Colorado Medicaid cut payments to embattled Grand Junction psychiatric hospital, pending investigation

Mind Springs, the mental health center serving most of western Colorado, had another setback earlier this month when Medicaid cut payments to its psychiatric hospital, but state officials said they want to see it get better.

The decision to stop Medicaid payments for new admissions to West Springs Hospital, first reported by the Grand Junction Daily Sentinel, followed a complaint by two former employees. The hospital still gets paid for care provided to Medicaid recipients who were admitted before the pause.

John Sheehan, CEO of Mind Springs, said he hasn’t been told what the allegations are, other than that they involve the children’s or adolescent programs at West Springs Hospital. Inspectors from the state health department visited in the first week of October, he said, but they likely won’t release their findings until November.

“I’ve asked repeatedly if there are concerns about the safety of children. I’ve been told no,” he said.

The Colorado Department of Public Health and Environment confirmed it was conducting an investigation, but declined to answer any more questions until its report is finalized.

Colorado’s Medicaid program operates through contractors known as regional accountable entities. The entities aren’t required to contract with every hospital and could choose not to do so with West Springs even if the inspectors don’t find major problems, but that’s not likely, given the small number of psychiatric hospitals in the state, said Cristen Bates, director of the Office of Medicaid and CHIP behavioral health initiatives and coverage at the Colorado Department of Health Care Policy and Financing.

“We need a beautiful new hospital out on the Western Slope that serves folks,” she said. “We have to make sure that comes with certain standards.”

Rocky Mountain Health Plans, the contractor for Medicaid on the Western Slope, is the largest payer to Mind Springs. Its representatives didn’t respond to questions about the payment stoppage.

Some other regional accountable entities also have paused payments to West Springs because the allegations are serious, Bates said. Each will be able to make its own decision about resuming them, and could ask for certain conditions, like that the hospital’s staff undergo additional training, she said.

If the payment stoppage continues, it will cost West Springs Hospital about $700,000 a month, Sheehan said. The hospital is continuing to admit patients covered by Medicaid, but it won’t automatically get paid for them even if the state deems the allegations unfounded. They will try to get the payments through a dispute process with Rocky Mountain Health Plans, he said.

“The likelihood of them reversing themselves is not great,” he said.

Doyle Forrestal, CEO of the Colorado Behavioral Healthcare Council, said she hasn’t heard anything from the other providers about patients having to wait for beds elsewhere because of the payment stoppage at West Springs Hospital. Still, anything that could reduce access to inpatient care for those who need it is concerning, especially given the increase in mental health needs among children, she said.

“Shutting down one unit is going to have a ripple effect,” she said.

Earlier this year, three state agencies audited Mind Springs because of concerns that it wasn’t meeting patients’ needs and that its spending wasn’t transparent. The audit, released in May, didn’t find any evidence of fraud but did highlight mismatches between the services offered and communities’ needs. It also called for changes to curb potentially risky prescribing while noting progress in other areas.

A group of former employees also alleged in May that they had been ordered to fill out assessments on patients they hadn’t seen. The state agencies that oversee mental health centers haven’t said if they’ve either substantiated or dismissed those allegations.