RD346 - Annual Report on Community Services Board Contracts for Private Inpatient Psychiatric Treatment ServicesJuly 1, 2005 - June 30, 2006


Executive Summary:
The General Assembly included language in item 311 K of the 2006 Appropriation Act to require the Department to submit a report annually to the Chairmen of the House Appropriations and Senate Finance Committees regarding community services board (CSB) contracts with private service providers for local inpatient psychiatric treatment services. CSBs contract with private providers of local inpatient psychiatric treatment services in two ways. Historically, a few CSBs have contracted individually with various private providers for local inpatient psychiatric services. Based on survey results, CSBs paid $117,612 to eight private providers for 434 bed days of inpatient psychiatric treatment for 103 individuals in FY 2006. Now, CSBs also contract with private providers of local inpatient psychiatric services on a regional basis through the Local Inpatient Purchase of Services (LIPOS) mechanism. In FY 2006, CSBs paid $11,637,032 of LIPOS funds to 32 private providers for 19,244 bed days of inpatient psychiatric treatment for 3,538 consumers. Thus, in FY 2006, CSBs reported that they paid a total of $11,754,644 to 32 private providers for 19,678 bed days of inpatient psychiatric treatment for 3,641 individuals.

The purchase of these services by CSBs and the diversion of consumers receiving those services from admission to state hospitals had a significant impact on state hospital expenditures, utilization, and operations. Any savings realized by community-based inpatient psychiatric treatment services would be reflected in avoidance of increased state hospital expenditures and in decreased demand for state hospital beds. Of the 3,641 consumers served in FY 2006 through these contracts, only 102 consumers, or 2.8 percent of the total number, were admitted to a state hospital upon their discharge from private providers. These individuals needed longer term extended rehabilitation services offered by state hospitals. As a result of these contracts, 3,539 consumers were diverted from possible admission to state hospitals. In FY 2006, 3,119 individuals were served in state hospital admission units. If all 3,539 diverted consumers had been admitted, this would have increased the number of individuals admitted to state hospitals by 113 percent in FY 2006.

In conclusion, CSB contracts for local private inpatient psychiatric treatment services served more individuals than state hospital admission units in FY 2006, 3,641 versus 3,119 consumers. Those contracts obtained services for these individuals at far less cost than they could have been served in state hospitals, $11,754,644 in the community versus up to as much as $93,086,317 in state hospitals, depending on assumptions made about average lengths of stay in state hospital admission units and the proportion of those consumers who might have been admitted to state hospitals. Therefore, it is vitally important that funding for the purchase of local inpatient psychiatric treatment services delivered through contracts with private providers be maintained and even increased as Virginia moves to transform its public mental health, mental retardation, and substance abuse services system to serve individuals with serious mental illnesses most appropriately and effectively.