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entitled 'District of Columbia: Status of Reforms to the District's 
Mental Health System' which was released on April 30, 2004.

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Report to the Chairman, Committee on Government Reform, House of 
Representatives:

United States General Accounting Office:

GAO:

March 2004:

District of Columbia:

Status of Reforms to the District's Mental Health System:

GAO-04-387:

GAO Highlights:

Highlights of GAO-04-387, a report to the Chairman, Committee on 
Government Reform, House of Representatives 

Why GAO Did This Study:

Since 1975, the District of Columbia has operated its mental health 
system under a series of court orders aimed at developing a community-
based system of care for District residents with mental illnesses. 
Placed in receivership from 1997 to 2002, the District regained full 
control of its mental health system in 2002 but has been ordered to 
implement a court-approved plan for developing and implementing a 
community-based mental health system. Additionally, the District must 
comply with exit criteria, which must be met in order to end the 
lawsuit. The court expects that it will take the District 3 to 5 years 
to implement the court-ordered plan and begin measuring performance 
against the exit criteria, with year 1 beginning in July 2001. 

GAO was asked to report on the current status of the District’s efforts 
to develop and implement (1) a mental health department with the 
authority to oversee and deliver services, (2) a comprehensive 
enrollment and billing system that accesses available funds for federal 
programs such as Medicaid, (3) a consumer-centered approach to 
services, and (4) methods to measure the District’s performance as 
required by the court’s exit criteria. 

What GAO Found:

The District created the Department of Mental Health (DMH) in 2001 to 
oversee the provision of mental health services. DMH methods of 
oversight have included establishing certification and making use of 
licensing standards for participating providers and beginning to 
monitor provider compliance. DMH also continues to deliver direct 
services, acting as the primary provider for 55 percent of all 
consumers enrolled in the mental health system as of October 2003, and 
operating over 500 beds at St. Elizabeths Hospital, the District-run 
institution specializing in inpatient care for people with acute, 
intermediate, and long-term mental health needs.

DMH has also implemented a comprehensive enrollment and billing system 
designed to coordinate clinical, administrative, and financial 
processes. The system links payment to consumer treatment and increases 
access to federal funds by providing mental health rehabilitative 
services through the District’s Medicaid program, which reimbursed DMH 
$17.5 million in federal Medicaid funds in fiscal year 2003. Providers 
have faced challenges managing cash flow in a fee-for-service system 
where service demand varies throughout the year. Also, because provider 
contracts were tied to the fee-for-service billing projections, DMH 
could not pay claims for providers who were exceeding their projections 
until their contracts were changed, and providers did not always 
receive timely claims payments in fiscal year 2003. DMH senior 
officials noted that DMH has a plan in process to prevent this problem 
from recurring.

DMH activities to increase the involvement of consumers in their own 
treatment and recovery process are evolving. While DMH has established 
a number of requirements in two key areas—consumer choice and consumer 
protection—its initial review of providers’ records showed gaps in 
documentation of consumer participation in treatment planning for 41 
percent of the records reviewed. Consumer protection policies are also 
evolving, as DMH instituted a consumer grievance policy that provides a 
uniform process for ensuring that all consumer grievances are tracked. 

DMH is developing data collection methods for 17 performance targets 
aimed at determining the system’s performance against the court’s exit 
criteria. Although the court monitor expects DMH to both measure and 
improve its performance in fiscal years 2004 and 2005, DMH faces major 
challenges in accurately measuring its performance, including 
establishing methods to collect electronic data, correcting known data 
deficiencies, and working with providers to submit accurate data. 

In its comments on a draft of the report, DMH indicated that the report 
did not reflect the entire spectrum of progress made since the creation 
of DMH. While the progress cited by DMH is important, GAO believes that 
focusing on DMH’s status in meeting the exit criteria is an appropriate 
gauge of its overall compliance with the Dixon Decree.


www.gao.gov/cgi-bin/getrpt?GAO-04-387.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Kathryn G. Allen at 
(202) 512-7118.

[End of section]

Contents:

Letter:

Results in Brief: 

Background: 

DMH Has Assumed Oversight Authority and Responsibility for Providing 
Direct Care: 

Enrollment and Billing System Is Designed to Coordinate Clinical, 
Administrative, and Financial Processes: 

Consumer-Centered Approach Blending Choice and Protection Is Evolving: 

DMH Faces Challenges in Developing the Capability to Measure 
Performance against Exit Criteria: 

Comments from DMH and the Court Monitor and Our Evaluation: 

Appendix I: Major Court Actions Related to District Compliance with the 
Dixon Decree:

Appendix II: Comments from the District of Columbia Department of 
Mental Health and GAO's Response:

GAO's Response to DMH's Comments: 

Appendix III: GAO Contact and Staff Acknowledgments:

GAO Contact:

Acknowledgments: 

Tables:

Table 1: Key Events in Court Oversight of the District's Mental Health 
System, 2001-2002:

Table 2: Status of Meeting Court Expectations for the District's New 
Mental Health System: 

Table 3: Summary of Functional Responsibilities of DMH, as of January 
2004: 

Table 4: Examples of Services in the Community-Based System of Care 
Overseen by DMH, as of January 2004: 

Table 5: Overview of District Medicaid Mental Health Rehabilitative 
Services Coverage, as of January 2004: 

Table 6: Summary of 17 Exit Criteria Measures with Performance Targets, 
December 11, 2003: 

Figure:

Figure 1: Overview of Enrollment and Billing System, as of October 2003	
1:

Abbreviations:

CSA: Core Services Agency: 
DMH: Department of Mental Health: 
FFS: fee-for-service: 
OCFA: Office of Consumer and Family Affairs: 
RTC: residential treatment center:

United States General Accounting Office:

Washington, DC 20548:

March 31, 2004:

The Honorable Tom Davis: 
Chairman: 
Committee on Government Reform: 
House of Representatives:

Dear Mr. Chairman:

In 1997, the U.S. District Court for the District of Columbia found 
that the District had failed over the previous 22 years to comply with 
a 1975 court determination, known as the Dixon Decree,[Footnote 1] that 
District residents with mental illnesses have a statutory right to 
community-based treatment under the least restrictive conditions when 
that treatment is clinically appropriate. Consequently, the court 
placed the District of Columbia Commission on Mental Health Services in 
receivership and appointed two successive receivers, one in 1997 and 
one in 2000. Both receivers were charged with implementing the 
transition from treating consumers in an institutional setting, 
specifically in the District-run St. Elizabeths Hospital, to delivering 
a broader array of mental health services--including counseling, 
supported employment, and housing--in the community. Both receivers 
introduced initiatives intended to enhance the District's community-
based mental health system. In response to congressional concerns, we 
previously examined the second receiver's plan to comply with the Dixon 
Decree. In October 2000, we reported that compliance with the Dixon 
Decree would require a fundamental shift in the District's approach to 
providing and financing mental health operations, including (1) 
assuming the more traditional oversight responsibilities of a mental 
health department and (2) increasing access to federal funds for 
Medicaid, the joint federal-state program for low-income families and 
aged, blind, and disabled people, to expand the scope and number of 
covered community-based mental health services.[Footnote 2] We also 
reported on challenges remaining to comply with the Dixon Decree.

In 2002, the District regained full control of its mental health system 
from the second receiver. However, the District remains under court 
order to implement a plan and comply with exit criteria for ending the 
Dixon lawsuit including meeting specific performance targets. The final 
plan, which was completed by the second receiver in 2001, provides an 
overall framework for developing and implementing an effective and 
integrated community-based system of mental health care for the 
District of Columbia.[Footnote 3] Within this framework, the District 
is responsible for establishing certain components, including a new 
department of mental health capable of overseeing and delivering mental 
health services and developing and implementing a comprehensive 
enrollment and billing system for community-based providers. The final 
plan also highlights the need for consumers of mental health services 
to be offered choices from providers about the services they receive. 
In December 2003, the court approved a set of exit criteria, which 
provides a basis to measure the District's performance in a number of 
areas, such as consumer satisfaction and system performance. One exit 
criterion, for example, requires the District to demonstrate that it is 
providing continuity of care for consumers moving from an inpatient to 
a community-based setting. Until the exit criteria are fulfilled, the 
Dixon lawsuit remains open. Overall, the court expects that it will 
take the District 3 to 5 years to implement the court-ordered plan and 
begin measuring its performance against the exit criteria, with year 1 
beginning in July 2001.

In keeping with your oversight responsibilities with regard to the 
District of Columbia, you asked us to report on the status of the 
District's effort to establish a community-based system of mental 
health care, particularly the District's steps to develop and implement 
(1) a mental health department with the authority to oversee--through 
regulation and monitoring--and deliver mental health services, (2) a 
comprehensive enrollment and billing system that accesses available 
federal funds, (3) a consumer-centered approach to services, and (4) 
methods to measure the District's performance as required by the 
court's exit criteria.

To review the District's actions to implement the final plan, we 
analyzed court orders, including the final plan and exit criteria; 
policies; reports; and evaluations regarding the District's 
implementation of a community-based mental health care system. We 
interviewed the court monitor, who was also the second of the two 
receivers and was charged with monitoring implementation of the final 
plan. Additionally, we interviewed District officials, consumer 
advocates, and providers. We reviewed available data on mental health 
programs and services in operation in the District for fiscal year 
2003, including data on District residents with mental illnesses who 
are enrolled consumers of the mental health system. We corroborated 
data and information received from the District with available data and 
information from the court monitor, providers, and advocates. We 
performed our work from July 2003 through March 2004 in accordance with 
generally accepted government auditing standards.

Results in Brief:

As the first step in implementing the final court-ordered plan to 
establish a community-based mental health system, in 2001 the District 
passed legislation that created the Department of Mental Health (DMH). 
As articulated by the final plan, DMH has taken on the responsibility 
of overseeing the provision of community-based services, including 
setting regulations and monitoring provider compliance with them. DMH 
has centralized oversight of mental health service providers under its 
authority, established certification standards and made use of 
licensing standards for participating providers and facilities, and is 
beginning to implement a monitoring framework to ensure that services 
are meeting quality and safety standards. In addition to its oversight 
of community-based providers, DMH continues the District's historic 
role as a significant provider of services, acting as the primary 
provider for 55 percent of all consumers enrolled in the mental health 
system as of October 2003, and operating over 500 beds at St. 
Elizabeths Hospital. While the number of occupied beds at St. 
Elizabeths Hospital has declined about 18 percent, from 628 in 2000 to 
513 in 2003, the absence of additional community acute care beds, 
services, and supports has limited further reductions in the number of 
occupied beds at the hospital.

DMH has developed and implemented a comprehensive enrollment and 
billing system designed to coordinate clinical, administrative, and 
financial processes. Under this system, a Core Services Agency (CSA), 
which is a DMH-certified provider, enrolls eligible consumers in the 
District mental health system and develops treatment plans, provides 
and coordinates services, and bills DMH on a fee-for-service (FFS) 
basis. As stated in the final plan, this system has two key attributes. 
First, it links payment directly to treatment planning and services 
provided. Second, it increases access to certain community-based mental 
health services, with a significant share of the costs reimbursable by 
federal Medicaid funds for community-based mental health services. For 
fiscal year 2003, DMH received $17.5 million in federal Medicaid funds, 
and DMH expects further growth in Medicaid revenue. In transitioning to 
FFS, however, providers have faced challenges managing cash flow in a 
system that no longer guarantees revenue regardless of performance. 
Additionally, because provider contracts were tied to the FFS billing 
projections, DMH could not pay claims in 2003 for providers who were 
delivering more services than had been projected until their contracts 
were changed. As a result, providers did not always receive claims 
payments on a timely basis in fiscal year 2003. By August 2003, DMH 
made the necessary contract changes to allow providers to be paid for 
the remainder of the fiscal year and, according to senior officials, 
had a plan in process for fiscal year 2004 to prevent this problem from 
recurring.

The District's new mental health system is taking steps to increase the 
involvement of consumers in their own treatment and recovery process 
through a number of provider requirements, such as having policies in 
place that (1) inform consumers of their right to choose providers and 
participate in their treatment planning and (2) establish protections 
for consumers. Although DMH has established requirements related to 
consumer choice, its initial review of provider records, completed in 
January 2003, showed gaps in documentation of consumer participation in 
treatment planning for 41 percent of the records reviewed. Consumer 
protection policies are also continuing to evolve, as DMH instituted a 
consumer grievance policy in October 2003 that provides a uniform 
process for ensuring that all consumer grievances are tracked.

To comply with the exit criteria that the District must meet prior to 
ending the Dixon lawsuit, the court monitor, in conjunction with DMH 
and others, developed methods of measuring compliance, which were 
approved by the court on December 11, 2003. These methods included two 
qualitative requirements relating to consumer satisfaction with 
services and consumer functioning, the latter of which assesses 
consumers' clinical, social, and other conditions. In addition, the 
court approved performance targets for 17 exit criteria measures 
relating to system performance. For example, DMH will be required to 
measure the percentage of DMH expenditures allocated to community-based 
services. DMH is in the initial stages of developing the capability to 
collect data to measure its performance against these exit criteria. 
While the court monitor expects DMH to both measure and improve its 
performance in fiscal years 2004 and 2005, DMH faces several challenges 
in collecting and verifying the accuracy of the performance data, such 
as establishing methods for electronically collecting the information, 
correcting known data deficiencies, and working with providers to 
submit accurate data.

In its comments on a draft of the report, DMH indicated that the report 
did not reflect the entire spectrum of changes and progress made since 
the creation of DMH. In assessing the status of DMH's steps to 
establish a community-based system of care, we focused on four key 
areas of reform central to meeting the exit criteria for the Dixon 
Decree. While we believe that the other reform initiatives and services 
are important, we believe that DMH's status with regard to meeting the 
exit criteria is an appropriate gauge of compliance with the Dixon 
Decree.

Background:

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 
alleged that the practice of treating the District's mental health 
patients in an institutional setting violated the statutory rights of 
individuals. Specifically, the plaintiffs asserted that patients at St. 
Elizabeths Hospital had a statutory right to appropriate care in 
alternative care facilities when less restrictive settings were 
clinically appropriate. In a ruling known as the Dixon Decree, the 
court ruled in favor of the plaintiffs in 1975, ordered the District to 
build a system to facilitate the provision of community-based treatment 
for these individuals, and continued oversight of the District's 
progress in developing this system. In 1997, finding that the District 
was no closer to complying with the Dixon Decree than it had been 22 
years earlier, the court placed the D.C. Commission on Mental Health 
Services in receivership and appointed a receiver to implement the 
transition to a community-based mental health system.[Footnote 4] This 
receiver introduced initiatives that sought to change the way the 
District delivered services, but implementation was slow and the first 
receiver made little progress in implementing these initiatives during 
his 2-year oversight of the commission. Thus, a second or 
"transitional" receiver was appointed on April 1, 2000, to facilitate 
the transition from court receivership to District control. (App. I 
summarizes the major court actions related to the Dixon Decree.):

The transitional receiver was charged with developing a comprehensive 
plan for the District to achieve compliance with the Dixon Decree and 
resume full control of its mental health system. The court approved a 
final plan in April 2001 and required the District to implement it; 
however, before the receivership could be ended, the court required the 
transitional receiver to certify that the District had the capacity to 
implement--and was implementing--the final plan. Although the court 
originally anticipated this certification in late 2001, in December 
2001 the transitional receiver recommended extending the date, 
characterizing the implementation delay as largely unavoidable because 
of (1) additional time needed for recently hired senior DMH managers to 
begin major initiatives, and (2) the unexpected need for crisis 
services to respond to September 11, 2001, terrorist events. Following 
this extension, the transitional receiver reported to the court that 
the District had made sufficient progress and, as a result, the court 
terminated the receivership and appointed the former transitional 
receiver as a court monitor to oversee the District's continued 
implementation of the final plan in May 2002. (See table 1.):

Table 1: Key Events in Court Oversight of the District's Mental Health 
System, 2001-2002:

2001: 

Date: March 28; 
Event: The transitional receiver issued the final court-ordered plan.

