District of Columbia: Receiver's Plan to Return Control of Mental Health
Commission Is Evolving (Letter Report, 10/30/2000, GAO/GAO-01-157).

The failure by the District of Columbia's Commission on Mental Health
Services to provide community-based mental health services, as required
by a 1974 court ruling, prompted a judge to appoint a receiver to carry
out the court's order. Control of mental health services is scheduled to
be returned to the Commission in April 2001. Although the transitional
receiver is developing a plan to enhance the Commission's ability to
comply with the court ruling, many challenges must be overcome. For
example, the District must change its hospital-based system of care to
one that considers the needs of the individual within a framework of a
community-based provider responsible for all aspects of mental health
and supportive services needs. Many interested mental health providers
and patient care advocacy groups believe that a solid foundation is
being laid for community-based mental health services. However, success
will depend on the Commission's ability to improve management processes
and coordinate with other agencies that provide care to the mentally
ill.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GAO-01-157
     TITLE:  District of Columbia: Receiver's Plan to Return Control of
	     Mental Health Commission Is Evolving
      DATE:  10/30/2000
   SUBJECT:  Mental illnesses
	     Mental health care services
	     Mental care facilities
	     Community health services
	     Interagency relations
	     Internal controls
IDENTIFIER:  District of Columbia
	     Medicaid Program

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GAO-01-157

A

Report to the Subcommittee on the District of Columbia, Committee on
Government Reform, House of Representatives

October 2000 DISTRICT OF COLUMBIA

Receiver's Plan to Return Control of Mental Health Commission Is Evolving

GAO- 01- 157

Letter 3 Appendix Appendix I: Major Court Actions Related to District
Compliance

With the Dixon Decree 22 Table Table 1: Comparison of District Strategies
With Other Mental

Health Systems 13

Abbreviations

ACT assertive community treatment programs CMHC Community Mental Health
Center FIP Final Implementation Plan HCFA Health Care Financing
Administration HST Homeless Support Team MCOTT Mobile Community Outreach
Treatment Team MRO Medicaid Rehabilitation Option NAM new antipsychotic
medication NASMHPD National Association of State Mental Health Directors
SAMHSA Substance Abuse and Mental Health Services Administration SDP Service
Development Plan

Lett er

October 30, 2000 The Honorable Tom Davis Chairman The Honorable Eleanor
Holmes Norton Ranking Minority Member Subcommittee on the District of
Columbia Committee on Government Reform House of Representatives

In 1974, a class action suit filed on behalf of District of Columbia
residents with mental illnesses argued that the District's Commission on
Mental Health Services' (the commission) practice of treating the majority
of the District's mental health patients by institutionalizing them in St.
Elizabeths Hospital violated the federal statutory rights of individuals to
appropriate treatment in alternative care facilities. In a ruling known as
the Dixon Decree, the U. S. District Court for the District of Columbia
determined that these individuals had a statutory right to community- based
treatment by the least restrictive means. 1 In 1997, the court found that
District efforts taken during the previous 22 years had failed to meet the
Dixon Decree. Consequently, the judge appointed a receiver to take charge of
the commission and carry out the court's orders. On April 1, 2000, the
initial receiver was replaced by a transitional receiver who is required to
develop a plan to return day- to- day operations of the commission to the
District government in early 2001.

Recently, your Subcommittee raised concerns about the receivers' progress in
creating a community- based mental health system, and the time frame for
shifting control of the commission back to the District of Columbia. To
address these concerns, you asked us to (1) describe the receivers' efforts
to comply with the Dixon Decree; (2) compare the proposals advanced by the
transitional receiver with other mental health systems; and (3) discuss the
challenges facing the transitional receiver and the District in developing
and implementing a community- based mental health system. To carry out this
investigation, we interviewed District officials from the commission and the
Office of the Receiver, the Mayor's office, and District agencies

1 Persons covered under the Dixon Decree include adult residents of St.
Elizabeths Hospital, elder residents of St. Elizabeths Hospital, adults and
elders who pose a risk of rehospitalization, and mentally ill and homeless
individuals. See Dixon v. Weinberger, 405 F. Supp. 974 (D. C. D. C. 1975).

with related programs; mental health and community services providers;
client advocacy groups; and other organizations. We also reviewed the
history of the Dixon case, documentation provided by the receiver, data from
community- based mental health systems and national mental health
organizations, and our past work on organizational reform. We conducted our
work from July 2000 to September 2000 in accordance with generally accepted
government auditing standards.

Results in Brief Compliance with the Dixon Decree requires a fundamental
shift in the District's approach to providing and financing mental health
services.

Essential to this change is the need for the commission to diminish its role
as a direct care provider and assume the more traditional responsibilities
of a mental health authority: a purchaser, regulator, and manager of mental
health care. While both of the court- appointed receivers identified similar
improvements needed to enhance the District's community- based mental health
system, the second, or transitional, receiver has taken more decisive action
to ensure their implementation. The transitional receiver has relied on
strategies that are often modeled after methods used by other states or
nationwide. For example, to increase federal funding for mental health
services, he has pursued an approach used by more than 30 states to increase
the number and scope of services reimbursable by Medicaid. In addition, he
has undertaken initiatives based on national models for housing and
supported services.

