GAO

United States General Accounting Office

Report to the Subcommittee on the

District of Columbia, Committee on

Government Reform, House of

Representatives

October 2000 DISTRICT OF

COLUMBIA

Receiver’s Plan to

Return Control of

Mental Health

Commission Is

Evolving

GAO-01-157

Page 1 GAO-01-157 D.C. Mental Health Receiver’s Plan

Contents

Letter 3

Appendix Appendix I: Major Court Actions Related to District Compliance

With the Dixon Decree 22

Table Table 1: Comparison of District Strategies With Other Mental

Health Systems 13

Abbreviations

ACT assertive community treatment programs

CMHC Community Mental Health Center

FIP Final Implementation Plan

HCFA Health Care Financing Administration

HST Homeless Support Team

MCOTT Mobile Community Outreach Treatment Team

MRO Medicaid Rehabilitation Option

NAM new antipsychotic medication

NASMHPD National Association of State Mental Health Directors

SAMHSA Substance Abuse and Mental Health Services Administration

SDP Service Development Plan
Page 2 GAO-01-157 D.C. Mental Health Receiver’s Plan
Page 3 GAO-01-157 D.C. Mental Health Receiver’s Plan

United States General Accounting Office

Washington, D.C. 20548 Letr

October 30, 2000

The Honorable Tom Davis

Chairman

The Honorable Eleanor Holmes Norton

Ranking Minority Member

Subcommittee on the District of Columbia

Committee on Government Reform

House of Representatives

In 1974, a class action suit filed on behalf of District of Columbia residents

with mental illnesses argued that the District’s Commission on Mental

Health Services’ (the commission) practice of treating the majority of the

District’s mental health patients by institutionalizing them in St. Elizabeths

Hospital violated the federal statutory rights of individuals to appropriate

treatment in alternative care facilities. In a ruling known as the Dixon

Decree, the U.S. District Court for the District of Columbia determined that

these individuals had a statutory right to community-based treatment by

the least restrictive means.1 In 1997, the court found that District efforts

taken during the previous 22 years had failed to meet the Dixon Decree.

Consequently, the judge appointed a receiver to take charge of the

commission and carry out the court’s orders. On April 1, 2000, the initial

receiver was replaced by a transitional receiver who is required to develop

a plan to return day-to-day operations of the commission to the District

government in early 2001.

Recently, your Subcommittee raised concerns about the receivers’ progress

in creating a community-based mental health system, and the time frame

for shifting control of the commission back to the District of Columbia. To

address these concerns, you asked us to (1) describe the receivers’ efforts

to comply with the Dixon Decree; (2) compare the proposals advanced by

the transitional receiver with other mental health systems; and (3) discuss

the challenges facing the transitional receiver and the District in developing

and implementing a community-based mental health system. To carry out

this investigation, we interviewed District officials from the commission

and the Office of the Receiver, the Mayor’s office, and District agencies

1

Persons covered under the Dixon Decree include adult residents of St. Elizabeths Hospital,

elder residents of St. Elizabeths Hospital, adults and elders who pose a risk of

rehospitalization, and mentally ill and homeless individuals. See Dixon v. Weinberger, 405 F.

Supp. 974 (D.C.D.C. 1975).
Page 4 GAO-01-157 D.C. Mental Health Receiver’s Plan

with related programs; mental health and community services providers;

client advocacy groups; and other organizations. We also reviewed the

history of the Dixon case, documentation provided by the receiver, data

from community-based mental health systems and national mental health

organizations, and our past work on organizational reform. We conducted

our work from July 2000 to September 2000 in accordance with generally

accepted government auditing standards.

Results in Brief Compliance with the Dixon Decree requires a fundamental shift in the

District’s approach to providing and financing mental health services.

Essential to this change is the need for the commission to diminish its role

as a direct care provider and assume the more traditional responsibilities of

a mental health authority: a purchaser, regulator, and manager of mental

health care. While both of the court-appointed receivers identified similar

improvements needed to enhance the District’s community-based mental

health system, the second, or transitional, receiver has taken more decisive

action to ensure their implementation. The transitional receiver has relied

on strategies that are often modeled after methods used by other states or

nationwide. For example, to increase federal funding for mental health

services, he has pursued an approach used by more than 30 states to

increase the number and scope of services reimbursable by Medicaid. In

addition, he has undertaken initiatives based on national models for

housing and supported services.

