The only Colorado psychiatric hospital west of the Front Range will stay open for the foreseeable future after the community mental health center that owns the facility reached a deal with its main insurance payer.
Mind Springs Health, which provides mental health services for much of western Colorado, announced Wednesday that it had reached a deal with Rocky Mountain Health Plans for a contract in the fiscal year starting in July. Mind Springs said the two sides also came to an agreement about a dispute over whether the insurer had overpaid West Springs Hospital.
“This new agreement with RMHP removes the immediacy of West Springs Hospital possibly closing,” Mind Springs said in a statement, which didn’t provide any financial details about the agreements.
Mind Springs leadership had said in mid-April that the Grand Junction hospital could close within weeks if it didn’t receive financial help. West Springs is one of only 11 psychiatric hospitals in Colorado.
Rocky Mountain Health Plans, which administers Medicaid on the Western Slope, didn’t answer questions about the agreements, but released a statement saying it was “pleased” with the outcome.
“Our top priority is ensuring the communities we serve on the Western Slope have access to high-quality care. We are grateful for the time and support from community and state leaders in achieving this agreement,” the statement said.
Mind Springs had asked the state for $6.6 million, saying it had burned through its cash reserves while fixing problems agencies had identified in recent years. The Colorado Department of Health Care Policy and Financing, the Behavioral Health Administration and the Department of Public Health and Environment released a joint statement in late April saying they couldn’t help, and that West Springs had benefited from about $13 million in overpayments over the last two years.
Mind Springs CEO John Sheehan also blamed Rocky Mountain Health Plans, saying it tried to steer patients away from West Springs to save money and refused to pay for medically necessary care. Rocky Mountain Health Plans said Sheehan’s statements were inaccurate and that it paid appropriately for care where patients sought it.
West Springs has 48 beds and a psychiatric emergency room for people in crisis. It employs more than 200 people, out of the roughly 550 who work for Mind Springs.
The news of the agreement comes after three difficult years for Mind Springs.
State agencies had cited Mind Springs in 2021 for prescription errors that put patients at risk. Former employees also alleged in 2022 that they were told to fill out paperwork as if they had seen patients they hadn’t. An audit by the three health agencies didn’t find evidence of fraud, but did say Mind Springs needed to fix prescribing practices and better tailor its services to communities’ needs.
In their letter explaining they wouldn’t offer additional financial help, the three state agencies also shared additional allegations against Mind Springs from 2021 and 2022, including that the hospital:
- Didn’t ensure staff members were appropriately trained
- Billed Medicaid incorrectly
- Didn’t protect patient confidentiality
- Didn’t notify parents when it secluded, restrained or involuntarily medicated underage patients
- Failed to protect patients from self-harm
- Didn’t have a program to prevent infections from spreading through the facility
The hospital lost the ability to bill Medicaid for care to new patients in late 2022, following allegations by two former employees. West Springs regained the ability to bill Medicaid in May 2023 after agreeing to hire a management company to help it improve.
West Springs’ six inspections since June 2023 haven’t found any problems. The hospital remains under a conditional license, meaning it must continue to contract with a management company, submit monthly financial stability reports and develop a plan to transition to operating independently.
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