Despite the progress in developing a blueprint for a more accountable and
integrated community- based mental health system, the transitional
receiver's plan is still evolving, and many formidable implementation
challenges remain to be met before- and after- the return of the commission
to the District, scheduled to occur by April 1, 2001. By April, many of the
receiver's initiatives will be in their earliest stages of implementation,
or not yet implemented; thus, the long- term success of these initiatives
will be largely unknown. Moreover, successfully integrating these
initiatives into the District government will also require improvements in
several management systems and processes, including financial and other
information systems, personnel, procurement, and contracting. The extent to
which the commission and the District separately or jointly address these
processes and foster relationships between relevant District agencies will
also affect the long- term success of the mental health system. Achieving
compliance with the Dixon Decree will require that all of these initiatives-
transformation to a community-

based system, modernization and improvements to District operations, and
coordination across the District government- be undertaken.

Background Dramatic changes in public mental health systems in the United
States began in the 1960s and 1970s with the shift to community- based care.

During this era, state mental hospitals as the primary providers of care and
treatment were supplanted by a new emphasis on care in the community.
Unfortunately, communities were often not prepared to offer housing,
community treatment approaches, vocational opportunities, income supports,
or a sense of community support to deinstitutionalized mental patients. Many
persons with severe mental illness released from institutions found
themselves in residential settings such as group homes or halfway houses,
homeless, or in the welfare or criminal justice system. Consequently,
advocates nationwide began urging the development of community support
systems to address the social welfare needs of individuals with mental
illness. Among other services, community support systems included treatments
such as new medications and assertive community treatment programs (ACT)
that offer a multidisciplinary team approach to treating individuals with
serious mental illness.

States have modeled their mental health systems on a framework that centers
on the assumption that serious mental illness is a long- term disorder that
requires ongoing but flexible community- based treatment and support
services, including affordable and stable housing. The continuing shift away
from institutionalized care is evident in the decrease in state mental
health agency expenditures for inpatient care, from 54 percent of all state
mental health expenditures in 1990 to 41 percent in 1997. Between 1990 and
1999, 44 state mental hospitals were closed, reducing the number of state
mental hospitals from 263 to 219, compared to 277 in 1970. 2 Further, the
Supreme Court ruled in June 1999 that the failure of states to find
community placements for individuals with disabilities, forcing them to
remain in institutional settings, is a form of discrimination under the
Americans with Disabilities Act. 3

2 See National Association of State Mental Health Program Directors
(NASMHPD) Research Institute, State Profile Highlights: Closing and
Reorganizing State Psychiatric Hospitals: 2000 (Alexandria, Va.: Aug. 10,
2000).

3 This decision, in Olmstead v. L. C., requires states to develop
comprehensive plans to end unnecessary institutionalization at a
“reasonable pace.”

In 1997, federal funds made up 25 percent of state mental health agency
funding. Most of the federal money came from Medicaid, a joint federalstate
program for low- income families and aged, blind, and disabled people that
in 1998 spent about $177 billion to finance health coverage for 41 million
individuals. States administer their own Medicaid programs within broad
federal requirements and can elect to cover a range of optional populations
and benefits. Because Medicaid is an entitlement program, states and the
federal government are obligated to pay for all covered services provided to
an eligible individual. Each state program's federal and state funding share
is determined through a statutory matching formula based on a state's per-
capita income in relationship to the national average, with the federal
share ranging from 50 to 83 percent. 4 Medicaid covers both required health
services (such as inpatient and outpatient services) and the optional
services (such as rehabilitation) selected by the states. Reflecting its
medical focus, Medicaid mental health services have traditionally been
provided by physicians, including psychiatrists, who work at hospitals,
clinics, and other organizations; and to a lesser extent by other
practitioners, such as psychologists and psychiatric social workers. While
Medicaid will cover services provided to individuals in facilities with 16
or fewer beds, the program specifically excludes coverage provided in larger
psychiatric institutions (called institutions for mental disease) for adults
aged 21 to 64. 5

Other federal funding sources for public mental health programs account for
5 percent of all state mental health agency funding and include grants
overseen by the Substance Abuse and Mental Health Services Administration
(SAMHSA). Medicare also pays for limited mental health coverage for
individuals over 65 and some individuals younger than 65 who are disabled.
States also play an important role in the funding of mental health services,
making up 69 percent of state mental health agencycontrolled revenues in
1997.