Date: April 2; 
Event: The court approved the transitional receiver's final plan and 
required the District to implement it.

Date: May 21; 
Event: The District regained operational control of mental health 
services (transitional receiver still in place).

Date: Oct. 21; 
Event: The District emergency legislation creating the Department of 
Mental Health (DMH) went into effect.

Date: Dec. 15; 
Event: The transitional receiver recommended extending the 
receivership.

Date: Dec. 18; 
Event: Permanent legislation creating DMH became effective.

2002: 

Date: May 15; 
Event: The transitional receiver provided the court with updated 
findings and recommendations on the extended receivership.

Date: May 22; 
Event: The court; 
* found that the District was capable of implementing the final plan, 
* terminated the receivership, 
* appointed the former transitional receiver as a court monitor of 
District compliance with the final plan, and; 
* approved exit criteria for the Dixon case.

Date: Oct. 23; 
Event: The court approved the court monitor's monitoring plan for 
fiscal year 2003, which included reporting to the court twice in that 
year. 

Source: GAO summary of documents from U.S. District Court for the 
District of Columbia.

[End of table]

District Mental Health System Prior to the Approval of the Final Plan:

When the transitional receiver was responsible for overseeing the 
District's mental health system, the District was the largest provider 
of mental health services to its residents, treating approximately 
10,000 consumers annually and employing close to 2,000 staff in fiscal 
year 2000. The focal point of the mental health system was St. 
Elizabeths Hospital, which was the major point of entry for all 
consumers in the system.[Footnote 5] St. Elizabeths Hospital provided a 
wide range of mental health services in an acute care setting, 
including more than 600 beds divided among two types of inpatient 
consumers, forensic and civil,[Footnote 6] for adults and children and 
youth.[Footnote 7] The District also directly provided services through 
outpatient facilities in the community, including two community mental 
health centers and five mobile community outreach treatment teams.

In addition to providing inpatient and direct services in the 
community, the District contracted with private community providers for 
housing, employment, case management, and other community-based 
services. In its contracts with private community providers, the 
District often used a "slot" system to allocate a defined number of 
consumers to providers and paid them a fixed daily rate per consumer. 
Under this system, providers did not compete to attract consumers and 
were paid regardless of performance, consumer satisfaction, or the 
actual delivery of service.

The District and its providers focused primarily on treating the 
medical symptoms of the consumer without focusing as much on whether 
the individual was participating in his or her recovery from mental 
illness and successfully living in the community.[Footnote 8] 
Furthermore, the system did not have many safeguards in place, such as 
uniform provider standards, to involve the consumer in key aspects of 
service delivery, such as choosing a provider and developing a 
treatment plan based on the consumer's goals. The transitional receiver 
identified the need for a restructured mental health system that had 
the flexibility to meet individual needs and allow consumers to 
successfully obtain treatment and live in the community, maximizing 
principles of accessibility, recovery, and consumer choice.

In 2001, the federal share of Medicaid, an entitlement program in which 
states and the federal government are obligated to pay for covered 
services provided to an eligible individual,[Footnote 9] accounted for 
8 percent of District mental health system revenue as compared to the 
national average of 22 percent.[Footnote 10] The transitional receiver 
identified the need to better utilize Medicaid as a major funding 
source. The District's access to Medicaid funds had been limited 
because Medicaid did not cover most of the services provided at St. 
Elizabeths Hospital, considered under the Medicaid statute as a larger 
psychiatric institution.[Footnote 11] This effect was exacerbated by 
the limited capacity in the developing community-based system to 
support inpatients ready for discharge. For example, in October 2000, 
District officials estimated that approximately 60 percent of 
individuals in acute care units at St. Elizabeths Hospital could be 
moved into the community where outpatient services covered by Medicaid 
would be available, if stable alternative housing were available.

A second limit to the District's accessing federal funds was that the 
District had not taken advantage of optional community-based mental 
health services that could be reimbursed through the Medicaid program. 
The transitional receiver required the District to implement a strategy 
adopted by at least 40 other states to expand the services reimbursable 
by Medicaid through an option to cover rehabilitative services, thus 
expanding the scope of eligible services and providers beyond that of 
the program's traditional focus on services delivered by physicians and 
psychiatrists who work at hospitals, clinics, and other facilities. 
Rehabilitative services include crisis and emergency care, medication 
treatment, and community-based interventions. The variety of 
rehabilitative treatments and services covered by this Medicaid option 
is intended to facilitate a consumer's recovery from mental illness, 
including restoring a consumer to his or her best possible functional 
level.

Final Plan and Exit Criteria:

The court-approved final plan broadly outlines the mental health 
system's direction, philosophy, major roles, and governance. It 
represents a major shift in the District's mental health system on 
several fronts, including the system's structure and organization, 
method for enrolling consumers and paying providers, and involvement of 
consumers in their plan for recovery. For example, the final plan:

* identifies the need to create a new mental health department with the 
additional responsibility of oversight along with continuing the 
District's historic role as provider;

* envisions a significant change in enrollment and billing systems, 
such as linking payment to the delivery of services, and developing new 
funding strategies that increase federal reimbursement; and:

* articulates that the new system have a built-in capacity to measure 
itself in key performance areas and to translate any findings into 
continued system improvements.

Underpinning these structural changes is a refocusing of the mission of 
the District's mental health system toward involving the consumer in 
treatment decisions and incorporating changes that facilitate the 
consumer's recovery from mental illness and away from focusing 
primarily on treating the individual's medical symptoms.

The court also approved exit criteria for the Dixon lawsuit, which 
provide a basis for measuring the performance of the District's mental 
health system and which must be met in order to end the Dixon case. The 
criteria cover four areas:

1. consumer satisfaction, which assesses consumers' satisfaction with 
mental health services provided;

2. consumer functioning, which tracks consumers' clinical, social, and 
other conditions upon entry into the mental health system and again 
after receiving services for a specified period of time;

3. consumer service delivery, which assesses the adequacy of the mental 
health system's overall performance for consumers in a range of areas 
including treatment planning, coordination of care, and response to 
emergent and urgent needs; and:

4. system performance, which demonstrates how well the community-based 
system of care is serving particular populations.

The first two areas require DMH to develop and implement methods for 
reviewing and measuring consumer satisfaction and consumer functioning 
and to use the data to refine the system. To fulfill the remaining 
criteria, DMH is required to meet 17 performance targets, many of which 
measure activities identified as national best practices in the field 
of mental health.[Footnote 12]

According to the court monitor, implementing the final plan, including 
developing the ability to measure DMH's progress against the exit 
criteria, will take 3 to 5 years, with year 1 beginning July 1, 
2001.[Footnote 13] In general, efforts for years 1 and 2 were expected 
to center on planning, laying the basic infrastructure for the system, 
and beginning to provide community-based services. By the end of year 
3, which began October 1, 2003, DMH is expected to be stabilizing and 
improving performance within the system, and in years 4 and 5 DMH is 
expected to be actively measuring performance outcomes. (See table 2.) 
In addition to developing performance targets for the exit criteria, 
the court monitor is required to provide the court with semiannual 
reports on the District's progress in meeting all of the exit criteria. 
The court monitor's first two reports, submitted to the court in 
January 2003 and July 2003, respectively, focused primarily on DMH's 
status in implementing the final plan and also included an update on 
the status of meeting the exit criteria to end the Dixon case.

Table 2: Status of Meeting Court Expectations for the District's New 
Mental Health System:

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Hire DMH director; 
Status: Step is completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Hire and train key leadership; 
Status: Step is completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Develop and implement regulatory and 
monitoring functions; 
Status: Step is completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Begin delivering Medicaid 
rehabilitative services; 
Status: Step is completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Design and implement enrollment and 
billing systems; 
Status: Step is completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Certify and license community-based 
providers; 
Status: Step is completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Issue consumer protection rules; 
Status: Step is completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Design and implement hotline and 
crisis supports; 
Status: Step is completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Review adult and child and youth 
consumer services and establish performance targets; 
Status: Step is completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Define system performance measures 
and establish performance targets; 
Status: Step is completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Develop consumer functioning review 
methods; 
Status: Step is in process but not completed.

Phase and time period: Planning and developing infrastructure and 
beginning data collection; July 2001 - Sept. 2003; 
Expected results for time period: Develop consumer satisfaction review 
methods; 
Status: Step is in process but not completed.
 
Phase and time period: Stabilizing, evaluating, and measuring system 
performance; 
Begin Oct. 2003 (no specific end date); 
Expected results for time period: Meet 2 performance targets for adult 
and child and youth services; 
Status: Step is in planning.

Phase and time period: Stabilizing, evaluating, and measuring system 
performance; 
Begin Oct. 2003 (no specific end date); 
Expected results for time period: Submit performance target data for 15 
measures of system performance to court monitor on quarterly basis; 
Status: Step is in planning.

Phase and time period: Stabilizing, evaluating, and measuring system 
performance; 
Begin Oct. 2003 (no specific end date); 
Expected results for time period: Meet 15 system performance targets 
for measures such as: 
* Penetration rates[A]; 
* Specialized services for adults; 
* Specialized services for children and youth; 
* Continuity of care; 
* Efficient use of resources; 
Status: Step is in planning.

Phase and time period: Stabilizing, evaluating, and measuring system 
performance; 
Begin Oct. 2003 (no specific end date); 
Expected results for time period: Use consumer functioning review data 
for quality improvement; 
Status: Step is in planning.

Phase and time period: Stabilizing, evaluating, and measuring system 
performance; 
Begin Oct. 2003 (no specific end date); 
Expected results for time period: Use consumer satisfaction review data 
to improve the availability and quality of care; 
Status: Step is in planning.

Source: Court monitor, DMH, and documents from U.S. District Court for 
the District of Columbia, March 2004.

[A] Penetration rates measure the percentage of District populations, 
such as adults aged 18 and over, who are served by the mental health 
system (defined as receiving at least one provided service).

[End of table] 

DMH Has Assumed Oversight Authority and Responsibility for Providing 
Direct Care:

In accord with the transitional receiver's final plan, the District 
restructured its mental health system by creating DMH to oversee the 
provision of mental health services, including the authority to set 
regulations and monitor compliance--a shift away from the structure of 
its predecessor office, which was primarily a provider of services. 
Under this structure, DMH also continues the District's historic role 
as a provider of mental health services. In its oversight role, DMH has 
developed certification standards and made use of licensing standards 
to enroll a network of providers to deliver an array of mental health 
services, which DMH continues to expand to ensure adequate capacity for 
community-based mental health services. DMH is in the early stages of 
implementing its new monitoring framework to ensure that services are 
complying with existing and newly established quality and safety 
standards. DMH remains the largest provider of community-based services 
and continues to provide inpatient mental health care for the District 
at St. Elizabeths Hospital.

Oversight Responsibilities Include Setting Regulations and Monitoring 
Provider Compliance:

In 2001 the District took the first step toward implementing the final 
plan by passing legislation establishing DMH and giving it new 
oversight responsibilities, including setting regulations and 
monitoring community-based provider compliance.[Footnote 14] The 
significant organizational change accompanying the addition of 
oversight responsibilities required hiring new leadership and 
redeploying and retraining a large portion of existing staff. For 
example, of DMH's 270 administrative and oversight staff positions, 
which represent approximately 14 percent of all budgeted staff for 
fiscal year 2003, the majority of positions were new and required 
either redeployment of existing staff or hiring new staff. Consistent 
with the final plan, DMH established a training institute to provide 
staff training and development, among other services. As of December 
2001, a court report indicated that key leadership positions had been 
filled, including that of the director of DMH, who was hired by the 
mayor in April 2001. Subsequently, however, one key leadership 
position, DMH's chief financial officer, experienced turnover, with 
four individuals serving in the role since April 2001. DMH has also 
hired two chief executive officers with experience in other systems 
undergoing reform, to run its community-based services agency and St. 
Elizabeths Hospital, respectively. (See table 3 for a summary of DMH's 
functional responsibilities, including oversight, by office.):

Table 3: Summary of Functional Responsibilities of DMH, as of January 
2004:

DMH office: Office of Fiscal and Administrative Services; 
Functions of office: 
* Prepares and oversees DMH's operating and capital budgets; 
* Plans for and manages DMH's facilities and information systems; 
* Operates DMH's contract management system and develops enrollment and 
eligibility processes for services provided directly or by contractors; 
* Administers human resources and labor management.

DMH office: Office of Accountability; 
Functions of office: 
* Certifies mental health rehabilitative services providers, 
freestanding mental health clinics, residential treatment centers for 
children and youth, and Medicaid day treatment programs; 
* Licenses community residential facilities for persons with a mental 
illness; 
* Oversees unusual incident review, grievance, and consumer complaint 
processes; 
* Develops and implements quality improvement, program evaluation, and 
compliance functions, such as audits of provider records; 
* Develops and implements policies.

DMH office: Office of Delivery Systems Management; 
Functions of office: 
* Develops program requirements for DMH's service contracts and 
arranges for community-based mental health service delivery through 
agreements with community providers; 
* Develops and monitors acute care contracts with community hospitals; 
* Develops discharge planning and diversion programs for adults and 
children and youth; 
* Operates the Access Helpline, a telephone hotline providing crisis 
emergency services, enrollment assistance, and information and referral 
24 hours a day, 7 days a week; 
* Collaborates with other public agencies, including the District's 
Youth Services Administration and Department of Health, to develop 
operational arrangements for service delivery with other public systems 
of care.

DMH office: St. Elizabeths Hospital; 
Functions of office: 
* Provides inpatient care for adults with acute, intermediate, and long-
term mental health needs; 
* Provides mental health evaluations and recommendations to courts as 
to a person's competence to stand trial; 
* Treats adults with forensic status, meaning the court has found the 
patient not guilty by reason of insanity or the patient has been moved 
to St. Elizabeths Hospital from a correctional facility for temporary 
treatment in a secure environment.

DMH office: D.C. Community Services Agency; 
Functions of office: 
* Delivers a broad range of mental health services for adults and 
children and youth, including mental health rehabilitation, crisis 
response, and homeless outreach, in a variety of settings, such as 
homes, schools, neighborhood sites, and in the agency's 17 locations 
throughout the District; 
* Operates three pharmacies, which provide free medication to 
consumers; three medical clinics; and a reform school for adolescents. 

Source: DMH.

