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State hospitals accredited, but civil-commitment costs and longer stays strain psychiatric hospitalization budget
Summary
Officials told the legislature that all three state psychiatric hospitals are now accredited and billing Medicaid, reducing general-fund needs, but civil-commitment expenditures and an increase in long stays beyond 60 days have driven supplemental requests and higher state costs.
All three state psychiatric hospitals have received accreditation, Department of Health and Welfare Director Alex Adams told the Joint Finance-Appropriations Committee, allowing hospitals to bill Medicaid for eligible patients and produce federal receipts that reduce general-fund costs.
Adams said State Hospital West has billed $1.6 million and received $1.3 million in Medicaid receipts since accreditation. He said State Hospital North was the most recent to receive accreditation.
Despite accreditation gains, officials asked the committee for a one-time general‑fund supplemental of $2,600,000 to cover increased civil‑commitment expenditures for fiscal 2025. Alex Williamson, the Legislative Services analyst, said the supplemental request follows a 2022 change in statute (Senate Bill 1327) that shifted responsibility for some civil‑commitment costs from counties to the state. Director Adams told members that the department does not control the number of mental‑hold placements because those holds are made by law enforcement or licensed health‑care professionals under statute.
Committee members pressed for more detail about whether accreditation produced expected savings and how long hospital stays affect billing. Adams said the 60‑day federal rule matters: if a patient’s hospital stay is 60 days or less Medicaid will cover the cost; if a stay exceeds 60 days Medicaid will not reimburse and the cost falls to the state. He said the percentage of admissions longer than 60 days rose from about 17% to 37%, increasing state costs.
Officials also described demand and waitlists at the hospitals. Ross Edmonds, administrator for the Division of Behavioral Health, told the committee that state hospital waitlist figures were roughly eight people for State Hospital North and about 18 for State Hospital South at the time of the hearing. Edmonds said the hospitals are seeing a marked increase in restoration‑to‑competency commitments, which he reported rose about 600% over the last decade and occupy a large share of beds: roughly 75% of State Hospital North’s beds were filled with restoration‑to‑competency cases.
On staffing, Director Adams said vacancy rates vary by hospital: State Hospital West reported a 0% vacancy rate, State Hospital South about 2.8%, and State Hospital North 11.5%. He credited prior committee actions on compensation increases for helping reduce vacancies.
Ending: The department asked for supplemental authority and a transfer‑exemption; committee members requested follow‑up numbers on billing and the effect of accreditation on general‑fund savings. No formal votes were recorded in the transcript.