Commission Background The commission was created on October 1, 1987, when
the federally owned and operated St. Elizabeths Hospital was merged into the
District's mental

health care system. The commission is the largest public provider of mental
4 In the District of Columbia, the federal government contributes 70 cents
of each Medicaid dollar spent. 5 This limitation was imposed to avoid a
shift in financial responsibility from state and local governments, who have
traditionally funded these facilities, to the federal government.

health services in the District, treating approximately 10, 000 clients
annually. The commission must also treat mentally ill individuals who commit
criminal offenses in the nation's capitol. The mental health system's focal
point is St. Elizabeths Hospital, which provides a wide range of acute care
services. The hospital currently has 628 beds divided among three types of
inpatient clients: civil (365 beds), criminal (forensic) (243 beds), and
children (20 beds). 6 The commission also provides services to individuals
through a number of outpatient facilities, including two Community Mental
Health Centers (CMHC) and five Mobile Community Outreach Treatment Teams
(MCOTT). Other District agencies, such as the Departments of Health,
Housing, and Corrections, Child and Family Services Agency, and D. C. public
schools may also provide mental health and other types of services to
persons with severe mental illness.

The commission's proposed operating budget for fiscal year 2001 is about
$224 million, an increase of approximately $19 million over fiscal year
2000. Of the proposed fiscal year 2001 budget, 62 percent is to be funded
with local dollars, and the remaining 38 percent from federal and other
sources. Of the $85 million from federal and other sources, the federal
share of Medicaid represents 70 percent- approximately $60 millionï¿½with
Medicare making up most of the remainder.

According to the most recent national data available (fiscal year 1997), the
District had the highest per- capita spending for mental health services in
the nation at $337 per person. (The second- and third- highest states, New
York and Connecticut, spent $113 and $99 per person, respectively.) Some
experts attribute the District's relatively high mental health costs to a
number of factors, including its unique city- state status, which requires
the District to bear costs normally shared by two levels of government; the
cost of maintaining St. Elizabeths campus- a national historic landmark- and
its associated hospital- based, institutional services; the District's
exclusively urban jurisdiction; and high rates of poverty, substance abuse,
unemployment, and other indicators of poor mental health.

Under federal and subsequent District control, St. Elizabeths and the
commission have been slow to follow the trend of deinstitutionalization

6 Fewer than 700 individuals currently reside on the campus of St.
Elizabeths; over 12,000 considered the campus home in the 1950s. Over the
period of the Dixon Decree, the inpatient population at St. Elizabeths fell
from 5,912 in 1974 to 765 in 1997, when the first receiver was appointed by
the court.

that has occurred in the rest of the country. In 1974, a class action suit
filed in the U. S. District Court for the District of Columbia on behalf of
individuals with mental illnesses argued that the practice of treating the
majority of the District's mental health patients by institutionalization in
St. Elizabeths Hospital violated the statutory rights of individuals to
appropriate care in alternative care facilities. The court ruled in favor of
the plaintiffs in 1975 and continued to oversee District progress in
developing a community- based mental health system. In 1997, finding that
the District was no closer to a community- based mental health system than
it had been 20 years earlier, the court appointed a receiver to bring the
system into compliance with the Dixon Decree. 7 The court granted the
receiver broad powers, including all powers previously exercised over the
commission by the Commissioner, the Director of Human Services, and the
Mayor. The receiver also has the authority to hire and fire personnel,
negotiate or renew labor contracts, and establish the commission's budget.
(App. I summarizes the major court actions related to the Dixon Decree.)

A second or transitional receiver appointed on April 1, 2000, was charged
with developing a plan that the District can implement to achieve compliance
with the Dixon Decree. Under the court order, the receiver is to transfer
control of the commission to the District government between January 1 and
April 1, 2001. 8 The involvement of the transitional receiver, however, does
not end when control of the commission is transferred back to the District.
As described in the March 6, 2000, consent order, the receiver will monitor
the District's day- to- day operation of the commission for 6 months
following the transfer of control. Within the first 60 days of this 6- month
period, the involved parties will present the court with criteria for
termination of the case decrees and orders and submit a schedule for

7 Receivers are appointed to effect compliance with court orders. In this
case, the court concluded that “only a receiver provides the Court
with enough day to day authority to force compliance without causing
confusion and ambiguity in the administration of the Commission.” See
Dixon v. Barry, 967 F. Supp. 535, 554 (D. C. D. C. 1997).

8 At the time the transitional receiver was appointed, four other District
agencies were also in court- ordered receivership: the Department of
Corrections Central Detention Facility Medical Services, the Department of
Public and Assisted Housing, the Child and Family Services Agency, and the
juvenile justice system of the Department of Human Services. In December
1999, the Mayor appointed an individual to act as his administration's
liaison with the commission and other District agencies under receivership.
This individual collaborates with each of the receiverships to develop
solutions for systemic issues and facilitate the return of the agency to
District government.

monitoring the District's progress. After this 6- month period, in order to
end the receivership, the transitional receiver must certify that the
District has the capacity to implement and is implementing the plan. The
transitional receiver will continue to monitor the District's performance
and by October 30, 2001, will submit recommendations to the court regarding
termination of the court orders.