[End of table]

DMH became the primary entity for overseeing a mental health system 
that is focused on community-based systems of care. (See table 4.) 
DMH's regulatory responsibilities include developing standards and 
certifying providers of services, such as rehabilitative services and 
supported housing at independent living facilities, and licensing 
community residential facilities. As of January 2004, DMH had certified 
22 mental health rehabilitative services providers, licensed more than 
148 community residential facilities, and was in the process of 
implementing a certification program to oversee more than 400 supported 
independent living facilities.[Footnote 15] DMH addressed 
rehabilitative services standards by developing and publishing specific 
provider certification standards that took effect on November 9, 
2001.[Footnote 16]

Table 4: Examples of Services in the Community-Based System of Care 
Overseen by DMH, as of January 2004:

Mental health service: Counseling; 
Description: Individual, group, or family face-to-face services to help 
consumers develop, restore, and enhance the skills necessary to access 
community resources and support systems and restore or enhance the 
family unit.

Mental health service: Community support; 
Description: A broad range of activities to enable consumers to recover 
from mental illness, such as participating in the development and 
implementation of their treatment plan, providing assistance and 
support for consumers in crisis, offering support for consumers' family 
members, and assisting consumers with the self-monitoring and self-
management of symptoms.

Mental health service: Medication/somatic treatment; 
Description: Medical interventions such as physical examinations; 
prescription, supervision, and direction for administration of mental 
health medications; 
and monitoring results of laboratory diagnostic procedures for mental-
health related medications.

Mental health service: Crisis response; 
Description: Site-based services, which allow extended observation to 
stabilize a consumer and prevent hospitalization as well as critical 
incident and stress debriefing capacity, and mobile services. Services 
are available 24 hours a day, 7 days a week.

Mental health service: Supported housing; 
Description: Personal care support for adult and older youth (18 to 21 
years of age) consumers living alone or with others, including 
assistance with maintaining a safe and sanitary living environment, 
maintaining personal hygiene and health, and identifying community 
resources for education, employment, and recreation.

Mental health service: Homeless support and outreach; 
Description: Intermittent and long-term support services for 
individuals who are homeless, including outreach and initial evaluation 
as well as supportive counseling, medication management, and housing 
assistance.

Mental health service: Consumer advocacy; 
Description: Information on consumers' rights and the procedures for 
resolving complaints and individual advocacy for consumers who seek 
assistance with specific rights violations.

Mental health service: Peer support; 
Description: Self-help services, including self-help groups, health 
education, and nutrition services. In addition, services include 
assistance to maintain a supportive network and an advocacy program. 

Source: DMH.

[End of table]

In addition to its regulatory responsibilities, DMH must monitor 
providers' compliance with existing and newly developed quality and 
safety standards. DMH's oversight division, the Office of 
Accountability, has direct responsibility for monitoring compliance 
with standards. DMH has developed a monitoring framework that is in the 
early stages of implementation, with DMH beginning to use information 
from some monitoring efforts to assess provider compliance and 
continuing to adjust other efforts. The following are examples of DMH 
monitoring efforts:

* Safety inspections, which are surveys of the sites where licensed 
providers offer services, are used to ensure health and safety 
standards are met. In the first 11 months of 2003, DMH conducted at 
least 150 inspections of 148 eligible facilities. When DMH conducts 
site inspections, it can issue notices of infractions for violations of 
the standards. According to DMH, from April 2002 through January 2004, 
it issued 46 notices to 22 providers and issued more than $29,000 in 
fines for identified deficiencies, including items such as insufficient 
staff on duty, failure to report unusual incidents, inaccurate 
personnel records, and exceeding maximum capacity. Increasing the 
number of site inspections of facilities that serve DMH consumers is 
one of the goals included in the DMH annual "scorecard" submitted to 
the District Mayor's office, which tracks commitments and deadlines set 
for DMH.

* Provider audits, which are record reviews of certified rehabilitative 
services providers, are used to analyze trends across providers and to 
ensure that providers are meeting documentation and service standards. 
In January 2003, DMH completed its first round of audits for the 12 
providers certified at that time. As expected by DMH for the first year 
of applying standards, the audit found that providers were not in 
compliance with certain documentation requirements, such as having the 
approving practitioner sign the authorized treatment plan, and, as a 
result, all 12 providers were to implement corrective action plans. 
While these initial audits focused solely on provider documentation 
compliance, the second round of audits of all certified providers, 
which DMH expects to complete in early 2004, will examine how well 
specific services (such as medication treatment) are being provided.

* Routine, biennial recertification reviews for rehabilitative services 
providers, which include evaluations of recorded complaints, audits, 
and public comment, are used to ensure that individual providers are 
complying with certification standards. With the first round of 
recertification applications, begun in December 2003, DMH will be able 
to use data from these reviews to make decisions regarding providers' 
recertifications.[Footnote 17]

* Investigations of unusual incidents, which are conducted by the 
Office of Accountability and providers, are used to ensure consumer 
safety and reduce the occurrence of future incidents.[Footnote 18] DMH 
is expected to investigate any major unusual incident, such as consumer 
deaths, adverse drug reactions, and allegations of abuse or neglect. 
Providers are expected to investigate other, less serious incidents, 
defined as any events that occur outside the normal routine of care, 
and they are required to report to DMH all unusual incidents and action 
taken to respond to them. Unusual incidents, which vary widely in 
severity, were reported 1,259 times in calendar year 2003, including 
336 reports of major unusual incidents. Of the 1,259 unusual incidents 
reported for 2003, DMH resolved 528 cases, including 161 major unusual 
incident cases. The remaining 731 cases usually required additional 
information from providers or other District agency investigators 
before DMH could take action. According to a DMH official, on average, 
a case remains pending for between 30 and 90 days before a disposition 
is reached.

DMH Continues the District's Historical Role as a Direct Provider of 
Mental Health Services:

Through DMH, the District remains a direct provider of a significant 
portion of mental health services. DMH's own community services agency 
is the largest provider of community-based services in the District, 
acting as the primary provider for 55 percent of all consumers enrolled 
in the District mental heath system as of October 2003. In addition, it 
is the sole provider of a number of services, including crisis response 
services for adult consumers through its Comprehensive Psychiatric 
Emergency Program and free pharmacy services for uninsured consumers. 
The number of consumers receiving community-based services directly 
from DMH grew from 4,191 in October 2002 to 6,971 in October 2003. In 
addition, the total number of consumers served by the 13 other 
community-based providers increased from 2,612 in October 2002 to 5,631 
in October 2003.[Footnote 19]

As envisioned by the transitional receiver's final plan, DMH has also 
taken steps to reduce the number of beds at St. Elizabeths Hospital, 
but reductions have been limited by the lack of community-based 
services and agreements with community hospitals for acute 
care.[Footnote 20] The intent of the plan was for St. Elizabeths 
Hospital to be primarily a forensic hospital and a safety net facility 
for the community-based system of services and for community 
hospitals.[Footnote 21] While neither the final plan nor the exit 
criteria for the Dixon Decree specify goals for the reduction in the 
bed census at St. Elizabeths Hospital as a condition of ending the 
Dixon case, the exit criteria specify that 60 percent of DMH's annual 
expenditures must be directed to community-based services. In DMH's 
2004 proposed budget, 41 percent of funds, approximately $80 million, 
are allocated for community-based providers and 42 percent, 
approximately $81 million, are allocated for St. Elizabeths Hospital. 
The remaining 17 percent, approximately $34 million, are budgeted for 
administration, oversight, delivery systems management, and other 
direct service costs, some of which represent fixed costs for 
community-based services.[Footnote 22] DMH has decreased the number of 
occupied beds at St. Elizabeths Hospital--from 628 beds in October 2000 
to 513 beds in October 2003. In July 2003, the court monitor reported 
that the current model of continued reliance on St. Elizabeths Hospital 
was not financially viable, did not promote the concept of community-
integrated care, and was not in compliance with the court-ordered plan. 
However, DMH stated that the hospital's budget cannot be reduced 
without an additional decrease in the number of occupied beds. The 
chief executive officer of St. Elizabeths Hospital said that the census 
would not decrease until the community can support patients upon 
discharge, including providing access to affordable housing. The court 
monitor estimates that for the community-based system to adequately 
meet the needs of District residents, DMH would have to double the 
current capacity.

Enrollment and Billing System Is Designed to Coordinate Clinical, 
Administrative, and Financial Processes:

In its first 2 years, DMH developed and implemented a comprehensive 
enrollment and billing system that coordinates clinical, 
administrative, and financial processes. Two key attributes of this 
system that were described in the final plan are that it (1) links 
payment with planning for individual treatment and the provision of 
services and (2) increases access to federal funds through the 
development of mental health rehabilitative services, which are 
community-based mental health services that a state's Medicaid program 
can choose to provide. DMH has developed and implemented a system to 
link payment to authorized treatment plans, enroll consumers, reimburse 
providers, and bill Medicaid for rehabilitative services provided. 
However, moving to an FFS billing system for services has resulted in 
difficult adjustments, including managing cash flow, for some DMH 
providers.

Enrollment and Billing System Links Payment to Treatment:

DMH's enrollment and billing system that links payment to treatment, as 
envisioned by the final plan, is in place and operating. Consumers can 
enter into the mental health system through a variety of points in the 
community, including calling DMH's Access Helpline, visiting a DMH-
certified community-based service provider, receiving treatment in 
hospitals or emergency rooms, and receiving mental health assistance 
through other DMH outreach efforts.[Footnote 23] All District residents 
needing mental health services are eligible to receive them regardless 
of insurance coverage.[Footnote 24] The Access Helpline--which is a 
telephone hotline that provides crisis emergency services, enrollment 
assistance, and information and referral 24 hours a day, 7 days a week-
-or a certified CSA[Footnote 25]--which is responsible for acting as a 
clinical home and therefore assessing consumer needs and coordinating 
care--will enroll eligible consumers within 3 days of initial 
contact.[Footnote 26] When enrolling in the system, the consumer 
chooses a CSA as a clinical home based on a number of preferences such 
as location and treatment specialties. (See fig. 1.) After choosing the 
CSA, a consumer meets with a clinical manager to develop a treatment 
plan, which includes objectives and a plan of services, called an 
individualized recovery plan for adults and an individualized plan of 
care for children and youth. Once a clinical manager and a consumer 
develop a treatment plan, it is submitted by the CSA to DMH for 
authorization. Upon authorization of the treatment plan, a consumer can 
begin accessing the approved services. These services must be provided 
by a CSA or by another DMH-certified provider; once services are 
delivered, the providers then bill DMH on an FFS basis for 
reimbursement. Screening consumers for eligibility to receive mental 
health services and billing DMH for services rendered are new 
responsibilities for providers. Providers will be paid only for 
services delivered that are identified by the treatment plan and 
authorized by DMH.

Figure 1: Overview of Enrollment and Billing System, as of 
October 2003:

[See PDF for image]

[End of figure]

As of December 2003, DMH had transitioned 12 of its 27 community-based 
services to the FFS enrollment and billing system, including all nine 
rehabilitative services, but 15 other services, such as consumer 
advocacy and peer support, had yet to be added. Services that have not 
been transitioned to the FFS system do not have to be identified in an 
authorized treatment plan; however, community-based providers must 
deliver these services according to their contractual agreements with 
DMH.

In order to develop a system that links payment to services provided, 
DMH purchased management information systems that coordinate clinical, 
administrative, and financial processes for mental health services. 
These systems allow CSAs to enroll consumers in the mental health 
system, submit claims electronically, and retrieve their consumers' 
demographic data. These systems also streamline DMH's administrative 
efforts by allowing DMH to electronically enroll consumers, authorize 
services, adjudicate claims, and generate payment reports for 
providers. The system further helps DMH monitor how much individual 
providers are billing, which helps DMH project expenditures. DMH 
received the first batches of claims in June and July 2002, and as of 
October 2003 it reported that its mental health system had 12,602 
consumers enrolled.[Footnote 27] However, DMH could not report the 
number of consumers who received services within a 90-day period, which 
is consistent with the court's definition of provision of services to 
enrolled consumers. As of January 2004, DMH had paid rehabilitative 
services providers $30.4 million for claims submitted in fiscal year 
2003.[Footnote 28] DMH projects that it will have paid these providers 
a total of $35 million to $40 million for claims submitted in fiscal 
year 2003.[Footnote 29]

DMH Has Increased Access to Federal Funds through a Medicaid Mental 
Health Rehabilitation Services Option:

In December 2001, the Centers for Medicare & Medicaid Services approved 
the District's request to add the mental health rehabilitation services 
option to its Medicaid program.[Footnote 30] (See table 5.) Approval of 
the option increased both the number and scope of mental health 
services reimbursable by Medicaid. Under the option, DMH certifies and 
contracts with community providers to deliver covered services. DMH 
pays providers for any DMH-authorized service and, on behalf of 
contracted providers, files claims with the District Medicaid office 
for reimbursement of the federal share of the cost of Medicaid-covered 
services. Thus, there is no relationship between the District Medicaid 
office and the local providers for these services, nor is payment to 
providers contingent upon reimbursement by Medicaid. Other District 
community-based service providers that do not contract with DMH bill 
the District Medicaid office directly for their services.

Table 5: Overview of District Medicaid Mental Health Rehabilitative 
Services Coverage, as of January 2004:

Covered services: 
* Diagnostic/assessment; 
* Medication/somatic treatment[A]; 
* Counseling and psychotherapy; 
* Community support; 
* Crisis/emergency; 
* Day services[B]; 
* Intensive day treatment[C]; 
* Community-based intervention; 
* Assertive community treatment[D]; 

Coverage criteria: The service should be: 
* medically necessary; 

Coverage criteria: The service should be delivered: 
* by a DMH-certified provider; 
* by a qualified practitioner (associated with a DMH-certified 
provider); 
* in accordance with a treatment plan; 
* in accordance with service standards[E]; 

Qualified practitioners: 
* Psychiatrist; 
* Psychologist; 
* Clinical social worker; 
* Social worker; 
* Registered nurse; 
* Licensed professional counselor; 
* Addiction counselor. 

Source: GAO analysis of DMH Medicaid information.

[A] Medication/somatic treatment services are medical interventions 
such as physical examinations, prescription, and supervision or 
administration of mental health medications; and monitoring results of 
laboratory diagnostic procedures for mental health-related 
medications.

[B] Day services are structured to restore community living, 
socialization, and adaptive skills.

[C] Intensive day treatment is a coordinated acute treatment program 
that serves as a step-down service from inpatient care.

[D] Assertive community treatment is an intensive integrated 
rehabilitative, crisis, treatment, and mental health community support 
service provided by an interdisciplinary team with coverage 24 hours a 
day and 7 days a week.

[E] Service standards include, among other things, staffing ratios, 
levels of availability, and location of service delivery.

[End of table]

DMH built mechanisms into the enrollment and billing processes to help 
providers and DMH work together to obtain Medicaid reimbursement. 
Access Helpline counselors work with providers to identify consumers 
who are eligible and enrolled in the Medicaid program using eligibility 
data from the District Medicaid office.[Footnote 31] Before 
transmitting Medicaid-reimbursable claims to the District's Medicaid 
office, DMH checks each claim to ensure that the consumer is currently 
enrolled in Medicaid, that the provider is eligible, and that the 
covered service has been paid by DMH. Upon submittal for reimbursement 
to the District's Medicaid office, DMH tracks the status of claims, 
receiving reports that detail the claims paid, waiting to be paid, and 
denied payment. The report also provides reasons that claims were 
denied.

