Skip to main content

Klamath County’s Mental Health Services Under Transition

July 8, 2013—For a few weeks in late May and early June, it looked like Klamath County’s county-operated mental health programs would shut down or be disrupted. But frantic negotiations and the involvement of the Oregon Health Authority is preventing that from happening.
July 9, 2013


July 8, 2013—For a few weeks in late May and early June, it looked like Klamath County’s county-operated mental health programs would shut down or be disrupted. But frantic negotiations and the involvement of the Oregon Health Authority is preventing that from happening.

The county and Oregon Health Authority are currently undergoing a transition period, expected to last approximately 90 days, after which a non-profit organization will take over the county’s adult mental health services, which include crisis services, supportive housing, and case management to approximately 1,200 mentally ill adults in Klamath County.

According to a July 3 Klamath Herald and News article, negotiations are currently underway to have Klamath Youth Development Center, a non-profit providing children and youth mental health services, take over county mental health services, currently operated by Klamath Health and Behavioral Wellness, by August 1.

If negotiations reach an impasse, the Oregon Health Authority has the ability to step in and designate an organization as the county’s community mental health provider to prevent service disruption—which would be the first time in Oregon’s history that the state would step in in such a manner.

“This is unprecedented throughout the state,” said Amanda Bunger, director of Klamath Health and Behavioral Wellness, during a June 25 meeting of the Klamath County board of commissioners.

The transition, which struck many as sudden and surprising, comes after protracted negotiations with the county’s soon-to-be coordinated care organization, Cascade Health Alliance, and the conservative political ideology of the county’s board chair, Dennis Linthicum.

Jefferson Behavioral Healthcare’s closure on June 30 was the domino setting the upheaval of Klamath’s mental health services in motion. That organization provided mental healthcare to Coos, Curry, Jackson, Josephine and Klamath counties before the Oregon Health Plan was reformed last year to begin provided care through coordinated care organizations (CCOs).

Bob Furlow, Jefferson’s director, said his organization tried to contract with southern Oregon’s CCOs for a year and a half, but none of them were interested.

“The counties that made up Jefferson Behavioral Healthcare decided that they did not want the organization to be a party to the delivery of mental health services in southern Oregon,” Furlow said.

Klamath County is the last area in the state to have a coordinated care organization provide care to its Oregon Health Plan patients. Cascade Health Alliance is expected to begin operating on Sept. 1.

Coordinated care organizations are reimbursed by the state with a capitated rate. Organizations that provide care to Oregon Health Plan patients outside of coordinated care organizations are reimbursed by the state using a fee-for-service billing system.

Fee-for-service reimburses providers per patient visit for services—unlike how coordinated care organizations are reimbursed (or how managed care organizations like Jefferson Behavioral Health used to be reimbursed), fee-for-service does not include additional funding for risk reserves, administrative costs or any adjustments.

Under fee-for-service, Klamath County would have only been paid for the services it provided. But Dennis Linthicum, the chair of Klamath County’s board of commissioners, thought that would not be enough to pay for all the services of Klamath Behavioral Health and Wellness.

On June 14, the board sent the Oregon Health Authority a letter saying the county could not afford to maintain the current level of its mental health services with fee-for-service, calling it an “abrupt and drastic funding change” that made operating Klamath Behavioral Health and Wellness impossible without laying off staff and restructuring services.

The board asked the Oregon Health Authority to find another community mental health provider and requested additional money during the transition period to that new provider. The board also to no longer be the county’s “local mental health authority”—a statutory role county boards play to oversee county mental health services. It is not a role counties can legally give up.

Linthicum spearheaded the effort. He did not respond to calls for comment, but the Klamath Herald and News has quoted the Republican commissioner saying that his primary reason for closing Klamath Behavioral Health and Wellness is not only the possibility that fee-for-service would not be able to pay for the county’s mental health programs, but also that government should not pay for such services.

“I simply object to the government takeover of the healthcare industry,” Linthicum said when the county approved a Memorandum of Understanding with Cascade Health Alliance in late May.

“Healthcare is running mad and will be very expensive” after Medicaid expansion, he told The Lund Report in May. “Instead of cost cutting and finding innovation, healthcare is going to bankrupt this country if we don’t take this seriously.”

Linthicum’s conservative politics have drawn ire from Klamath County residents. A petition for his recall was filed in late May, after the board, with his support, cut support to the Meals on Wheels program, which delivers meals to the elderly.

Sources say that negotiations with Cascade Health Alliance also led to the current changes.

It took a year for Cascade Health Alliance and the county to negotiate how the CCO would coordinate and contract with mental health services, and negotiations concluded in late May only after the Oregon Health Authority intervened and a mediator became involved.

“We were negotiating in good faith with the county mental health department,” said Bill Guest, Cascade Health Alliance’s executive director.

To ensure that the county’s mental health services do transition to a non-profit provider, the county board of commissioners insisted that two amendments be included in an intergovernmental agreement with the Oregon Health Authority. through July 31. The amendments allow the county to terminate the contract for any reason with a 90-day notice, or within 45 days if funds to pay for mental health services were unavailable. The board approved that agreement on June 25.

Stanley Gilbert, the executive director of Klamath Youth Development Center, did not respond to repeated phone calls and emails for comment.

Image for this story by Michael McCullough (CC BY-NC 2.0) via Flickr.

Amanda Waldroupe can be reached at [email protected].