Compliance Requires a Compliance with the Dixon Decree requires a
fundamental shift in how the

Fundamental Shift in District operates its mental health system, a shift
that will not be complete

when the receivership returns control of the commission to the District by
District Mental Health

April 1, 2001. Central to this change is the need for the commission to
shift Operations

its role from a direct provider of mental health services to that of a
mental health authority- a purchaser, regulator, and manager of mental
health care. Although its provider role will ultimately diminish, the
commission may continue to provide some level of acute care as well as
fulfill its additional role of providing services to federally detained and
committed individuals- services for which it has never been consistently
reimbursed. Both receivers developed initiatives aimed at moving the
District toward a community- based mental health system. The initial
receiver introduced initiatives which sought to change the way the
commission delivered services, but development and implementation were slow.
The transitional receiver, who took over on April 1, 2000, has taken more
decisive action, and has begun to implement a number of community- based
initiatives.

Receiver and the District Meeting the requirements of the Dixon Decree
requires a fundamental shift

Face Daunting Task in in the District's approach to mental health services.
Currently, the

Making Fundamental commission is the largest single provider of mental
health services in the

Changes to the Delivery of District, employing close to 2, 000 individuals
in fiscal year 2000 and,

according to commission officials, providing various services to about
Mental Health Services

10, 000 individuals annually. The commission operates both St. Elizabeths
Hospital and two community- based mental health centers- a dual
responsibility assumed by only 11 states. 9

In addition to providing inpatient services and direct services in the
community, the commission is structured so that fiscal and clinical

9 According to a 1996 survey conducted by NASMHPD, these 11 states are
Connecticut, Delaware, Idaho, Louisiana, Missouri, Nevada, New York, North
Dakota, Oklahoma, South Carolina, and Texas. Four states did not respond to
the survey.

decisions remain largely centralized. The commission contracts with private
providers for housing, employment, case management, and other community-
based services. The commission has often used a “slot” system to
allocate a defined number of clients to providers and has paid them a fixed
rate per client. Under this system, providers do not compete to attract
clients and are paid regardless of performance, client satisfaction, or the
actual delivery of services. Unlike other community- based providers in the
District, which may bill Medicaid directly for their services,
commissioncontracted service providers bill Medicaid through St. Elizabeths
hospital. 10 In order for the commission to move away from its current role
as a direct provider of services, community- based providers will need to
have the capability to bill Medicaid for the services they provide. 11 Thus,
as the commission restructures itself to become more of a mental health
authority, these provider- like functions will diminish and be replaced by
regulatory and oversight functions.

However, the commission is likely to retain some type of provider role in
order to provide mental health services to federally detained and committed
individuals. 12 When operation of the hospital was transferred from the
federal to the District government in 1987, the Congress mandated that
federal agencies referring persons for admission to St. Elizabeths be
responsible for the cost of their care and treatment. 13 The commission
bills several federal agencies for these costs on a monthly basis, including
the U. S. Marshals Service for federal court detainees who are either not
guilty by reason of insanity or not competent to stand trial, and the U. S.
Secret Service for persons admitted to the hospital as a result of a threat
of action against a federal official.

10 Providers who do not have contracts with the commission or who operate
their own mental health clinics may bill Medicaid separately for mental
health services. In 1997, D. C. Medicaid spent over $40 million in direct
payments to these providers.

11 In addition, the federal Health Care Financing Administration (HCFA),
which oversees the Medicaid program, published a final rule on
disaffiliation that, according to consultants, will likely require providers
who currently contract with the commission to be individually certified as
Medicaid providers and to bill for services independently.

12 According to a commission official, construction of a new hospital is
expected to begin in October 2001. Although its size is uncertain,
commission officials estimated that the new facility would house forensic
clients and a limited number of longer- term care beds for other clients.

13 24 USC 225g.

Payment from these federal agencies, however, has been problematic for some
time. In 1993, the District filed suit against the United States for payment
for these services, seeking reimbursement from the U. S. Marshals Service,
the U. S. Secret Service, and other federal agencies. 14 Although the U. S.
Marshals Service agreed to a settlement and has made payment in full- about
$13 million- for services rendered, other agencies have made sporadic
payments or none at all. The lawsuit is in active mediation at this time.
For fiscal year 1999, the commission provided close to 13,000 inpatient days
of care- or approximately 6 percent of inpatient days- to federal
beneficiaries at a cost of about $5 million. With the exception of the U. S.
Marshals Service and the U. S. Virgin Islands, no other entity made payments
for services during fiscal year 1999. 15

Both Receivers Focused on The movement from a hospital- based system to a
community- based mental

Expanding CommunityBased health approach not only reflects a change in
treatment nationwide, it is a

Services court- ordered requirement. Because the District had not made
sufficient

progress in implementing such a system, the court ordered the commission to
be put into receivership 3 years ago. During this time, the two receivers
developed overarching goals aimed at enhancing the District's communitybased
mental health system. For example, in identifying key priorities for the
commission, both receivers cited the need to (1) develop initiatives to
increase housing options, 16 (2) take better advantage of Medicaid to
finance

14 The lawsuit identified costs associated with providing services to 56
individuals referred by the U. S. Marshals Service and 147 individuals
referred by the U. S. Secret Service. According to commission officials, the
U. S. Secret Service continues to refer more individuals to St. Elizabeths
Hospital than any other federal agency. In addition to requesting payment
for individuals referred to St. Elizabeths by a federal agency, the lawsuit
also includes charges that the federal government failed to complete or pay
for repairs and renovations to the St. Elizabeths campus.