Despite the progress in developing a blueprint for a more accountable and

integrated community-based mental health system, the transitional

receiver’s plan is still evolving, and many formidable implementation

challenges remain to be met before—and after—the return of the

commission to the District, scheduled to occur by April 1, 2001. By April,

many of the receiver’s initiatives will be in their earliest stages of

implementation, or not yet implemented; thus, the long-term success of

these initiatives will be largely unknown. Moreover, successfully

integrating these initiatives into the District government will also require

improvements in several management systems and processes, including

financial and other information systems, personnel, procurement, and

contracting. The extent to which the commission and the District

separately or jointly address these processes and foster relationships

between relevant District agencies will also affect the long-term success of

the mental health system. Achieving compliance with the Dixon Decree

will require that all of these initiatives—transformation to a community-
Page 5 GAO-01-157 D.C. Mental Health Receiver’s Plan

based system, modernization and improvements to District operations, and

coordination across the District government—be undertaken.

Background Dramatic changes in public mental health systems in the United States

began in the 1960s and 1970s with the shift to community-based care.

During this era, state mental hospitals as the primary providers of care and

treatment were supplanted by a new emphasis on care in the community.

Unfortunately, communities were often not prepared to offer housing,

community treatment approaches, vocational opportunities, income

supports, or a sense of community support to deinstitutionalized mental

patients. Many persons with severe mental illness released from

institutions found themselves in residential settings such as group homes

or halfway houses, homeless, or in the welfare or criminal justice system.

Consequently, advocates nationwide began urging the development of

community support systems to address the social welfare needs of

individuals with mental illness. Among other services, community support

systems included treatments such as new medications and assertive

community treatment programs (ACT) that offer a multidisciplinary team

approach to treating individuals with serious mental illness.

States have modeled their mental health systems on a framework that

centers on the assumption that serious mental illness is a long-term

disorder that requires ongoing but flexible community-based treatment and

support services, including affordable and stable housing. The continuing

shift away from institutionalized care is evident in the decrease in state

mental health agency expenditures for inpatient care, from 54 percent of all

state mental health expenditures in 1990 to 41 percent in 1997. Between

1990 and 1999, 44 state mental hospitals were closed, reducing the number

of state mental hospitals from 263 to 219, compared to 277 in 1970.2

Further, the Supreme Court ruled in June 1999 that the failure of states to

find community placements for individuals with disabilities, forcing them

to remain in institutional settings, is a form of discrimination under the

Americans with Disabilities Act.3

2

See National Association of State Mental Health Program Directors (NASMHPD) Research

Institute, State Profile Highlights: Closing and Reorganizing State Psychiatric Hospitals:

2000 (Alexandria, Va.: Aug. 10, 2000).

3

This decision, in Olmstead v. L.C., requires states to develop comprehensive plans to end

unnecessary institutionalization at a “reasonable pace.”
Page 6 GAO-01-157 D.C. Mental Health Receiver’s Plan

In 1997, federal funds made up 25 percent of state mental health agency

funding. Most of the federal money came from Medicaid, a joint federalstate program for low-income families and aged, blind, and disabled people

that in 1998 spent about $177 billion to finance health coverage for 41

million individuals. States administer their own Medicaid programs within

broad federal requirements and can elect to cover a range of optional

populations and benefits. Because Medicaid is an entitlement program,

states and the federal government are obligated to pay for all covered

services provided to an eligible individual. Each state program’s federal and

state funding share is 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 from 50 to 83 percent.4 Medicaid covers both

required health services (such as inpatient and outpatient services) and the

optional services (such as rehabilitation) selected by the states. Reflecting

its medical focus, Medicaid mental health services have traditionally been

provided by physicians, including psychiatrists, who work at hospitals,

clinics, and other organizations; and to a lesser extent by other

practitioners, such as psychologists and psychiatric social workers. While

Medicaid will cover services provided to individuals in facilities with 16 or

fewer beds, the program specifically excludes coverage provided in larger

psychiatric institutions (called institutions for mental disease) for adults

aged 21 to 64.5

Other federal funding sources for public mental health programs account

for 5 percent of all state mental health agency funding and include grants

overseen by the Substance Abuse and Mental Health Services

Administration (SAMHSA). Medicare also pays for limited mental health

coverage for individuals over 65 and some individuals younger than 65 who

are disabled. States also play an important role in the funding of mental

health services, making up 69 percent of state mental health agencycontrolled revenues in 1997.

Commission Background The commission was created on October 1, 1987, when the federally owned

and operated St. Elizabeths Hospital was merged into the District’s mental

health care system. The commission is the largest public provider of mental

4

In the District of Columbia, the federal government contributes 70 cents of each Medicaid

dollar spent.

