Performance audit, Department of Health Serivces, Division of Behavioral Health Services

              PERFORMANCE AUDIT
DEPARTMENT OF HEALTH SERVICES
DIVISION OF BEHAVIORAL HEALTH SERVICES
Report to the Arizona Legislature
By the Auditor General
November 1989
DOUGLAS R NORTON. CPA
AIJDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
LINDA J. BLESSING, CPA
DEPUTY AUDITOR GENERAL
November 8, 1989
Members of the Arizona L e g i s l a t u r e
The Honorable Rose Mofford, Governor
Mr. Ted Williams, D i r e c t o r
Department of Health Services
Transmitted herewith i s a report of the Auditor General, A Performance
Audit of the Department of Health Services, D i v i s i o n o f Behavioral
Health. This report i s i n response to a June 2 , 1987. r e s o l u t i o n of
the Joint L e g i s l a t i v e Oversight Committee. The performance a u d i t was
conducted as a part of the Sunset Review set f o r t h i n Arizona Revised
Statutes 5541 - 2351 through 41- 2379.
The report addresses the fragmentation between State and county
behavioral health programs and the need for an integrated, statewide
system. The report also i d e n t i f i e s d e f i c i e n c i e s i n the d i v i s i o n ' s
contract monitoring and also suggests improvements i n contracts and
a l l o c a t i o n o f funds.
My s t a f f and 1 w i l l be pleased to discuss or c l a r i f y items i n the
report .
Sincerely,
DRN : lmn
STAFF: William Thomson
Peter N. Francis
Nancy L. Moore
Dennis B. Murphy
Leonard P. Wojciechowicz
George A . Anderson
Cindy Karlson
D o w a s R. Norton
Auditor General
2700 NORTtl CENTRAL AVE. SUITE 700 0 PHOENiX, ARIZONA 85004 8 ( 602) 255- 4385
The O f f i c e o f the Auditor General has conducted a performance audit of
the Arizona Department of Health Services, D i v i s i o n o f Behavioral Health
Services i n response to a June 2, 1987, r e s o l u t i o n of the J o i n t
L e g i s l a t i v e Oversight Committee. This performance a u d i t was conducted as
part of the Sunset Review set f o r t h i n Arizona Revised Statutes ( A. R. S.)
9941- 2351 through 41- 2379. This i s the seventh i n a series of reports
issued on the Department of Health Services.
The D i v i s i o n o f Behavioral Health Services i s comprised of three program
service u n i t s : the O f f i c e o f Community Behavioral Health Services, the
Arizona State H o s p i t a l , and the Southern Arizona Mental Health Center.
The O f f i c e o f Community Behavioral Health Services ( OCBHS) i s responsible
for overseeing the d e l i v e r y of community- based behavioral health
services, and overseeing contract funds, and contract development and
monitoring. The Arizona S t a t e H o s p i t a l ( ASH) located i n Phoenix i s
responsible for providing i n p a t i e n t treatment services, and the Southern
Arizona Mental Health Center ( SAMHC) located i n Tucson provides mental
health services i n c l u d i n g o u t p a t i e n t and r e s i d e n t i a l treatment, and
prevention programs. This a u d i t focuses on the Off ice of Community
Behavioral Heal th Services and the de l ivery of communi ty- based behavioral
h e a l t h services. ( See report # 89- 9 f o r a performance audi t report on the
Arizona S t a t e H o s p i t a l .)
Integration o f S t a t e and County Behavioral Health Programs Is Needed
( see pages 7 through 15)
The State and counties of Arizona operate separate community- based
behavioral health programs, which may r e s u l t i n c o s t l y d u p l i c a t i o n and,
i n some cases, poor c l i e n t s e r v i c e . I n t o t a l , counties spent
approximately $ 24 mi l l ion on communi ty- based behavioral heal t h services
i n FY 1988. Four counties - Maricopa, Pima, Yuma, and La Paz - accounted
for 90 percent of t o t a l county expenditures and they play a major r o l e i n
the de I i very of commun i ty- based serv i ces . For example, Mar i copa County
spent $ 12.2 m i l l ion for services i n FY 1988. The county operates a
66- bed p s y c h i a t r i c f a c i l i t y at i t s health center and dedicates 120 beds
for mental healthcare i n i t s c o r r e c t i o n a l health program. Pima County
spent $ 8.7 m i l l i o n for behavioral health services i n FY 1988. I t
m a i n t a i n s a 36- bed p s y c h i a t r i c u n i t i n the county h o s p i t a l , a 16- bed
r e s i d e n t i a l care f a c i l i t y , and a 47- bed p s y c h i a t r i c u n i t i n the county
j a i l . By c o n t r a s t , DHS spent $ 35.5 m i l l i o n statewide on community- based
services i n FY 1988.
Although s u b s t a n t i a l i n s i z e , county programs a r e p o o r l y coordinated w i t h
the State system. DHS c o n t r a c t s f o r service d e l i v e r y and oversight w i t h
p r i v a t e , n o n p r o f i t o r g a n i z a t i o n s c a l l e d a d m i n i s t r a t i v e e n t i t i e s . E n t i t i e s
have not c o n s i s t e n t l y involved counties i n assessing needs, planning
programs, o r d e l i v e r i n g s e r v i c e s , and only two c o u n t i e s a r e represented
on e n t i t y boards. This lack of c o o r d i n a t i o n has resulted i n a
fragmentation of services which can impact c l i e n t s adversely. For
example, one c l i e n t s u f f e r i n g from depression was s h u f f l e d back and f o r t h
m u l t i p l e times between a state- funded provider and the county, and d i d
not g e t t h e needed treatment from e i t h e r system.
An i n t e g r a t e d S t a t e system w i t h a s i n g l e a u t h o r i t y and funding stream i s
needed. Rather than operate a county- based system as done i n some other
s t a t e s , Arizona may wish to consider developing a s t a t e - r u n b e h a v i o r a l
h e a l t h program as i t d i d w i t h indigent medical care. A s i n g l e state- run
system would b e n e f i t the counties and e l i m i n a t e the c o s t l y overlap and
d u p l i c a t i o n which now e x i s t .
DHS I s Not Adequately Monitoring the Performance of Administrative
Ent i ties ( see pages 17 through 23)
Because DHS has n o t monitored a d m i n i s t r a t i v e e n t i t y performance
e f f e c t i v e l y , s i g n i f i c a n t d e f i c i e n c i e s have not been i d e n t i f i e d and
problems have not been f u l l y addressed. For example, a l l e g a t i o n s that an
e n t i t y o f f i c i a l used s t a f f , c l i e n t s , and m a t e r i a l s to r e p a i r h i s home,
and that c l i e n t s were being overcharged and p o o r l y t r e a t e d were only
s u p e r f i c i a l l y i n v e s t i g a t e d . I n a previous review by DHS, the same
a d m i n i s t r a t i v e e n t i t y was unable to show that i t had provided more than
$ 150,000 worth of services f o r which the State had paid. However, DHS
never pursued recovery of the $ 150,000 i t claimed the a d m i n i s t r a t i v e
e n t i t y owed the State.
We found that DHS i s not f o l l o w i n g i t s own established monitoring
procedures. I n f i s c a l year 1988 the department d i d not conduct annual
s i t e v i s i t s of each a d m i n i s t r a t i v e e n t i t y as required, and i n f i s c a l
years 1988 and 1989 i t d i d not complete s i t e v i s i t reports i n a timely
manner. Most s i t e v i s i t reports, moreover, do not address important
contract requirements. In a d d i t i o n , DHS i s not checking s u f f i c i e n t
numbers of c l i e n t records t o v e r i f y that services have been provided.
Changes i n Contracts Could Result i n Improved Services ( see pages 25
through 30)
DHS could strengthen c o n t r a c t p r o v i s i o n s to more e f f e c t i v e l y ensure
del ivery of qua1 i t y services. E n t i t y contracts c u r r e n t l y do not target
services to those most i n need. The contracts contain few s p e c i f i c
d e f i n i t i o n s of persons q u a l i f i e d to receive behavioral health services.
Instead, contracts s p e l l out the types and number of u n i t s of services to
be provided. This can r e s u l t i n two problems. F i r s t , services may be
provided to those who present themselves for services, not necessarily
those most i n need. Second, since payment i s based on c o n t r a c t u a l l y
established u n i t s of service ( e . g . , alcohol treatment), an a d m i n i s t r a t i v e
e n t i t y may d i r e c t i t s e f f o r t s toward f i l l i n g those u n i t s to avoid losing
payments. Yet those services may not be the most needed.
In contrast, Colorado, which has developed a n a t i o n a l l y recognized
performance c o n t r a c t i n g system, defines the t a r g e t p o p u l a t i o n which
provider agencies must serve. For FY 1990, Colorado's target population
consists of the most s e r i o u s l y mentally i l l , c h i l d r e n , e l d e r l y , and
m i n o r i t i e s . S p e c i f i c d e f i n i t i o n s of each t a r g e t p o p u l a t i o n are spelled
out i n the contracts.
DHS' contract provisions could also be improved i n two other areas.
F i r s t , administrative e n t i t y contracts do not contain penalty provisions
to enable the State t o e f f e c t i v e l y enforce contractual requirements.
Second, contracts c u r r e n t l y do not require e n t i t i e s t o e s t a b l i s h q u a l i t y
assurance programs. Qual i t y assurance i s needed to make c e r t a i n that
c l i e n t s receive appropriate services and t h a t services are not over- or
u n d e r u t i l i z e d . Again i n c o n t r a s t , Colorado has s p e c i f i c penalty
provisions i n i t s contracts as well as requirements that funded agencies
perform q u a l i t y assurance.
DHS Could Improve I t s Methods o f A l l o c a t i n g Funds by Basing Funding More
on Needs Assessments ( see pages 31 through 37)
DHS should consider modifying i t s methods of a l l o c a t i n g funds to ensure
that l i m i t e d resources are dedicated to those most i n need of behavioral
health services. To address d i s p a r i t i e s i n regional funding which
existed at the time the a d m i n i s t r a t i v e e n t i t y system was created, DHS has
used a formula ( f o r alcohol and drug treatment, and general mental health
services) and a comprehensive plan ( p r i n c i p a l l y for c h r o n i c a l l y mentally
i l l services) t o a l l o c a t e funds and achieve p a r i t y . Both methods of
a l l o c a t i n g funds r e l y heavily on population, and less on social
i n d i c a t o r s of need.
Greater use could be made of both d i r e c t and i n d i r e c t measurements of
need. For example, DHS could use such factors as income l e v e l s ,
employment, e t h n i c i t y , gender, age, divorce rates, and other social
i n d i c a t o r s to estimate the need for services w i t h i n each region. The
National I n s t i t u t e of Mental Health ( NIMH) reports that such i n d i r e c t
i n d i c a t o r s provide a v a l i d , r e l i a b l e , and comparatively low- cost way to
estimate service requirements. A t least two s t a t e s , New Jersey and
Minnesota, are c u r r e n t l y using i n d i r e c t measures to a l l o c a t e portions or
a l l o f t h e i r behavioral health funding.
TABLE OF CONTENTS
INTRODUCTION AND BACKGROUND. . . . . . . . . . . . . . . . . .
FINDING I: INTEGRATION OF STATE AND COUNTY
BEHAVIORAL HEALTH PROGRAMS IS NEEDED . . . . . . . . . . .
State and Counties Operate
Independent Programs . . . . . . . . . . . . . . . . . . .
Fragmentation Adversely Affects
Service Delivery . . . . . . . . . . . . . . . . . . . . .
A State- Directed System Should
BeEstablished. . . . . . . . . . . . . . . . . . . . . .
Recomnendation . . . . . . . . . . . . . . . . . . . . . .
FlNDlNG II: DHS IS NOT ADEQUATELY MONITORING
THE PERFORMANCE OF ADMINISTRATIVE ENTITIES . . . . . . . .
Importance of Monitoring . . . . . . . . . . . . . . . . .
Problems and Deficiencies Are Not
Identified and Corrected . . . . . . . . . . . . . . . . .
Contract Monitoring Has Not
B e e n a P r i o r i t y . . . . . . . . . . . . . . . . . . . . . .
Recomnendations. . . . . . . . . . . . . . . . . . . . . .
FINDING Ill: CHANGES IN CONTRACTS COULD RESULT
IN IMPROVEDSERVICES . . . . . . . . . . . . . . . . . . .
Contractual Problems Involving the
Provision and Quality of Services. . . . . . . . . . . . .
Recomnendation . . . . . . . . . . . . . . . . . . . . . .
FINDING IV: DHS COULD IMPROVE ITS METHODS OF
ALLOCATING FUNDS BY BASING FUNDING MORE ON
NEEDS ASSESSMENTS. . . . . . . . . . . . . . . . . . . . .
DHS I s Attempting to Equalize
Funding on aPer CapitaBasis. . . . . . . . . . . . . . .
DHS Should Consider Allocating
Funds BasedMore on Needs. . . . . . . . . . . . . . . . .
Recomnendation . . . . . . . . . . . . . . . . . . . . . .
Page
1
TABLE OF CONTENTS Con't
Page
OTHER PERTINENT INFORMATION. . . . . . . . . . . . . . . . . . 39
Concerns About the
Administrative Entity System . . . . . . . . . . . . . . . 3 9
Behavioral Health
Management Information System. . . . . . . . . . . . . . . 41
Service Providers Must
Contend w i t h M u l t i p l e
StateAgencies. . . . . . . . . . . . . . . . . . . . . . 44
AGENCY RESPONSE
LIST OF TABLES
TABLE 1 COMPARISON OF TOTAL BEHAVIORAL HEALTH FUNDING
FISCAL YEAR 1985- 86 AND FISCAL YEAR 1989- 90 . . . . . 3 2
TABLE 2 COMPARISON OF POVERTY RATES AMONG
BEHAVIORAL HEALTH SERVICE AREAS . . . . . . . . . . . 35
INTRODUCTION AND BACKGROUND
The O f f i c e of the Auditor General has conducted a performance audit of
the Arizona Department of Health Services, D i v i s i o n of Behavioral Health
Services i n response to a June 2, 1987, r e s o l u t i o n of the Joint
L e g i s l a t i v e Oversight Committee. This performance audit was conducted as
p a r t of the Sunset Review set f o r t h i n Arizona Revised Statutes ( A. R. S.)
9941- 2351 through 41- 2379. This i s the seventh i n a series of reports
issued on the Arizona Department of Health Services ( DHS).