15 Once a federal agency has referred individuals to St. Elizabeths, several
circumstances limit the District's ability to return the individuals to
their states for treatment. For example, according to District law, any
public hospital, including St. Elizabeths, is required to accept any person
who requires hospitalization if the hospital agrees there is a need for this
level of care. In addition, once a person is a resident of St. Elizabeths,
District law requires that the individual's original state must be willing
to accept him or her prior to a transfer back to the state. According to
commission officials, St. Elizabeths has executed compact agreements with
many states to facilitate such a transfer; however, in practice, these
agreements have been largely unsuccessful.

16 According to commission staff, about 60 percent of patients currently in
acute care units in St. Elizabeths could be moved into the community if
stable alternative housing were available.

mental health services, (3) establish an administrative infrastructure
independent of the District, and (4) assume regulatory and oversight
responsibilities that are typically associated with a mental health
authority. Despite the introduction of such initiatives, the first receiver
made little progress in implementing these and other goals during his 2-
year oversight of the commission.

In preparation for the return of the commission to the District by April
2001, the second, or transitional, receiver assumed control on April 1,
2000, and has taken more decisive action to implement a number of
communitybased initiatives. He also developed broad program goals that
should enable the commission to finally comply with the court orders. For
example, he has continued efforts to develop and implement a pilot
initiative, called Carepoints, which transfers financial and clinical
responsibilities for clients to community providers. He has also initiated
discussions with local hospitals about the use of available beds for
inpatient psychiatric care. Finally, he has made progress in channeling
resources into development of an initiative intended to expand provider
capacity and increase Medicaid funding for mental health services, termed
the Medicaid Rehabilitation Option (MRO). 17 If successful, these
initiatives will enhance the responsibility and accountability of community
providers and decrease the commission's direct provider role. The commission
then will be able to assume more of the responsibilities of a mental health
authority, including the oversight and regulation of mental health services
in the District.

Most Strategies The transitional receiver has drawn on his own and other
expert

Adopted by the knowledge and experience to shape the development of a
communitybased

mental health system in the District. Although he is still in the
Transitional Receiver

process of preparing his implementation plan, the transitional receiver has
Draw on Approaches Used by Other States

17 Under its rehabilitation option, the Medicaid program allows states to
increase the scope and number of mental health services reimbursable by
Medicaid.

produced several broad program goals. 18 These goals emphasize the
development of infrastructure, capacity, and accountability; the
strengthening of partnerships with providers, District agencies, and
clients; and the development of a community- based system of care in which
the commission acts as a mental health authority rather than as a provider.
Strategies being implemented by the transitional receiver include methods
actively employed across the nation or in specific states as well as those
that are modeled on national trends but adapted to meet the needs of the
District. In some cases the strategies adopted or furthered by the receiver
are considered “best practices” by mental health experts and
other organizations and are often consistent with national trends in mental
health care (table 1).

Table 1: Comparison of District Strategies With Other Mental Health Systems

District strategy Description Similar models MRO Federal approval is
required for an MRO, which

More than 30 states have used an MRO to cover increases the number and scope
of mental health

mental health services. services reimbursable by Medicaid. The commission
plans to implement the MRO no earlier

than March 2001. a Carepoints A single community provider is responsible for
the full

Carepoints incorporates aspects of programs in other array of client
services, including assessment, inpatient

jurisdictions, including Wisconsin; Baltimore, and outpatient services, and
housing and employment

Maryland; and Long Beach, California. assistance. Target enrollment is 300
individuals; current enrollment is

approximately 25. New antipsychotic

NAMs offer significantly fewer and less severe side Mental health advocates
state that access to the

medications (NAM) effects than older medications. newer medications is
important to the treatment of

As of May 31, 2000, the commission budgeted funds for mental illness because
they have significantly fewer

NAMs to cover 1, 800 persons in the District. and less- severe side effects
than older medications.

The commission plans to increase the number of clients Other states have
also undertaken efforts to increase

using NAMs to 3, 100 or 83 percent of the eligible the use of NAMs in their
mental health community,

population by the end of fiscal year 2001. including Virginia and Texas.

18 In summary, these goals seek to (1) create the capacity to function as a
mental health authority separate from any provider role; (2) build a
community- based system of care that maximizes principles of accessibility,
recovery, and consumer choice; (3) create infrastructure to support the
strategic direction; (4) create and reward a culture of accountability and
performance improvement; and (5) forge strong partnerships among District
agencies that participate in the provision of services to individuals with
mental illness.

