A deal struck between Salt Lake County and Valley Mental Health will spare 1,400 consumers from having to find new mental health counselors.
Announced on Tuesday, the deal transfers a respite care program from Valley to the county's managed care contractor, Optum Health, which can administer the program for less.
The resulting savings allow Valley to abandon an earlier plan to shrink its client rolls by about 2,200 people due to budget constraints, Alyson Heyrend, spokeswoman for Mayor Ben McAdams said.
"So those 120 people that might have gotten a letter from Valley saying you aren't going to get [respite] services anymore that won't happen," Heyrend toldThe Salt Lake Tribune.
Respite care is a Medicaid-funded service for parents and caregivers of mentally ill children in desperate need of a break.
Most clients shouldn't see changes in their service, Heyrend said. Optum already has a list of approved respite providers and has committed to add others to its network.
The development comes as the county prepares to audit its mental health system following Valley's June announcement that cuts in the rates it gets paid for services would force it to shrink its patient rolls by up to 2,200.
The cuts targeted only adult clients who were considered by Valley's clinical staff as "capable and stable enough to negotiate a transition of care to another provider," Valley's Executive Director Gary Larcenaire told the council.
Had Valley simply absorbed the rate cuts without reducing its number of clients, the nonprofit agency would essentially have been providing two months of free services to Optum and the county, he said.
County officials cut payment to mental health and substance abuse providers by 5.5 percent in fiscal year 2014 after learning they would have less state and federal Medicaid funding. The county asked providers to absorb the cuts rather than cancel programs or services, officials have said.
Valley took a smaller rate cut 4.9 percent because some of the services it provides are tied to specific Medicaid rules, Tim Whalen, director of the county's behavioral services, has said. Without the cuts, the county may have had to seek a tax increase.
Both the County and McAdams have publicly criticized Valley for its handling of the client cuts a decision both McAdams and council members have said they learned about through the news media.
Larcenaire and Valley board Chairman Bruce Cummings expressed regret for any miscommunications, but said they were advised that any direct communication could be perceived as an attempt to interfere in the county's contractual relationship with Optum. Both companies competed for the contract to manage the county's behavioral health services in 2011, with Optum awarded the bid for services Valley had provided for decades.
Under Optum's administration, Valley has incurred a 42 percent drop in revenue from $102 million to roughly $59 million, Cummings told the council. Funding for mental health services alone has been cut by $5.3 million, according Valley's data.
"The majority of this funding is still in the system, but no longer available to Valley Mental Health," Cummings said.
But Valley's system of care and programs which includes housing for the homeless, substance abuse programs, autism services for children and nursing home care was built over 25 years and based on the premise that its relationship with the county and funding would continue, Larcenaire said.
With all of that changed, Valley must consider how it can continue to provide critical services, which could mean more tough decisions ahead, he added.
"This is by no means over, " Larcenaire said. "We still have many programs that need to be reviewed to ensure that they will run properly and for many year to come under this new funding mechanism."