coordinator at Lakemary Center, a 65-bed facility in Paola. “In May, we had four.”

“We haven’t had an admission in two weeks,” said Dr. George Thompson, medical director at TLC, a 60-bed facility in Olathe.

Changes underway at SRS

Parent struggles with new PRTF policy

"All about money"

As the mental health centers were being told they needed to spend less, SRS officials were raising concerns that the PRTFs were being used too much, that children were staying in them longer than necessary and that many of the PRTFs’ services should be available through the mental health centers at less cost.

“The over-utilization concerns have been around for the past year or so,” said Mike Hammond, executive director at the Association of Community Mental Health Centers of Kansas.

“What’s different now is that Kansas Health Solutions has been asked to begin slowing the growth in Medicaid spending on mental health. The goal is to slow the growth by 6 percent,” he said.

Kansas Health Solutions is governed by a 15-member board. Eight of the board's members represent or work for a community mental health center.

Some PRTF officials said the drop in referrals is entirely about the budget cuts, regardless what state officials might say about over-utilization concerns. And a recent study commissioned by SRS revealed little evidence that the treatment centers were over utilized, though it did raise the concern about readmissions due to inadequate initial stays and coaching of parents in how to deal with their children upon release.


KU Report on Child Psychiatric Care

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“Let’s make no mistake, this is all about money,” Rathbun said. “And if the goal is to cut spending by 6 percent, why is the census down 30 to 50 percent?"

Hammond said SRS asked Kansas Health Solutions and the mental health centers to look for various ways to cut spending, including referring fewer children to PRTFs, fewer adults to the state hospitals, and cutting back on outpatient services.

Right service, right time, right amount, right provider

"There will be a renewed effort to ensure the focus is on providing the right service at the right time in the right amount by the right provider," Hammond said. "Kansas Health Solutions has a budget-reduction target that has to be hit but in a manner that's safe and effective."

The reduction in PRTF admissions was not the subject of a public hearing during this year's legislative session. The Brownback administration had proposed cuts in state dollars to the mental health centers. But the Legislature restored the funding and SRS Secretary Rob Siedlecki pledged he would not divert the mental health center money for other agency purposes.

But lawmakers also ordered an overall reduction in general agency spending and SRS officials are looking for ways to cut more than $20 million. Siedlecki said last week he hopes to make public no later than Labor Day the agency’s plan for meeting the Legislature’s budget target. But it is now clear that at least one cost-cutting move has been made through Kansas Health Solutions, which has warned the community mental health centers that if they do not succeed in trimming costs they will have their Medicaid reimbursements reduced by up to 25 percent until the savings targets are reached.

"Critical to achieving savings"

In an email to KHI News Service, Rick Shults, director of mental health services at SRS, noted that the state-funded portion of the department’s budget had been cut $6.8 million in fiscal 2011 and $17 million in fiscal 2012, which begins July 1.

Kansas Health Solutions' “efforts to improve utilization management is critical to achieving these savings,” Shults wrote.

Community mental health centers, he said, appeared to have become too dependent on PRTFs and, instead, should be providing comparable services in community settings.

Some centers’ recent efforts, he wrote, “have resulted in a reduced need to use residential treatment,” referring to PRTFs.

But PRTF officials said the need for their facilities was more vital than ever, noting that in recent years the role of the state-funded mental hospitals has moved away from long-term treatment and toward short-term stabilization.

PRTFs, they said, have become the last option for parents whose children’s needs go beyond what can be handled by their community mental health center.

"A bomb's been dropped"

“What we’re being told now is, no, your job isn’t treatment, it’s to get the kids stabilized and back in the community,” Rathbun said. “Well, wait a minute, that’s a huge change and it’s one that I would argue is not good for the families we’re talking about here.”

And at least some in the mental health system are wondering if the change won't result in the community mental health centers referring more children to acute-care psychiatric hospitals since services there don't fall under the Kansas Health Solutions contract. If that scenario should play out it would likely mean more referrals to facilities operated by KVC Behavioral Health and ultimately might cost the state more.


Interhab letter to Pedro Moreno of SRS

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SRS privatized the children’s unit at Rainbow Mental Health Facility in Kansas City in 2007 and at Larned State Hospital in 2010, contracting with KVC Behavioral Health, which opened acute-care inpatient psychiatric facilities in Wyandotte County and Hays.

Gerald Snell, chief clinical services officer at Youthville, a state foster care contractor that also has a PRTF, said the confusion over the apparently changing role of the PRTFs, coupled with the restrictions on admissions, have put the system in chaos.

“It‘s like we’re all scrambling after a bomb’s been dropped,” he said.

PRTF operators aren't the only ones concerned by the changes. Also upset are those who represent community programs for the developmentally disabled. Among their clients are emotionally disturbed children.

On Sunday, Interhab Executive Director Tom Laing sent a strongly worded letter to SRS Deputy Secretary Pedro Moreno complaining that the agency and its contractors had "engaged in a very non-transparent behaviors and are refusing to acknowledge the extent to which children with significant mental, behavioral and developmental challenges and their families are being used as financial game-pieces, in which a child's circumstances are being held hostage by one party and used as a bartered commodity by a second party. Both parties seem to point to the other party as the cause of the problem. For all practical purposes, accountability for this matter is like a dead fish — it smells bad at either end."

Laing asked for a meeting with Moreno no later than Wednesday to help resolve the problem. No meeting had been scheduled as of Tuesday. But Laing said he had heard back from Moreno, who told him that Steve Leary, SRS director of community support services, would, "look into it."

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