Company planning Middleton psychiatric hospital has violations in other states

April 8, 2018 GMT

After 10 youth escaped from Strategic Behavioral Center in Charlotte, North Carolina, on New Year’s Day, the state suspended admissions, issued a $20,000 fine and gave the psychiatric hospital an immediate jeopardy violation for failing to keep the facility secure.

The sanctions are among nine immediate jeopardy citations and other serious actions taken in recent years against psychiatric hospitals owned by Strategic Behavioral Health, which plans to build a 72-bed hospital in Middleton, according to public records reviewed by the Wisconsin State Journal.

Middleton’s Plan Commission will hold public hearings Tuesday on a conditional-use permit and a zoning amendment for the hospital, to be called Miramont Behavioral Health and planned for 3169 Deming Way. The City Council, which could consider approving the project on April 17, has endorsed the concept of giving $1.2 million in tax incremental financing to Strategic Behavioral Health, a for-profit company based in Memphis, Tennessee.


The company’s hospital in Green Bay, which opened in January 2017, received lower-level citations in December for failing to do full background checks on employees and not properly caring for a patient with an open wound and three patients at risk for falls, including one who fell in November.

The Green Bay facility, called Willow Creek Behavioral Health, has had four medical directors, and current and former employees say the facility is short-staffed. Aurora Health Care, which did medical exams at the hospital, terminated the contract this January.

A company with multiple immediate jeopardy violations “could have serious and systemic problems,” said Richard Curtis, CEO for the Center for Improvement in Healthcare Quality, which consults for and accredits hospitals.

However, some states and inspectors give out immediate jeopardy citations more than others, and the federal government has pushed for more of the citations in recent years, especially in behavioral health, Curtis said. A Dane County official said she welcomes Strategic Behavioral Health’s arrival despite its regulatory record.


“It’s just as plausible, however, that some citations are the result of all the variables and inadequacies and problems of the whole survey and certification process,” Curtis said.

Immediate jeopardy “is the highest level of potential sanction, and it is not common,” said Mark Covall, CEO of the National Association of Behavioral Healthcare, which represents psychiatric hospitals and includes Strategic Behavioral Health as a member.

“But the real key is whether or not the hospital made the changes that were necessary to continue their license,” Covall said.

Jim Shaheen, founder and president of Strategic Behavioral Health, said none of the company’s 10 hospitals has lost its license or certification.

Some of the immediate jeopardy violations, including the one this year in Charlotte, have been at residential treatment programs, which involve months-long stays for people severely affected by mental illness or substance abuse, Shaheen said. The company won’t offer that type of care in Middleton, he said.

“Any regulated entity, obviously, has opportunities to improve,” Shaheen said. “That’s what we do ... It’s not like we’re not on top of when we need to improve in different care areas.”

Plans in Middleton

The nine immediate jeopardy violations occurred at four facilities in Colorado, North Carolina and Texas since 2014, according to public records. Most of the violations stem from safety and staffing problems.

Shaheen argues that the company has had only four of the violations. But according to public records, as well as an expert and a regulator, it’s nine.

Texas inspectors cited immediate jeopardy in five citations in one report. Curtis said that counts as five immediate jeopardy violations, but Shaheen said it should count as one.

In Colorado, an inspection report from 2016 cites immediate jeopardy. A state regulator, in an email last month to the State Journal, referred to the sanction as an immediate jeopardy citation. But because the citation was lifted during the inspection, which is not unusual, Shaheen said it shouldn’t be counted.

In addition to the immediate jeopardy citations, the company’s hospital in Las Vegas received other serious citations last year, for not properly investigating alleged sexual and physical abuse of patients. In New Mexico, a state-designated advocacy group said in 2015 that the company’s hospital in Santa Teresa had an “unsafe environment.”

Strategic Behavioral Health, which started in 2006, plans to open facilities this year in Kingsport, Tennessee, and next year in Bettendorf, Iowa, adding two more states to its reach.

In Middleton, the company plans to spend $17 million to $20 million to build a hospital in the Airport Road Business Park, near two day care centers.

It says it will provide inpatient psychiatric care — on a voluntary and involuntary basis — for children, adolescents, adults and seniors, along with chemical dependency treatment for adults. Partial hospitalization and intensive outpatient care also will be provided.

