A program providing mental health care to 3,600 of Colorado’s most troubled children is in jeopardy and may lose up to $34 million in annual federal funding.
Federal officials last week told Colorado that for the past 11 years the state’s youth residential treatment centers had improperly billed the Medicaid program.
The 44 treatment centers participating in Colorado’s youth rehabilitation program do not meet federal guidelines, such as requiring medical doctors and registered nurses on site and industry accreditation, federal officials said.
If Colorado does not comply within the next four months, the federal Medicaid program will stop payment, officials with the Centers for Medicare and Medicaid Services told the state.
The warning stunned state health and welfare officials, the provider community, and politicians. “I’m shocked and very worried about where we’re going to come up with the money to become compliant,” said state Sen. Dan Grossman, D-Denver. “We can’t just throw these kids away.”
Colorado spent $68.2 million, half of which was federal money, on youth residential treatment programs in 2004, according to state records.
Medicaid’s position on Colorado may point to a major shift in how public programs care for abused and neglected children from low-income families, according to public-health experts.
There are 37 other states with residential treatment programs similar to Colorado’s.
Colorado Gov. Bill Owens is working to extend the deadline for retooling the program, and his staff is contacting the other states, said Dan Hopkins, the governor’s press secretary.
“The program has been around for a decade and, as far as we knew, was in accordance with federal regulations,” said Barbara Prehmus, director of the state Department of Health Care Policy and Financing’s medical assistance office.
The residential treatment centers house children – from foster care, troubled homes and the correction system – with behavioral problems such as aggression, self-injury, pyromania and effects of sexual abuse. The children, who stay anywhere from a few days to more than a year, receive counseling, special schooling and other therapies.
If the treatment centers can meet the more stringent guidelines that would make them more like psychiatric hospitals, Colorado will not have to repay hundreds of millions of dollars it allegedly improperly billed Medicaid, federal officials also told the state.
Medicaid, funded by state and federal dollars, is a health-insurance program for low-income individuals and families. While Medicaid pays to treat diagnosed mental illness, it doesn’t pay for counseling or child care, according to Mary Kahn, spokeswoman for the Centers for Medicare and Medicaid Services, or CMS, in Washington, D.C.
Residential homes for emotionally troubled children began admitting Medicaid-covered youths in the mid-1990s, when Colorado began to remove children from its psychiatric hospital in Pueblo.
Government regulations weren’t clear in laying out the program’s scope, and providers created a system that could bring in federal Medicaid-matching funds, said Skip Barber, a former administrator at the hospital, who is now chief executive for Colorado Care Management.
“It was not well defined. The rehabilitation option is about two sentences long in federal regulations,” Barber said. “It was intended to be a very small program. It was not meant to be the multimillion-dollar program it now is.”
In Washington, Medicaid programs continue to come under close scrutiny. The Bush administration’s 2006 budget calls for $10 billion in Medicaid cuts over five years.
Mike Fierberg, spokesman for the Denver regional office of the CMS, said the decision to look more closely at mental-health residential treatment programs was not purely money-driven.
“Money has not been the concern here,” Fierberg said. “The concern is for the welfare of the people involved.”
County social workers and mental-health providers are creating backup plans in the event the program shuts down before the end of the year, said Peg Long, executive director of the Colorado Association of Family and Children’s Agencies.
Some may be hospitalized, and others could be placed with specially trained foster families, Long said. Many would re-enter the public-school system.
“The state Department of Human Services and the providers and the mental-health community, we all have to sit at the table and realize that these are all our kids,” said Dr. Jerry Yager, director of the Denver Children’s Home.
Staff writer Marsha Austin can be reached at 303-820-1242 or maustin@denverpost.com.