The D i v i s i o n o f Behavioral Health Services i s comprised of three program
service u n i t s : the O f f i c e of Community Behavioral Health Services
( OCBHS), which i s responsible for overseeing the d e l i v e r y o f
community- based behavioral health services, and overseeing contract
funds, and contract development and monitoring; the Arizona State
Hospital ( ASH) located i n Phoenix, which i s responsible f o r p r o v i d i n g
i n p a t i e n t treatment services; and the Southern Arizona Mental Health
Center ( SAMHC) located i n Tucson, which provides behavioral health
services including o u t p a t i e n t and r e s i d e n t i a l treatment, and prevention
programs. This audit w i l l not address the operations of ASH or SAMHC but
rather w i l l focus on the O f f i c e of Community Behavioral Health Services
and the d e l i v e r y of community- based behavioral h e a l t h s e r v i c e s . ( See
report # 89- 9 for a performance audit report of the State H o s p i t a l . )
Community- Based Care
The concept of community- based mental health programs grew n a t i o n a l l y i n
the 1960s. The development of psychotropic medicines and court decisions
a f f i r m i n g individual freedom and the r i g h t to treatment i n the least
r e s t r i c t i v e s e t t i n g contributed to the trend of d e i n s t i t u t i o n a l i z i n g
p a t i e n t s o f state mental h o s p i t a l s . ' Rather than i s o l a t i n g persons
w i t h mental i l l n e s s i n s t a t e i n s t i t u t i o n s , the goal was to meet t h e i r
needs i n the community. Arizona responded w i t h l e g i s l a t i o n i n 1980 w i t h
the i n t e n t of e s t a b l i s h i n g " a statewide system of r e s i d e n t i a l services
and adequate treatment for the c h r o n i c a l l y mentally i I I i n the least
r e s t r i c t i v e a l t e r n a t i v e a v a i l a b l e . "
( 1 ) Psychotropic drugs such as mood s t a b i l i z e r s , a n t i p s y c h o t i c s , a n t i d e p r e s s a n t s , and
a n t i a n x i e t y medications help t o c o n t r o l some o f the symptoms o f mental i l l n e s s .
D e i n s t i t u t i o n a l i z a t i o n has succeeded i n releasing large numbers of
patients from s t a t e mental h o s p i t a l s . The Arizona S t a t e H o s p i t a l has
seen a decrease i n population from an average dai l y census of 1,684
patients i n 1965 to an average d a i l y population of 515 i n 1988.
However, the development of an adequate service system i n the community
has not been achieved.
In Arizona the D i v i s i o n of Behavioral Health Services ( BHS) i n DHS has
r e s p o n s i b i l i t y f o r p r o v i d i n g care to those needing behavioral health
services. I t does t h i s through provisions for service d e l i v e r y ,
planning, needs assessment, and e v a l u a t i o n f o r several service areas.
These areas include mental h e a l t h , chronic mental i l l n e s s , domestic
violence, alcohol and drug abuse, and c h i l d r e n ' s behavioral health.
Administrative Entity History
DHS c u r r e n t l y provides community- based services through the
a d m i n i s t r a t i v e e n t i t y system and through SAMHC. According to the
department, i n l a t e 1983 i t began looking at the d e l i v e r y service system
because of the concern about fragmentation and lack of coordination among
125 n o n p r o f i t organizations that received State funding through more than
20 umbrella agencies. H i s t o r i c a l funding patterns from b o t h S t a t e and
federal governments had created t h i s patchwork d e l i v e r y system i n which
umbrella agencies competed w i t h each other for funds. Many f e l t that the
a d m i n i s t r a t i v e s t r u c t u r e s of the agencies were d u p l i c a t i v e , thus
burdening the system w i t h unnecessary cost.
In 1984, w i t h the L e g i s l a t u r e and Governor's approval and funding, DHS
developed the a d m i n i s t r a t i v e e n t i t y ( AE) system. This system established
nine a d m i n i s t r a t i v e e n t i t i e s , organized by geographic areas, responsible
for a d m i n i s t e r i n g , c o o r d i n a t i n g , and monitoring community- based
behavioral health services for each region!"
DHS contracts w i t h each e n t i t y to perform the necessary functions, and
( 1 One a d m i n i s t r a t i v e e n t i t y has been closed by OHS f o r a d m i n i s t r a t i v e
i n e f f i c i e n c i e s . I n f i s c a l year 1989 DHS contracted d i r e c t l y w i t h s i x provider
agencies i n t h i s region. I n a d d i t i o n , the department contracts d i r e c t 1 y w i t h some
Indian t r i b e s throughout the s t a t e .
the administrative e n t i t i e s contract w i t h n o n p r o f i t agencies to provide
the d i r e c t services. However, t h i s v a r i e s by e n t i t y . Some AEs,
p a r t i c u l a r l y i n r u r a l Arizona, also serve as d i r e c t providers i n a d d i t i o n
to t h e i r a d m i n i s t r a t i v e r e s p o n s i b i l i t i e s .
D i v i s i o n History and Organizational Structure
In 1986 the L e g i s l a t u r e passed l e g i s l a t i o n which reestablished the
D i v i s i o n of Behavioral Health Services. "' The l e g i s l a t i o n gave the
d i v i s i o n r e s p o n s i b i l i t y f o r administering u n i f i e d mental health programs,
including ASH, community mental health programs, and substance abuse
programs. The O f f i c e of Community Behavioral Health Services, ASH, and
SAMHC were placed i n the d i v i s i o n . I n a d d i t i o n , several a d m i n i s t r a t i v e
support u n i t s were also established w i t h i n the d i v i s i o n and are described
below.
0 O f f i c e o f Planning, Rules and Grants - This o f f i c e i s responsible
for developing the five- year plan, forecasting service needs,
coordinating the budget process, and overseeing the grants process.
0 O f f i c e o f Management Information Systems, Research, and Evaluation
This o f f i c e i s responsible for e s t a b l i s h i n g a behavioral health
management information system, operating current information
programs, maintaining federal r e p o r t i n g systems, and determining
appropriate and needed research and e v a l u a t i o n f u n c t i o n s .
0 O f f i c e o f Behavioral Health Licensure - This o f f i c e i s responsible
for inspecting and licensing behavioral healthcare treatment
f a c i l i t i e s .
0 O f f i c e of Support Services - This o f f i c e provides a d m i n i s t r a t i v e
support for the d i v i s i o n but p r i n c i p a l l y for the central o f f i c e u n i t s .
( 1 ) The d i v i s i o n had been abolished i n 1984, and the major functions were t r a n s f e r r e d
t o the d i r e c t o r ' s o f f i c e .
In a d d i t i o n to OCBHS and the support u n i t s , the d i v i s i o n i s also
responsible for d i r e c t , community- based service d e l i v e r y through SAMHC.
SAMHC i s located i n Tucson and provides c r i s i s and b r i e f treatment, day
treatment, youth and family programs, r e s i d e n t i a l treatment, o u t p a t i e n t
treatment, and a f t e r c a r e programs. SAMHC i s the d i v i s i o n ' s only d i r e c t
service provider f o r community- based services.
Fund i ng
In recent years Arizona has been c r i t i c i z e d for low funding of behavioral
health programs. A 1988 study of services for the c h r o n i c a l l y mentally
i l l c i t e d Arizona w i t h the lowest per c a p i t a funding of the f i f t y states
and the D i s t r i c t of Columbia. However, i n the past two years the
L e g i s l a t u r e has responded by increasing i t s appropriations for behavioral
health services. For f i s c a l year 1989 the d i v i s i o n was appropriated
$ 83,757,100 which represented a 33 percent increase i n funding from the
previous year. Of t h i s increase, $ 16.6 m i l i i o n was appropriated
speci f i c a l Iy for behavioral health programs ($ 14.8 mi I I ion for
community- based programs) i n a b i l l separate from the general
appropriations b i l l . I n f i s c a l year 1990 the L e g i s l a t u r e continued to
increase funding for such services by a p p r o p r i a t i n g an a d d i t i o n a l $ 16.7
m i l l i o n to expand s e r v i c e s .
According to DHS, the m a j o r i t y of a l l funds the d i v i s i o n uses to provide
behavioral health services are S t a t e a p p r o p r i a t i o n s . I n a d d i t i o n to
State appropriated funds, federal b l o c k g r a n t s , f i n e s , and other types of
grants comprise the t o t a l funds provided the d i v i s i o n . "' The
d i v i s i o n ' s t o t a l budget for f i s c a l year 1990 ( excluding ASH) i s
$ 89,358,900.
Although not included i n the department's budget, matching funds are also
a source of behavioral health monies. Organizations c o n t r a c t i n g w i t h the
( 1 DHS receives monies from the f i n e s of DWI offenses t o be used f o r alcohol abuse
treatment programs.
administrative e n t i t i e s are required to provide matching funds. ( 1 )
Matching funds generated by the a d m i n i s t r a t i v e e n t i t i e s are comprised of
other f e d e r a l , State, and local government funds, c l i e n t fees,
c o n t r i b u t i o n s , donations, and grants. DHS estimates the contractor match
to be 23 percent o f t o t a l d o l l a r s expended for services.
Scope of Aud i t
This audit contains f i n d i n g s i n four areas:
0 The need for the State to integrate State and county behavioral
healthcare programs;
0 The need for DHS to improve i t s monitoring of a d m i n i s t r a t i v e e n t i t y
contracts;
0 The need for DHS to strengthen i t s contract provisions to ensure
d e l i v e r y o f q u a l i t y service;
0 The need for DHS to improve i t s method of d i s t r i b u t i n g funds to
b e t t e r r e f l e c t and address needs i n the community.
The r e p o r t a l s o contains Other P e r t i n e n t I n f o r m a t i o n ( pages 39 through
45) which discusses concerns w i t h the a d m i n i s t r a t i v e e n t i t y system and
the status of the Behavioral Health Management Information System. I t
also discusses other State agencies providing behavioral health programs
and the impact of m u l t i p l e agencies and t h e i r requirements on service
providers.
The audit was conducted i n accordance w i t h general ly accepted
governmental auditing standards.
DHS may waive the match requirement based on hardship and may not require i t in all
ci rcumstances.
The Auditor General and s t a f f express a p p r e c i a t i o n to the D i r e c t o r of the
Department of Health Services, the Assistant D i r e c t o r of the D i v i s i o n of
Behavioral Health Services, and t h e i r s t a f f for t h e i r cooperation and
assistance throughout the a u d i t .
FINDING I
INTEGRATION OF STATE AND COUNTY
BEHAVIORAL HEALTH PROGRAMS IS NEEDED
I n t e g r a t i o n of State and county programs i s necessary to achieve an
e f f i c i e n t system of community- based behavioral h e a l t h s e r v i c e s . The
State and some counties operate r e l a t i v e l y independent, poorly
coordinated behavioral h e a l t h programs. The lack of i n t e g r a t i o n and
t o o r d i n a t i o n between these programs r e s u l t s i n c o s t l y d u p l i c a t i o n and has
l e f t some c l i e n t s poorly served. Arizona should consider developing an
integrated system w i t h the State as the a d m i n i s t r a t i v e a u t h o r i t y .
State and Counties
Operate Independent Programs
The State and counties operate separate d e l i v e r y systems f o r
community- based s e r v i c e s . Although some c o u n t i e s a r e a key provider of
mental and o t h e r b e h a v i o r a l h e a l t h services, t h e i r programs are not
i n t e g r a t e d o r coordinated w i t h State programs. Unclear l e g i s l a t i o n , poor
r e l a t i o n s between the State and counties, and establishment of the
a d m i n i s t r a t i v e e n t i t y system have c o n t r i b u t e d t o fragmented and
uncoordinated s e r v i c e s .
Counties operate major programs - Counties play a s i z e a b l e r o l e i n
providing behavioral h e a l t h s e r v i c e s . I n f i s c a l year 1988, the counties
spent approximately $ 24 m i l l i o n f o r such s e r v i c e s . In that same
year, DHS spent $ 35.5 mi l l i o n i n State funds ( p l u s $ 9.5 mi l l i o n i n
federal grants) f o r community- based services d e l i v e r e d through the
a d m i n i s t r a t i v e e n t i t i e s and SAMHC!~)
( 1 ) Because many counties are n o t a b l e to separate behavioral heal th expendi tures from
o v e r a l l human services budgets, the t o t a l county f i g u r e i s an estimated f i g u r e .
( 2 ) I n addi ti on t o communi ty- based s e r v i ces, DHS expended $ 28.1 m i 11 i on i n f i scal year
1988 f o r treatment of p a t i e n t s i n ASH.
The State has a1 so s i g n i f i cant1 y increased i t s appropriations f o r communi ty- based
behavioral heal thcare f o r f i s c a l years 1989 and 1990, an a d d i t i o n a l $ 14.8 m i l 1 ion
f o r f i s c a l year 1989, and $ 16.7 m i l l i o n f o r f i s c a l year 1990 f o r community- based
services.
Four counties i n f i s c a l year 1988 accounted for over 90 percent of t o t a l
county behavioral h e a l t h expenditures. These four counties were
Maricopa, Pima, Yuma, and La Paz. ( " Maricopa County has the largest
county behavioral h e a l t h program. I n f i s c a l year 1988 i t spent $ 12.2
mi I l i o n for services. Of that amount, i t spent $ 3 mi I I ion for the
c h r o n i c a l l y mentally i l l ( CMI) and $ 2.2 mi l l ion f o r a l c o h o l abuse
treatment. The county also maintains a 66- bed p s y c h i a t r i c f a c i l i t y at
i t s medical center.
Maricopa County also operates a large c o r r e c t i o n a l mental h e a l t h services
program with the m a j o r i t y of services f o r CMls. As part of i t s f i s c a l
year 1988 expenditures, the county devoted $ 2.4 mi I l i o n for these
services. According to the county c o r r e c t i o n a l h e a l t h d i r e c t o r , the bulk
of c o r r e c t i o n a l s e r v i c e s goes to CMls who have not received needed
services elsewhere. The program has 120 beds dedicated p r i m a r i l y to CMI
care at two of i t s j a i l s . Consequently, the d i f f i c u l t and c o s t l y care of
CMls was for Maricopa County, and for some other counties, i t s major
expense.
Other counties have p r o p o r t i o n a t e l y large programs. Although Pima County
has a population one t h i r d the size of Maricopa County, Pima County spent
$ 8.7 m i l l i o n for behavioral health services. I t maintains a 36- bed
p s y c h i a t r i c f a c i l i t y i n the county h o s p i t a l , a 16- bed r e s i d e n t i a l care
f a c i l i t y , and a 47- bed p s y c h i a t r i c u n i t i n i t s county j a i l . I n a d d i t i o n ,
Yuma County p r o p o r t i o n a t e l y spent more than twice as much as Maricopa
County with expenditures of $ 1.3 mi l l ion and La Paz County spent
proportionately 50 percent more than Maricopa County.
( ' 1 With the passage of the Arizona Health Care Cost Containment System l e g i s l a t i o n ,
counties were on1 y requi red to maintain thei r respective s e r v i c e 1 eve1 s ( not
increase them) f o r i n d i g e n t heal thcare, i n c l u d i n g mental health, as of January 1,
1981. Because most counties a t that time only provided f o r court ordered
evaluations, the m a j o r i t y of counties have 1 i m i ted mental health services today.
