SitNews - Stories in the News - Ketchikan, Alaska

State Privatizing Alaska's Only Psychiatric Hospital

Some lawmakers concerned with decision


February 10, 2019
Sunday PM

(SitNews) Anchorage, Alaska - Friday Commissioner of the Alaska Department of Health and Social Services, Adam Crum, announced that he is taking over the day to day management of Alaska Psychiatric Institute (API) in Anchorage, which is Alaska’s only psychiatric hospital. Commissioner Crum has contracted with a private for-profit health care company to provide administrative support and leadership for the hospital. Details of the apparent sole source, non-competitive contract with Wellpath Recovery Solutions have not been disclosed.

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Crum invoked his authority under state law to immediately assume management of the Anchorage-based Alaska Psychiatric Institute (API). Alaska state law (AS 47.32.140) allows for the commissioner to assume either temporary or permanent management of a licensed health care entity when there is reasonable cause to believe there is a danger to the health, safety or welfare of individuals receiving care from that entity.

In a news release, the Deptartment of Health & Social Services wrote the decision was made in response to the considerable problems that continue to put patients and staff in jeopardy at API and in light of recent and ongoing investigations from the Centers for Medicare and Medicaid Services (CMS) and other state and federal regulatory agencies.

As part of assuming authority over API, Commissioner Crum made the choice to contract with Wellpath Recovery Solutions, a nationally recognized health care company with a proven record of success, to provide administrative leadership of the facility with continued oversight from the state, quoting the news release.

“During the course of recent investigations at API, we determined immediate steps were needed to protect patients and staff and ensure complete compliance with federal regulations, which also allows the facility to continue to receive federal funds,” said Commissioner Crum. 

Serious efforts have been made towards addressing the deficiencies identified by federal and state authorities, but progress is not being made quickly enough, according to the Alaska Department of Health & Social Services. While additional security measures have recently been implemented at API to better ensure patient and staff safety, contracting with Wellpath was deemed necessary to further address safety and patient rights issues and bring the facility rapidly into complete compliance with federal and state standards.

The DHSS news release states, "The contract with Wellpath provides for administrative oversight with the intent of correcting problems of patient and staff safety and patient rights, bringing the hospital into rapid compliance with its regulatory bodies, improving the therapeutic environment, and preparing the hospital to return to its full capacity by June 30, 2019. 

During the initial phase of the contract, DHSS news release wrote that Wellpath will bring in a team of experts to fill key leadership positions at API to support the successful completion of their mission. All API staff will remain in their positions as State of Alaska employees. Gavin Carmichael will continue as API’s acting chief executive officer. If Wellpath is successful in the first phase, the company will assume full responsibility of API after July 1, 2019.

“I recognize this decision may take Alaskans by surprise, but it was not made lightly. Changes have been needed at API for a very long time,” said Commissioner Crum. “This decision will help us solve these long-standing problems at API, and then allow us to more effectively broaden our focus to address the entire continuum of behavioral health care across Alaska.” 

According to Commissioner Crum's announcement, Wellpath, which is a recent merger of Correct Care Solutions and Correctional Medical Group Companies, has had success bringing facilities similar to API back into compliance with CMS and Joint Commission standards. In Massachusetts, Wellpath substantially improved conditions at the Bridgewater State Hospital after assuming operations in 2017. All hospitals managed by Wellpath are fully accredited by the Joint Commission. 

Representatives from the Alaska Mental Health Trust, the Alaska Behavioral Health Association, North Star Behavioral Health, Alaska Regional Hospital and Fairbanks Memorial Hospital joined the Alaska Department of Health and Social Services for the decision announcement Friday. According to DHSS, they are in support of this course of action.

“By taking this step with the support of the health care community, the State of Alaska and our health care partners can begin to seriously address API’s longstanding problems and Alaska’s behavioral health crisis,” said Commissioner Crum. 

However, details of the apparent sole source, non-competitive contract have not been disclosed, which leaves many unanswered questions by lawmakers. According to a news release, Senator Bill Wielechowski (D-Anchorage) discovered Friday that Wellpath Recovery Solutions was formerly known as Correct Care, which is affiliated with GEO Group, a company that focuses on privatizing prisons and mental health services.