(Continued From Previous Page) District strategy Description Similar models
MCOTTs and

These initiatives offer a comprehensive service delivery ACT includes case
management, initial and ongoing

Homeless Support model that provides community- based treatment to

assessments, psychiatric services, and housing and Team (HST)

people with severe and persistent mental illness. employment assistance. b

Five MCOTTs and two HSTs provide community- based At least 35 states have
implemented programs based

services to more than 500 individuals. in part on ACT.

D. C. Medicaid has requested federal approval to allow Medicaid
reimbursement for MCOTT services.

Home First II Provides rental subsidies and community living

Supported housing models can be found across the Program expenses,
emphasizing client choice.

country and in other nations. Current enrollment is approximately 310;
capacity is 450.

Supported housing emphasizes elements such as regular housing, client
choice, and appropriate supports, such as self- help; it strives for client
independence and integration through community living and enhanced quality
of life.

Section 8 Housing The commission currently can assist 90 clients with their
The federal Section 8 program, funded by the U. S. housing rental costs.
Department of Housing and Urban Development,

assists low- income families, the elderly, and persons with disabilities
with renting housing in the private sector. Mental health advocates cite
this program as a

primary, mainstream resource for persons with mental and physical
disabilities.

Cornerstone, Inc. Cornerstone is a nonprofit housing finance intermediary
The National Technical Assistance Center for State

that provides grants and loans to providers to subsidize Mental Health
Planning recognizes partnerships

the purchase of housing for persons with mental illness. between state
mental health agencies and housing

Cornerstone has secured housing for 650. finance and development agencies as
a best practice

The commission has awarded $9 million to Cornerstone in housing.

since 1994. a Some providers have indicated that the March 2001
implementation of an MRO is not likely. b While the commission has developed
these ACT- based programs, mental health advocates noted that programs in
place do not have all the elements of a true ACT model.

In some cases, the strategies used by the transitional receiver are tailored
specifically to the District's needs and resources. For example, three of
the commission's MCOTTs have recently begun to operate group houses based on
the Oxford House model for substance abuse. Started in 1975 in Silver
Spring, Maryland, the Oxford House model is a democratically self- run
independent group home that is typically used by persons with substance
abuse problems. The District has adapted this model to serve persons with
mental illness. Similar to the national model, residents are provided
affordable housing and an opportunity to share in all aspects of house
operations.

Finally, to create a mental health authority function separate and distinct
from any provider role, the transitional receiver will rely on his
experience as Commissioner of Mental Health in Indiana and Texas, and advice
from

consultants and other state mental health authorities. While still
developing the blueprint for this transformation, he has identified a number
of functions that are essential to an authority, including quality
improvement and accountability initiatives, such as certification of
providers; and financial powers, such as budgeting and procurement. In
addition, the transitional receiver intends to tailor national performance
standards developed by SAMHSA to meet the District's needs.

Significant Challenges Significant challenges remain as the transitional
receiver finalizes the

Remain to Comply District's plans to achieve compliance with the Dixon
Decree. The

transitional receiver's strategic plan will span a period of 3 to 5 years;
thus, With the Dixon Decree

at the time of the commission's return to the District, many strategies and
initiatives will be only partially implemented or still in a planning stage.
For example, plans to enhance Medicaid reimbursement through an MRO and to
build a solid base of community providers will, at best, be in the early
stages of implementation. The transitional receiver has taken steps to
identify needed improvements in the commission's management processes,
identifying personnel, procurement, and information systems as key areas
that require attention. Finally, the extent to which the commission and the
District foster relationships among District agencies relevant to the
commission will also affect the long- term success of its mental health
system. Achieving compliance with the Dixon Decree will require that all of
these initiatives- transformation to a community- based system,
modernization of and improvements to District operations, and coordination
across District government agencies and services- be undertaken.

Despite Progress, the Most mental health and community providers, consumer
advocacy groups,

Success of the Receiver's and other mental health organizations believe the
transitional receiver is

Plan Will Be Uncertain taking positive steps to build a solid foundation for
implementation of the

District's community- based mental health system. In general, those we
interviewed expressed optimism regarding the efforts of the transitional
receiver and noted his ability to be decisive and apply innovative
approaches to revamping the District's mental health system. For example,
both advocates and providers noted his quick appointment of new financial
leadership in response to issues raised in an external management review. 19
Similarly, community organizations complimented his pursuit of the MRO to
increase Medicaid funding for mental health services.

However, a few individuals expressed concern that the transitional
receiver's longer- term focus may not reform community- based programs that
are already under way and in need of improvement. For example, the
commission stated in a July 2000 report that clients must receive services
at least once every 90 days in order to remain active in community care.
However, in the same report, the commission presented data that showed that
three of the MCOTTs, which are expected to provide comprehensive services
for individuals with severe and persistent mental illness, did not provide
direct patient service to 35 of the approximately 310 enrolled clients over
a 90- day period. A mental health provider asserts that this lack of contact
with clients is unacceptable since MCOTTs currently have a waiting list to
enroll.

