Health Forward Foundation

Fiscal Shortfall Results in Review of Operations at Johnson County Mental Health Center

OLATHE – Officials here say they are doing a top-to-bottom review of the services provided by Johnson County’s mental health center after the agency depleted millions of dollars in reserves, leaving it in apparent need of a taxpayer bailout in order to maintain operations into early next year.

“I think we have to look at the entire picture and identify what is our core mission and evaluate that, and move forward,” said Tim DeWeese, clinical director of the Johnson County Mental Health Center. “I think we can do that in a way that will ultimately be sustainable and meet the needs of our clients.”

Assistant County Manager Maury Thompson said officials need a preliminary plan by the time the county begins preparing its 2015 budget in the spring.

But officials said they hope to lay the groundwork within the next 90 days, while Chad VonAhnen is assisting the mental health agency. VonAhnen is executive director of the county agency that serves the developmentally disabled and is doing double duty after the mental health center board last month placed Executive Director Maureen Womack on paid leave for what one board member said was failure to meet performance standards.

County officials, including commission Chairman Ed Eilert, have declined to publicly discuss the action against Womack, including when her status might be resolved. Womack also has declined to comment and did not return a phone call seeking comment for this article.

Mental health officials suggested some service cuts as part of budget discussions in the summer, including closing the Adolescent Center for Treatment. But the current planning team said those suggestions were not necessarily high on the list for proposed actions moving forward.

In a request scheduled for consideration by the commission on Thursday, county officials are asking the board to give the county manager authority to transfer an unspecified amount of general revenue funds to the mental health center so it can meets its obligations until the distribution of property tax revenues early next year.

Officials said they expect the center to need perhaps as much as $1 million to bridge the gap.

The budget situation has some county commissioners calling for a complete overhaul of the center.

“Kill the program, start over, rebuild it,” Commissioner Steven Klika said during a budget discussion in the summer. “Find a way to recreate this thing where it might be more sustainable.”

Declining finances
Unlike most other mental health centers in the state, which generally are independent nonprofit corporations, the Johnson County Mental Health Center is an agency of county government. Its executive director serves as both top manager of the mental health center and as the head of the county mental health agency.

According to documents prepared for the 2014 budget process, the mental health center expects to serve nearly 11,000 people next year.

Its financial situation has significantly deteriorated in recent years.

The center had about $4.2 million in reserves at the start of 2009, according to a county budget document, a level that staff considered adequate. But newer county estimates show the center being $900,000 in the red by the end of this year.

Next year’s county spending plan calls for a mental health center budget of approximately $28.4 million, said Budget Director Scott Neufeld. The center’s budgeted amount for this year, he said, is about $32.7 million, though projections call for revenues and expenditures to fall below that target.

Next year’s budget authorizes 309 workers, down from 385 from this year. That’s the result of the county commission slashing 76 unfilled positions left vacant by the center largely to save money.

County funding accounts for roughly half of the mental health center budget with other funding sources including fees for service and support from state and federal government.

External and internal factors
Officials said several factors have contributed to the center’s poor financial health, including flagging property tax receipts during the recession and state budget cuts.

Mental health officials have also blamed KanCare, the overhaul of the Kansas Medicaid program that began at the beginning of the year. Through KanCare, the state has contracted with three insurance companies, known as managed care organizations, to operate the Medicaid program.

DeWeese said the center has experienced increased administrative expenses in working with the KanCare contractors.

The KanCare contractors also have recruited some of the center’s fee-generating staff, he said, which is one reason the center has had higher-than-usual turnover the past two years.

The number of fee-generating staff has decreased more than 25 percent within the past five years, according to the county budget office.

Mental health officials have conceded that lower-than-expected staff productivity has contributed to the center’s revenue shortfalls.

Last year, according to budget documents, just 10 percent of the staff met or exceeded performance standards. Womack told commissioners this summer that the center was implementing a consultant’s recommendations to improve productivity.

Neufeld, the budget director, has also acknowledged that past budgets have been “terribly misleading” with respect to the fee-for-service dollars the center could generate annually.

This year’s budget, for instance, projected $14 million in fees, though the actual number is going to be more like $8.7 million, according to the budget office.

What to do?
Three years ago, the mental health center hired a consultant to work with staff and outside agencies, including law enforcement, to prioritize mental health services for the county as funding continued to drop.

They identified four main areas as top priorities:

  • Emergency and mobile crisis services;
  • Around-the-clock crisis stabilization and hospital diversion;
  • Services for vulnerable populations, including children and adults with severe or disabling mental illness;
  • And services where the mental health center was the only provider.

In pitching proposed solutions to the center’s budget problems, administrators this summer offered one plan that would balance the budget without any additional county support and put the agency on a path to building up reserves.

To achieve the annual savings of about $6.1 million, the scenario called for eliminating the vacant positions at the center with service cuts providing about 20 percent of the savings.

In addition to closing the adolescent treatment center, which serves teens with substance abuse problems, that plan would have eliminated the limited transportation services the agency offers clients along with job-support activities.

In the end, the commission eliminated the vacant positions and brought next year’s projected budget more in line with anticipated receipts.

Eilert noted the difference between taking stop-gap measures and addressing the structural problems with the center’s budget.

“There is draining the swamp and then there is combatting the alligators in front of us,” he said.

“I don’t have any problem looking at the larger swamp issue,” he added, “but the immediate thing is to remove the alligators from our back pocket – or from our billfold. So, I would hope that would be where the efforts are, and then we can continue with the swamp project.”

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