DMH is improving its overall enrollment and billing system to decrease 
the time providers spend on administration and to increase the time 
they spend serving consumers. For example, in October 2003, DMH changed 
a component of the billing system that delayed providers from offering 
services. The system had required providers to electronically update 
treatment plans every 90 days. To reinforce this requirement, the 
information system prevented the provider from entering any other 
consumer data, such as claims data for a service provided, until the 
plan was updated. DMH realized that requiring providers to do this was 
burdensome and prevented them from serving consumers. As a result, DMH 
removed the requirement to update the treatment plan from the 
electronic billing system and is monitoring compliance with the 90-day 
requirement through an alternative mechanism.

DMH projects that as the enrollment and billing system improves and the 
provision of community-based services continues to expand, mental 
health rehabilitative services will eventually generate approximately 
$36 million to $38 million annually in federal Medicaid funds. As of 
November 2003, the District's Medicaid office had reimbursed DMH $17.5 
million for fiscal year 2003--over 50 percent of the amount DMH paid to 
providers for rehabilitative services. As one condition of ending the 
Dixon case, federal Medicaid funds must cover at least 49 percent of 
all mental health rehabilitative services provided. Although DMH 
expects future growth in Medicaid revenue, many individuals served by 
the District's mental health system, especially adults, are not 
eligible for Medicaid.

New System Presents Challenges to Providers:

According to DMH officials, moving to an FFS system represented a major 
change in business operations for DMH providers and has presented 
challenges for them; however, DMH has offered assistance to all 
certified rehabilitative providers. DMH offered training for providers 
on service and billing requirements and grants for building the 
infrastructure required to participate in the system. In addition, 
consultants funded by DMH can work with providers on developing sound 
business practices, including cash flow analysis, budgeting in an FFS 
environment, staff assignments and productivity, record keeping, and 
billing.

Even with assistance, providers experienced challenges since beginning 
to bill DMH on an FFS basis. Two providers reported that there are 
considerable investments of time and money necessary to be certified as 
a CSA. According to one provider, the new system requires more 
"business savvy" and planning by providers for revenue peaks and 
valleys because providers are no longer guaranteed revenue regardless 
of the level of services provided. Thus, as stated by the same 
provider, they must plan ahead to ensure they can meet payroll in 
months like December and February, when fewer consumers seek services 
because of holidays and winter weather.

Problems managing cash flow were exacerbated because provider contracts 
with DMH were tied to the billing projections, which meant that DMH 
could not pay claims for providers who exceeded their projections until 
their contracts were changed.[Footnote 32] The Mental Health Coalition, 
whose members are primarily DMH-certified providers, wrote to DMH 
several times in fiscal year 2003 listing a number of concerns with the 
billing process, and its primary concern was the lack of timely payment 
on a consistent basis. By August 2003, DMH made the necessary contract 
changes to allow providers to be paid for the remainder of the fiscal 
year and, according to senior officials, had a plan in process for 
fiscal year 2004 to prevent this problem from recurring. DMH provided 
data showing that in fiscal year 2003 it adjudicated--that is, made a 
decision to pay or deny--79 percent of submitted claims within 30 days; 
however, after adjudication, the District of Columbia Treasury must 
then pay the approved claims, which, according to DMH, took an average 
of 15 additional days. The court monitor has identified claims payment 
as an area of concern that will continue to be monitored. DMH did not 
provide the court monitor with a measure of timely reimbursement in 
2003, but, according to the court monitor, in fiscal year 2004 DMH will 
be required to report the percentage of claims being paid within 30 
days of submission.

Consumer-Centered Approach Blending Choice and Protection Is Evolving:

Also central to DMH's new mental health system is facilitating 
consumers' participation in their recovery from mental illness, an 
approach that is consistent with the final plan,[Footnote 33] as well 
as national trends.[Footnote 34] Consistent with this focus, DMH has 
established requirements in two key areas, consumer choice and consumer 
protection. With regard to consumer choice, DMH has requirements in 
place to ensure that consumers participate in the selection and receipt 
of services. However, DMH's initial review of rehabilitative services 
provider records showed gaps in documentation of consumer 
participation, such as a lack of documentation of the consumers' 
participation in--and agreement with--their treatment plans for 41 
percent of the records reviewed. DMH is addressing these gaps with 
providers to ensure that their practices comply with these requirements 
and adequately involve consumers in their treatment. Consumer 
protection policies are also evolving, with DMH publishing a uniform 
consumer grievance policy in October 2003. DMH officials emphasized 
that moving to a consumer-focused model is a long-term change that will 
take place gradually.

With Requirements in Place, DMH Is Addressing Gaps in Consumer Choice:

Consumers entering the District's mental health system are faced with 
important choices that help shape the provision of care they receive, 
including the choice of a CSA as a clinical home that will provide and 
coordinate care, choice of other DMH-certified providers, and choice of 
services through involvement in treatment planning. As part of the 
enrollment process, both the CSA and the Access Helpline are required 
to present consumers with the option to select any DMH-certified CSA to 
serve as the clinical home, a choice typically made based on their 
preferences, such as location and treatment specialties provided. Every 
CSA that serves as a consumer's clinical home is required by DMH's 
certification standards to have a policy in place to inform consumers 
about these and other choices available to them. For example, each 
CSA's consumer choice policy must also inform consumers about the 
availability of peer and family support services--such as 
transportation, education, nutrition services, and recreation 
activities--as well as how to access the services. DMH's certification 
standards also require CSAs to coordinate the treatment planning 
process for their consumers and to document consumer participation. For 
example, CSAs are required to develop a diagnostic assessment and 
treatment plan for each consumer that follows the consumer throughout 
the service delivery and reimbursement systems. Each CSA acting as a 
clinical home is required to obtain a consumer's written consent to 
treatment as well as provide all consumers with a statement outlining 
their rights and responsibilities during the enrollment and treatment 
process.

To assist consumers in obtaining mental health services, the Director 
of DMH's Office of Consumer and Family Affairs (OCFA) told us that DMH 
employs 15 to 20 mental health consumers as enrollment specialists who 
are available to other consumers as a resource in making these choices. 
DMH also offers training, some of which is conducted by other mental 
health consumers, that is available to consumers and their families on 
selecting providers and planning treatment. In addition, DMH's 
enrollment handbook for new consumers summarizes aspects relating to 
the enrollment process, such as the types of mental health services 
available, range of consumer choices, and activities a consumer can 
expect during enrollment. Intended for use in the second quarter of 
2004, DMH is developing a provider report card that contains specific 
information about each rehabilitative services provider to better 
facilitate consumer choice. For example, the provider report card will 
give providers a numerical score in areas, such as consumer access, 
billing and claims, and consumer complaints, that would enhance the 
consumers' basis for selecting a provider. Finally, OCFA is also 
responsible for overseeing the development and implementation of the 
consumer satisfaction review required in the Dixon exit criteria, an 
initiative that DMH envisions as expanding the role of consumers in 
measuring the quality of services they receive in the District's mental 
health system.

The court monitor and District mental health advocates have highlighted 
areas relating to consumer choice that need attention and that are 
consistent with DMH's plans for additional development. In a January 
2003 report to the court, the court monitor recommended that DMH 
develop a system for tracking consumer choice to help determine whether 
choices truly are available.[Footnote 35] The Director of OCFA told us 
that DMH would begin addressing this issue by identifying concerns 
relating to choice through consumer focus groups planned for each CSA 
in 2004. In addition, University Legal Services, the designated 
protection and advocacy program for the District,[Footnote 36] told us 
that consumers do not have enough information about how to access 
providers in the mental health system, and therefore it has published 
its own consumer rights manual. For example, an official with this 
organization told us that District consumers often do not have a choice 
among the full range of providers because many CSAs have limited 
capacity and have had to develop waiting lists. University Legal 
Services also cited a delay for consumers in receiving community-based 
services who are discharged from St. Elizabeths Hospital. While DMH is 
not required to report current baseline data regarding the receipt of 
community-based services for consumers following a hospital discharge, 
one condition for ending the Dixon case will be to demonstrate that 80 
percent of known discharged inpatients receive services in a non-
emergency, community-based setting within 7 days of a hospital 
discharge.

DMH's initial audits of documentation practices of each of its 
certified rehabilitative services providers showed gaps in 
documentation of consumer participation in development of their 
treatment plans. Of the 740 unique consumer records DMH reviewed in its 
audit completed in January 2003, 38 percent did not have a consumer's 
signature on the treatment plan and 41 percent did not document the 
consumer's participation in and agreement with the treatment plan. Each 
of the 12 providers reviewed by DMH was asked to develop a self-audit 
program and implement staff training to address areas of deficiency in 
the audits, which, according to DMH, were to be expected in the first 
year of applying provider standards. Concerns raised by other 
stakeholders were consistent with the results of DMH's audits of 
provider documentation practices. For example, in a July 2003 letter to 
DMH, University Legal Services noted systemic problems with treatment 
plans relating to consumer participation and accuracy, such as being 
unsigned, lacking consumer preferences, and failing to reflect consumer 
medical needs. DMH's written response to University Legal Services 
highlighted the provider documentation audits completed by DMH as 
evidence that the department is identifying treatment plan issues but 
acknowledged that these problems will take time to resolve.

Consumer Protection Mechanisms Are Evolving:

In October 2003, DMH published a consumer grievance policy, required by 
the legislation creating DMH,[Footnote 37] which strengthened the basic 
consumer protection provisions in DMH's provider certification 
standards. Prior to publication of this policy, CSAs and other mental 
health providers were required to establish written complaint and 
grievance policies and procedures but did not have to include specific 
criteria consistent with an overall and uniform DMH policy. For 
example, the DMH policy published in October 2003 required providers to 
review, investigate, and respond within 5 business days to grievances 
alleging abuse or neglect or denial of a service. While consumers can 
continue to file grievances with CSAs or DMH, the new policy also 
specifically outlines the conditions under which consumers can request 
an external review of a grievance that can result in a fact-finding 
hearing or mediation process.[Footnote 38] The new policy also requires 
DMH to facilitate and fund peer advocacy programs that are independent 
of providers to assist consumers throughout the grievance process. In 
addition, providers are required to take specific steps to increase 
consumer awareness about their grievance policies, such as posting the 
various options and procedures for filing a grievance and documenting 
that the consumer received a copy of the provider's policy.

DMH's monitoring of consumer complaints and grievances is also 
evolving. As of January 2004, DMH had contracted with an organization 
to create a database that will allow OCFA to track consumer grievances 
and identify systemic issues. OCFA expects that the database will be 
developed in the first few months of 2004. The new grievance policy 
also specifies that DMH will periodically review the implementation of 
the provider policies and publish a semiannual report on the types and 
dispositions of all grievances filed as well as highlight noteworthy 
trends, patterns, and other statistical information. Prior to this 
policy, DMH could not ensure that grievances were being tracked and did 
not review the extent to which providers were implementing their 
grievance procedures.

DMH Faces Challenges in Developing the Capability to Measure 
Performance against Exit Criteria:

The court monitor worked with DMH and others to develop performance 
targets to measure compliance with the Dixon exit criteria. On December 
11, 2003, the court approved qualitative requirements for two exit 
criteria measures relating to consumer satisfaction with services and 
level of functioning. In addition, the court approved 17 performance 
targets for 17 exit criteria measures relating to system performance. 
Although the court monitor envisioned fiscal years 2004 and 2005 as the 
appropriate time frame for DMH to both measure and improve its 
performance, DMH faces major challenges to collecting and verifying the 
accuracy of the performance data, including developing methods to 
electronically collect the data, correcting known data deficiencies, 
and working with providers to submit accurate data.

Methods to Measure Performance against the Exit Criteria Approved in 
December 2003:

In working to measure the District's compliance with the exit criteria, 
the court monitor, in conjunction with an outside expert and the legal 
parties to the Dixon case, developed two qualitative requirements and 
17 performance targets, which were approved by the court in December 
2003.[Footnote 39] The qualitative requirements address two of the exit 
criteria measures--consumer functioning and consumer satisfaction. For 
these two measures, DMH is required to develop and implement consumer 
satisfaction and functioning review methods and begin using the data 
obtained by these methods to make refinements to service delivery. DMH 
has contracted with a consumer organization to build a consumer 
satisfaction initiative patterned after model programs around the 
country. As of December 2003, OCFA had conducted a telephone survey of 
consumers to help DMH develop this consumer satisfaction review. In 
addition, DMH officials told us that they are testing the effectiveness 
of a tool for assessing consumer functioning. According to the court 
monitor, DMH will provide a progress report in early 2004 on the status 
of these two reviews, but is not likely to submit the methodologies to 
the court monitor--which is required to comply with the exit criteria-
-for several more months.

The court also approved 17 exit criteria measures, each with a specific 
performance target. (See table 6.) Two of the 17 measures articulate 
overall system performance targets that DMH must meet in annual reviews 
of the services provided to adult and child and youth consumers. For 
example, DMH's system must perform positively for 80 percent of the 
adults who are sampled and reviewed. The remaining 15 measures define 
specific system performance targets that DMH must meet in the aggregate 
for 4 consecutive quarters, such as demonstrating the timely receipt of 
supported housing services for a specific percentage of persons 
referred to supported housing. Once DMH meets these targets for the 
specified time frame, the court monitor ends active monitoring of the 
measure. However, according to the court order, DMH is required to 
continue to submit data to the court monitor for all exit criteria 
measures regardless of their monitoring status, giving the court the 
ability to require that DMH meet the performance targets for any exit 
criteria measure showing a substantial drop in performance. The Dixon 
case can be dismissed when the court monitor submits a report to the 
court affirming that the District has achieved compliance with all 
required performance targets and qualitative requirements for all of 
the exit criteria, and the court accepts that finding.[Footnote 40]

Table 6: Summary of 17 Exit Criteria Measures with Performance Targets, 
December 11, 2003:

Exit criteria measure: Consumer services reviews: Acceptable services:  
* children and youth (0- 17); 
* adults (18 and over); 
Description of methodology: Aggregate score of overall service system 
performance from stratified random sample of subpopulation of consumers 
who have received services; 
Performance target: 
* Children and youth: DMH will receive aggregate scores of 80% for 
acceptable services for children and youth sampled and reviewed[A]; 
* Adults: DMH will receive aggregate scores of 80% for acceptable 
services for adults sampled and reviewed[A].

Exit criteria measure: System performance: Penetration rates for 
adults:  
* adults (18 and over); 
* adults with serious mental illness; 
Description of methodology: Percentage of District population aged 18 
and over served by the system (defined as receiving at least one 
provided service)[B]; 
Performance target: 
* Adults (3%); 
* Adults with serious mental illness (2%).

Exit criteria measure: System performance: Penetration rates for 
children and youth:  
* children and youth (0-17); 
* children and youth with serious emotional disturbances; 
Description of methodology: Percentage of District population aged 0-17 
served by the system (defined as receiving at least one provided 
service)[B]; 
Performance target: 
* Children and youth (5%); 
* Children and youth with serious emotional disturbances (3%).