Most District officials and others with whom we spoke acknowledge that the
commission will be in the midst of many changes when control is transferred
to the District, leaving the long- term success of the transitional
receiver's initiatives unclear. In fact, although the transitional
receiver's plan has not yet been finalized, its overarching goals are based
on a 3- to 5year implementation timeframe.

Thus, when the commission is returned to District government, several of the
transitional receiver's key initiatives will still be in a planning stage or
newly implemented. Of particular concern is the MRO, which forms the basis
of funding community services and enhances provider autonomy and capability
to actively participate in the commission's mental health system. While the
current plan is that the MRO will be implemented in March 2001, certain
providers have expressed doubt that this can be accomplished so quickly. The
commission is still determining which services will be covered under the MRO
as well as working with HCFA on implementation issues. 20 With some of the
most basic administrative issues yet to be finalized, it is questionable
whether community providers will be equipped to bill the Medicaid
programï¿½and hence receive reimbursementï¿½by next spring. For example, some
providers currently do not have the administrative infrastructure to do the
billing and clinical recordkeeping that Medicaid requires.

19 See Pricewaterhouse Coopers, Commission on Mental Health Services
Management Audit (Apr. 13, 2000). 20 HCFA, in the U. S. Department of Health
and Human Services, has oversight responsibility for the Medicaid program.

Similarly, the initiative to expand the number of clients receiving NAMs is
also longer- term in nature, with a substantial increase in access to new
medications planned by 2001. Finally, certain housing initiatives will
continue to evolve over the next several years. Some provider and advocacy
organizations expressed concerns that these initiatives need to be farther
along in the implementation prior to the transition so that efforts to
comply with the Dixon Decree are ultimately successful.

Improvement in Compliance with the Dixon Decree will also hinge on the
transitional

Management Processes and receiver's and the District's ability to improve
management processes and

Working Relationships Is coordination among District agencies who share in
the responsibility of

Essential providing necessary services to persons with mental illness. A
recent

external management audit identified several problem areas within the
commission, including the lack of (1) a linkage between service delivery
goals and the budget process; (2) appropriate training, education, and
performance expectations for key management staff; and (3) a strategy to
work with providers in building a strong community- based system.

In an effort to improve management processes, the transitional receiver has
developed a work plan in response to the management audit and used his
authority to create a new commission management structure, recruit qualified
managers, and hire at least seven individuals with various types of
expertise, including procurement, information systems, and financial
management. 21 In addition to issues identified in the audit, the
transitional receiver and District officials acknowledged the need to
strengthen the commission's management information system, which, according
to commission officials, cannot currently produce an accurate count of
individuals participating in the District's mental health system.

In addition, District officials acknowledge that historical inefficiencies
and problems in District government in areas such as accountability,
technology, procurement, and working relationships must be resolved when the
District reassumes control of the commission. Recognizing these problems, a
District official and the transitional receiver told us that they

21 Positions filled by the transitional receiver include the Chief Operating
Officer, Chief Financial Officer, Director of the Office of Accountability,
Director of Community Services Administration, Acting and Deputy Chief
Information Officers, and Deputy for Procurement. The Chief Financial
Officer has since resigned and will need to be replaced.

continue to discuss these systemic issues and to collaborate on solutions
with each other and the plaintiffs' counsel.

Finally, collaboration among the various District agencies that also provide
services to this population is critical for a smooth transition and for
compliance with the court orders. The transitional receiver reported that he
is meeting with all key District agency heads in an effort to create a
structure that will allow the development of reformed and accountable
systems. For example, he is working with the District's Medicaid agency to
implement the MRO and with District child and youth agencies to develop a
cross- agency plan for high- risk children in residential care. In addition,
the District has worked with SAMHSA to obtain grant funding for a
comprehensive system of care for District children with severe emotional
disturbances who are at risk of residential placement outside of the
District. Commission officials provided examples of other collaborative
efforts with the Office of Early Childhood Development, Child and Family
Services Agency, and the Deputy Mayor for Children, Youth and Families.

However, additional opportunities for improved collaboration exist. For
example, efforts to improve coordination with the D. C. Jail are ongoing,
but are not fully developed. Because incarcerated individuals at the D. C.
Jail may have a history of mental illness, 22 the commission has a jail
liaison that works to link persons being released to community- based
services. In addition, the District has a Jail Diversion Task Force, which
is charged with developing initiatives (such as police education) that may
appropriately divert persons into the commission's mental health system. A
successful diversion program could reduce the $2.3 million that the D. C.
Jail annually spends to provide mental health services to incarcerated
individuals. Coordination with housing agencies in the District could also
be strengthened. While a certain level of coordination has occurred, such as
joint efforts with the D. C. Housing Authority to apply for Section 8
housing certificates and meetings with high level officials, the commission
and others with whom we spoke recognize that more coordination is needed. 23

Recognizing that interagency coordination is critical, the District, in
consultation with the transitional receiver, appointed a transition

22 In her October 28, 1999, testimony before the U. S. District Court for
the District of Columbia, the Director of Mental Health Services at the D.
C. Jail said that 63 percent of detainees admitted to the D. C. Jail in June
1998 had some prior mental health history.

