State plans overhaul of mental health care
            Amanda J. Crawford
            The Arizona Republic
            Jan. 21, 2007 12:00 AM

State health officials have decided to revamp Maricopa County's public behavioral health system to address decades-long concerns about the way the
mentally ill receive treatment.

The new plan would provide more health care choices for the 70,000 county residents who use the system and demand greater accountability for those who  provide services.

Instead of extending the contract of ValueOptions, the private firm that oversees the system, the state will accept bids for a new provider. The move
comes as ValueOptions and the state health department face new criticism  from a state audit and a court-appointed monitor.

A request for proposals for the almost $1.4 billion, three-year contract reveals a plan for significant changes in the system.

The contract, the largest of its kind in the nation, already has sparked  intense competition. ValueOptions is likely to face challenges from three or
four other health care companies.

Rocky history

The state is required by law to provide services for the seriously mentally ill, but a lack of resources or adequate services has long plagued the
system. In 1981, advocates for the mentally ill sued the state in Arnold vs.Sarn.

The state still is subject to oversight by the court, which regularly monitors its progress in Maricopa County in serving about 18,000 adult
residents with serious mental illness, such as schizophrenia or bipolar  disorder.

Arizona was one of the first states in the nation to use managed care to oversee its mental health system, with six regions overseen by private firms
called Regional Behavioral Health Authorities. The state took over the system when the previous contractor, ComCare, filed for bankruptcy
protection. In 1998, the state turned to Virginia-based ValueOptions, the first for-profit authority in Maricopa County.

Since then, the company has faced complaints about its accessibility and quality of care. Still, the company's contract with the state was renewed in
2001 and again in 2004.

Two years ago, the court monitor in the class-action suit delivered a scathing report that concluded the system had gotten worse despite an infusion of more than $230 million since 2000. And in a new court audit  released earlier this month, the court found improvement in about half of
the areas it examined but declines in the other half.

Court monitor Nancy Diggs said ValueOptions does a good job for some clients  but expressed concern that the company focuses more on making things look good on paper than on the quality of its services.

She also said she is concerned about high turnover at the company, finding  that about half of the priority clients had a new case manager every six
months.

ValueOptions' Dr. Don Fowls, a senior adviser to the chief executive officer, points to an audit the company commissioned that showed it is on
par with one of the model programs in the country. He said the fact the state is seeking new bids is not an indication that ValueOptions was doing
anything wrong.

"I think in terms of the public sector and managing these kind of programs,  (Value- Options) clearly is the national leader," he said.

Changing the system
One of the proposed changes addresses a problem found in a fall audit conducted by the state Auditor General's Office. Although it did not find a
major misuse of funds, the audit recommended that the state strengthen  financial oversight of the system.

ValueOptions also operates 24 clinics for the seriously mentally ill. The audit found that the company paid itself at a far greater rate - sometimes
more than twice as much - than it paid others for the same services.

ValueOptions said it had higher costs, in part, because of the Arnold  lawsuit. But Fowls agrees that having the behavioral health authority also
operate as a service provider creates a system ripe for conflict.

Under the new contract, there will be more price controls and the authority  will not operate any clinics itself, which could also improve oversight,
said Broadway, the state deputy director.

Broadway said will infuse the system with competition and allow consumers to  switch networks if they are unhappy.

Ultimately, they would have more choice over who treats them.

Diggs called the changes in the new contract terrific ideas that she hopes  could lead to long-needed improvements.

Sherri Walton, vice president of the Mental Health Association of Arizona,  praised the state for listening to the community in making the changes.

But the plaintiffs' attorney in the Arnold suit remains skeptical. Anne  Ronan of the Arizona Center for Law in the Public Interest said she believes
the state rejiggers the system too much and should instead consider longer  contracts to provide stability in the system.

"I think it is a mistake to assume that changing the leadership is going to  solve all the quality-of-care issues that exist in the mental health
system," she said.