Exit criteria measure: System performance: Specialized services for 
adults with serious mental illness:  
* supported housing; 
* supported employment; 
* assertive community treatment[C]; 
Description of methodology: Number of persons in subpopulation served 
by DMH as a percentage of total number of adults with serious mental 
illness served in the community who have been referred to receive this 
service; 
Performance target: 
* 70% of persons referred receive supported housing services within 45 
calendar days; 
* 70% of persons referred receive supported employment services within 
120 calendar days; 
* 85% of persons referred receive assertive community treatment 
services within 45 calendar days.

Exit criteria measure: System performance: Specialized services for 
adults with schizophrenia:  
* newer generation anti-psychotic medications for adults with 
schizophrenia; 
Description of methodology: Number of persons in subpopulation served 
by DMH as a percentage of total number of adults with schizophrenia 
served in the community; 
Performance target: 
* 70% of adults with schizophrenia will be prescribed newer generation 
medications.

Exit criteria measure: System performance: Specialized services for 
adults who are chronically homeless and seriously mentally ill:  
* homeless adults; 
Description of methodology: Number of persons in subpopulation served 
by DMH identified as chronically homeless and seriously mentally ill; 
Performance target: 
* 150 individuals will be "engaged" by a DMH Housing First 
provider[D,E].

Exit criteria measure: System performance: Specialized services for 
children and youth with serious emotional disturbances:  
* in natural settings, including schools, churches, youth centers and 
recreational centers; 
* in their own home or surrogate home; 
Description of methodology: Number of persons in subpopulation served 
as a percentage of total number of children and youth with serious 
emotional disturbances served by DMH; 
Performance target: 
* 75% will receive a service in a natural setting[F]; 
* 85% will be living in their own home or surrogate home[F].

Exit criteria measure: System performance: Specialized services for 
children and youth:  
* children and youth who are homeless; 
Description of methodology: Number of persons in subpopulation served 
by DMH identified as homeless; 
Performance target: 
* 100 individuals will be "engaged" by a DMH provider[D,E].

Exit criteria measure: System performance: Demonstrated continuity of 
care upon discharge from inpatient facilities:  
* adults and children and youth; 
Description of methodology: Percentage of subpopulation discharged from 
an inpatient unit who are seen in a nonemergency outpatient setting 
within 7 days of discharge; 
Performance target: 
* 80% of known discharges from an inpatient psychiatric hospital will 
be seen in a nonemergency outpatient setting within 7 days of 
discharge[G].

Exit criteria measure: System performance: Demonstrated efficient use 
of resources:  
* increase in percentage of total resources directed toward community-
based services; 
Description of methodology: Dollars expended on community-based 
services as a percentage of the total DMH expenses; 
Performance target: 
* 60% of total annual DMH expenditures will be directed toward 
community-based services.

Exit criteria measure: System performance: Demonstrated efficient use 
of resources:  
* maximization of Medicaid funding to support community-based services; 
Description of methodology: Federal Medicaid reimbursement dollars as a 
percentage of total community-based billings for Medicaid approved 
services; 
Performance target: 
* 49% of total billings for mental health rehabilitative services will 
be reimbursed by federal Medicaid dollars[H]. 

Source: U.S. District Court for the District of Columbia.

[A] This score is based on the results of the annual consumer services 
reviews conducted to comply with the exit criteria. According to the 
court monitor, this performance target means that 80 percent of sampled 
consumers receive an aggregate score indicating the receipt of 
acceptable services.

[B] The District population used to calculate the four penetration rate 
performance targets for adults and children and youth is defined as the 
U.S. Census Population Estimate for the calendar year (or latest data 
available). For example, the penetration rate performance target for 
adults with serious mental illness requires DMH to provide at least one 
service to two percent of the District's total adult population aged 18 
and over.

[C] Assertive community treatment is an intensive integrated 
rehabilitative, crisis, treatment, and mental health rehabilitative 
community support service provided by an interdisciplinary team with 
coverage 24 hours a day and 7 days a week.

[D] According to the court monitor, the parties to the Dixon case chose 
to measure the number of homeless adults and children and youth 
"engaged" rather than "served," because "served" implies enrollment. 
Many of the homeless adults and children and youth who need DMH 
services may choose not to enroll in the system. According to the court 
monitor, the parties have not negotiated a definition for "engaged.":

[E] In addition to meeting the performance targets for homeless 
services to adults and to children and youth, DMH is also required to 
implement a comprehensive strategy to engage and serve these 
subpopulations.

[F] DMH must first achieve a penetration rate of at least 2.5 percent 
for children and youth with serious emotional disturbances before DMH 
can meet this performance target.

[G] According to the court monitor, this performance target allows DMH 
to limit its measurement to "known" hospital discharges to account for 
potential difficulties in collecting comprehensive discharge data from 
local hospitals. For example, a consumer may seek care in a local 
hospital that does not typically report discharge data to DMH.

[H] According to the court monitor, the performance target of 49 
percent is based on the assumption that 70 percent of mental health 
rehabilitative services provided will be received by consumers enrolled 
in Medicaid multiplied by the District's 70 percent federal match for 
the costs of those services.

[End of table]

Originally, the court expected the proposed performance targets 
submitted by the court monitor to be accompanied by baseline measures 
of performance. The proposal approved by the court in December 2003, 
however, did not include previous requirements for DMH to submit 
baseline measurement data along with the performance targets. According 
to the court monitor and a DMH official, baseline data were omitted 
because (1) historical data are generally incomplete because of 
problems with data systems as well as a general lack of reliable and 
consistent previous data, and (2) many of the performance targets 
require information that was not collected by DMH and its providers, 
such as the number of consumers referred to supported housing. In 
commenting on a draft of this report, DMH noted that it was unable to 
identify comparable baselines from other jurisdictions.

Developing the Capability to Measure and Meet Performance Targets Will 
Take Time:

Meeting the exit criteria performance targets, and thus ending the 
Dixon case, is a multiyear effort that requires DMH to develop and 
carry out a plan that will satisfy the court on three levels: (1) 
developing policies and practices that address the requirements of the 
exit criteria and demonstrating that DMH monitors the extent to which 
these policies are implemented, (2) developing specific methods for 
DMH's collection and verification of the accuracy of the data, and (3) 
meeting the required performance targets for one full year as defined 
by the court. In November 2003, the court monitor anticipated that 
reviews relating to the first two requirements--policies and procedures 
and data collection and verification methods--will start in early 2004, 
but it may be a year before these two requirements are met for all of 
the exit criteria measures. The court monitor expects that DMH will 
concurrently develop and implement a plan to measure performance on all 
three levels that will allow the department to begin generating valid 
performance data in 2004. Although DMH began to collect data in July 
2003 for some of the exit criteria measures based on the earlier 
methodologies approved by the court in May 2002, DMH officials told us 
in November 2003 that this data collection was preliminary and that 
they would not begin to develop a specific plan for meeting these three 
requirements until the court approved the final performance targets, 
which occurred in December 2003.

Satisfying the court regarding DMH's demonstration of specific methods 
for collecting and verifying the accuracy of the performance data is 
likely to be challenging because of impediments to data collection as 
well as the fact that collected data may be incomplete or inaccurate. 
DMH and its providers face three major obstacles in collecting accurate 
data used to meet the actual performance targets: (1) establishing 
methods to collect electronic data, (2) correcting known data 
deficiencies, and (3) ensuring the accuracy of information collected 
and reported by providers. A description of each of these challenges 
follows.

Data Not Collected Electronically:

Although the final exit criteria measures and performance targets were 
not approved until December 2003, DMH began collecting monthly data 
nonelectronically for 8 of the 17 exit criteria measures from providers 
in July 2003.[Footnote 41] For example, mental health rehabilitative 
services providers submit nonelectronic monthly reports to DMH on 
services provided to homeless consumers who are diagnosed with a 
serious mental illness. However, because the court approved revisions 
to some of the exit criteria measures in December 2003, providers will 
have to refine some of the information that they collect and report to 
DMH. In addition, the performance targets themselves, which did not 
exist prior to December 2003, will also affect the types of data 
collected. DMH officials told us that the department may be able to 
modify its enrollment and billing information system to collect some--
but not all--of the data for the exit criteria measures, thus 
developing a central repository of information is still under 
discussion between DMH and the court monitor.[Footnote 42] Beyond this, 
a related issue will be developing the capacity to appropriately factor 
in other data currently collected by DMH in a way that is not 
duplicative of the monthly data submitted by mental health 
rehabilitative services providers. For example, officials told us that 
DMH's school-based services program collects information that could be 
used as part of the calculation to meet the performance target 
requiring 75 percent of children and youth with serious emotional 
disturbances to receive services in a natural setting such as the home 
or school. However, the information collected through this program is 
not consumer-specific, nor is it linked to DMH's enrollment and billing 
information system, which may, according to DMH officials, eventually 
be the primary mechanism for collecting data on many of the performance 
targets.

Deficiencies in Service Utilization Data:

As part of the exit criteria requirements for the Dixon case, DMH 
conducted an initial consumer services review in the spring of 2003 
that identified two major service provision gaps relating to services 
provided to children and youth that need to be addressed to ensure the 
accuracy of the performance target data collected by DMH. The court 
monitor's semiannual reports to the court have similarly highlighted 
these findings as areas requiring action. First, the review showed that 
many of the children and youth placed in residential treatment centers 
(RTC) do not have a clinical home at a CSA as intended and thus are not 
receiving DMH services. In addition to raising concerns about the 
coordination between DMH and RTCs, the lack of services for these 
individuals could also affect the accuracy of the data collected by DMH 
to meet a performance target that requires DMH to demonstrate that 85 
percent of children and youth with serious emotional disturbances 
served by the system are living in their own or surrogate 
homes.[Footnote 43] Second, according to the court monitor, the 
consumer services review also revealed a significant gap between the 
number of children and youth enrolled in DMH's system and the number 
who are actually receiving services. The court monitor's report 
acknowledged that the source of this gap, while unknown, could reflect 
flaws in DMH's data management system, its disenrollment 
policy,[Footnote 44] or clinical standards, such as required follow-up 
with consumers who have missed an appointment. Since the four 
penetration rate performance targets are calculated using the number of 
enrolled consumers who received at least one service in the past 
quarter, DMH will need to determine the cause of this gap to ensure 
that its performance data are accurate. As of March 2004, DMH had not 
provided us with the number of consumers who were enrolled and 
receiving services within a 90-day period.

Accuracy of Information Reported by Providers:

Beginning in July 2003, DMH began collecting unaudited monthly data 
from mental health rehabilitative services providers for a range of 
exit criteria measures, including the provision of supported housing 
and supported employment.[Footnote 45] The department has also begun to 
collect preliminary discharge data from St. Elizabeths Hospital and 
local hospitals providing acute care to mental health care consumers. 
However, as of November 2003, neither the mental health rehabilitative 
services providers nor the local hospitals were required to track this 
information, and DMH did not have processes in place for verifying the 
accuracy of these data. DMH's Director told us in December 2003 that 
DMH is planning to incorporate reporting requirements as part of the 
recertification process for mental health rehabilitative services 
providers. As of January 2004, DMH was planning to collect quarterly 
discharge data from local hospitals but was still working out the 
details. Until these reporting processes are put in place, DMH will 
continue to collect discharge data from a combination of St. Elizabeths 
Hospital (for adults) and mental health rehabilitative services 
providers (for children and youth).[Footnote 46] Even after hospital 
reporting processes are implemented, the court monitor and DMH expect 
some difficulties in collecting comprehensive discharge data. For 
example, a DMH consumer may seek care in a local hospital that does not 
typically serve DMH consumers and thus does not provide quarterly data 
to DMH. Recognizing potential challenges in collecting data from local 
hospitals, the court monitor proposed--and the court approved--as one 
of the 17 performance targets, a continuity of care performance target 
that allows DMH to limit its measurement against this exit criteria 
measure to "known" inpatient hospital discharges.[Footnote 47] The 
court monitor expects DMH to include in its plan specific strategies 
for obtaining and verifying the accuracy of these data. The potential 
lack of accurate data--for example, from local hospitals--may mean that 
some discharged individuals are not factored into the data used to 
measure performance. In addition, the lack of consumer-specific data 
collected by DMH to meet the performance targets will also be a 
challenge. For example, because mental health rehabilitative services 
providers do not submit the names of each homeless consumer served, 
just the total number of these individuals served, information 
submitted is not consumer-specific and thus may be duplicative, 
compromising the accuracy of the measurement. The court monitor has 
also told us that DMH will need to verify that the performance target 
data are unduplicated.

Comments from DMH and the Court Monitor and Our Evaluation:

DMH provided written comments on a draft of our report. DMH's comments 
are included, with our detailed responses, in appendix II. The court 
monitor provided technical comments, which we incorporated as 
appropriate.

In its comments, DMH stated that the court-ordered plan for the reform 
of the District's mental health system envisioned comprehensive and 
sweeping reforms, noting that accomplishing such reforms would result 
in over 50 percent of DMH's budget being redirected in a 5-year period. 
DMH described six broad changes to the District's mental health system 
in the court-ordered implementation plan. These changes included (1) 
implementing a mental health authority, (2) instituting systems of 
care, (3) developing a new set of accountability functions and changing 
the oversight and monitoring of mental health services, (4) 
incorporating consumer protections, (5) shifting the methods and 
operations for financing the delivery of inpatient and outpatient 
mental health services, and (6) creating a new Department of Mental 
Health with new responsibilities for operating within the city 
government. In addition, DMH stated that in spite of the District's 
failure to meaningfully participate in the last 20 years of mental 
health reform, DMH is moving aggressively to become a positive 
contributor to the health and well being of the community and to 
persons in priority service groups.

DMH commented that the draft report addressed several issues in depth 
while overlooking other reforms prominent in the final plan and the 
legislation creating DMH and other services such as Assertive Community 
Treatment, Supported Employment, and Supported Housing. The scope of 
our work was the status of DMH's efforts to establish a community-based 
system of mental health care, focusing on four key areas of reform 
central to meeting the exit criteria for the Dixon Decree. While we 
believe that the other reform initiatives and services are important, 
we believe that DMH's status with regard to meeting the exit criteria 
is an appropriate gauge of compliance with the Dixon Decree. We believe 
that making a comprehensive assessment of the system's performance 
before DMH begins reporting on the exit criteria is premature.

DMH also provided specific comments that clarified, updated, or added 
information regarding its status in implementing the final plan (see 
app. II). Where appropriate, we incorporated these changes into the 
report.

As agreed with your office, we plan no further distribution of this 
report until 30 days from its date of issue, unless you publicly 
announce its contents. At that time, we will send copies of this report 
to the Director of the District of Columbia Department of Mental 
Health. We will also make copies available to others upon request. In 
addition, the report will be available at no charge on the GAO Web site 
at http://www.gao.gov.

Please call me at (202) 512-7118 or Carolyn Yocom at (202) 512-4931 if 
you have questions about this report. Major contributors to this report 
are listed in appendix III.

Sincerely yours,

Signed by: 

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

[End of section]

Appendix I: Major Court Actions Related to District Compliance with the 
Dixon Decree:

Date: 1974; Court action: 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.