Prior to the announcement, House Democrats sent a letter to Governor Dunleavy to disclose the Office of Management and Budget (OMB) Director Donna Arduin's financial connections to the GEO Group or its affiliated groups. Senate Democrats have not received a response from Governor Dunleavy. 

"There is no doubt that significant improvements need to happen at API. For years they have been understaffed and underfunded," said Sen. Wielechowski. "But just last week the Department of Health and Social Services acknowledged they were 'already seeing a turnaround' at API. This makes the decision to issue an apparent sole source, non-competitive contract to Wellpath all the more questionable."

Quoting Wielechowski's news release, preliminary research shows that Correct Care and the GEO group have been sued hundreds of times in recent years, violated first amendment rights, and provided poor medical care that led to multiple deaths during their operations in other states. According to the Anchorage Daily News, the GEO group operates most halfway houses in Alaska and noted critics have said, "management has allowed drugs and contraband to infiltrate the halfway houses and the number of inmates escaping to rise dramatically."

"Privatizing mental health care raises a whole host of issues where for-profit companies have an incentive to make a profit off those who desperately need psychiatric services. This company's past is troubling and deserves a hard look. The legislature needs to carefully vet this transaction," said Sen. Wielechowski.

Senator David Wilson (R-Wasilla), chairman of the Senate Health and Social Services Committee, released a statement in response to the Dunleavy administration’s decision to address safety issues with the Alaska Psychiatric Institute (API). 

Wilson said, “I appreciate the Dunleavy administration and Commissioner Crum taking swift action to combat these important issues. DHSS quickly identified the limitations to the facility’s current capabilities and accessed the necessary tools and resources to keep patients, workers, and Alaskans safe.”

“Clearly, something had to be done at API because staff and patients are in jeopardy. I am cautiously optimistic that the leadership transformation announced today will be successful in turning things around at API,” said Representative Ivy Spohnholz (D-Anchorage), who is the most recent Chair of the Health and Social Services Committee in the Alaska House of Representatives. “Further, I look forward to continuing to work with other legislators to provide diligent oversight of API. I hope the Dunleavy administration will accept the necessity of additional funding for behavioral health treatment in Anchorage and throughout Alaska to address our growing safety crisis both at API and in communities across the state.” 

State law allows the Commissioner of the Department of Health and Social Services to assume management of a licensed health care facility when the health, safety, or welfare of patients is in danger. In recent years, staffing shortages and overcrowding at API has resulted in numerous instances where the safety of both patients and staff have been placed in jeopardy.

“I look forward to a full briefing from the department on this decision. It seems like a reasonable first step to take to address the serious health and public safety concerns at API,” said Rep. Matt Claman, who is the most recent Chair of the House Judiciary Committee. “Moving forward, my colleagues and I will insist on full transparency to ensure that there is real progress towards improving the daily operations at API. We will work closely with the Commissioner and his team to identify additional funding and resources to improve the situation at our only psychiatric hospital. Many Alaskans need urgent mental health care, and they deserve a facility and staff that can meet those needs safely and professionally.”

Both Reps. Claman and Spohnholz are urging Governor Dunleavy to protect the limited number of behavioral health services in Alaska from cuts in the Fiscal Year 2020 budget proposal expected this week. They are also calling on the Dunleavy administration to keep in place Medicaid expansion in Alaska.  



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Findings of Investigation of Alaska Psychiatric Institute Released 
SitNews - September 26, 2018

State Prepared to Incarcerate Mental Health Patients; Endangement an Issue with Correctional Officers Association
SitNews - October 12, 2018

DHSS Contracts to Open More Emergency Mental Health Beds
SitNews - December 05, 2018


Reporting and Editing by Mary Kauffman, SitNews



Source of News:

Alaska Department of Health & Social Services

Alaska Senate Majority

Office of Sen. Wielechowski

Office of  Rep. Ivy Spohnholz

Office of Rep. Matt Claman Chair of the House Judiciary Committee


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