Independent programs r e s u l t i n a fragmented system - Although
substantial i n s i z e , these county programs are not coordinated w i t h the
State system. DHS operates the State program through i t s a d m i n i s t r a t i v e
e n t i t y system, and the a d m i n i s t r a t i v e e n t i t i e s have not c o n s i s t e n t l y
involved the counties i n assessing needs, planning a c t i v i t i e s , or
d e l i v e r i n g services. A survey of county health a u t h o r i t i e s indicated
only two counties had representation on e n t i t y boards. Only one county
has coordinated i t s services i n any substantial manner w i t h those of the
administrative e n t i t y for i t s area. I n f a c t , many of the county
o f f i c i a l s contacted were uninformed about s p e c i f i c e n t i t y programs or
a c t i v i t i e s i n t h e i r area.
The department concurs that the counties and the State operate
uncoordinated programs. The 1989 DHS State plan reported that the
d e l i v e r y system i n Arizona i s " a non- system that i s both complex and
fragmented." The report s t a t e s , " One of the greatest problems facing
those concerned w i t h behavioral health i n Arizona i s lack of
coordination." The report concludes t h a t c o o r d i n a t i o n i s needed at the
community and s t a t e level among providers, a d m i n i s t r a t i v e e n t i t i e s and
s t a t e , and county agencies. Further, t h i s same report also states that
" e f f o r t s are needed to coordinate e x i s t i n g l i m i t e d funding i n such a way
as to avoid unnecessary d u p l i c a t i o n and maximize the b e n e f i t s . "
Factors hindering i n t e g r a t i o n - Unclear s t a t u t e s , poor State and county
r e l a t i o n s , and the decision to e s t a b l i s h the a d m i n i s t r a t i v e e n t i t y system
are a l l factors which have hindered i n t e g r a t i o n and coordination of State
and county systems. S t a t u t e s r e q u i r e both the State and counties to
provide behavioral health services and have c o n s i s t e n t l y c a l l e d for
coordination of services between the two levels of government. However,
State and county o f f i c i a l s do not believe s t a t u t e s confer a u t h o r i t y t o
ensure services are coordinated or define which j u r i s d i c t i o n i s
responsible for p a r t i c u l a r services. Consequently, there i s overlap
between systems and disagreement over r e s p o n s i b i l i t y f o r services.
Poor State and county r e l a t i o n s also impede i n t e g r a t i o n . According to
State and county a u t h o r i t i e s f a m i l i a r w i t h DHS' e a r l y e f f o r t s to
establ ish a communi ty- based system, r e l a t i o n s between responsible p a r t i e s
were very poor. D i f f i c u l t i e s encountered i n e s t a b l i s h i n g the Arizona
Health Care Cost Containment System ( AHCCCS) f u r t h e r d e t e r i o r a t e d
r e l a t i o n s , and they continue to be s t r a i n e d . According to the a s s i s t a n t
Maricopa county manager f o r h e a l t h s e r v i c e s , there i s a
" non- relationship" between the State and the county regarding mental
health resources.
The t h i r d area which has hindered i n t e g r a t i o n of systems i s the
administrative e n t i t y system. U n t i l 1984 when DHS developed the e n t i t y
system, county o f f i c i a l s believed that the counties would, i f they
wished, assume r e s p o n s i b i l i t y for DHS funded community services.
However, w i t h the e n t i t y system, DHS developed a system of overseeing
service d e l i v e r y and d i s t r i b u t i n g s t a t e funds without going through the
counties. DHS did not provide the a d m i n i s t r a t i v e e n t i t i e s w i t h d i r e c t i o n
or guidance for i n t e g r a t i n g counties i n t o needs assessment and a c t i v i t y
planning o r for coordinating county and state- funded services. DHS has
s t i l l not provided such d i r e c t i o n .
Fragmentation Adversely
Affects Service Delivery
Failure t o i n t e g r a t e S t a t e and county community- based services i n t o a
u n i f i e d system adversely a f f e c t s the d e l i v e r y o f services. A v a i l a b i l i t y
and e f f i c i e n t d e l i v e r y of services i s reduced.
Experts and p r a c t i t i o n e r s agree that uncoordinated programs reduce
e f f i c i e n t service d e l i v e r y . They s t a t e that lack of coordination,
coupled w i t h a lack of clear roles and r e s p o n s i b i l i t i e s for the agencies
involved, r e s u l t s i n c o s t l y d u p l i c a t i o n and r e p e t i t i o n of services for
some c l i e n t s and the i n a b i l i t y of others to f i n d or receive appropriate
services. The f o l lowing case examples provided by an advocate group for
the c h r o n i c a l l y mentally i l l i l l u s t r a t e the continuing d i f f i c u l t y of some
c l i e n t s to receive prompt and appropriate treatment.
Case Example One
A c l i e n t s u f f e r i n g from depression was referred by the county to a
l o c a l service provider on contract w i t h the a d m i n i s t r a t i v e e n t i t y .
The c l i e n t was seen by a doctor, put on medication, and scheduled for
another appointment. The c l i e n t was unable to make the appointment
and due to poor communication w i t h the service provider the c l i e n t
was not n o t i f i e d of the rescheduled appointment. Consequently, the
c l i e n t again f a i l e d to appear and was drcpped by the service
provider. He was t o l d he had to go back to the county for services.
However, when he returned to the county he was t o l d that the
state- funded service provider would have to continue care. Also, the
county would not r e f i l l the c l i e n t ' s p r e s c r i p t i o n because i t was
w r i t t e n by the s e r v i c e p r o v i d e r doctor. The c l i e n t u l t i m a t e l y f i l e d
a grievance to resolve the s i t u a t i o n and to receive treatment.
Case Example Two
A long- time schizophrenic c l i e n t was released from the county
hospital on high dosages of l i t h i u m . He was placed i n a state- run
outpatient treatment program. Although a doctor w i t h the s t a t e
operation prescribed medication, the c l i e n t a c t u a l l y received the
medication from the county. A county outreach worker delivered the
medication to the c l i e n t . Both the county and the state- run program
thought the other was monitoring the c l i e n t ' s l i t h i u m blood l e v e l .
After about s i x months i t was discovered that neither was doing the
monitoring. By that time the l i t h i u m level had become t o x i c and had
damaged the c l i e n t ' s kidneys.
Meantime, t h i s p a t i e n t , whose schizophrenia had long been r e s i s t a n t
to a l l a v a i l a b l e schizophrenia medication, was being scheduled for a
c l i n i c a l t r i a l at the county h o s p i t a l on a promising new drug not yet
federal ly l icensed for general use. However, due to the kidney
damage the c l i e n t was not able to t r y the new drug.
A recent Arizona Supreme Court decision also concluded that uncoordinated
programs have adverse r e s u l t s . In the Arnold vs. Sarn case ( 775 P. 2d 521
( 19891) the court noted the e f f e c t s of fragmentation and lack of
cooperation. I t found that as a r e s u l t of the independent operations,
the present level of care provided " t o the CMI i s t r a g i c a l l y low." The
court also found that many CMls received no mental health services at a l l .
A State- Di rected System
Should Be Estabiished
A statewide system w i t h a single a u t h o r i t y and funding stream should be
developed. A s i n g l e a u t h o r i t y and funding stream are necessary for the
e f f i c i e n t d e l i v e r y o f behavioral health services. Arizona may wish to
consider e s t a b l i s h i n g a consolidated behavioral health system.
National authorities agree - National studies recommend a behavioral
healthcare system w i t h a single a u t h o r i t y and funding stream. The
National Conference of State L e g i s l a t u r e s , the National I n s t i t u t e of
Mental Health, and a leading advocacy group have performed independent
studies. Thei r respective reports concluded that s t a t e or county systems
11
w i t h a s i n g l e a u t h o r i t y and funding stream o f f e r the greatest promise for
e f f e c t i v e service d e l i v e r y . Although s t a t e mental health systems are i n
t r a n s i t i o n and none have been f u l l y implemented or evaluated, the studies
agree that the s t r u c t u r e o f the system may be as important f o r s e r v i c e
d e l i v e r y as the amount of money expended.
Other s t a t e programs - Wisconsin and Ohio, f r e q u e n t l y c i t e d as having
leading behavioral health programs, both have programs w i t h a s i n g l e
management a u t h o r i t y and a s i n g l e funding stream. ( I n both cases, the
a u t h o r i t y has been placed a t the community l e v e l . ) I n 1974 Wisconsin
transferred s t a t e funds and f u l l r e s p o n s i b i l i t y f o r providing services to
the counties. From the funds they receive, the counties are responsible
for a l l appropriate services, i n c l u d i n g payment for i n p a t i e n t services
from s t a t e mental h o s p i t a l s .
Ohio has community boards which serve as the management a u t h o r i t y . I n
1988 the s t a t e t r a n s f e r r e d r e s p o n s i b i l i t y and funds to community mental
health boards. F i f t y - t h r e e boards serve 88 counties. Fiscal and
administrative r e s p o n s i b i l i t y for community- based and i n p a t i e n t services
w i l l be gradually consolidated and given to the local boards.
U l t i m a t e l y , the S t a t e ' s r o l e w i l l be that of policymaker, provider of
funds, monitor, and evaluator.
Arizona's experience - Although many states have developed county- run
behavioral health systems, Arizona may wish t o consider a
state- administered program for the f o l l o w i n g reasons. F i r s t , most
counties may not have s u f f i c i e n t resources to support a county- run
system. Second, by e s t a b l i s h i n g the a d m i n i s t r a t i v e e n t i t y system, the
State has indicated i t s preference for and e s t a b l i s h e d a s t r u c t u r e t o
administer a state- run program rather than a county- run system.
Most counties may not have the resources t o operate a county behavioral
health system. The a s s i s t a n t d i r e c t o r of BHS c l a i m s t h a t most counties
do not have the expertise, taxing power, or desire to support a county
mental health system. As p r e v i o u s l y s t a t e d , most r u r a l counties
c u r r e n t l y provide only court ordered evaluations, and i n many counties
the j a i l serves as the only county f a c i l i t y to hold those needing care.
The current system allows each county to operate d i f f e r e n t l y making i t
d i f f i c u l t to create a cohesive statewide p o l i c y i n t e g r a t i n g f i f t e e n
county systems.
The urban counties also feel that the present d e l i v e r y system causes them
to absorb the most c o s t l y c l i e n t s and services. For example, the
chairman of the Department of Psychiatry at Kino Community Hospital ( who
oversees behavioral health services i n Pima County) noted that the county
cannot l e g a l l y t u r n someone down i n an emergency s i t u a t i o n .
Consequently, the county absorbs the most c o s t l y component of the
services continuum, c r i s i s i n t e r v e n t i o n . He believes that the State
should be made the s i n g l e a u t h o r i t y and counties should no longer be
responsible for service d e l i v e r y .
O f f i c i a l s over the behavioral health programs i n Maricopa, Pima, Yuma and
La Paz counties concur that there needs to be a s i n g l e a d m i n i s t r a t o r f o r
behavioral health services. However, the county representatives
expressed some concerns regarding speci f i c aspects of how a
state- administered system might be s t r u c t u r e d . A primary concern i s the
funding mechanism and the amount counties would have t o c o n t r i b u t e . The
counties also fear that the State would not involve them i n the
development of a state- run system. I n a d d i t i o n , w h i l e the assistant
Maricopa County manager f o r h e a l t h services agrees there should be a
state- run system, he has a s p e c i f i c concern about how i t should be
structured i n Maricopa County. He believes the county should oversee
service d e l i v e r y instead of using the current system of three
administrative e n t i t i e s which r e s u l t s i n the county being divided i n t o
three service areas.
The State has also shown i t s preference for a state- run behavioral health
program by e s t a b l i s h i n g the a d m i n i s t r a t i v e e n t i t y system. DHS has
elected to provide services, d i s t r i b u t e funds, and oversee programs
through p r i v a t e , n o n p r o f i t organizations. I n f a c t , i n some instances DHS
selected newly established agencies to serve as a d m i n i s t r a t i v e e n t i t i e s
instead of counties already providing behavioral health services. DHS
has continued to provide community- based services through the
a d m i n i s t r a t i v e e n t i t i e s . While we recognize the e n t i t y system has
experienced some problems ( see Other Pertinent Informat ion, page 39),
according to the assistant d i r e c t o r , DHS i s s t i l I committed t o t h a t
sys tern.
F i n a l l y , precedence e x i s t s f o r e s t a b l i s h i n g a state- operated system i n
the S t a t e ' s c r e a t i o n of i t s indigent healthcare system. In providing
indigent healthcare, the State developed a state- operated system rather
than a county system. AHCCCS integrates state and county heal thcare
services under a s i n g l e , s t a t e level a u t h o r i t y . While the State i s
responsible for a d m i n i s t e r i n g t h e program, county and State funds, i n
addition to federal monies, are combined to pay for services!')
On a small scale, DHS has recently attempted to take a simi l a r approach
i n behavioral health by consolidating funds and e s t a b l i s h i n g a single
a u t h o r i t y for i t s c h i l d r e n ' s program i n Pima County. This program could
serve as a model for i n t e g r a t i o n for other behavioral health programs.
In January 1989, the Comprehensive Child and Adolescent Treatment
Services ( CCATS) program began providing a f u l l continuum of care for
children and adolescents. By voluntary agreement the State and Pima
County have consolidated funds at the DHS l e v e l . County monies were
redirected to the State and v i a the e n t i t y combined w i t h DHS funds. The
e n t i t y contracts w i t h SAMHC for c l i n i c a l management of the program.
SAMHC also provides intake, c r i s i s i n t e r v e n t i o n , and case management
services. A l l other long- term treatment i s contracted for w i t h other
service providers.
Because CCATS has been i n ope r a t i on on l y s i nce January 1989, i t cannot
yet be f u l l y evaluated. Nevertheless, SAMHC and e n t i t y administrators
state the program i s working we1 I . In f a c t , they consider i t to be very
c o s t - e f f e c t i v e , and discussions are underway to expand i t to other State
agenc i es .
( 1 ) The l e v e l o f a c o u n t y ' s f i n a n c i a l c o n t r i b u t i o n was capped by s t a t u t e a t 50 percent
of i t s f i s c a l year 1980- 81 heal t h c a r e budget o r expenditures, whichever was l e s s .
RECOWENDATION
The State should develop a long- range plan t o e s t a b l i s h a state- run,
behavioral health program that i n t e g r a t e s S t a t e and county behavioral
health programs. A s i n g l e management a u t h o r i t y and funding stream should
be key elements o f the integrated system.
FINDING I I
DHS IS NOT ADEQUATELY MONITORING
THE PERFORMANCE OF ADMINISTRATIVE ENTITIES
DHS' monitoring of e n t i t y performance and compliance w i t h contract
provisions has been lax. Important d e f i c i e n c i e s and problems have gone
undiscovered o r uncorrected because DHS i s not conducting adequate s i t e
v i s i t s , v e r i f y i n g services, o r f o l l o w i n g up when problems are
discovered. Monitoring has not been a management p r i o r i t y , and s t a f f
responsible f o r m o n i t o r i n g a d m i n i s t r a t i v e e n t i t i e s have not received
clear d i r e c t ion.
