Spokane County faces millions in penalties for heavy use of Eastern State Hospital

Spokane County may be on the hook to pay more than $3 million to Eastern State Hospital this year for patient care, nearly a quarter of the county’s budget for mental health services outside of Medicaid.

The payments, which are required when a county uses more than its allocated share of beds at state mental hospitals, were intended to encourage investments in proactive and outpatient mental health care.

But they’ve ballooned to the point county officials say they’re siphoning money from the services they were supposed to encourage.

“Having to pay out between 3 and 6 million dollars a year in penalties does not help us build that resource,” County Commissioner Shelly O’Quinn said.

The issue is an unintended side effect of a 2014 federal court ruling requiring the state to evaluate and treat criminal defendants with suspected mental illnesses promptly at state hospitals. Before the ruling, people were languishing in jail for months, often in solitary confinement, waiting for mental health treatment.

It took several years and many deadline extensions for state hospitals to open new beds, hire practitioners and get the wait times reduced. At Eastern State, that process was completed about a year ago, earning praise from Gov. Jay Inslee during a recent visit to Spokane.

In theory, that shouldn’t have affected the county. People who enter Eastern State through the criminal justice system start out in the hospital’s forensic wards. The county’s bed allocation is for civil patients, who are committed to the hospital for mental health treatment outside the criminal justice system.

But as the hospital began evaluating more forensic patients, they found many of them needed extended hospital stays to get well enough to stand trial. Those patients are often “flipped” to the civil side of the hospital. So even though they came to Eastern State because of an arrest, they end up counting against the county’s bed allocation.

The county’s behavioral health organization, which also serves Adams, Ferry, Grant, Lincoln, Okanogan, Pend Oreille and Stevens counties, can use up to 110 beds in the state hospital before payments kick in. The penalty is $691 per person per day over that allocation, based on an average over the quarter.

In 2014, the county paid about $76,000 for being slightly over its bed allocation. In 2015, the amount grew to about $370,000.

Late 2016 is when the number of people in civil beds started increasing significantly, said Christine Barada, the county’s director of community services, housing and community development. From October to December, the county’s behavioral health organization averaged 121 people in Eastern State civil beds. The bill came to $710,348 just for that quarter.

For the first half of 2017, Barada projects having to pay Eastern State about $1.5 million.

“It’s rising very quickly,” she said.

Bed allocations are determined every three years. To get more beds in the hospital, Spokane would have to take them from another behavioral health organization, said Kelly Stowe, a spokeswoman for the Department of Social and Health Services, which runs the hospitals.

County commissioners are pushing state senators to change the law requiring reimbursements, giving behavioral health organizations around the state a waiver from payments during the biennium while the state studies the unintended side effects of the federal court ruling.

Sens. Shelly Short, a Republican from the 7th District, and Andy Billig, a Democrat from the 3rd, said they’ve talked to O’Quinn and are optimistic about a solution being included in the budget.

Short said the best-case scenario would be a complete waiver of payments to state hospitals. But at the very least, she said, counties should not have to pay for civil patients who come from the forensic side of the hospital.

“The overages are really simply a large part of those criminal cases coming into the civil system,” Short said.

Eastern State Hospital did not respond to a call Monday seeking comment on the proposal.

The county behavioral health organization’s total budget for non-Medicaid mental health services is about $12 million, Barada said, and covers all seven of the counties the organization serves.

Those funds pay for things like outpatient services in rural counties and some programs at Frontier Behavioral Health, including the Evergreen Club, a peer-led clubhouse for people recovering from mental illness.

“If this funding that’s used for the penalties can instead be retained for a more positive purpose like investing in community resources, we’re going to be better off as individuals and as a community,” Billig said.