23 See table 1 for a description of the Section 8 program.

coordinator to enhance and facilitate collaboration among the transitional
receiver and the multiple District agencies that provide services to persons
with mental illness. The transition coordinator will also oversee the
transfer of the commission back to District government. In this regard,
determining whether the commission will operate as an independent entity or
operate as part of the District Department of Human Services remains a key
unresolved issue.

Conclusions For more than 25 years, the District's inability to care for
some of its most vulnerable citizens has been the source of repeated
judgments and court

orders, ultimately resulting in the most recent receivership. Under the
transitional receiver, a plan is emerging to provide individuals with severe
mental illness with adequate housing, treatment, and care in a
communitybased setting. Plans are under way to move the District from its
longstanding hospital- based system of care to a system that considers the
needs of an individual within a framework of a community- based provider
responsible for all aspects of mental health and supportive services needs.

However, important decisions must still be made and implementation of
various initiatives will be far from complete when the transitional receiver
is scheduled to return control of the commission to the District government.
Plans to enhance Medicaid reimbursement and build a solid base of community
providers- critical steps in creating a communitybased mental health
systemï¿½will be, at best, in the initial stages of implementation. In
addition to the uncertain timing of these and other critical initiatives,
reforms must be designed and overseen in a manner that ensures that progress
will continue as the commission returns to the District. While strategies
employed by the District and the transitional receiver draw on the
experience and expertise of other mental health systems, they must be
implemented within the District- a jurisdiction that acknowledges the need
to improve its management processes and interagency coordination
capabilities. Progress on these various fronts is critical to the District's
ability to comply with the Dixon Decree and provide quality mental health
services to eligible individuals.

Agency Comments We provided a draft of this report to the transitional
receiver and to the District of Columbia's Special Counsel for Receiverships
and Institutional

Litigation in the Executive Office of the Mayor for their review and

comment. They concurred with our findings and also offered clarifying and
technical comments, which we incorporated as appropriate.

We are sending copies of this report to Dennis R. Jones, Transitional
Receiver for the Commission on Mental Health Services; and Grace M. Lopes,
Special Counsel for Receiverships and Institutional Litigation for the
Executive Office of the Mayor of the District of Columbia. We will also
provide copies to others on request.

If you or your staffs have questions about this report, please contact me at
(202) 512- 7114. This report was prepared by Susan Anthony, Laura Sutton
Elsberg, and Emily Gamble under the direction of Carolyn Yocom.

Kathryn G. Allen Director, Health Care- Medicaid and Private Health
Insurance Issues

Appendi xes Major Court Actions Related to District

Appendi xI

Compliance With the Dixon Decree Date Court action

1974 A class action lawsuit was filed in the U. S. District Court for the
District of Columbia on behalf of District residents institutionalized at
St. Elizabeths Hospital.

1975 The court determined that the District and the federal government had a
joint responsibility to provide the plaintiffs “community- based
treatment in the least restrictive means.” This ruling is known as the
Dixon Decree.

1980 To comply with the court order, the involved parties drafted a Final
Implementation Plan (FIP) that generally required an assessment of plaintiff
class members and periodic reports on progress in establishing a community-
based system.

1984 The Congress enacted legislation that required the District to
establish an integrated coordinated mental health system by October 1, 1991.
a The Congress transferred sole responsibility of establishing the required
local mental health services to the District. b

1992 The court determined no progress had been made to comply with the FIP.
The involved parties therefore developed a second approach, known as the
Service Development Plan (SDP).

1993 The court appointed a special master to oversee implementation of the
SDP. c 1995 The court determined that the District was still unable to
comply with the terms of the SDP. As a result, the involved

parties negotiated a third plan, the Phase I agreement, whose goals the
District met. 1996 The parties negotiated and began to implement Phase II,
which was significantly broader in scope and required

activities such as hiring personnel and developing a homeless service plan.
1996 The District admitted noncompliance with the Phase II plan, and the
plaintiffs requested the appointment of a receiver. 1997 On September 10,
the court appointed a receiver, ruling that “only a receiver provides
the court with enough day to

day authority to force compliance without causing confusion and ambiguity in
the administration of the commission.” 2000 On March 6, with agreement
of all parties, a new receiver, referred to by the court as a transitional
receiver, was

appointed. He officially assumed his role on April 1, and is scheduled to
return control of the commission to the District between January 1 and April
1, 2001.

a 24 USC 225( b)( 1) and (2). b 24 USC 225b( a)( 1). c The special master's
powers included the ability to require compliance reports, make formal and
informal recommendations to the parties, and mediate disputes.

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