The project would add 72 beds to the roughly 90 inpatient psychiatric beds in Dane County, operated by general hospitals.

The plan comes as Dane County is embarking on a study of its mental health services, including whether a crisis restoration center is needed to help keep people with mental health emergencies out of jail and quickly connect them with services.

Police have complained about having to transport many mentally ill patients to Winnebago Mental Health Institute in Oshkosh since 2014, when the state stopped accepting most non-criminal patients at Mendota Mental Health Institute in Madison.

The psychiatric hospital in Middleton could help divert people from jail and reduce trips to Winnebago, mental health advocates, county officials and police have said.

Shaheen said the hospital would reduce trips to Winnebago by 90 percent, and crisis assessment would be offered 24 hours a day, seven days a week. “Folks can just walk in,” he said. “If they are in the middle of a crisis that they cannot manage, then we will take care of them.”

In Green Bay, police said the opening of Willow Creek Behavioral Health last year has reduced trips to Winnebago and given officers a place to take patients who agree they need treatment.

“Willow Creek is a breath of fresh air,” Barb Gerarden, one of the Green Bay Police Department’s two mental health officers, told the State Journal this year.

Parkway also for-profit

But Willow Creek has had significant turnover among administrators and medical staff, according to two current and two former high-level employees who spoke to the State Journal on the condition of anonymity, saying they feared they could lose their jobs or be sued if identified.

The hospital turns away patients with a questionable ability to pay for treatment, and sometimes admits patients when there aren’t enough staff to take care of them, they said. Many patients haven’t received required physical exams since Aurora ended its contract, the current employees said.

Aurora ended the contract Jan. 31 because of growing demand at Aurora facilities and “our ongoing dedication to providing all patients with the best care,” said Aurora spokeswoman Tami Kou.

Shaheen said nurse practitioners are now performing the exams and the facility meets state-mandated staffing ratios. “We do not cherry pick patients,” he said. “We take all payers as they come.”

Dr. Randall Cullen, a Madison-area psychiatrist and former medical director of Mendota Mental Health Institute, questioned Strategic Behavioral Health’s business model.

Cullen was also medical director of Parkway Hospital, a 62-bed psychiatric hospital for children, adolescents and adults built on Madison’s West Side in the late 1980s by Hospital Corporation of America, or HCA, a for-profit company in Nashville, Tennessee.

Parkway had a hard time getting business from the provider-owned HMOs that dominate Dane County’s health care market, Cullen said. It closed in 1993, and HCA sold the building to UW-Madison, which uses it to house the Wisconsin Psychiatric Institute and Clinics, and Wisconsin Sleep, a lab for sleep studies.

Strategic Behavioral Health hasn’t signed any contracts with the HMOs, but those discussions typically don’t start until a few months before a facility opens, Shaheen said.

Cullen said he would expect the company to operate its hospital much like HCA ran Parkway.

“The pressure is immense to fill the beds,” he said. “They’re going to make or break their profits based on how thin they cut their staffing.”

Lynn Green, Dane County’s human services director, said she and other officials have been aware of sanctions against Strategic Behavioral Health in other states. But she is satisfied with the corrective actions the company said it has taken.

“We talked to them about that ... they’ve talked to us pretty openly about those problems,” Green said. “They’re really willing to meet the needs of the community.”

Lindsay Wallace, executive director of the Dane County chapter of the National Alliance on Mental Illness, said the sanctions against Strategic Behavioral Health are “concerning.” Whether the hospital in Middleton accepts patients with little or no insurance will be key to how much benefit it provides the community, she said.

“There are some positive features of Strategic Behavioral Health, but it does depend on their ability to deliver on their promises for us to see a true impact,” Wallace said.

“It’s just as plausible ... that some citations are the result of all the variables and inadequacies and problems of the whole survey and certification process.” Richard Curtis, CEO for the Center for Improvement in Healthcare Quality“The pressure is immense to fill the beds ... They’re going to make or break their profits based on how thin they cut their staffing.” Dr. Randall Cullen, a Madison-area psychiatrist and former medical director of Mendota Mental Health Institute