RD27 - Annual Report on Community Services Board Contracts for Private Inpatient Psychiatric Treatment Services July 1, 2006 - June 30, 2007


Executive Summary:
Item 311 K of the 2007 Appropriation Act requires 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 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 $110,779 to nine private providers for 509 bed days of inpatient psychiatric treatment for 152 individuals in FY 2007. Several CSBs also received 179 bed days for 21 individuals at no cost. CSBs contract with private providers of local inpatient psychiatric services primarily on a regional basis through the Local Inpatient Purchase of Services (UPOS) mechanism. In FY 2007, CSBs paid $11,981,176 of UPOS funds to 32 private providers for 20,305 bed days of inpatient psychiatric treatment for 3,193 consumers. Thus, in FY 2007, CSBs reported that they paid a total of $12,091,955 to 32 private providers for 20,993 bed days of inpatient psychiatric treatment for 3,366 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 potential 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 3,366 consumers served in FY 2007 through these contracts, only 329 consumers, or 9.8 percent of the total number, were transferred 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, 3,037 consumers were diverted from possible admission to state hospitals. In FY 2007, 3,255 individuals were served in state hospital admission units. If all 3,037 diverted consumers had been admitted, this would have increased the number of individuals admitted to state hospital admission units by 93 percent in FY 2007.

In conclusion, CSB contracts for local private inpatient psychiatric treatment services served more individuals than state hospital admission units in FY 2007, 3,366 versus 3,225 consumers. Those contracts obtained services for these individuals at far less cost than they could have been served in state hospitals, $12,091,955 in the community versus up to as much as $78,312,871 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.