Date: 1975; Court action: 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 
conditions. This ruling is known as the Dixon Decree.

Date: 1980; Court action: To comply with the court order, the involved 
parties drafted a final implementation plan that generally required an 
assessment of the plaintiff class members and periodic reports on 
progress in establishing a community-based system.

Date: 1984; Court action: Congress passed legislation that required the 
District to complete implementation of an integrated coordinated mental 
health system by October 1, 1991.[A] Congress transferred sole 
responsibility of establishing the required local mental health 
services to residents of the District.b The transfer was not effective 
until October 1, 1987.

Date: 1992; Court action: The court determined that no progress had 
been made to comply with the final implementation plan. The involved 
parties therefore developed a second plan. This plan is known as the 
service development plan.

Date: 1993; Court action: The court appointed a special master to 
oversee implementation of the service development plan.[C].

Date: 1995; Court action: The court determined that the District was 
still unable to comply with the terms of the service development plan. 
As a result, the involved parties negotiated a third plan, whose goals 
the District met. This plan is referred to as the Phase I agreement.

Date: 1996; Court action: The parties negotiated and began to implement 
a fourth plan, which was significantly broader in scope and required 
activities such as hiring personnel and developing a homeless service 
plan. This plan is referred to as the Phase II plan.

Date: 1996; Court action: The District admitted noncompliance with the 
fourth plan, and the plaintiffs requested the appointment of a 
receiver.

Date: 1997; Court action: On September 10, the court appointed a 
receiver on the basis 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.

Date: 2000; Court action: On March 6, with agreement of all parties, a 
new receiver, referred to by the court as a transitional receiver, was 
appointed and officially assumed this role on April 1. The transitional 
receiver was scheduled to return control of the mental health system to 
the District between January 1 and April 1, 2001.

Date: 2001; Court action: On April 2, the court approved the 
transitional receiver's final plan and required the District to 
implement it. The plan provided a policy framework for meeting the 
Dixon mandate, including developmental milestones but not specific 
service targets.

Date: 2002; Court action: On May 22, the court found that the District 
was capable of implementing and was in fact implementing the final plan 
and thus terminated the receivership. The order also appointed the 
former transitional receiver as court monitor of District compliance 
with the final plan, and it approved exit criteria agreed upon by all 
parties. The monitor was directed to report to the court and the 
parties no less frequently than every 6 months.

Date: 2003; Court action: On December 11, the court approved a revised 
set of exit criteria, which replaced the criteria approved in May 2002, 
with measurement methodologies, definitions, performance targets and 
qualitative requirements. In addition, the court ordered that the case 
would be dismissed when (1) the court monitor affirms that the District 
has complied with all of the performance targets and qualitative 
requirements and the court accepts that finding; or (2) the District 
moves for dismissal and demonstrates "substantial" compliance with the 
performance targets and qualitative requirements and the court 
determines the case should be dismissed.

Source: GAO summary of documents from the U.S. District Court for the 
District of Columbia.

[A] 24 U.S.C. 225b(a)(2) (2000). The statute was amended in 1991 to 
require the District to complete implementation by October 1, 1993.

[B] 24 U.S.C. 225b(a)(1) (2000).

[C] The special master's powers included the ability to require 
compliance reports, make formal and informal recommendations to the 
parties, and mediate disputes.

[End of table]

[End of section]

Appendix II: Comments from the District of Columbia Department of 
Mental Health and GAO's Response:

Note: GAO comments supplementing those in the report text appear at the 
end of this appendix.

GOVERNMENT OF THE DISTRICT OF COLUMBIA DEPARTMENT OF MENTAL HEALTH:

Office of the Director:

March 18, 2004:

Kathryn G. Allen:

Director, Health Care-Medicaid and Private Health Insurance Issues 
U.S. General Accounting Office 
Washington, D.C. 20548:

Dear Ms. Allen:

Thank you for this opportunity to comment on the Draft Report on the 
"District of Columbia: Status of Reforms to the District's Mental 
Health System" (GAO-04-387). Enclosed are our comments on the Report.

We appreciate the diligence and professionalism of Carolyn Yocum and 
her team.

Sincerely,

Signed by: 

Martha B. Knisley, 
Director: 

Enclosure:

DC DEPARTMENT OF MENTAL HEALTH COMMENTS TO THE DRAFT REPORT ON THE 
STATUS OF REFORMS TO THE DISTRICT'S MENTAL HEALTH SYSTEM:

Summary of Comments:

Thank you for this opportunity to comment on the Draft Report on the 
"STATUS OF REFORMS TO THE DISTRICT'S MENTAL HEALTH SYSTEM". Below arc a 
number of general comments and several specific comments.

The Reform of the District's mental health system is quite sweeping in 
nature. As correctly stated in the Draft Report, the Court ordered Plan 
adopted by the Federal Court in Dixon v. Williams in May, 2001, 
contemplated comprehensive reforms in the District's mental health 
system. In broad terms the reforms contemplated included six broad 
changes:

1. The Court ordered Plan required the overall system be restructured to 
include the development of a mental health authority. Such a change 
when realized would result in the Department making shifts in up to 30% 
of its budgeted functions.

2. The Plan called for far-reaching changes in mental health practices. 
In many areas the Plan required the system to meet best practice 
standards of existing services. In other areas the Plan required the 
system be expanded to include more contemporary and useful programs 
particularly in the area of child and youth services that arguably was 
an area where the District's performance had been dismal. The new 
Department was required to develop services and supports in accordance 
with a "systems of care" approach.

3. The Plan required a set of new accountability functions and a 
complete change in the oversight and monitoring of mental health 
services.

4. The Plan spoke to consumer protections and the District implemented 
broad statutory changes within weeks after the new Department of Mental 
Health was created.

5. The Plan contemplated a complete shift in methods and operations for 
financing the delivery of inpatient and outpatient services.

6. Finally the Court Ordered Plan required the District create a new 
Department of Mental Health with new responsibilities for how the 
Department operates within city government.

The Court Ordered Plan also required many specific changes be made that 
fell outside of the six broad categories above. The reforms that were 
required if accomplished would actually result in the most sweeping 
changes required of a "state" level mental health program in the 
country in the past fifteen years. If accomplished, the new Department 
of Mental Health would be redirecting over 50% of its budget in a five-
year period. This is a huge task for a well functioning agency let 
alone a new agency that is required to carry out both state and local 
functions.

The Draft Report largely describes two aspects of one of the reforms 
the agency has undertaken, the implementation of the grievance process 
and specific aspects of the work of the newly developed Office of 
Accountability.

The Draft Report goes into great detail on one operations function, 
claims processing which in and of its itself is not a tenet of the 
reform of the system but rather an operation to help carry out of the 
reforms in the system. The Department though has done seminal work to 
create the "clinical home", access requirements, changes in crisis 
support and introduction of cultural competency standards, development 
and implementation of provider qualifications, quality improvement and 
agency management requirements. Further, massive work is underway to 
put in force service standards for the first time in this system's 
history.

From there the report speaks to several issues in depth while 
overlooking other issues prominent in the President's New Freedom 
Commission Final Report, the Court Ordered Plan and the MH Reform Act 
of 2001 including Title IT of that Act, or new services and practices, 
including but not limited to Assertive Community Treatment, Supported 
Employment or Supported Housing.

There is also substantial development underway in the child and youth 
system of care, including actions to return youth to the city from out 
of District institutions. Only one reference is made in passing to the 
creation of Care Coordination and the Access Helpline. The reference 
was only related to the Unit's enrollment function. The new Department 
has awarded for the first time a peer advocacy contract; is 
implementing a Charter agreement with the Department of Health to 
fundamentally change how persons with co-occurring problems are served 
and has implemented a major program to introduce medication best 
practices. The Department was also faced with an enormous to clean up 
problems associated with past billing practices and poor record 
keeping. After two years of work by the Department the District wrote 
down uncollectable receivables dating back to 1992, completed and 
submitted cost reports dating back to 1988 and completely re-structured 
its billing practices.

In summary, in spite of the District's failure to meaningfully 
participate in the last twenty years of mental health reform, the new 
Department is moving aggressively to become a positive contributor to 
the health and well being of our community and to persons in our 
priority service groups.

Specific Comments:

Section: What GAO Found:

1. This section, the lead into the report references only a portion of 
the requirements of 
the Mental Health Reform Act and the Court Ordered Plan. Notably the 
Draft Report is silent on development of "systems of care" which are 
the true cornerstones to the Court Ordered plan and to the legislation 
creating the Department. These functions are central to the 
Department's core mission. For example there has been a dramatic 
increase in enrollment for both children and adults and the gains and 
challenges in improving consumer access, including but not limited to 
the outreach efforts made to local community groups, the calls made to 
the ACCESS Helpline, the location of new staff at Children's Hospital, 
the expansion of staff into schools, into the Family Court and other 
locations. DMH began contracting for child and youth services which had 
been disregarded during the ten years prior to the Department being 
created, resulting in many children being thrown into the Special 
Education system, incarcerated in the juvenile justice system or 
languishing in residential treatment after being placed there from the 
foster care system.

2. There are a myriad of consumer protections called for in Title II of 
the MH Act beyond the grievance policy. These protections include 
improved policies and rules for seclusion and restraint, information 
privacy, retention of civil rights, consent for youth, medication 
administration, consent to treatment, service planning, durable power 
of attorney, declarations of advance instructions, conditions of mental 
health treatment and separate legislation for the modernization of the 
Ervin Act.

3. In FY 2002 when the MHRS system was first implemented payments were 
made to providers within 60 days on average; however, this time frame 
has been reduced significantly. This section therefore does not 
accurately portray payments to providers in FY 2003. Fiscal Year 2003 
MHRS billings net of $ 4 million in initial denials that were returned 
for further adjudication was $30,429,329 by early January, 2004[NOTE 
1].

Further 77% of those claims were paid in 30 days and an additional 12% 
were paid in 60 days. If two providers who experienced significant edit 
problems in their initial claims are subtracted from the equation, DMH 
payments within 30 days were 82% of claims and another 13% were paid 
within 60 days. Clearly payments were as prompt as most 3`D party payer 
sources across the country, private or public. Thus slow payment cannot 
be substantiated although the perception of this slow payment persists. 
Clearly the changes providers had to make to a fee-for-service system 
have effected their cash flow but the conventional wisdom that this is 
associated with slow payment by DMH is not fully warranted.

Results in Brief (page 3):

1. This section does not reference new services, the creation of the 
"clinical home", new service planning, provider requirements and 
access/outreach requirements---all centerpieces of the Court Ordered 
Plan.

2. The Draft Report refers to affordable housing as absent, yet the 
Department has done a 
massive re-write of the Housing Plan written during the Receivership 
period to increase the number of affordable housing units that can be 
made available. The Department has sought and secured additional 
funding and continues to expand affordable housing at a pace equal to 
or greater than any other jurisdiction in the country. Every month new 
subsidies and new housing units are made available and DMH has 
successfully stayed ahead of demand. DMH has developed over 120 units 
of new housing this past year and have somewhere between 300-500 units 
in the pipeline based on financing arrangements being completed now.

3. DMH is not attempting to develop additional acute care beds, rather 
we are attempting to re-locate them.

Background/ System Prior to the Plan (pages 5-8):

1. On page 6 there is a reference to a delay in hiring senior managers 
as reported by the Transitional Receiver as one of two reasons for his 
extending the date for ending Receivership. This statement is out of 
context. The Transitional Receiver points to the need for new senior 
staff to get underway with their tasks but is more explicit about 
needing more time to get major initiatives underway. Indeed the 
Director hired senior staff at a remarkable speed. The Senior Deputy 
Director, one of the three Deputy Directors and two CEOs relocated to 
the District within four months. Two other Deputy Directors came on 
board as did the General Counsel, Acting Chief Clinical Officer, who 
was later made permanent and the Chief Regulatory Counsel. The Director 
hired 9 senior staff within four months of being appointed Director of 
the agency. Although we cannot speak for the Transitional Receiver 
(Court Monitor), we believe he would say today that assuming the 
probationary requirements could be met within six to seven months was 
unrealistic and in no way indicative of the Department's capacity to 
manage its own affairs at that time.

Final Plan and Exit Criteria (pgs. 9-11):

The Chart on page 11 is excellent depiction of the phases and expected 
results for the time period. However it appears the assumption has been 
made that DMH has not begun work on meeting the 15 system performance 
targets, or begun using consumer functioning and consumer satisfaction 
data. In fact the Office of Consumer and Family Affairs has just 
submitted a report on consumer satisfaction reviews conducted in 
November, 2003. DMH has not reported on these but has initiatives 
underway in each of these areas to meet each of the performance 
targets. Given that the Chart is labeled expected results---not 
reported results---there should be a distinction that the "step has 
been started". It is correct to state that DMH has not begun submitting 
performance target data although work is underway to begin that 
process.

DMH Has Assumed Oversight Authority and Responsibility for Providing 
Care (pgs. 11-18):

1. DMH has taken on a whole new responsibility for creating a "system 
of care". The 
NM Reform Act defines "system of care" and makes explicit the 
responsibility for the Department to develop systems of care for both 
adults and children. Inherent in developing systems of care are 
development of collaboration, financing, resource allocation, training 
and delivery of services across all appropriate public systems.

To be effective, a system of care is built on the individualization of 
mental health services and supports for each person (and their family 
and supporters) articulated in an individualized recovery or resiliency 
plan. Each plan should be designed to promote recovery and resiliency 
and develop social, personal and community living skills including 
helping a person meet their basic and essential human needs. This means 
that it is DMH's responsibility to develop an integrated, community-
based mental health service system, with outreach, emergency services, 
crisis intervention and stabilization, age-appropriate educational 
support and job readiness along with housing support, family and 
caregiver support and education. For children it means adding 
prevention and early intervention:

The section does a thorough job of describing the infrastructure 
supports for a large part of the mental health reform --creating the 
MHRS. However, in doing so, it creates the impression that developing 
MHRS infrastructure has been the single major activity of the 
Department over the past two years. On balance it is one of six major 
activities for the Department during this time.

2. The Draft Report references leadership positions that have 
experienced turnover or long periods of vacancy, without providing 
important explanatory details, especially for the two examples 
discussed. The first Chief Financial Officer left after one year 
because of her mother's illness. The appointment of a replacement was 
delayed approximately nine months in favor of retaining a senior health 
care executive to finish the 12-year-old Cost Reports and complete the 
overhaul of the reimbursement functions for St. Elizabeths Hospital.

Further DMH and the CFO determined that making a change during the 
budget period would not be in the best interest of the Department. It 
appears the authors of this report may have included the Transitional 
Receiver's CFO. This individual declined to be considered for the 
position before the Department was formed for personal and health 
reasons. His decision was well known before the Department was created 
and he stayed to help with the transition. On the other hand Win 
Dearing, Deputy Director for Administration and Finance has been in his 
job since the inception of the Department.

Frances Priester was appointed to the position of Director of Consumer 
and Family Affairs only three months after the incumbent left the 
Department to take a post in the mayor's office.

DMH assumed the role of Licensing Community Residential Facilities 
(CRFs) within five months of the passage of the 2001 Reform Act. DMH 
had no budget for this function, yet hired and trained staff on the 
standards, upgraded the standards and established a competency based 
training program. DMH cleaned up the licensing 
program that was woefully behind, for the first time issued sanctions 
where needed and met the never previously achieved goal of licensing 
all facilities within a one year time frame.

