Plan to Fuse Health Care Hits Hurdle

Faced with the potential loss of millions of dollars in federal funds, the county Board of Supervisors is expected today to delay restructuring of the massive Human Services Agency until it can find a way to legally shift control of mental health services from the county hospital to welfare officials.

Five months after supervisors approved a controversial merger of behavioral health and welfare services into the new Human Services Agency, federal officials notified the county Friday that the way it intends to manage the consolidation is not legal.

Without state and federal approval, the county could lose between $11 million and $15 million a year in Medicare and Medi-Cal payments for treating mental patients, officials said Monday.

“I think the merger has merit and we should pursue it, but not at the expense of losing money,” said Supervisor John Flynn, who voted for the merger in April. The measure passed by a 3-2 vote, opposed by Supervisors Judy Mikels and Frank Schillo, who said Monday they would join in asking the board to go back to the drawing board.

Flynn is seeking a delay to give Supervisor Susan Lacey, who proposed the merger, time to lead a county delegation that would negotiate a management plan acceptable to the U.S. Health Care Financing Administration.

Federal officials last week said that because the county’s license to provide mental health services is tied to Ventura County Medical Center, the proposed shift of control to an oversight committee--and ultimately the Board of Supervisors--would not pass legal muster.

“We do not accept the premise that the Board of Supervisors or the Oversight Committee is the immediate governing body of the hospital. . . . [So] all mental health services would not be allowed to be billed as hospital services,” wrote Stan Marcisz, the health-care administration’s regional director in San Francisco.

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Mikels said she supports sending a delegation to talk with federal officials.

“I’m not happy to have the county in this mess, whether I voted for it or not,” Mikels said. “But saying, ‘I told you so,’ doesn’t help when we’re facing these kinds of issues.”

Schillo said he was not surprised federal officials rejected the county’s restructuring plan, adding that the county should halt the merger until it can come up with a plan that makes sense.

“What we have right now doesn’t work,” Schillo said. “I’m confused by it too. It’s a fuzzy organizational chart that’s destined to cause a lot of problems among the staff.”

Instead, Schillo said, the plan should be completely rethought, with the county setting up a mental health department independent of both hospital and welfare agencies.

Mental health agency administrators have long wanted to be free of the Health Care Agency, which operates the hospital, and that’s what led to the proposed restructuring, Schillo said. Under his plan, mental health would be independent and licensed to run its own programs.

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Lou Matthews, president of the county Alliance for the Mentally Ill, applauded the federal action. The 200-member alliance, mostly parents of children with mental illness, has opposed the restructuring.

“I think this is very good news,” said Matthews, who cares for her 49-year-old son, Mark, at home. “This needed more thought. We’d urged from the beginning to take this whole process more slowly because we feel this is a step backward for the mentally ill.

“That’s because mental illnesses are brain disorders and primarily are medical problems,” she said. “They’re developing so many new medications that the medical part of it is so important.”

Today’s expected delay would be the most recent development in a dispute that has simmered for years behind the scenes of county government.

Mental health officials have long favored a move where their services would be linked more closely to county-provided social services. But county health-care officials have wanted to keep control of mental health services at the Ventura County Medical Center.

The new Human Services Agency, with its mental health component, was set up to improve teamwork among county employees and better serve the mentally ill, homeless and needy children and families.

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But the highly politicized issue has pitted physicians who favor the old “medical model” of treatment against those who advocated the “social model” of combining mental health and social services.

In August, the California Psychiatric Assn. contacted state and federal agencies that provide money for mental health services to complain about the change and to ask for a formal investigation--a precursor to a possible lawsuit, county officials believe.