Importance of Monitoring
Since most community- based behavioral health services funded through DHS
are provided by n o n p r o f i t agencies under contract w i t h DHS, contract
monitoring i s an important DHS r e s p o n s i b i l i t y . Monitoring ensures that
services the State i s paying for are being provided as required.
Monitoring also i s important to ensure that c l i e n t s are being properly
treated and t h a t both c l i e n t s and the State are properly charged for
services. When done e f f e c t i v e l y , monitoring should r e s u l t i n the timely
discovery and c o r r e c t i o n of problems.
DHS has assigned seven s t a f f members the r e s p o n s i b i l i t y of monitoring the
performance of a d m i n i s t r a t i v e entities. DHS procedures r e q u i r e t h a t
monitoring be done through regular s i t e v i s i t s to the a d m i n i s t r a t i v e
e n t i t i e s , v e r i f i c a t i o n o f services reported and b i l l e d to the s t a t e , and
preparation of reports on e n t i t y compliance w i t h contract p r o v i s i o n s .
Problems and Deficiencies Are Not
I d e n t i f i e d and Corrected
DHS monitoring of e n t i t y performance has been l i m i t e d and follow- up on
problems has been weak and s u p e r f i c i a l . As a r e s u l t , s i g n i f i c a n t
d e f i c i e n c i e s have not been i d e n t i f i e d and problems have not been f u l l y
addressed and corrected. Our analysis found that s i t e v i s i t s ,
v e r i f i c a t i o n of s e r v i c e s , and r e p o r t i n g are n o t being done c o n s i s t e n t l y
and i n accordance w i t h established p o l i c i e s and procedures.
Examples of poor monitoring - I n some cases, DHS has not i d e n t i f i e d
s i g n i f i c a n t d e f i c i e n c i e s and noncompliance w i t h e n t i t y contract
p r o v i s i o n s . In other cases, problems i d e n t i f i e d or brought to the
department's a t t e n t i o n have not been f u l l y and adequately followed up and
resolved. The f o l l o w i n g examples i l l u s t r a t e t h i s problem.
0 Example 1 - I n A p r i l 1989, a clergyman alleged impropriety at an
a d m i n i s t r a t i v e e n t i t y . A l l e g a t i o n s included misuse of s t a f f , c l i e n t s
and materials used to repair the executive d i r e c t o r ' s home,
overmedication of c l i e n t s , poor c l i e n t s e r v i c e , inappropriate sexual
r e l a t i o n s between CMI c l i e n t s and s t a f f , and other problems. The DHS
s t a f f person responsible for overseeing the e n t i t y met w i t h the
executive d i r e c t o r who denied a l l o f the a l l e g a t i o n s . However, no
e f f o r t was made t o i n v e s t i g a t e . C l i e n t records were not reviewed,
interviews were not conducted, and no report was prepared.
Previously, DHS had conducted a review of c l i e n t service records at
the same e n t i t y and found that i t may have overcharged the State more
than $ 150,000. I n August and September 1987, DHS could f i n d no
documentation to v e r i f y that the e n t i t y had provided any of the 759
" semi- supervised" u n i t s of service for CMI c l i e n t s for which i t had
charged the S t a t e . DHS could v e r i f y only 208 ( 19 percent) of the
1083 u n i t s o f r e s i d e n t i a l service for which i t had been b i l l e d , and
only 40 ( 27 percent) of the 146 u n i t s of ease management. Seven
months l a t e r , DHS conducted a 100 percent review of some e n t i t y
records. The review revealed that the agency may have been m i scodi ng
service u n i t s . For example, semi- supervised days were reported as
long- term r e s i d e n t i a l days, w h i l e o u t p a t i e n t v i s i t s were reported as
semi- supervised days. DHS requested that the agency r e t u r n over
$ 150,000 to the S t a t e . The agency f i l e d a w r i t t e n response disputing
most of DHS f i n d i n g s and has not repaid any funds. Over one year
l a t e r , DHS has taken no f u r t h e r a c t i o n to recover monies owed or to
correct d e f i c i e n c i e s at the e n t i t y .
Comnent - In t h i s case, DHS was aware of serious p o t e n t i a l problems
a t an a d m i n i s t r a t i v e e n t i t y but has f a i l e d twice to take adequate
follow- up a c t i o n . These problems involve improperly charging c l i e n t s
and the State, poor c l i e n t treatment, and p o t e n t i a l fraud. When
asked why he d i d not take f u r t h e r a c t i o n on the more than $ 150,000
DHS claimed was owed to the State, the DHS s t a f f person responsible
s t a t e d t h a t other d u t i e s took precedence and neither the former nor
the current OCBHS Administrator requested f u r t h e r follow- up.
Example 2 - DHS i s not checking to ensure that c l i e n t s are being
properly charged f o r services. State law requires DHS to e s t a b l i s h
fee schedules f o r chronical l y mental l y i l l ( CMI) r e s i d e n t i a l c l ients
and c l i e n t s r e c e i v i n g alcohol treatment services. E n t i t y contract
provisions f u r t h e r require that DHS approve c l i e n t fee col i e c t i o n
p o l i c i e s . DHS has adopted a fee p o l i c y which e s s e n t i a l l y establishes
a s l i d i n g scale fee based on income and family s i z e . We found,
however, that 55 of the 61 agencies we randomly sampled are not
f o l l o w i n g approved fee schedules. Nineteen o f the providers ( who the
a d m i n i s t r a t i v e e n t i t i e s are responsible for overseeing) had no fee
schedule whatsoever. One agency even charges c l i e n t s twice as much
for an i n i t i a l v i s i t as DHS p o l i c y allows, and r e q u i r e s t h a t c l i e n t s
pay for services when they are rendered, unless other arrangements
are made beforehand.
Comnent - DHS i s not adequately monitoring fee schedules. DHS
management acknowledges that many provider agencies are not f o l l o w i n g
the DHS fee schedule and that agencies' fee p o l i c i e s may d i f f e r
s u b s t a n t i a l l y . Therefore, some c l i e n t s are not being properly
charged. This can r e s u l t i n three problems. F i r s t , the State may be
paying for some services that some c l i e n t s can a f f o r d to pay for
themselves, consuming State resources that could be allocated to more
needy c l i e n t s . Second, c l i e n t s may themselves be overcharged for
some services t h a t , according to DHS p o l i c y , should be paid by the
State. In a d d i t i o n , i n e q u i t y r e s u l t s when d i f f e r e n t providers charge
comparable c l i e n t s d i f f e r e n t fees for s i m i l a r services. For
example, we found that one agency charges c e r t a i n c l i e n t s $ 5 for
outpatient alcohol services while another agency charges comparable
c l i e n t s $ 32. Neither agency's fee p o l i c y complies w i t h DHS p o l i c y .
o Example 3 - Over the l a s t three years, DHS and the responsible
a d m i n i s t r a t i v e e n t i t y have received several complaints about the
practices of a p r o v i d e r agency. A l l e g a t i o n s include improper
charging of c l i e n t s and not t r e a t i n g c r i s i s c l i e n t s . A DHS s i t e
v i s i t team also discovered that the agency may have been involved i n
a questionable p r a c t i c e c a l l e d " creaming." This l a t t e r a l l e g a t i o n
involves a p r a c t i c e i n which c l i e n t s w i t h ample f i n a n c i a l resources
are placed i n f o r - p r o f i t programs that provide b e t t e r q u a l i t y and a
wider range of services than n o n p r o f i t programs.
During the f i s c a l year 1987- 88 annual v i s i t DHS s t a f f found evidence
suggesting that the agency's f o r - p r o f i t program was providing b e t t e r
drug abuse treatmen! services to i t s paying, insured c l i e n t s than i t
was to those served i n the agency's n o n p r o f i t ( DHS- supported)
d i v i s i o n . DHS referred the matter for f o l low- up to the
a d m i n i s t r a t i v e e n t i t y . However, DHS never monitored the e n t i t y ' s
follow- up a c t i o n s , and d i d not address the matter i n i t s most recent
s i t e v i s i t to the e n t i t y .
Comnent - DHS d i d not monitor the e n t i t y to ensure that appropriate
follow- up i n v e s t i g a t i o n and a c t i o n was taken i n response t o p o t e n t i a l
problems i d e n t i f i e d . These problems involved p o t e n t i a l mischarging
of c l i e n t s and inequitable treatment of c l i e n t s based on a b i l i t y to
pay. Without follow- up monitoring, DHS may not know i f p o t e n t i a l l y
improper practices have been corrected.
Monitoring procedures not followed - Problems i d e n t i f i e d above are
occurring because DHS i s not c o n s i s t e n t l y monitoring a d m i n i s t r a t i v e
e n t i t i e s and i s not f o l l o w i n g established procedures for monitoring.
S i t e v i s i t s and v e r i f i c a t i o n of s e r v i c e s a r e i n c o n s i s t e n t and are not
always performed i n accordance w i t h prescribed p o l i c i e s .
DHS s t a f f are required to make an annual s i t e v i s i t to each
a d m i n i s t r a t i v e e n t i t y and to report on the s i t e v i s i t r e s u l t s w i t h i n
21- working days of the s i t e v i s i t . In f i s c a l year 1987- 88, DHS d i d not
conduct an annual s i t e v i s i t a t two of the e i g h t a d m i n i s t r a t i v e
e n t i t i e s . I n f i s c a l year 1988- 89 DHS conducted an annual s i t e v i s i t at
each e n t i t y , but only two of the s i t e v i s i t reports were completed w i t h i n
the p o l i c y t i m e l i n e . I n f a c t , as of July 1989, DHS had s t i l l not
completed two of the e i g h t reports even though the s i t e v i s i t s had been
conducted i n March 1989.
When DHS has completed s i t e v i s i t r e p o r t s , the reports have lacked
u n i f o r m i t y and completeness. A review of the s i x completed annual s i t e
v i s i t reports for f i s c a l year 1988- 89 revealed that s t a f f reviewed
d i f f e r e n t aspects of e n t i t y performance and used d i f f e r e n t methods to
report t h e i r f i n d i n g s . Most reports also f a i l to s u f f i c i e n t l y address
the q u a l i t y of s e r v i c e t h a t c l i e n t s receive. Most of the r e p o r t s a r e ,
however, consistent i n one respect: they do not address most of the
a d m i n i s t r a t i v e e n t i t i e s ' contract requirements. The annual s i t e v i s i t
section of one r e c e n t l y completed report was j u s t over four pages long
and, therefore, could n o t possibly cover the contract requirements ( the
work statement i t s e l f i s 14 pages long), l e t alone p r o v i d e a
comprehensive analysis of the e n t i t y .
DHS i s also not s u f f i c i e n t l y checking c l i e n t records to ensure that
services b i l l e d to the State were, i n f a c t , properly categorized and
provided. The DHS service v e r i f i c a t i o n p o l i c y r e q u i r e s t h a t at least 20
c l i e n t records be reviewed annually at each provider agency. ( 1 ) A
review of DHS f i l e s revealed t h a t s e r v i c e v e r i f i c a t i o n s were conducted at
( 1 ) Aside from the DHS s e r v i c e v e r i f i c a t i o n , a d m i n i s t r a t i v e e n t i t i e s u s u a l l y conduct
q u a r t e r l y s e r v i c e v e r i f i c a t i o n s o f subcontracting agencies. However, the DHS
p o l i c y predates the a d m i n i s t r a t i v e e n t i t y system, which c o u l d c r e a t e some question
as t o whether DHS should r e v e r i f y records reviewed by the e n t i t y o r draw a separate
sample o f c l i e n t r e p o r t s submitted t o DHS by s u b c o n t r a c t o r s . Although the OCBHS
A d m i n i s t r a t o r s t a t e d t h a t both methods are used, he a l s o s t a t e d t h a t s e r v i c e
v e r i f i c a t i o n should be conducted by DHS a t each agency a t l e a s t b i e n n i a l l y .
only two of the a d m i n i s t r a t i v e e n t i t i e s i n f i s c a l year 1987- 88 and at
only f i v e a d m i n i s t r a t i v e e n t i t i e s i n f i s c a l year 1988- 89. In f i s c a l year
1987- 88, DHS reviewed records a t only 10 of some 234 contracting
faci I i t i e s . However, DHS reviewed the minimum 20 records at only two of
those faci l i t ies. In f i s c a l year 1988- 89, DHS reviewed records at 27 of
some 260 f a c i l i t i e s , but reviewed 20 or more records at only e i g h t o f
them.
Contract Monitoring Has Not
Been a P r i o r i ty
OCBHS has not made the monitoring o f e n t i t y performance and contract
compliance a p r i o r i t y . Monitoring has not received adequate a t t e n t i o n ,
and many standards and p o l i c i e s needed for e f f e c t i v e monitoring have not
been updated since the e n t i t y system was implemented. Furthermore, DHS
s t a f f responsible for monitoring have not received clear d i r e c t i o n from
management.
Inadequate a t t e n t i o n - According to the OCBHS Administrator, the
monitoring of e n t i t y contracts has not rzceived adequate a t t e n t i o n . The
Administrator a t t r i b u t e s the lack of a t t e n t i o n to OCBHS management's
f a i l u r e to ensure s t a f f were properly monitoring e n t i t y performance and
service d e l i v e r y . In a d d i t i o n , s t a f f time has been devoted to reviewing
f i n a n c i a l r e p o r t i n g of the a d m i n i s t r a t i v e e n t i t i e s and to numerous
contract amendments r e s u l t i n g from a d d i t i o n a l funding and the creation of
new se rv i ces . ( 1 )
Neglect of program standards and p o l i c i e s used for monitoring i s f u r t h e r
i n d i c a t i o n of monitoring's low p r i o r i t y . The Program Approval Standards
contain c r i t e r i a against which DHS i s t o monitor any behavioral health
service provider t h a t c o n t r a c t s or subcontracts w i t h DHS. The standards
have been used as a major moni t o r ing tool and address several important
program areas i n c l u d i n g planning for service needs, personnel management,
f a c i l i t y environment, c o n f i d e n t i a l i t y of records, and program
( ) According to the OCBHS Admini s t r a t o r , beginning i n f i s c a l year 1989- 90, the
monitoring of e n t i t y f i n a n c i a l r e p o r t i n g w i l l no longer be the r e s p o n s i b i l i t y of
program s t a f f . Instead, the deputy administrator and her s t a f f w i l l have t h i s
responsi b i 1 i t y .
evaluation. However, the standards were o r i g i n a l l y d r a f t e d by DHS over
10 years ago and have never been updated. They were f i r s t used to
evaluate the performance o f the provider agencies. However, since the
i n t r o d u c t i o n of the a d m i n i s t r a t i v e e n t i t y , system, DHS continues to use
the same standards. Therefore, i t i s not clear whether DHS should apply
the standards to the a d m i n i s t r a t i v e e n t i t i e s or to the provider
agencies. Some sections would probably be more appropriate as licensing
standards. For example, the standards r e q u i r e t h a t the d i n i n g area be
" l i g h t , a i r y , and s u i t a b l y decorated," windows have proper screening, the
f a c i l i t y be free of insects and rodents, and burned out l i g h t bulbs be
f i x e d o r replaced. While DHS has i n i t i a t e d r e v i s i o n s to the standards,
the r e v i s i o n s w i l l be r e l a t i v e l y minor.