On provider audits, the report does not reference that there were no 
standards for provider audits; that provider audits had never been 
conducted before; that prior to the Reform Act of 2001 and the 
subsequent passage of rules, the providers had never been required to 
update treatment plans, and that treatment plan requirements had never 
been backed up by reviews and sanctions. It was fully expected that 
providers would not be in compliance and that this first round of 
audits conducted within 6-9 months of each provider's initial 
certification would be a good test of where improvements needed to be 
made.

With respect to investigations of unusual incidents, the system had 
never experienced a review of unusual incidents. Also, unusual 
incidents range from consumers returning late for dinner to injury and 
abuse. Therefore DMH is faced with thousands of unusual incidents that 
in the normal course of family life would be routine behavior for 
teenagers. The DMH sorts through incidents to very quickly conduct 
reviews on serious incidents while routinely reviewing less serious 
problems. More importantly, DMH is trending incidents now. This is an 
excellent risk management and quality improvement tool.

DMH Continues the District's Historical Role as a Direct Provider (pgs. 
16-18):

The reference to the Core Service Agency as the largest provider is 
accurate but the portrayal of the public core service agency as having 
an increase over the next largest provider of three times obscures the 
fact that DMH added over ten new providers in FY 2003. The addition of 
new providers and additional consumers to other existing providers 
accounted for more growth in the system than did increased enrollment 
at the Public Core Service Agency.

With respect to St. Elizabeths, the Transitional Receiver did not put a 
time frame on reductions at the hospital. We believe the Court Monitor 
would agree that stabilizing the new system to meet the Balanced Budget 
Act changes to Medicaid reimbursement, creating MHRS and changes in the 
DMH Housing Plan and ACT would be necessary to sustain decreases 
without creating more turmoil in the community. After 30 thirty years 
experience of de-institutionalization, the field has learned that 
decreasing state hospital census should be done planfully to not add to 
homelessness, increase in incarceration rates and general turmoil and 
risk in individual consumer's lives. Also we believe the Court Monitor 
would agree the closure of DC General and failures at Greater Southeast 
Hospital make gaining support for adding new psychiatric services 
within local hospitals more difficult. In fairness, the report should 
reference such external events that are beyond the control of DMH yet 
have a substantial impact on our ability to achieve our mandates.

The St. Elizabeths budget has already been reduced an additional $2 
million in FY 2004 and will be reduced again in FY 2005. The Hospital's 
census is not hostage to housing 
concerns, contrary to some of the reported observations. Supported 
housing subsidies and units are available and the DMH has speeded up 
this schedule for availability this year. DMH is ahead of schedule for 
developing housing capacity and already has one of the largest local 
housing programs in the country.

The St. Elizabeths Hospital has also undertaken massive reform in the 
past two years: I. All of the hospital's operations were moved from the 
West to East Campus in order to reduce costs. St. Elizabeths received a 
CMS certification without conditions for the first time in five years. 
St. Elizabeths developed a treatment mall, which was praised by the CMS 
Certification Team that recently surveyed the hospital. Likewise the 
PCSA had no information system when it was formed in late FY 2001 and 
is now implementing a new modern system, The PCSA has also modernized 
its clinical programs and has reformed its medical services, pharmacy 
and the payeeship program. It has added a new homeless program, the 
Sobering Center and has reformed the Child/Youth Crisis Services.

Enrollment and Billing System is Designed to Coordinate Clinical, 
Administrative, and Financial Processes (pgs. 18-25):

The title of this section reflects a significant misapprehension. The 
enrollment and billing systems are not the major functions in the 
design of the clinical, administrative and financial processes. The 
billing system is an administrative function, but it only helps with 
the major administrative design function that is the shift from a non-
performing contract system operated entirely as if it were a grants 
system to a performance-focused fee-for-service-system that will serve 
as the system's segui to a fully developed performance driven system. As 
a result of this reform, DMH is only paying for services provided 
directly to consumers rather than paying for an agency's capacity to 
serve consumers. One major difference, DMH implemented this system in 
eighteen months rather than over a period of years that has generally 
been the case in most states and local jurisdictions. DMH was placed at 
a serious disadvantage of having to make this shift more quickly than 
desirable mostly as a result of past performance and changes in 
Medicaid regulations. DMH successfully made that shift but not without 
needing considerable technical support and an infusion of local 
resources.

Consumer Centered Approach Blending Choice and Protection is Evolving 
(pgs. 25-29):

As stated above, the Report focuses on one area, consumer grievances, 
to the exclusion of a large body of protections that are new and 
updated in the District. For example, DMH has updated seclusion and 
restraint rules and policies and the District has passed a bill 
modernizing the Ervin Act. To many consumers, these areas are of equal 
or greater importance than the grievance rule implementation.

Consumer-centered services and consumer rights are evolving concepts 
all around the country. No assessment of the District's progress in 
these areas would be complete without a comparison of our progress in 
each area compared to national trends.

The Draft Report mentions a "gap in documentation of the consumers' 
participation in - and agreement with---their treatment plans". Prior 
to FY2002, this documentation was not a requirement, nor was the level 
of consumer participation now required even expressed as important. It 
is not surprising that a gap in documentation was found. What is most 
encouraging was evidence found in 59% of the plans. This would be 
considered a large success in most jurisdictions after the first audit. 
Traditional mental health professional and academic views are still 
mixed on the efficacy or advisability of the consumer's role and 
direction of treatment. Thus DMH faces an uphill battle on this 
approach.

Even more difficult is implementing consumer choice. Most states do not 
even attempt to provide choice at the level DMH requires choice. One 
reason states flock to using Medicaid waivers is to limit choice. 
Therefore DMH is introducing a wholly new concept. The statement that 
DMH is "addressing gaps" in consumer choice does not go far enough. 
More accurately, DMH is promoting consumer choice and introducing a 
variety of mechanisms to give consumers more choice.

This section references the Enrollment Specialist role but does not 
reference the training on choice, the requirements for provider 
policies, the role of the Access Helpline and Care Coordination overall 
and the role of Delivery Systems Management in both consumer choice and 
the development and implementation of the "clinical home" concept.

The Draft report makes reference to comments of the Court Monitor and 
the local PAMI agency concerning problems with consumer choice and 
community follow-up upon discharge from the hospital. However, these 
observations were not quantified, and the report provides no other 
basis upon which to assess their reliability. Finally the last portion 
in this section references the new grievance policy but does not 
reference that DMH was instrumental in laying the groundwork for it in 
the MH reform legislation, that DMH held countless sessions with 
advocates and stakeholders on both the rule drafting and the 
implementation of the grievance policy, contracted out an external 
grievance peer support function, and trained all providers and numerous 
stakeholders on the entire process. DMH is effecting profound systems 
change, not just drafting policy.

DMH Faces Challenges in Developing the Capability to Measure 
Performance Against Exit Criteria (pgs. 29-38):

This section also presents an incomplete account of events leading to 
the development of products, in this case the targets for measuring 
performance against the exit criteria. DMH proposed the 17 performance 
targets after DMH did extensive research on performance targeting, 
including convening a panel of nationally recognized experts in 
delivery systems management.

The discussion of the reasons for not including baseline data misses a 
critical factor. Many of the services and supports contemplated in the 
performance targets did not exist 
prior to the DMH becoming a Department. For example ACT was not offered 
prior to mid FY 2002 therefore there was no baseline. Most communities 
across the country cannot measure the success of ACT because the 
programs being offered do not have fidelity to the ACT model even after 
years of development. Thus having a baseline here or anywhere would be 
impossible.

Suitable baselines are not available with respect to most of the 
measures. When DMH did its research on other jurisdictions for 
comparison purposes, the DMH found that the services being measured did 
not exist in a form by which genuine comparison could be made. Thus 
baseline became less relevant and DMH progress against itself became 
the choice for measurement. This means that DMH will be creating a 
baseline agreeable to the Court Monitor and Plaintiffs.

Finally the last part of this section focused on data collection and 
data integrity. Both are important issues. However, DMH would submit, 
given the total disregard for data collection and integrity prior to FY 
2001, DMH is making good progress. DMH tied electronic data collection 
to the development of the eCURA system. It is a struggle for new 
providers struggling to meet data requirements, while attempting to get 
off the ground organizationally and administratively. This process has 
also been slowed by the work necessary for providers and the Department 
to become HIPAA compliant. This federal regulatory initiative has 
caused massive re-writes and delays nationwide.

Some of the performance criteria do not lend themselves to electronic 
data collection. For instance, both the adult and child homeless 
services targets are largely tied to the development of access and new 
programs not yet fully organized. The performance targets reflect the 
developmental nature of these service approaches.

The reference to deficiencies in service utilization data again do not 
take into account the developmental stage of the process. Five 
different departments in city government carry out RTC placement. 
Several departments have their own case management and tracking 
systems. Thus DMH and its partner agencies are re-structuring the 
entire service system. This means that assignment of youth in RTCs to a 
clinical home is quite complicated. A review of the SAMHSA literature 
and research explicates this. Again this is a national phenomenon. DMH 
does refer all youth to a Core Service Agency that it places in RTCs 
and is working with other agencies to make this a reality across the 
board in FY 2004, but it would not be wise to take on this task without 
first assuring we are not creating confusion and duplication.

The statement that there is a gap between the number of children and 
youth enrolled in the system and the number actually receiving services 
lacks quantitative support. Such an assessment is complicated by the 
fact that DMH cannot produce an accurate count of persons actually 
receiving services until all claims data has been submitted by provider 
agencies. In other words, there is a lag time between confirmation of 
enrollment and confirmation of receipt of services.

The Draft Report cites the collection of discharge data as an accuracy 
problem, but does 
not acknowledge that the performance targets that lead to the correct 
processes being put into place were not formalized until November, 
2003. DMH has already moved far beyond what is reported in this Draft 
Report in two months now that we are all clear on what information is 
to be reported. The Draft Report fails to mention that until a court 
order is in place, DMH has no legal grounds to request information from 
an organization it neither regulates nor contracts with, including most 
of the private hospitals in the Districts. It should be noted that all 
the hospitals we have met with have been very willing and supportive of 
this activity and we are already getting good verifiable data from 
several hospitals.

This section does not seem to acknowledge fully that DMH is moving 
ahead quickly to overcome deficiencies in performance targeting that 
date back 20 to 30 years. DMH is encouraged by the support and progress 
it has made to date in these areas.

NOTES: 

[1] By 2-05 this amount had grown to $ 37 million with approximately 5 
million in denials still outstanding. We assume the final billings for 
FY 2003 net of final denials will reach between $35 and $40 million.

The following is our response to DMH's letter dated March 18, 2004.

GAO's Response to DMH's Comments:

Our responses below correspond to the comments numbered in the margin 
of DMH's letter.

1. DMH commented that the draft report references only a portion of the 
requirements of the Mental Health Reform Act and the court-ordered plan 
and does not discuss the development of "systems of care," which it 
characterizes as cornerstones of the court-ordered plan and the 
legislation creating DMH. We believe that the report adequately 
characterized the immensity of the tasks faced by DMH. The scope of 
this report encompassed the actions taken by DMH since its creation to 
comply with the Dixon Decree. As such, we reported on the status of the 
District's effort to establish a community-based system of mental 
health care, with a focus on four key areas of reform that were 
confirmed by the court monitor to be central to compliance with the 
Dixon Decree. Because many of the services and initiatives under way 
were still evolving and had incomplete data at the time of our work, we 
did not believe that a comprehensive assessment of DMH's progress on 
all activities was appropriate. As a result, we focused on the data 
collection methods for the 17 performance targets relating to the 
District's compliance with the court's exit criteria.

2. We modified the report where appropriate to address information 
about the additional consumer protections, the number of supportive 
housing arrangements, the relocation of acute care beds, the hiring of 
senior managers, the status of leadership positions at DMH, the 
increases in service provision at the public CSA, the difficulty of 
adding new psychiatric services in local hospitals, and the results of 
provider audits.

3. DMH stated that the draft report did not accurately portray payments 
made to providers in fiscal year 2003 and that our findings on slow 
payments to providers could not be substantiated. We modified the 
report to reflect the updated data on billings for fiscal year 2003. 
However, we disagree that payment problems could not be substantiated. 
Provider contracts with DMH were tied to the billing projections, which 
meant that DMH could not pay claims for providers who exceeded their 
projections until their contracts were changed. The court monitor's 
2003 reports also indicate that claims payment has been an area of 
concern. Our draft report acknowledged that DMH had made the necessary 
contract changes to allow providers to be paid for the remainder of 
fiscal year 2003. Additionally, we cited DMH's plan for fiscal year 
2004, which aimed to prevent similar billing problems from occurring.

4. With regard to our assessment of DMH's status in meeting court 
expectations, DMH commented that it believes table 2 reflects our 
assumption that DMH has not begun work on meeting the 15 system 
performance targets or begun using consumer functioning and consumer 
satisfaction data. DMH stated that it has not reported on these steps 
but has initiatives under way to meet each one and therefore the table 
should reflect that the "step has been started." As of March 2004, the 
court monitor had not received evidence that these steps were in 
process, but confirmed that DMH had conducted preliminary work that had 
not been captured in court documents. Thus, we modified the report to 
reflect that these steps were "in planning." In addition, the report 
refers to the work under way to meet the exit criteria, such as the 
consumer telephone survey conducted in 2003 to help DMH develop its 
consumer satisfaction review and data collection efforts from providers 
for some of the exit criteria measures.

5. DMH commented that the draft report did not indicate that there were 
no standards for provider audits, that provider audits had never been 
conducted, and that DMH expected that providers would not be in 
compliance. The draft report stated that DMH's new responsibilities for 
regulating and monitoring providers, including conducting audits, were 
a shift away from the structure of its predecessor office and that the 
monitoring framework was in the early stages of implementation. We 
revised the report to reflect DMH's expectation that providers would 
not be in compliance with the new standards.

With regard to the draft report's discussion of unusual incidents, DMH 
noted that the District's mental health system had never experienced a 
review of unusual incidents and stated that unusual incidents ranged in 
severity from consumers returning late for dinner to injury and abuse. 
DMH also stated that it is faced with thousands of unusual incidents 
and said that it sorts through incidents quickly and is beginning to 
identify trends. We modified the report to reflect the range of 
severity of unusual incidents.

6. DMH commented that the report's subheading, "Enrollment and Billing 
System Is Designed to Coordinate Clinical, Administrative, and 
Financial Processes" represents a significant misapprehension. DMH 
stated that the enrollment and billing systems are not the major 
functions in the design of the clinical, administrative, and financial 
processes. DMH characterized the billing system as an administrative 
function that helped with the transition from a grants-based system of 
delivering services to a performance-focused fee-for-service (FFS) 
system. We believe that the enrollment and billing system is an 
important design component. For example, the final court-ordered plan 
outlines that a comprehensive enrollment and billing system that links 
payment to treatment is necessary to access federal Medicaid revenue 
through the mental health rehabilitation services option, which was 
identified in our October 2000 report and in the final plan as a key 
component for reforming the District's mental health system. Further, 
DMH's enrollment and billing information system is used to enroll 
consumers, reimburse providers, and, according to DMH officials, may 
eventually be the primary mechanism for collecting the performance data 
required to meet the Dixon exit criteria.

