RD424 - Annual Report on Community Services Board Contracts for Private Inpatient Psychiatric Treatment Services July 1, 2008 - June 30, 2009


Executive Summary:
Item 315.K of the 2009 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 some private providers for local inpatient psychiatric services. Based on survey results, CSBs contracted with eight private providers and paid $103,872 for 358 bed days of inpatient psychiatric treatment provided to 108 individuals in FY 2009. However, CSBs contract primarily with private providers of local inpatient psychiatric services on a regional basis through the Local Inpatient Purchase of Services (LIPOS) mechanism. In FY 2009, CSBs paid $12,082,126 of LIPOS funds to 34 private providers for 17,044 bed days of inpatient psychiatric treatment provided to 3,182 individuals. Combining these two ways of contracting for local inpatient psychiatric services, CSBs reported that they paid $12,185,998 to 34 private providers for 17,402 bed days of inpatient psychiatric treatment for 3,290 individuals in FY 2009.

The purchase of these services by CSBs and the diversion of individuals 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 3,290 individuals served in FY 2009 through these contracts, only 278 individuals, or 8.4 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, 3,012 individuals were diverted from possible admission to state hospitals. In FY 2009, 2,691 individuals were served in state hospital admission units. If the 3,012 diverted individuals had been admitted, this would have increased the number of individuals admitted to state hospital admission units by 112 percent in FY 2009.

In conclusion, CSB contracts for local private inpatient psychiatric treatment services served more individuals than state hospital admission units in FY 2009, 3,290 versus 2,691 individuals. Those contracts obtained services for these individuals at far less cost than they could have been served in state hospitals, $12,185,998 in the community versus up to as much as $102,355,743 in state hospitals, depending on assumptions made about average lengths of stay in state hospital admission units and the proportion of those individuals 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 strives to transform its public behavioral health and developmental services system to serve individuals with serious mental illnesses most appropriately and effectively, increasing the availability of services in the community.