The Legislative Audit Committee has authorized the state auditor to draft a bill that would investigate 17 nonprofit community mental health centers that were granted “non-compete contracts and preferred rate status for almost 60 years, without significant supervision”.
The audit was requested in January by reps Dafna Michaelson Jenet, D-Aurora and Colin Larson, R-Littleton, and the Senses. Robert Rodriquez, D-Denver and Julie Gonzales, D-Denver, all members of the Audit Committee.
In December, the Colorado News Collaborative reported that centers “collectively treated fewer clients during the pandemic than before, despite skyrocketing mental health needs. At the same time, more than half of centers had $10 million in liquid reserves or The Denver center retained more than $40 million in liquid reserves while its clients faced record wait times for care,” the report states.
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Among the report’s findings:
- The state payment system has inadvertently created a financial incentive for centers to accept fewer sick people and charge higher costs, while protecting them from competition
- The centers charged taxpayers up to 17 times more than independent Medicaid providers for the same services, but with little transparency about the expenses on which those rates are based.
- Several centers, including those in communities with large immigrant populations, had no Spanish-speaking care providers
- Some centers have been paid for programs they did not provide, without state agencies funding and regulating them
In January, the CEO of Mind Springs, one of 17 centers and which provided behavioral health services in 10 West Slope counties, resigned.
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The lawmakers’ request called for a review of the roles of the Colorado Department of Social Services and the Colorado Department of Health Care Policy and Funding and their effectiveness in overseeing behavioral health care services.
The auditor told the audit committee on Tuesday that he could conduct a standard performance audit under his authority, but if the committee authorized it by law, an audit could examine the issue of oversight as well as the processes and records of non-profit organizations.
The committee has chosen to authorize a draft bill, which it could examine at its next meeting, scheduled for March 22.
The letter from the auditor noted the timing of the audit as it applies to the creation of a behavioral health administration, which is being considered under Bill 1278. This week, lawmakers introduced the first of several bills that will guide federal government spending of $450 million. American Rescue Plan Act dollars for behavioral health services related to the pandemic.
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