The P o l i c i e s and Procedures Manual used by OCBHS i s also outdated. The
manual provides guidelines to be used by OCBHS i n administering
behavioral h e a l t h c o n t r a c t s . The p o l i c i e s range from methods to be used
i n r e c e i v i n g c o n t r a c t proposals to guidelines to be used i n contract
n e g o t i a t i o n , preparation, and processing. Several p o l i c i e s address
c o n t r a c t m o n i t o r i n g and e v a l u a t i o n . Same, l i k e the v e r i f i c a t i o n of
services p o l i c y , have not been updated since 1985 when the a d m i n i s t r a t i v e
e n t i t y system was developed and, therefore, address OCBHS' administration
of provider agencies rather than administration of the a d m i n i s t r a t i v e
e n t i t i e s .
Staff lack clear direction - While present DHS management has
established monitoring as a p r i o r i t y , more d i r e c t i o n needs to be given to
s t a f f on the procedures to be used. For example, program representatives
use d i f f e r e n t standards i n monitoring the a d m i n i s t r a t i v e e n t i t i e s . One
program representative said he always uses the P o l i c i e s and Procedures
Manual as a guide. I n c o n t r a s t , several other program representatives
stated they were not sure to what degree the manual i s to be used. One
representative claimed a documents monitoring report i s used widely but
none of the other r e p r e s e n t a t i v e s s t a t e d they use i t . Because of t h i s
confusion, program representatives agreed that there i s l i t t le
consistency i n the methodology used i n monitoring or report w r i t i n g .
S t a f f members said they had received very l i t t l e d i r e c t i o n since November
1988 when they received a b r i e f , two- page memorandum l i s t i n g t h e i r job
d u t i e s . However, the memo does not contain s p e c i f i c d e t a i l s on how
monitoring should be performed by the s t a f f . S t a f f members said few
s t a f f meetings are held, and l i t t l e communication i s received regarding
how they should complete t h e i r d u t i e s . One s t a f f member s t a t e d t h a t an
" underground" communication network had developed among program
monitoring s t a f f to share information and develop a common d i r e c t i o n .
RECOWENDATIONS
1. DHS' annual s i t e v i s i t s and reports should:
a Focus on contract requirements;
a Be more comprehensive, uniform, and t i m e l y ;
a Include follow- up v i s i t s to determine whether recommended
changes have been implemented.
2. DHS should conduct a greater number of service v e r i f i c a t i o n reviews.
These reviews should also be more thorough.
3. DHS should immediately follow up on a l l e g a t i o n s of agency misconduct
and should provide to the a d m i n i s t r a t i v e e n t i t i e s w r i t t e n reports of
i t s f i n d i n g s . S i t e v i s i t s should be used to determine whether
administrative e n t i t i e s have corrected the problem.
4. DHS management should make monitoring of a d m i n i s t r a t i v e e n t i t y
performance a p r i o r i t y and should provide clear d i r e c t i o n to s t a f f as
to how monitoring i s to be accomplished.
5. The OCBHS Program Approval Standards, and P o l i c i e s and Procedures
Manual should be updated i n order to be used as e f f e c t i v e monitoring
devices of a d m i n i s t r a t i v e e n t i t i e s .
FINDING Ill
CHANGES IN CONTRACTS COULD RESULT IN IMPROVED SERVICES
Changes i n the manner and form of c o n t r a c t i n g between DHS and the
a d m i n i s t r a t i v e e n t i t i e s could r e s u l t i n improved behavioral health
services. Contracting methods used by Colorado could address
shortcomings i n DHS contracts i n v o l v i n g the provision and q u a l i t y of
services.
Colorado has developed a progressive c o n t r a c t i n g system to purchase
mental health services from providers and i s considered a national leader
i n t h i s area. This system, referred to as performance c o n t r a c t i n g ,
establishes t a r g e t populations to be served by providers and incorporates
provisions to ensure performance as well as q u a l i t y of services
provided. Because of the system's unique approach, as well as i t s
reported adaptation by several other s t a t e mental health a u t h o r i t i e s ,
Auditor General s t a f f v i s i t e d the Colorado Department of I n s t i t u t i o n s ,
D i v i s i o n o f Mental Health, to o b t a i n a f i r s t h a n d perspective on the
performance contract system and i t s p o t e n t i a l b e n e f i t s to Arizona.
Contractual Problems I n v o l v i n g
the Provision and Q u a l i t y
o f Services
DHS' contracts w i t h the a d m i n i s t r a t i v e e n t i t i e s f a i l to d i r e c t services
to s p e c i f i c populations and lack necessary provisions to ensure the
qua1 i ty of services provided. E n t i t y contracts contain few s p e c i f i c
d e f i n i t i o n s of who i s to receive services. Furthermore, the contracts do
not contain p r o v i s i o n s a l l o w i n g the assessment of p e n a l t i e s f o r
nonperformance. F i n a l l y , the contracts do not contain s p e c i f i c
requirements f o r a d m i n i s t r a t i v e e n t i t i e s to conduct q u a l i t y assurance of
services.
Few d e f i n i t i o n s o f who i s t o receive services - E n t i t y contracts
contain few s p e c i f i c d e f i n i t i o n s of who i s to receive behavioral health
services. Without c o n t r a c t u a l l y defined populations to be served, the
a d m i n i s t r a t i v e e n t i t i e s determine who w i l l receive a v a i l a b l e services.
However, because DHS bases contract comp l i ance on un i t s of serv i ce
provided, t h e a d m i n i s t r a t i v e e n t i t i e s may not be p r o v i d i n g services to
those most i n need. I n c o n t r a s t , Colorado c o n t r a c t u a l l y establishes
target populations t~ be served by providers.
Those r e c e i v i n g most contracted services are not defined s p e c i f i c a l l y .
For f i s c a l year 1989- 90, DHS contracted w i t h the a d m i n i s t r a t i v e e n t i t i e s
to provide a p a r t i c u l a r number o f u n i t s of service a t a s p e c i f i c p r i c e
per u n i t f o r several behavioral h e a l t h programs, i n c l u d i n g drug, a l c o h o l ,
and mental h e a l t h , as well as services to the c h r o n i c a l l y mentally i l l
( CMI) and to s e r i o u s l y e m o t i o n a l l y d i s t u r b e d c h i l d r e n ( SEDC). However,
while a s t a t u t o r y d e f i n i t i o n f o r services to CMls e x i s t s , DHS has not
defined who should receive services from the other behavioral health
programs. Current contract language indicates only that those
i n d i v i d u a l s who are at r i s k of or s u f f e r i n g from a p a r t i c u l a r behavioral
h e a l t h disorder can be served. Furthermore, c l i e n t intake c r i t e r i a
broadly defines serviceable problems! 2'
Since populations to be served are not defined i n the e n t i t y contracts,
the a d m i n i s t r a t i v e e n t i t i e s determine who w i l l receive a v a i l a b l e
services. This can, i n t u r n , r e s u l t i n two problems. F i r s t , services
may be d i r e c t e d to those who present themselves for treatment rather than
those w i t h the greatest need f o r services. As such, the " worried w e l l "
may be r e c e i v i n g services rather than those i n d i v i d u a l s s u f f e r i n g from
more serious mental i l l n e s s e s . Second, according to several e n t i t y and
DHS o f f i c i a l s , t h i s system r e s u l t s i n the u n i t s o f service d r i v i n g the
p r o v i s i o n of s e r v i c e s r a t h e r than a targeted population. For example, i f
an e n t i t y has an abundance of u n i t s of a p a r t i c u l a r service ( e. g. alcohol
( 1 ) Chronic mental i l l n e s s i s defined by A. R. S 536- 550 and must be documented by the
Check1 i s t f o r Chronic Mental I l l n e s s Determination.
( 2 ) C l i e n t i n t a k e c r i t e r i a . as defined i n the DHS Behavioral Health Management
Information System ( BHMIS) c l i e n t assessment form, broad1 y d e f i n e s s e r v i c e a b l e
problems t o i n c l u d e such fact. ors as a n x i e t y , s t r e s s o r tension, depression or mood
d i s o r d e r , thought d i s o r d e r , medical o r physical problems, m a r i t a l o r f a m i l y
problem, s o c i a l o r i n t e r p e r s o n a l problem, r o l e performance ( i . e. j o b , school,
homemaker), involvement w i t h c r i m i n a l j u s t i c e system, and other s i g n i f i c a n t
problems.
treatment), i t may d i r e c t i t s e f f o r t s to f i l I ing those u n i t s t o avoid
losing payments. However, these services may not be the services the
e n t i t y most needs to provide!"
Rather than basing successful performance on the completion of agreed
upon u n i t s of s e r v i c e , the Colorado performance contract t a r g e t s
p a r t i c u l a r populations f o r which s e r v i c e p r o v i d e r s c o n t r a c t u a l l y agree to
provide treatment. For f i s c a l year 1989- 90, the Colorado target
population i s comprised of the most s e r i o u s l y mentally i l l , c h i l d r e n ,
e l d e r l y , and m i n o r i t i e s , w i t h s p e c i f i c d e f i n i t i o n s for each. Unlike the
Arizona system, service p r o v i s i o n and contract compliance i s based on who
i s served, rather than on how many u n i t s of service a r e p r o v i d e d . For
example, while Arizona might purchase 100 u n i t s of CMI r e s i d e n t i a l care
from an e n t i t y and allow the e n t i t y to determine how many CMls should
receive the services, Colorado would e s t a b l i s h the minimum number of CMls
to receive services from a provider and allow the provider t o determine
the appropriate mix of services to meet each c l i e n t ' s needs.
E s t a b l i s h i n g the t a r g e t p o p u l a t i o n ensures that the s t a t e , rather than
the p r o v i d e r s , determines who w i l l receive s e r v i c e s w h i l e a l l o w i n g the
providers to determine the types of services needed. According to
Colorado o f f i c i a l s , t h i s requires outreach by s e r v i c e p r o v i d e r s to ensure
that targeted populations are served, not j u s t those persons who present
themselves f o r s e r v i c e . F i n a l l y , Colorado pays providers monthly based
on the u n i t s of service provided.
Penalties for nonperformance - E n t i t y contracts do n o t c o n t a i n
p r o v i s i o n s e s t a b l i s h i n g p e n a l t i e s f o r f a i l u r e to perform. Under current
contract language, i f an e n t i t y does not produce at least 80 percent of
the agreed upon u n i t s of s e r v i c e f o r the CMI and mental h e a l t h programs,
a l l t h a t i s required i s a payback of advanced monies that exceed the
amount of u n i t s produced.'*' While DHS allows and pays f o r up to
( 1 DHS1 procedure of paying f o r the u n i t s of service i n advance may create a d d i t i o n a l
pressure f o r the a d m i n i s t r a t i v e e n t i t i e s t o p r o v i d e s e r v i c e regardless of need i n
order t o avoid paying back monies that may have been spent already.
(*) A1 though the CMI and mental health programs represent a m a j o r i t y of behavioral
health funding, c o n t r a c t provisions f o r o t h e r behavioral health programs, i n c l u d i n g
drug, a1 coho1 , and chi l d r e n l s treatment and prevention, requi re a d m i n i s t r a t i v e
e n t i t i e s to pay back monies i n the event 100 percent of the agreed upon u n i t s of
service are not produced.
2 7
20 percent nonperformance, there i s no penalty f o r those a d m i n i s t r a t i v e
e n t i t i e s that exceed t h i s p r o v i s i o n .
Under terms of the Colorado performance contract , penal t i es are assessed
i f providers do not serve at least 93 percent of the agreed upon target
population. Unlike Arizona, these p e n a l t i e s a r e n o t merely simple
paybacks f o r services not provided, but r a t h e r a c t u a l p e n a l t i e s based on
the number of c l i e n t s not served and then subtracted from the f o l l o w i n g
y e a r ' s c o n t r a c t . "' However, to ensure t h a t p r o v i d e r s are not
penalized due t o circumstances outside of t h e i r c o n t r o l , the contract
allows the p r o v i d e r s two o p p o r t u n i t i e s during the term of the contract to
renegotiate the number of c l i e n t s to be served.
The Colorado contract also includes s p e c i f i c penalty p r o v i s i o n s ($ 5,000)
i n the event a provider does not submit timely f i n a n c i a l r e p o r t s . ( 2 )
Arizona contracts do n o t c o n t a i n p e n a l t y p r o v i s i o n s f o r untimely
f i n a n c i a l r e p o r t i n g .
Requirements for q u a l i t y assurance - Current contracts do n o t c o n t a i n
provisions r e q u i r i n g the a d m i n i s t r a t i v e e n t i t i e s to conduct q u a l i t y
assurance. Q u a l i t y assurance programs are used throughout healthcare
systems to ensure t h a t :
a p a t i e n t s receive q u a l i t y services,
a p a t i e n t s r e c e i v e a p p r o p r i a t e s e r v i c e s , and
a c e r t a i n types o f services are not over- or u n d e r u t i l i z e d .
In an acceptable q u a l i t y assurance program, the appropriateness of
p a t i e n t care and c l i n i c a l performance are monitored and evaluated through
( 1 The penalty i s determined by establ i shi ng the providers c o s t per c l i ent served that
year ( t o t a l program costs divided by number of c l i e n t s served) and m u l t i p l y i n g t h i s
sy the number o f c l i e n t s not provided service.
( 2 ) The $ 5,000 i s returned to the provider i f the report i s received w i t h i n 30 days.
I f the r e p o r t i s between 30 and 60 days l a t e , h a l f of the penalty i s returned.
However, i f t h e r e p o r t i s more than 60 days l a t e , the e n t i r e $ 5,000 i s withheld.
an ongoing review of p a t i e n t records, observations o f p a t i e n t care, and a
review of special treatments, medications, and incidents i n v o l v i n g
p a t i e n t s .
According to an o f f i c i a l w i t h the J o i n t Commission on A c c r e d i t a t i o n of
Heal thcare Organizations ( JCAHO) , qua1 i t y assurance programs are
essential for q u a l i t y healthcare because they require providers to openly
display t h e i r a c c o u n t a b i l i t y to those p a r t i e s i n t e r e s t e d i n t h e i r
performance ( i . e , c l i e n t s , c l i e n t s ' f a m i l i e s , and funding organizations).