7. Regarding our findings on consumer choice and community follow-up 
after a consumer's discharge from the hospital, DMH stated that 
comments from the court monitor and the local Protection and Advocacy 
for Individuals with Mental Illness (PAIMI) agency (University Legal 
Services), were not quantified and that the report provides no other 
basis upon which to assess their reliability. As of January 2004, DMH 
was in the process of developing methods to track consumer choice and 
had not reported data to the court on community follow-up after 
discharge from the hospital. Absent that data, we relied on the court 
monitor's judgments regarding DMH's progress in implementing the court-
approved plan. Additionally, the District mental health advocates with 
whom we spoke are part of the federally-mandated protection and 
advocacy system.

DMH commented that our findings on DMH's capability to measure 
performance against the exit criteria (1) presented an incomplete 
account of events leading to the development of the performance targets 
and (2) missed critical factors for why baseline data were not included 
in the exit criteria requirements, specifically, that having a baseline 
would be impossible because services did not exist before DMH became a 
department and there was no basis for comparison with other 
jurisdictions. In response to DMH's first concern, we revised the 
report to clarify that the court monitor did not act alone to develop 
the targets for measuring performance against the exit criteria. 
Regarding the second concern, the draft report stated that baseline 
data were omitted because historical data are generally incomplete and 
many of the performance targets require the collection of new 
information from DMH and its providers. We modified the report to 
reflect that DMH was unable to identify comparable baselines from other 
jurisdictions.

8. With regard to our findings on data collection and integrity, DMH 
commented that the draft report did not take into account the 
developmental stage of the data collection process. DMH noted that some 
of the performance criteria do not lend themselves to electronic data 
collection, gaps in service utilization data for children and youth 
placed in residential treatment centers must be viewed in the context 
that five city departments carry out placements, and the draft report's 
statement that there is a gap between the number of children and youth 
enrolled and the number receiving services lacks quantitative support. 
We modified the draft to reflect that the two performance measures 
related to homeless consumers do not lend themselves to electronic data 
collection, which was confirmed by the court monitor, and that 
addressing the gap in service utilization data requires coordination 
with other District agencies that typically have their own tracking 
systems. The draft report stated that according to the court monitor, 
the first consumer services review for children and youth revealed a 
gap between the number of children and youth enrolled and the number 
receiving services. DMH did not provide us with the number of children 
and youth enrolled and receiving services. In the absence of that data, 
we relied on the court monitor's report, which cited the gap identified 
by the consumer services review.

[End of section]

Appendix III: GAO Contact and Staff Acknowledgments:

GAO Contact:

Carolyn Yocom, (202) 512-4931:

Acknowledgments:

Major contributors included Susan Barnidge, Laura Sutton Elsberg, Kevin 
Milne, and Elizabeth T. Morrison.

FOOTNOTES

[1] See Dixon v. Weinberger, 405 F. Supp. 974 (D.D.C. 1975). 

[2] U.S. General Accounting Office, District of Columbia: Receiver's 
Plan to Return Control of Mental Health Commission Is Evolving, 
GAO-01-157 (Washington, D.C.: Oct. 30, 2000).

[3] See Dixon v. Williams, C.A. No. 74-285 (D.D.C. March 28, 2001) 
(Final Court Ordered Plan).

[4] A receiver is a person, usually appointed by a court, who takes 
control of and conserves assets or property that is the subject of 
litigation and manages the assets or property in accordance with court 
orders. In the Dixon case, the court granted the receiver broad powers, 
including the authority to hire and fire personnel, negotiate or renew 
labor contracts, and establish a budget. 

[5] St. Elizabeths Hospital specializes in inpatient care for people 
with acute, intermediate, and long-term mental health needs. Patients 
typically have symptoms that are so severe or intense that they need 
the security and structure of a hospital to assist in their recovery 
from mental illness. On October 1, 1987, the hospital passed from 
federal control to become part of the District's mental health system. 

[6] DMH treats mentally ill individuals referred through the criminal 
justice system. DMH provides a range of forensic mental health 
services, such as caring for and treating an individual found not 
guilty by reason of insanity. Federal agencies may also refer persons 
to St. Elizabeths Hospital who, if admitted, would be housed in the 
hospital's forensic division. For example, the U.S. Secret Service may 
refer a person who has made a threat against a federal official.

[7] For purposes of this report, children and youth refer to a single 
category of individuals aged 0 to 17.

[8] The President's New Freedom Commission on Mental Health, which was 
created to study and make recommendations about the nation's mental 
health service delivery system, defines "recovery" as the process in 
which people with mental illnesses are able to live, work, learn, and 
participate fully in their communities. See New Freedom Commission on 
Mental Health, Achieving the Promise: Transforming Mental Health Care 
in America. Final Report, Pub. No. SMA-03-3832 (Rockville, Md.: 
Department of Health and Human Services, 2003). 

[9] In the District of Columbia, the federal government contributes 70 
cents of each Medicaid dollar spent. This ratio is set in statute and 
does not change with fluctuations in the District's per capita income. 
States' federal funding rates are 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 in fiscal year 
2004 from 50 to approximately 77 percent. In the period April 1, 2003, 
through June 30, 2004 each state and the District of Columbia can 
receive an additional 2.95 percent in the federal share.

[10] See National Association of State Mental Health Program Directors 
Research Institute, Inc., Funding Sources and Expenditures of State 
Mental Health Agencies: Fiscal Year 2001 (Alexandria, Va.: May 2003).

[11] Medicaid will cover inpatient services provided to individuals in 
mental health facilities with 16 or fewer beds, but the Medicaid 
statute specifically excludes coverage provided in larger psychiatric 
institutions for adults aged 21 to 64. 

[12] For a discussion of best practices in mental health, see Mental 
Health: A Report of the Surgeon General (Rockville, Md.: Department of 
Health and Human Services, 1999). 

[13] While years 1 and 2 associated with implementing the transitional 
receiver's final plan did not follow a consistent 12-month cycle (year 
2 was extended from 12 to 15 months), years 3 and beyond are linked to 
the District's fiscal year cycle, with year 3 representing the time 
period October 1, 2003, to September 30, 2004. 

[14] The District legislation creating DMH--the Mental Health Service 
Delivery Reform Act of 2001, 49 D.C. Reg. 985 (2002)--assigned DMH the 
duty and authority to develop systems of care for adults and for 
children and youth, purchase and reimburse for services, regulate 
services and supports, investigate allegations of abuse and neglect, 
and operate an inpatient hospital and a CSA. See D.C. Code Ann. § 7-
1231.04 (2003 Supp.).

[15] In addition, there are other providers, including residential 
treatment centers for children and youth, day treatment programs, and 
free-standing mental health clinics, certified by DMH on behalf of the 
District Medicaid office. These providers can serve DMH consumers; 
however, they are paid directly by the District's Medicaid office.

[16] According to a DMH official, as of December 2003, in addition to 
the 22 certified rehabilitation providers, 17 additional providers had 
applied for certification to deliver rehabilitative services. As part 
of DMH's effort to increase capacity for serving children and youth, 
many of the 17 providers specialize in serving these populations.

[17] As a condition of Medicaid reimbursement, DMH is required to 
certify any willing provider who meets the business and clinical policy 
requirements for rehabilitative services. The first rehabilitative 
services providers were certified for 2 years in the spring of 2002.

[18] DMH has the authority to investigate unusual incidents reported by 
all providers who deliver services to District of Columbia residents. 
These providers include DMH certified or licensed providers, community 
residential facilities and their employees, all DMH mental health 
services and support contractors, St. Elizabeths Hospital, and other 
mental health providers serving children and youth located in and 
outside of the District.

[19] DMH officials told us that its enrollment data are inflated 
because the system does not actively disenroll consumers who are no 
longer receiving services. Thus, the enrollment counts could include 
individuals who have left the District and no longer receive services.

[20] In addition to increasing the care provided under the least 
restrictive conditions, the transitional receiver outlined a reduced 
role for St. Elizabeths Hospital in order to maximize access to 
Medicaid funds. Medicaid does not reimburse for most psychiatric 
admissions to large institutions.

[21] The final plan states that acute care services will also be 
provided under agreements with a number of willing and qualified acute 
care hospitals in the community that have unused capacity. The 
establishment and effectiveness of these agreements is an area 
identified in the court monitor's July 2003 report to the court as an 
area of concern for continued monitoring. We recognize that such 
agreements are difficult and often complex to negotiate and local 
hospitals must be willing and able to contract for such services. 

[22] According to the court monitor, the method for counting fixed 
costs for community-based services is still being negotiated by the 
parties to the Dixon case; the court monitor expects this to be 
finalized by July 2004. 

[23] For example, DMH's homeless outreach program has five full-time 
staff who visit homeless shelters throughout the District to help 
encourage contact with the mental health system. Outreach staff members 
maintain close contact with organizations for the homeless to remind 
them of DMH's Access Helpline and offer training to providers on a 
range of topics, including how to link homeless individuals with DMH 
services.

[24] Homeless individuals are considered residents if they are in the 
District while receiving services and express their intent to continue 
to stay in the District.

[25] CSAs are DMH-certified rehabilitative services providers 
responsible for assessing consumer needs, working with consumers to 
develop treatment plans, providing and/or coordinating services to meet 
objectives of the treatment plans, and billing DMH for services. 

[26] The Access Helpline and CSAs are the only entities that can enroll 
a consumer. As of January 2004, there were over 15 CSAs, one of which 
is DMH's community services agency. Other providers can, however, work 
with the Helpline to help a consumer enroll. 

[27] This enrollment number represents any individual who enrolled in 
the District's mental health system and selected or was assigned a CSA. 


[28] DMH's fiscal year 2003 covers the period October 1, 2002, through 
September 30, 2003.

[29] Under the standard contract between certified rehabilitative 
services providers and DMH, providers have up to 1 year from the date a 
service was delivered to submit a claim for reimbursement from DMH. 
According to a DMH official, there is generally a 30-to 60-day lag 
between the date of service and the submission of the claim.

[30] The Centers for Medicare & Medicaid Services oversees states' 
Medicaid programs at the federal level.

[31] The District's Medicaid office is the only agency in the District 
that can enroll individuals in Medicaid. However, it is a DMH priority 
to identify its consumers who are eligible for Medicaid coverage and 
assist with enrollment in Medicaid. DMH-certified providers are 
encouraged to refer and/or assist potentially eligible consumers in 
applying for Medicaid.

[32] At the beginning of each fiscal year, DMH and each individual 
provider sign a contract, which includes the projected amount to be 
billed for each rehabilitative service that the provider is certified 
to deliver. DMH submits the agreed-upon projections to the District 
contracting office to reserve funding at the agreed-upon level for the 
specified service and provider. When billing exceeds the amount of 
funds reserved for the designated fiscal year, the providers are no 
longer reimbursed for the services unless the projected billing amount 
is adjusted. 

[33] The final plan highlights developing a recovery-based system that 
is integrated and community based. A recovery-based system moves beyond 
treating the consumer's mental health symptoms to also measuring the 
success of his or her ability to live and function in the community. 

[34] SMA-03-3832, page 5. The July 2003 report of the President's New 
Freedom Commission on Mental Health cites two basic principles for 
successfully transforming a mental health service delivery system: (1) 
services and treatments must be consumer and family centered and (2) 
care must focus on increasing consumers' ability to successfully cope 
with life's challenges, on facilitating recovery, and on building 
resilience, not just on managing symptoms. 

[35] See Dixon v. Williams, C.A. No. 74-285 (D.D.C. January 13, 2003) 
(Report to the Court, Dennis R. Jones, Court Monitor).

[36] University Legal Services is a private, nonprofit organization 
that is the District of Columbia's federally mandated protection and 
advocacy system for the human, legal, and service rights of people with 
disabilities. Protection and advocacy organizations are 
congressionally mandated disability rights agencies that have the 
authority to provide legal representation and other advocacy services, 
under all federal and state laws, to all people with disabilities.

[37] This legislation also required DMH to implement a variety of other 
consumer protection mechanisms, such as durable power of attorney, 
informed consent for administration of medications, freedom from 
seclusion and restraint, and information privacy. 

[38] DMH is required to select and contract with one or more external 
reviewer(s) to provide timely, neutral, and impartial review of 
grievances that have not been resolved to the consumer's satisfaction.

[39] The December 2003 court order replaced an earlier set of exit 
criteria measures. The prior measures, which had been approved in May 
2002, had methodologies for measuring performance but did not contain 
performance targets, qualitative requirements, or definitions.

[40] Alternatively, under its December 11, 2003, order, the court also 
allowed the District to request a dismissal of the case after 
demonstrating "substantial compliance" with all required performance 
targets and qualitative requirements and the court determines that the 
case, in the interest of fairness, should be dismissed. In either 
scenario, the District would have to demonstrate a level of compliance 
with all of the exit criteria measures, including the 17 with 
performance targets and the consumer satisfaction and consumer 
functioning measures with qualitative requirements.

[41] The eight measures requiring nonelectronic data collection, which 
were based on the earlier methodologies approved by the court in May 
2002, include supported housing, supported employment, assertive 
community treatment, service to homeless adults, service to children 
and youth with serious emotional disturbances in natural settings, 
service to children and youth with serious emotional disturbances who 
live in their own home or a surrogate home, service to homeless 
children and youth with serious emotional disturbances, and continuity 
of care for children and youth. According to DMH officials, this 
information is entered into a separate database or compiled in a 
separate document. Under the new methodologies approved in December 
2003, the court monitor expects DMH to establish an electronic process 
to ensure accurate performance data. However, the court monitor 
acknowledged that electronic data collection would be difficult for the 
two performance measures related to homeless consumers. 

[42] As of January 2004, DMH was still determining the extent to which 
its enrollment and billing information system could be modified to 
collect this information and thus could not provide us with additional 
details.

[43] DMH officials recognize the need to address the gap between 
children and youth enrolled in RTCs and CSAs. While officials told us 
that DMH has put processes in place for ensuring that new children and 
youth placed in RTCs are linked to a CSA, the department is still 
working to develop a process for connecting children and youth already 
enrolled in an RTC with a CSA. However, according to DMH, addressing 
this gap requires coordination with other District agencies that 
typically have separate tracking mechanisms for children and youth 
referred to RTCs.

[44] As stated earlier, DMH officials told us that its enrollment data 
are inflated because the system does not actively disenroll consumers 
who are no longer receiving services. While inflated enrollment data 
resulting from do not directly factor into the exit criteria 
penetration rate calculations, it is an issue also identified by the 
court monitor that DMH needs to resolve. The court monitor stated in 
January 2004 that DMH is taking steps to implement a policy that would 
disenroll consumers no longer receiving services.

[45] DMH officials told us that this information is self-reported and, 
aside from some site visits to providers in July and August 2003, the 
data are not separately verified by DMH.

[46] In July 2003, DMH collected discharge data from two hospitals that 
have agreements to serve DMH children and youth, but has not requested 
this information on a routine basis.

[47] According to DMH, hospitals have indicated a willingness to submit 
discharge data to DMH. 

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