Kansas agency officials want to develop a request for a proposal to privatize Osawatomie State Hospital, a House committee was told.
Two legislators on the committee suggested to the head of the Kansas Department for Aging and Disability Services that the state’s two psychiatric hospitals had been mismanaged as a way to justify privatization.
Rep. Scott Schwab, an Olathe Republican, said there was an appearance of some “intentional mismanagement” to push the state toward privatization. Rep. Jim Ward, a Wichita Democrat, said it seemed the agency created a situation that would lead to turning over the hospitals to private companies.
“The intention has been for over a year to privatize these hospitals,” Ward said of Osawatomie and Larned state hospitals at a House Health and Human Services Committee meeting.
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Tim Keck, interim secretary of the Department for Aging and Disability Services under Gov. Sam Brownback, rejected the assertions.
“The agency has not made a decision to privatize,” only to develop a request for proposal so all options are available, he said. “We’re going to work with the Legislature.”
Asked after the meeting about the mismanagement charges, Keck said, “There’s no way. That’s not happening.”
Lawmakers anticipated the privatization idea. Both the House and Senate included provisions in budget bills last week to require legislative approval before any privatization process.
The privatization option would be for Osawatomie and not for Larned, Keck said.
Keck said the agency is working toward Medicare recertification for Osawatomie, which, if all goes well, could be completed by summer. Osawatomie is about 50 miles southwest of Kansas City.
The federal Centers for Medicare and Medicaid Services told the hospital in November that Medicare would stop reimbursements for patient care. That notice came after a survey found that the hospital had failed to protect suicidal patients, properly supervise care and perform safety checks.
Keck said the lack of federal reimbursements is costing about $1 million a month.
The department is working to solve hospital staffing issues, he said. Osawatomie currently has 146 patients. As of Jan. 25, the hospital had a 35 percent staff vacancy rate, with the highest vacancies in nursing staff, Keck said.
Increased funding of $1.2 million would provide a 5 percent staff pay increase. Both the House and Senate budget bills include extra funds for Osawatomie to help pay for staffing needs.
Keck said the agency contracted with KB Behavorial Healthcare Consulting in its effort to restore the hospital’s Medicare certification.