Quality assurance i s p a r t i c u l a r l y important g i v e n A r i z o n a ' s system of
d e l i v e r i n g services through c o n t r a c t s . I n t h i s system, the c o n t r a c t o r s
determine who w i l l receive s e r v i c e , the type of service that w i l l be
provided, and the amount of service. Lacking d i r e c t c o n t r o l over these
key decisions, the State needs a means of ensuring that i t s funds are
being used a p p r o p r i a t e l y . Thus, q u a l i t y assurance programs can perform a
dual f u n c t i o n : they can p r o t e c t the i n t e r e s t s of both the p a t i e n t s and
the State.
While q u a l i t y assurance i s c l e a r l y important and needed, the FY 1989- 90
DHS contract w i t h the a d m i n i s t r a t i v e e n t i t i e s does not contain s p e c i f i c
language r e q u i r i n g the a d m i n i s t r a t i v e e n t i t i e s to maintain q u a l i t y
assurance programs. Furthermore, DHS o f f i c i a l s are apparently aware of
the importance o f q u a l i t y assurance since an i n t e r n a l p o l i c y and
procedure to monitor e n t i t y q u a l i t y assurance programs e x i s t s , although
there i s no contractual p r o v i s i o n upon which to base i t s enforcement.
Again, u n l i k e Arizona, the Colorado contracts require each provider to
develop and m a i n t a i n a qua1 i t y assurance program i n order to ensure high
q u a l i t y p a t i e n t care. Colorado has formalized t h i s requirement through
an a d m i n i s t r a t i v e r u l e and r e g u l a t i o n , and f u r t h e r c l a r i f i e d the
requirement by e s t a b l i s h i n g c l i n i c a l guidelines for the providers to
f o l l o w . The c l i n i c a l guidelines include steps needed to perform q u a l i t y
of treatment as well as service u t i l i z a t i o n reviews. Furthermore, the
g u i d e l i n e s s p e c i f y the frequency of reviews, the number or percentage of
cases to be reviewed, c r i t e r i a for i d e n t i f y i n g unnecessary or
inappropriate u t i l i z a t i o n , and procedures for implementing c o r r e c t i v e
a c t i o n .
The Department of Health Services should evaluate the performance
contract system as developed by Colorado and consider adopting those
provisions dealing w i t h the development of service provision to targeted
popu l a t ions, assessment of penal t i e s for nonperformance, and qua1 i t y
assurance.
FINDING IV
DHS COULD IMPROVE ITS METHODS OF ALLOCATING FUNDS BY
BASING FUNDING MORE ON NEEDS ASSESSMENTS
DHS should consider a l l o c a t i n g funds for behavioral health services based
more on needs i n order to target l i m i t e d resources to those who most need
services. C u r r e n t l y , DHS' focus i s on achieving funding equity based on
population. However, t h i s focus f a i l s to recognize d i f f e r e n c e s i n the
p a r t i c u l a r behavioral health needs of each geographic area i n the State
and address these needs through funding.
As mental health funding has increased i n the State, DHS has increasingly
used per c a p i t a formulas to a l l o c a t e the funds. DHS' goal i s to reduce
the d i s p a r i t i e s i n funding which o r i g i n a t e d when the a d m i n i s t r a t i v e
e e n t i t y system was developed. DHS uses two funding models, both of which
are strongly based on a per c a p i t a formula, t o d i s t r i b u t e new funds.
I n i t i a l funding d i s t r i b u t i o n - The i n i t i a l d i s t r i b u t i o n of funding to
the administrative e n t i t i e s created a perception of funding d i s p a r i t y .
According to DHS o f f i c i a l s , when the a d m i n i s t r a t i v e e n t i t y system was
established i n 1985, i n i t i a l funding to the a d m i n i s t r a t i v e e n t i t i e s was
determined based upon how much funding had been provided i n the previous
year to the d i r e c t service providers located w i t h i n each of the newly
created a d m i n i s t r a t i v e e n t i t i e s ' geographic area. Under t h i s plan, for
f i s c a l year 1985- 86, those a d m i n i s t r a t i v e e n t i t i e s w i t h numerous
providers received a large share of the funding, whi le those areas w i t h
few established providers received I i t t le funding, regardless of the
population served by each e n t i t y . "' This resulted i n the perception
( ' 1 According t o DHS o f f i c i a l s , the decision to d i s t r i b u t e i n i t i a l funding i n t h i s
manner was a determination t h a t r e d i s t r i b u t i o n o f funding based on need would
r e s u l t i n reduced funding t o e x i s t i n g programs and hence cutbacks i n service t o
those already receiving services. Conversely, i t was easier to deny funding to
less developed a d m i n i s t r a t i v e e n t i t i e s who d i d not have c l i e n t s already r e c e i v i n g
DHS funded services, regardless of the need f o r such services.
that d i s p a r i t y e x i s t s between the a d m i n i s t r a t i v e e n t i t i e s since some
received s i g n i f i c a n t l y more funding per c a p i t a than others. Table 1
compares the o r i g i n a l d i s t r i b u t i o n of funding among the a d m i n i s t r a t i v e
e n t i t i e s and the d i s t r i b u t i o n as of t h i s f i s c a l year. The t a b l e reveals
that s i g n i f i c a n t per c a p i t a funding d i s p a r i t i e s continue to e x i s t ( e . g . ,
CODAMA ve r sus EVBHA ) .
TABLE 1
COMPARISON OF TOTAL BEHAVIORAL HEALTH FUNDING
FISCAL YEAR 1985- 86 AND FISCAL YEAR 1989- 90
Percentage Percentage Percentage
of State FY 1985- 86 of Total FY 1989- 90 of Total
Entity Population( a) Fund i ng Fund i ng Fund i ng Fund i ng
ADAPT 19.0
BH AC A 2.4
BHS 3.0
CCN 27.1
CODAMA 14.4
EVBHA 15.9
NACGC 9.2
SEABHS 4.7
IMBHA/ Direct
Contractors 1.9
Indian Res. 2.4
0 the r
Contractors
TOTAL l! lQAQQ
( a) Population f i g u r e s are based on 1986 estimates from t h e Arizona Department of
Economic Security and a r e f i g u r e s c u r r e n t l y used by DHS i n i t s funding
d i s t r i b u t i o n models.
Source: Auditor General analysis of DHS D i r e c t o r Approved Funding for
Fiscal Years 1985- 86 through 1989- 90 obtained from DHS Budget
O f f i c e .
Per capita funding equity - To address the per c a p i t a funding d i s p a r i t y
between administrative e n t i t i e s , DHS u t i l izes two d i f f e r e n t models to
d i s t r i b u t e new behavioral health funding. These models are designed to
gradually equalize per c a p i t a funding among the a d m i n i s t r a t i v e e n t i t i e s .
For the d i s t r i b u t i o n o f new monies for drug, a l c o h o l , and general mental
health programs, DHS uses a funding formula developed i n 1988. This
32
formula d i s t r i b u t e s a l l new monies by program plus an equal amount of the
p r i o r year funding to the a d m i n i s t r a t i v e e n t i t i e s as f o l l o w s :
r F i f t y percent to be d i s t r i b u t e d based on each a d m i n i s t r a t i v e
e n t i t i e s ' population
r Forty percent to be d i s t r i b u t e d based on each a d m i n i s t r a t i v e
e n t i t i e s ' population l i v i n g i n poverty ( as determined by three
poverty i n d i c a t o r s )
a Ten percent to be d i s t r i b u t e d based on each a d m i n i s t r a t i v e e n t i t i e s '
population which i s considered youth ( ages 5- 17) and e l d e r l y ( age 65
and over)
The second method used by DHS to d i s t r i b u t e new behavioral h e a l t h funding
i s the Comprehensive Mental Health Plan, completed by DHS i n January
1989. I n the plan, DHS estimated the t o t a l number of c h r o n i c a l l y
mental l y i l l and s e r i o u s l y emotional l y disturbed chi ldren for the e n t i re
State, and then divided t h i s t o t a l i n t o the 15 counties based upon each
counties' percentage of the t o t a l p o p u l a t i o n . " ' According to the
O f f i c e of Community Behavioral Health Services' A d m i n i s t r a t o r , a l l new
s t a t e monies appropriated for f i s c a l year 1989- 90 to CMI and C h i l d r e n ' s
Treatment and Prevention programs were d i s t r i b u t e d using the plan.
Both methods used to d i s t r i b u t e new funding are p r i m a r i l y intended to
achieve equal per c a p i t a funding between the a d m i n i s t r a t i v e e n t i t i e s .
Although the formula for drug, a l c o h o l , and general mental h e a l t h funding
incorporates s o c i a l i n d i c a t o r s of need ( poverty and age), f i f t y percent
of the formula i s based on p o p u l a t i o n . F u r t h e r , most of the t o t a l new
funding i s d i s t r i b u t e d based on population. For example, w i t h the
exception of some " a d m i n i s t r a t i v e adjustments," i n f i s c a l year 1989- 90,
approximately $ 12.6 m i l l i o n of the nearly $ 16.7 m i l l i o n i n new general
fund monies to behavioral h e a l t h was d i s t r i b u t e d using per c a p i t a
formulas. ( 2' According to DHS o f f i c i a l s , the goal behind the new
funding d i s t r i b u t i o n method i s to reach p a r i t y , whereby each e n t i t y ' s
funding i s commensurate w i t h i t s percentage of the S t a t e ' s population.
( 1 ) For example, because 19 percent o f the S t a t e ' s population r e s i d e s i n Pima County,
DHS assumed t h a t 19 percent of a l l CMIs i n the State r e s i d e i n Pima County.
( 2 ) " A d m i n i s t r a t i v e adjustments" are made by DHS o f f i c i a l s i n order t o fund new
programs o r t o address special needs o f some a d m i n i s t r a t i v e e n t i t i e s .
DHS Should Consider Allocating
Funds Based More on Needs
The funding system developed by DHS does not focus on the d i f f e r e n c e s i n
behavioral health needs of the geographic areas represented by the
a d m i n i s t r a t i v e e n t i t i e s . These d i f f e r e n c e s can be measured e i t h e r
d i r e c t l y , or i n d i r e c t l y , and used to make funding decisions. A t least
two other states now t i e funding more d i r e c t l y to need.
Differences among e n t i t i e s - Behavioral h e a l t h needs may vary
s i g n i f i c a n t l y among d i f f e r e n t geographic service areas. According to the
National I n s t i t u t e of Mental Health ( NIMH), current l i t e r a t u r e suggests
s i g n i f i c a n t r e l a t i o n s h i p s between the occurrences of mental disorder and
such s o c i a l i n d i c a t o r s as low median family income and high family
d i s o r g a n i z a t i o n ( few husband and w i f e family househo1ds).~" As
i l l u s t r a t e d i n Table 2 ( page 351, a comparison of one v a r i a b l e ( poverty)
shows the intense d i f f e r e n c e s t h a t can e x i s t among areas. ( e . g . , Only
2.4% of the S t a t e ' s population reside on the Navajo r e s e r v a t i o n , w h i l e
9.3% of a l l Arizonans l i v i n g i n poverty reside there. This means that
39.3% of the r e s e r v a t i o n p o p u l a t i o n l i v e i n p o v e r t y . )
( 1 " Needs Assessment; I t s Future," U. S. Department o f Health and Human Services,
National I n s t i t u t e of Mental Health, 1988.
E n t i t y or
Geographic Area
Navajo Reservation
Gila/ E. Pinal
BHACA
CODAMA
BHS
SEABHS
NACGC
ADAPT
EVBHA
CCN
TOTAL
Population
TABLE 2
COMPARISON OF POVERTY RATES AMONG
BEHAVIORAL HEALTH SERVICE AREAS
Percentage of
State Population
2.4
1.9
2.4
14.4
3.0
4.7
9.2
19.0
15.9
27.1 m
Population
In Poverty
E n t i t y Percentage
of Total
State Populations
In Poverty
Percentage of
Each E n t i t y ' s
Population
In Poverty
39.3
14.9
14.8
14.1
13.5
12.9
11.6
1 0 . 3
6.5
5.3
Source: DHS Funding formula for f i s c a l year 1989- 90
Specific measures f o r determining needs are a v a i l a b l e - S p e c i f i c
measurements t o e s t a b l i s h and fund behavioral health needs are a v a i l a b l e
to DHS. Need driven funding d i s t r i b u t i o n models are c u r r e n t l y used by
other s t a t e s .
Both d i r e c t and i n d i r e c t measurement of needs for behavioral health
services are a v a i l a b l e to DHS. The d i r e c t measurement of needs for
services involves f i e l d surveys i n which information about current or
past mental health problems i s obtained from a sample of community
residents. Whi l e such surveys are considered to be the best measurement
of need, they are di f f i c u l t and expensive to conduct. According to an
NIMH o f f i c i a l , these surveys can cost $ 150 to $ 300 per i n t e r v i e w
conducted.
I n d i r e c t measurements of need i n v o l v e e s t i m a t i n g need for services from
already a v a i l a b l e data such as s o c i a l i n d i c a t o r s ( demographic data) or
from records of c l i e n t s already receiving treatment. According t o a NIMH
o f f i c i a l , such subpopulation s o c i a l i n d i c a t o r s as income l e v e l s ,
employment l e v e l s , e t h n i c i t y , gender, age, m a r t i a l s t a t u s , divorce rates,
and suicide rates can be used to determine the r e l a t i v e behavioral health
needs of an area. In f a c t , i n i t s recent reports on needs assessment,
NIMH concluded that w i t h appropriate v a l i d i t y and r e l i a b i l i t y , i n d i r e c t
measures provide a comparatively low- cost, easy- to- use, quick, and
objective procedure for e s t i m a t i n g s e r v i c e requirements. A d d i t i o n a l l y ,
while not as accurate as d i r e c t measurements, they are c l e a r l y b e t t e r
than other procedures c u r r e n t l y i n use.
Other states - A t least two other s t a t e mental health a u t h o r i t i e s are
using i n d i r e c t measurements of need to determine a l l or a p o r t i o n of
t h e i r behavioral health funding."' Through an analysis of admissions
to mental health f a c i l i t i e s w i t h i n the s t a t e , New Jersey has
( 1 Based on the r e s u l t s o f a NIMH funding d i s t r i b u t i o n study, these were the only two
states we were able t o i d e n t i f y as using measurements of need to determine
behavioral health funding. According t o NIMH o f f i cia1 s, pol i ti cal pressures t o
d i s t r i b u t e behavioral health monies based on such factors as population and
h i s t o r i c a l funding patterns have discouraged most s t a t e mental health a u t h o r i t i e s
from using measurements of need to determine the d i s t r i b u t i o n of funding.
developed over 85 s o c i a l i n d i c a t o r s such as poverty, broken homes, and
e t h n i c i t y upon which to determine the d i s t r i b u t i o n of funding. Under
t h i s system, each s o c i a l i n d i c a t o r i s given a score based upon i t s
established association to p a r t i c u l a r behavioral health needs. These
weighted i n d i c a t o r s a r e then applied to each a r e a ' s population to
e s t a b l i s h funding. According to a New Jersey o f f i c i a l , weighting the
indicators based upon t h e i r association to p a r t i c u l a r needs allows the
formula to more accurately determine and fund s p e c i f i c needs. ( For
example, reported occurrences of c h i l d abuse would receive s i g n i f i c a n t
weighting when d i s t r i b u t i n g funding for behavioral health services to
c h i l d r e n . ) Through s t a t u t o r y requirements, Minnesota d i s t r i b u t e s
two- thirds of a l l new mental health funding through poverty i n d i c a t o r s
r e l a t e d t o the number of i n d i v i d u a l s r e c e i v i n g Aid to Fami I ies w i t h
Dependent Children ( AFDC) b e n e f i t s .
The Department of Health Services should i d e n t i f y s p e c i f i c measurements
of behavioral health needs and make greater of use them i n the funding
d i s t r i b u t i o n process.
OTHER PERTINENT INFORMATION
During the audit we developed other p e r t i n e n t information regarding
concerns w i t h the a d m i n i s t r a t i v e e n t i t y system, the Behavioral Health
Management lnformat ion System ( BHMIS), and the del ivery of behavioral
health services by other State agencies.
Concerns about the
Administrative Entity System
During our audit we i d e n t i f i e d concerns regarding the a d m i n i s t r a t i v e
e n t i t y system. The department has not been able t o e s t a b l i s h a statewide
e n t i t y system because there are few organizations which are able to
perform as an e n t i t y .
The a d m i n i s t r a t i v e e n t i t y system was designed to administer and provide
for behavioral health services w i t h i n geographic areas statewide. DHS
contracts w i t h one organization i n each area to perform a d m i n i s t r a t i v e
functions such as c o n t r a c t i n g w i t h d i r e c t service p r o v i d e r s , m o n i t o r i n g
contracts, and developing local needs assessments. According to DHS, the
advantages of the system a r e t h a t l o c a l involvement and decisions b e t t e r
address local behavioral health needs which may vary by area. Further,
the department f e l t t h a t c o n t r a c t i n g w i t h a d m i n i s t r a t i v e e n t i t i e s to
administer services would r e s u l t i n a d m i n i s t r a t i v e e f f i c i e n c i e s and
f l e x i b i l i t y .
D i f f i c u l t i e s implementing the e n t i t y system - The department has had
d i f f i c u l t y e s t a b l i s h i n g a statewide e n t i t y system. For the past three
years the geographic area consisting of G i l a and East Pinal counties has
operated without an a d m i n i s t r a t i v e e n t i t y . I n i t i a l l y DHS contracted w i t h
an organization named the Intermountain Behavioral Health Association.
However, a d m i n i s t r a t i v e i n e f f i c i e n c i e s and f i n a n c i a l problems resulted i n
DHS rescinding i t s c o n t r a c t . DHS contracts d i r e c t l y w i t h the s i x service
providers i n the area.
The d i v i s i o n has not been successful i n r e t u r n i n g t h i s area t o the e n t i t y
system. The d i v i s i o n has encouraged at least one e n t i t y t o expand i t s
service area and include these counties. However, the e n t i t y chose not
to expand. In a d d i t i o n , no other agency has come forward i n the area to
compete for a c o n t r a c t . C u r r e n t l y , e f f o r t s are being made to organize
interested d i r e c t service providers and others to develop an organization
capable of serving as an e n t i t y .
DHS has also had d i f f i c u l t y i n some r u r a l areas e s t a b l i s h i n g
a d m i n i s t r a t i v e e n t i t i e s which perform s t r i c t l y e n t i t y functions. Two
administrative e n t i t i e s i n r u r a l Arizona also provide d i r e c t services.
Before the e n t i t y system was created the two a d m i n i s t r a t i v e e n t i t i e s were
d i r e c t service p r o v i d e r s . The organizations were selected to become
administrative e n t i t i e s but were also given a waiver to continue to
provide services because few s e r v i c e p r o v i d e r s are a v a i l a b l e i n those
r u r a l areas. DHS i s c u r r e n t l y t r y i n g to have the two a d m i n i s t r a t i v e
e n t i t i e s move away from providing d i r e c t services and have the
a d m i n i s t r a t i v e e n t i t i e s serve s o l e l y i n an a d m i n i s t r a t i v e capacity.
Being a d i r e c t service provider c o n f l i c t s w i t h the e n t i t y ' s r o l e as an
administrator and monitor of services d e l i v e r e d . The e n t i t y cannot serve
as an independent oversight agency when reviewing i t s own records of
services. This i s a major problem w i t h one of the a d m i n i s t r a t i v e
e n t i t i e s which i n f i s c a l year 1988- 89 provided 81 percent of the services
i n i t s area. ( 1 )
Furthermore, an e n t i t y ' s o b j e c t i v i t y i n funding decisions may be weakened
when i t i s a l s o a p r o v i d e r . E n t i t i e s are responsible f o r c o n t r a c t i n g f o r
services and a l l o c a t i n g resources. According to one e n t i t y d i r e c t o r ,
a l l o c a t i o n decisions o f f e r the greatest p o t e n t i a l for charges o f c o n f l i c t
of i n t e r e s t . Because resources are l i m i t e d , there i s the p o t e n t i a l for
an e n t i t y to favor i t s own programs when c o n t r a c t i n g f o r services and
( 1 ) The 81 percent f i g u r e i s based on the a l l o c a t i o n of contract monies t o service
providers w i t h i n the e n t i t y and n o t t h e a c t u a l number o f s e r v i c e u n i t s provided.
a l l o c a t i n g funds. One service provider contends that one e n t i t y
contracts w i t h i t s e l f for a l l the d i r e c t services i t o f f e r s and then
approaches independent providers on a " take i t or leave i t " basis for the
remaining services needed.
The State may be a t r i s k because the number of organizations competing
for DHS e n t i t y contracts i s l i m i t e d . For the current a d m i n i s t r a t i v e
e n t i t y c o n t r a c t , only the e x i s t i n g e i g h t a d m i n i s t r a t i v e e n t i t y
organizations responded to DHS' request for proposal. Consequently, the
State may be a t r i s k i f an e n t i t y f a i l s to perform i t s r e s p o n s i b i l i t i e s .
As occurred i n the GilaIEast Pinal county area, there may be no other
organizations capable of performing as an a d m i n i s t r a t i v e e n t i t y i f an
e x i s t i n g e n t i t y f a i l s to perform i t s contracted d u t i e s or discontinues
operations. DHS, l i k e w i s e , may have d i f f i c u l t y assuming the
r e s p o n s i b i l i t y , e s p e c i a l l y i n the urban areas where a d m i n i s t r a t i v e
e n t i t i e s have numerous contracts and programs to oversee.
Behavioral Health
Management Information System
BHMIS may not meet l e g i s l a t i v e goals. The computer hardware and software
may not be adequate to meet the demands of BHMIS because of poor
processing times. In a d d i t i o n , the department i s unable to use BHMIS
data for evaluating programs a t t h i s time and complete tracking may not
be possible without county and other agencies' data.
In 1986 the L e g i s l a t u r e required the D i v i s i o n of Behavioral Health
Services to " contract for the design and develop a computer system to
track and monitor c h r o n i c a l l y mentally i l l c l i e n t s and to provide the
d i v i s i o n w i t h information on a l l behavioral health programs."
L e g i s l a t i o n c a l l e d f o r the system to be implemented on a statewide basis
by no l a t e r than July 1, 1987. The Legislature extended the deadline to
July 1, 1988, and then to January 1, 1990. The system went on- line June
1989.
Inadequate hardware system - Because DHS purchased the computer and
software systems before BHMIS was f u l l y designed, the e x i s t i n g hardware
may not be capable of handling BHMIS requirements. I n i t i a l l y , DHS
contracted for a general system design. The study recommended computer
hardware and DHS subsequently bought a system f o r BHMIS. However, the
general system design was n o t a d e t a i l e d design f o r BHMIS, and
consequently, DHS s t a f f had t o develop the d e t a i l e d design. The
s e l e c t i o n of the hardware and software f o r BHMIS may have been premature,
given that the f i n a l systems design was not done u n t i l a f t e r those
resources were purchased.
The current computer system may be inadequate f o r BHMIS requirements. A t
present, batch t r a n s a c t i o n times and on- l ine processing are extremely
slow. According t o the program a d m i n i s t r a t o r , during system t e s t i n g
i n i t i a l t r a n s a c t i o n times f o r 5,000 records i n batch r e p o r t i n g mode took
approximately eleven hours or 7.9 seconds per t r a n s a c t i o n . Transaction
time has reportedly been reduced to 2.8 seconds per t r a n s a c t i o n , but the
goal i s less than one second. DHS expects t h a t about 80 percent of a l I
transactions w i l l be processed through batch r e p o r t i n g . Because the
system has only begun o p e r a t i o n , i t i s too e a r l y to t e l I how batch
t r a n s a c t i o n times w i t l a f f e c t system processing and c o n t r a c t o r payments.
On- line processing response time also appears to be very poor.
Reportedly, during the t e s t i n g phase o n - l i n e processing was o r i g i n a l l y
taking ten to twelve minutes per t r a n s a c t i o n . Later during the t e s t i n g
phase, DHS reduced o n - l i n e processing time t o a range of e i g h t seconds to
one minute per t r a n s a c t i o n . The goal i s ten seconds or less per
transaction. Follow- up i n t e r v i e w s a f t e r implementation revealed that
on- line processing time i s s t i l l a problem. One e n t i t y s t a f f person said
that they have experienced automatic l o g - o f f s while w a i t i n g for
transactions t o process completely. The terminal i s a u t o m a t i c a l l y logged
o f f i f the enter key i s not pressed w i t h i n approximately 10 minutes.
Because some t r a n s a c t i o n s are not completed w i t h i n 10 minutes, terminal
operators are n o t able to enter more data and consequently are logged
o f f . As the database grows and the number of users on the system
increases, the problems associated w i t h poor on- line processing times are
l i k e l y to increase.
The program a d m i n i s t r a t o r a t t r i b u t e s much of the problem t o the
inadequacy of the hardware and the computer requirements of the
software. He questions whether the current hardware w i l l be adequate
beyond a year of operation. According to the department, s t a f f has
a c t i v e l y sought ways to overcome the l i m i t a t i o n s of the hardware and
software. They have worked w i t h the vendors to develop s o l u t i o n s to
problems they have encountered. In a d d i t i o n , they have recently
completed an extensive series o f t e s t s using an upgraded computer. DHS
reports that s i g n i f i c a n t improvements may be possible w i t h upgraded
equipment. However, i f the improvements are not a t t a i n e d , DHS w i l l then
have to consider various opt ions i n c l u d i n g reduced data co l lect ion,
r e s t r i c t e d access t o on- line r e p o r t i n g , and changes o r reduction i n
information r e p o r t i n g .
Evaluation component - Although an important use of BHMIS i s to
evaluate c l i e n t progress and program e f f e c t i v e n e s s , the program
administrator estimates i t w i l l be at least twelve months before v a l i d
research can begin. DHS must f i r s t e s t a b l i s h and f i l l s t a f f p o s i t i o n s
and develop q u a l i t y assurance plans to ensure the i n t e g r i t y o f the c l i e n t
assessment data.
Val i d research i s dependent on accurate and timely data. Providers must
complete a c l i e n t assessment for each registered c l i e n t seen. The
assessment determines the c l i e n t ' s functional a b i l i t y considering
psychological, s o c i a l , and occupational categories. This assessment must
be completed at the time of intake, every 90 days t h e r e a f t e r , and when
the c l i e n t i s discharged. This data i s reported to BHMIS. However, i n
many instances paraprofessionals w i l l be completing the assessment forms
due to the nature of the service p r o v i d e r ' s program. They may not have
the q u a l i f i c a t i o n s to accurately assess the c l i e n t s . For t h i s reason,
DHS w i l l have to provide appropriate t r a i n i n g . DHS has o f f e r e d l i m i t e d
t r a i n i n g to date but has plans to provide a d d i t i o n a l t r a i n i n g i n the
f u t u r e . In a d d i t i o n , professional s t a f f must also be able and w i l l i n g to
accurately complete the assessment form. Ensuring accurate and timely
data w i l l require an intense q u a l i t y assurance e f f o r t by DHS i n c l u d i n g
auditing provider records.
Aside from c l i e n t assessment data, DHS mas made considerable e f f o r t to
ensure data i n t e g r i t y . They have developed a q u a l i t y users manual, have
conducted several t r a i n i n g sessions on BHMIS and have developed extensive
data e d i t s that prevent many e r r o r s from g e t t i n g i n t o the data base.
Although l e g i s l a t i o n c a l l s for BHMIS t o t r a c k c h r o n i c a l l y mentally i l l
c l i e n t s , BHMIS may not be able to completely track some i n d i v i d u a l s who
receive county services instead of or i n a d d i t i o n t o State services.
BHMIS data i s c o l l e c t e d from service providers under contract w i t h DHS or
a d m i n i s t r a t i v e e n t i t i e s . However, some c h r o n i c a l l y mentally i l l may also
receive services from the counties and other s t a t e agencies. These
services are not reported to BHMIS, and therefore, tracking of services
may be incomplete. DHS f e e l s t h a t t o c o l l e c t such information from other
agencies exceeds i t s l e g i s l a t i v e mandate and would r e q u i r e f u r t h e r
l e g i s l a t i v e a o t h o r i t y . The problem could be addressed i n part by
i n t e g r a t i n g State and county systems as recommended i n Finding I ( see
pages 7 through 15).
Service Providers Must Contend
With M u l t i p l e State Agencies
In a d d i t i o n t o DHS, o t h e r S t a t e agencies provide behavioral health
services. These agencies include the Department ~ f Economic Security
( DES), the Department of Correct ions ( DOC), the Department of Education
( DOE), and the Supreme Court as administrator o f juveni le probation
programs. Many of these agencies expend s u b s t a n t i a l monies on behavioral
health services. Although these agencies have large programs w i t h
s i m i l a r o r r e l a t e d services, there i s l i t t l e coordination between
agenc i es .
M u l t i p l e agencies c o n t r a c t i n g f o r services adversely a f f e c t s service
providers and c l i e n t s . Service providers we interviewed reported that
they have contracts w i t h two or more s t a t e agencies, as well as with
counties. One s e r v i c e p r o v i d e r has contracts w i t h the administrative
e n t i t y , DES, the Supreme Court, and DOC. Another provider has contracts
w i t h two counties, DES, and the a d m i n i s t r a t i v e e n t i t y . Service providers
noted that each agency has i t s own record- keeping requirements and
conducts i t s own f i n a n c i a l a u d i t s , program evaluations, and licensing
reviews. One s e r v i c e p r o v i d e r reported t h a t as a r e s u l t o f t h e v a r i o u s
requirements, h i s operation was subject to 24 a u d i t s per year by two
a d m i n i s t r a t i v e e n t i t i e s i n a d d i t i o n t o 20 other a u d i t s and l i c e n s i n g
reviews. The provider has one f u l l - t i m e employee to a s s i s t e n t i t y and
agency personnel. Consequently, s e r v i c e p r o v i d e r s reported that
professional time w i t h c l i e n t s i s reduced because of time they must
devote to records and r e p o r t s t h a t vary from agency to agency. They
claim the cost of services i s increased due to m u l t i p l e agency
involvement.
* - -* - o- ARIZONA DEPARTMENT OF HEALTH SERVICES
iiii, r.\ ron of' Behavioral Health S e r ~ ~ i c r . ~
ROSE MOttOK[). (; OC'EK& OK
r m WII. I. I.~ VS. I) IKECTOK
November 6, 1989
Douglas R. Norton
Auditor General
2700 N. Central Ave.
Suite 700
Phoenix, A2 85004
Dear Mr. Norton:
The ADHSIDivision of Behavioral Health Services has reviewed the revised preliminary
draft of the performance audit report dated October 25, 1989. Our written response t o
that report is attached and reflects commentary by Boyd Dover, Assistant Director,
Division of Behavioral Health Services, the Division management and myself.
Thank you for the opportunity to review and to respond to the preliminary draft.
Sincerely, r
J
Ted Williams, Director
Arizona Department of Health Services
The Department of Health Services is An Equal Opportunity Affirmative Action Employer. All qualified men and
wom, en, including the handicapped, are encouraged to participate.
Birch Hall 41 1 North 24th Street Phoenix, Arizona 85008
INTEGRATION OF STATE AND COUNTY BEHAVIORAL HEALTH PROGRAMS IS
NEEDED.
RECOMMENDATION
THE STATE SHOULD DEVELOP A LONG RANGE PLAN TO ESTABLISH A STATE RUN,
BEHAVIORAL HEALTH PROGRAM THAT INTEGRATES STATE AND COUNTY
BEHAVIORAL HEALTH PROGRAMS. A SINGLE MANAGEMENT AUTHORITY AND
FUNDING STREAM SHOULD BE KEY ELEMENTS OF THE INTEGRATED SYSTEM.
Discussion
Finding One and the resultant recommendation is based on several observations discussed
in the audit report. They are as follows:
1) The existence of separate State and County behavioral health delivery systems
has resulted in fragmented and uncoordinated services, thereby creating an
inequitable distribution of available resources to individuals with similar needs.
2) The existence of separate delivery systems has resulted in poor County- State
relations prompting poor communications, unmet expectations, disproportionate
financial burden to the counties and lack of clear state direction to the State
established Entity System.
3) Separate systems have led to fragmented services which, in turn, have reduced
the quality and efficiency of those services.
4) The creation of a single management authority and a single funding stream are
considered critical to establishing an integrated delivery system approach. Such
can be accomplished at either the State or County level. Wisconsin and Ohio are
referenced by the report as good examples of county operated systems. Given
the lack of county resources in Arizona, the report concludes that for Arizona, a
state administered system is appropriate. AHCCCS, the state indigent health
care program is cited as the Arizona precedent for integrating state and county
services.
RESPONSE
The Division of Behavioral Health Services ( DBHS) management concurs with the report's
assessment that the existing service delivery system is fragmented and that " like"
services are not always well coordinated between State and County programs. However,
some of the information presented as substantiation for that assessment is in error. For
example, County expenditures for behavioral health services are cited as being nearly
equal to total DBHS expenditures for community based services delivered statewide
through the administrative entities and SAMHC. Specifically, the report states on page
seven that in FY 1988 Counties s nt approximately $ 24 million dollars for behavioral
health services while DBHS spent r. 20.9 million in State funds and $ 4.9 million in federal
* funds that same year. In actuality, DBHS for FY 1988, spent $ 50.4 million dollars for the
* Auditor's Note: The report has been revised to reflect the correct amount
of $ 35.5 mill ion for DBHS' FY 1988 expenditures.
provision of community based services. Furthermore, the referenced county
expenditures for behavioral health services includes institutional services provided a t
Maricopa Medical Center and Kino Community Hospital. Consequently, one could
legitimately argue that the total State expenditure should include the approximately 30
million dollars expended to operate the Arizona State Hospital during FY 1988 thus
bringing total DBHS expenditures to $ 80 plus million dollars.
The information presented as a justification for Finding One is subjective and/ or lacking
in verifiable data references. For example, county officials are quoted as professing
total lack of knowledge regarding the entity system or its activities. How this
information was gathered and whether the information reflects one officials opinion or
that of several is not indicated. Commentary by the authors of this report on the
negative experiences by two clients seeking behavioral health services from t h e S t a t e
administered system, implies that these occurrences indicate the norm rather than the
exception. Yet the report does not reference the thousands of clients who repeatedly
have received adequate care through the existing delivery system. In neither of these
two examples is the number of individuals reviewed or interviewed identified.
The Division of Behavioral Health Services, ADHS, is very interested in aggressively
moving toward a statewide system with a single authority and funding stream, as
suggested by this report. The September 1989 Arizona Comprehensive Mental Health
Services Plan, prepared by DBHS and the Governor appointed Mental Health Planning
Council, supports this concept as a means for establishing a more efficient and
consolidated service delivery approach. Many of the goals contained in this Plan reflect
that direction and address specific strategies for achieving such a systems approach. The
Division is also giving serious consideration to the introduction of legislation in the
upcoming session supporting such an approach and has raised the issue with the Governors
Task Force on the Serious Mentally I11 for consideration and recommendation.
FINDING I1
DHS IS NOT ADEQUATELY MONITORING THE PERFORMANCE OF ADMINISTRATIVE
ENTITIES
RECOMMENDATION
DHS' ANNUAL SITE VISITS AND REPORTS SHOULD:
* FOCUS ON CONTRACT REQUIREMENTS; * BE MORE COMPREHENSIVE, UNIFORM, AND TIMELY;
* INCLUDE FOLLOW- UP VISITS TO DETERMINE WHETHEK
RECOMMENDED CHANGES HAVE BEEN IMPLEMENTED.
RESPONSE
The DBHS, since its inception, has been conducting annual site visits of Community
Behavioral Health programs which focus on adherence to contract requirements. An
existing requirement checklist is employed which measures contractor performance
based on agreed to stipulated requirements and timelines on a contract by contract
basis. The checklist states each contract requirement, date the requirement is due, the
date submitted and any approval notation.
All DBHS annual site visits are performed in accordance with OCBHS established
procedures. Doing so ensures comprehensiveness, uniformity and timeliness. The due
date for FY 89- 90 site visits reports was established as October 1, 1989. Site visits for
FY 1989 have been completed, reports have been finalized and follow- up meetings have
been scheduled for the remainder of this year. These follow- up visits will be documented
and submitted as part of agency final trip reports.
RECOMMENDATION
DHS SHOULD CONDUCT A GREATER NUMBER OF SERVICE VERIFICATION
REVIEWS. THESE REVIEWS SHOULD ALSO BE MORE THOROUGH.
RESPONSE
DBHS will continue to conduct service verification reviews at the time of site visits in
accordance with established procedures. Agencies that are experiencing problems in
data recording are reviewed again at follow up visits for the purpose of verifying
corrective actions. Additional visits may be scheduled to verify compliance on an as
needed basis. A final audit is also completed by the DHS auditors and where
overpayments or undocumented payments are found, reimbursement is requested. A
hearing or other legal action follows, if the reimbursement is challenged.
RECOMMENDATION
DHS SHOULD IMMEDIATELY FOLLOW- UP ON ALLEGATIONS OF AGENCY
MISCONDUCT AND SHOULD PROVIDE TO THE ADMINISTRATIVE ENTITIES WRITTEN
REPORTS OF ITS FINDINGS. SITE VISITS SHOULD BE USED TO DETERMINE
WHETHER ADMINISTRATIVE ENTITIES HAVE CORRECTED THE PROBLEM.
RESPONSE
OCBHS has always investigated allegations of misconduct as they have been identified.
The rapidity of the response is based on the seriousness of the complaint.. Allegations of
agency misconduct are investigated by OCBHS within one week of notification.
Allegations involving client abuse or mistreatment are investigated within 24 hours of
notifications. All investigations are documented on field trip reports. If program
investigations prove misconduct, the matter may be referred to Adult or Child
Protective Services, Behavioral Health Licensing, appropriate Law enforcement
agencies, or the Department's Special Investigation unit for appropriate follow up. Any
findings are shared with Administrative Entities, as appropriate, and corrective action is
initiated and verified.
RECOMMENDATION
DHS MANAGEMENT SHOULD MAKE MONITORING OF ADMINISTRATIVE ENTITY
PERFORMANCE A PRIORITY AND SHOULD PROVIDE CLEAR DIRECTION TO STAFF
AS TO HOW MONITORING IS TO BE ACCOMPLISHED.
RESPONSE
DBHSIADHS management has always considered monitoring of Administrative Entities as
the highest priority for the Office of Community Behavioral Health. Existing OCBH
Program staff vacancies will be filled as quickly as possible so that OCBHS staffing will
be at full strength. Existing Quality Assurance procedures and program procedures will
be strictly adhered to by program staff. Standards and procedures are updated on an as
needed basis and periodic staff meetings are utilized for discussion of program direction,
clarification of procedures and site visit findings, when appropriate.
RECOMMENDATION
THE OCBHS PROGRAM APPROVAL STANDARDS, AND POLICIES AND PROCEDURES
MANUAL SHOULD BE UPDATED IN ORDER TO BE USED AS EFFECTIVE
MONITORING DEVICES OF ADMINISTRATIVE ENTITIES.
RESPONSE
OCBHS Program Approval Standards are revised periodically as dictated by changes in
programs and services. The OCBHS Policies and Procedures Manual is also continually
under revision to reflect changing State and Federal monitoring requirements.
FINDING I11
CHANGES IN CONTRACTS COULD RESULT IN IMPROVED SERVICES
RECOMMENDATION
THE DEPARTMENT OF HEALTH SERVICES SHOULD EVALUATE THE PERFORMANCE
CONTRACT SYSTEM AS DEVELOPED BY COLORADO AND CONSIDER ADOPTING
THOSE PROVISIONS DEALING WITH THE DEVELOPMENT OF SERVICE PROVISION TO
TARGETED POPULATIONS, ASSESSMENT OF PENALTIES FOR NON- PERFORMANCE,
AND QUALITY ASSURANCE.
RESPONSE
The Report suggests that DBHS evaluate Colorado's contracting approach as a possible
remedy for its own contracting process deficiencies. The Report stipulates that the
Division's contracting approach is deficient in that contracts do not clearly define who is
to receive services, establishes no penalties for non- performance, and does not contain
specific requirements for quality assurance.
As a general comment on the audit team's concerns about the contracts, the report
seems to ignore that the development of the service levels set forth in the contracts
follows an extensive needs assessment at the local levels. Since the service levels are
set
forth in the contracts, it is difficult to understand how the audit team concludes that
" the administrative entities determine who will receive available services." I t is clear
that DHS contracts are based on provision of service levels versus target population as
defined by the audit team. I t is not clear that utilization of target populations would
result in better overall service to the population. In either approach, the system must
provide treatment to those who present for treatment and the " worried well" have equal
opportunities under either system. Finally, the audit team offered no comment on a
recommended approach to converting to a target population system nor did they discuss
the practical aspects of doing so.
The facts are that contracts do clearly define which target populations are to be
served. The Division ( DBHS) recently provided each Administrative Entity with a
document that provides baseline data ( i. e., population projections by age, sex, and target
subgroup) to use in developing projections for the various target groups as to who is to
receive what services within their primary services area. Entity contract language
stipulating that needs assessment must be part of their annual plan of services has been
clarified. Collaborative efforts are presently underway between the Office of Planning,
Rules and Grants and the Office of MIS Research and Evaluation to refine the baseline
database for the purpose of providing additional demographic data for each target group
such as income, education, employment status, household size, etc. DBHS anticipates
that this data will be available to the Entities for their FY 1991 planning cycle.
The DBHS is committed to implementing an externally administered quality assurance
program to assess treatment approaches. The Arizona Comprehensive Mental Health
Services Plan calls for the establishment of a Quality Assurance program during FY 1990,
to be operational in FY 1991 ( See Goal S. I., page 86). OCBHS has developed and
published a Request for Proposal seeking qualified professionals to assist in this
endeavor.
Non- performance on the part of Administrative Entities for contracted services not
provided requires the return to DBHS of any dollars allocated for services not provided.
Consistent underserving of a target population or consistent non- provision of contracted
services will result in OCBHS evaluating alternative methods of providing the applicable
services.
The statement that " there is no penalty for those administrative entities that exceed this
provision" is not true. The penalty for exceeding the 20 percent provision is nonpayment
for those services which exceed the contract provision. Further, the audit team does not
recognize that increased payment is not made for overproduction.
The audit team's comment that Arizona contracts do not contain penalty provisions for
untimely financial reporting is inaccurate. General Provisions 16 b. and c. provide for
withholding of or adjusting payments if reports are not timely and accurate or if
compliance problems are discovered. Such penalty provisions are more effective than
relatively small " fines."
FINDING IV
DHS COULD IMPROVE ITS METHODS OF ALLOCATING FUNDS BY BASING FUNDING
MORE ON NEEDS ASSESSMENTS.
RECOMMENDATION
THE DEPARTMENT OF HEALTH SERVICES SHOULD IDENTIFY SPECIFIC
MEASUREMENTS OF BEHAVIORAL HEALTH NEEDS AND MAKE GREATER USE OF
THEM IN THE FUNDING DISTRIBUTION PROCESS.
RESPONSE
The Division is currently allocating funds according to population, poverty indicators and
by age of the target population. In so doing, historical funding disparities, although still
existent, are being minimized. Important to note is that those disparities existed prior to
the Entity system- not because of it. The Report, on page 36 advocates the use of social
indicators data as a measure of need. As previously stated, efforts are consistently
underway to expand the Division's data- base to include such indicators. At this time, the
Division continues to rely on the needs assessment data prepared by Peat, Marwick and
Main which was based on their extensive national experiences in developing needs
assessment data. The Division is continually updating that basedata as is reflected in the
needs assessment data contained in the September 1989 Comprehensive Mental Health
Services Plan.
I t is interesting to note that Arizona was selected as one of the States to participate in
the health block grant compliance reviews conducted in FY 1988 by the U. S. Department
of Health and Human Services. Regarding Arizona's approach to needs assessment, the
finding of the report states " The State of Arizona uses an impressive array of tools in
identifying populations in need of behavioral health services, Among these a r e t h e needs
assessments included in the annual report and budgets submitted by contractors to the
identified Administrative Entities. Those Administrative Entities, in turn, prepare
annual requests for funding that include assessments of needs in their geographic areas.
These requests are submitted to DBHS for use in the planning process."
FINDINGS: OTHER PERTINENT INFORMATION
The Report covers three additional areas of concern: the Administrative Entity System,
the Behavioral Health Management Information System ( BHMIS), and the delivery of
behavioral health services by other State agencies.
RESPONSE
With respect t o t h e Entit