5

This limitation was imposed to avoid a shift in financial responsibility from state and local

governments, who have traditionally funded these facilities, to the federal government.
Page 7 GAO-01-157 D.C. Mental Health Receiver’s Plan

health services in the District, treating approximately 10,000 clients

annually. The commission must also treat mentally ill individuals who

commit criminal offenses in the nation’s capitol. The mental health system’s

focal point is St. Elizabeths Hospital, which provides a wide range of acute

care services. The hospital currently has 628 beds divided among three

types of inpatient clients: civil (365 beds), criminal (forensic) (243 beds),

and children (20 beds).6 The commission also provides services to

individuals through a number of outpatient facilities, including two

Community Mental Health Centers (CMHC) and five Mobile Community

Outreach Treatment Teams (MCOTT). Other District agencies, such as the

Departments of Health, Housing, and Corrections, Child and Family

Services Agency, and D.C. public schools may also provide mental health

and other types of services to persons with severe mental illness.

The commission’s proposed operating budget for fiscal year 2001 is about

$224 million, an increase of approximately $19 million over fiscal year 2000.

Of the proposed fiscal year 2001 budget, 62 percent is to be funded with

local dollars, and the remaining 38 percent from federal and other sources.

Of the $85 million from federal and other sources, the federal share of

Medicaid represents 70 percent—approximately $60 millionwith

Medicare making up most of the remainder.

According to the most recent national data available (fiscal year 1997), the

District had the highest per-capita spending for mental health services in

the nation at $337 per person. (The second- and third-highest states, New

York and Connecticut, spent $113 and $99 per person, respectively.) Some

experts attribute the District’s relatively high mental health costs to a

number of factors, including its unique city-state status, which requires the

District to bear costs normally shared by two levels of government; the cost

of maintaining St. Elizabeths campus—a national historic landmark—and

its associated hospital-based, institutional services; the District’s

exclusively urban jurisdiction; and high rates of poverty, substance abuse,

unemployment, and other indicators of poor mental health.

Under federal and subsequent District control, St. Elizabeths and the

commission have been slow to follow the trend of deinstitutionalization

6

Fewer than 700 individuals currently reside on the campus of St. Elizabeths; over 12,000

considered the campus home in the 1950s. Over the period of the Dixon Decree, the

inpatient population at St. Elizabeths fell from 5,912 in 1974 to 765 in 1997, when the first

receiver was appointed by the court.
Page 8 GAO-01-157 D.C. Mental Health Receiver’s Plan

that has occurred in the rest of the country. 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 argued that the practice of treating the

majority of the District’s mental health patients by institutionalization in St.

Elizabeths Hospital violated the statutory rights of individuals to

appropriate care in alternative care facilities. The court ruled in favor of the

plaintiffs in 1975 and continued to oversee District progress in developing a

community-based mental health system. In 1997, finding that the District

was no closer to a community-based mental health system than it had been

20 years earlier, the court appointed a receiver to bring the system into

compliance with the Dixon Decree.7 The court granted the receiver broad

powers, including all powers previously exercised over the commission by

the Commissioner, the Director of Human Services, and the Mayor. The

receiver also has the authority to hire and fire personnel, negotiate or

renew labor contracts, and establish the commission’s budget. (App. I

summarizes the major court actions related to the Dixon Decree.)

A second or transitional receiver appointed on April 1, 2000, was charged

with developing a plan that the District can implement to achieve

compliance with the Dixon Decree. Under the court order, the receiver is to

transfer control of the commission to the District government between

January 1 and April 1, 2001.8 The involvement of the transitional receiver,

however, does not end when control of the commission is transferred back

to the District. As described in the March 6, 2000, consent order, the

receiver will monitor the District’s day-to-day operation of the commission

for 6 months following the transfer of control. Within the first 60 days of

this 6-month period, the involved parties will present the court with criteria

for termination of the case decrees and orders and submit a schedule for

7

Receivers are appointed to effect compliance with court orders. In this case, the court

concluded 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.” See Dixon v. Barry, 967 F. Supp. 535, 554 (D.C.D.C. 1997).

8

At the time the transitional receiver was appointed, four other District agencies were also

in court-ordered receivership: the Department of Corrections Central Detention Facility

Medical Services, the Department of Public and Assisted Housing, the Child and Family

Services Agency, and the juvenile justice system of the Department of Human Services. In

December 1999, the Mayor appointed an individual to act as his administration’s liaison with

the commission and other District agencies under receivership. This individual collaborates

with each of the receiverships to develop solutions for systemic issues and facilitate the

return of the agency to District government.
Page 9 GAO-01-157 D.C. Mental Health Receiver’s Plan

monitoring the District’s progress. After this 6-month period, in order to

end the receivership, the transitional receiver must certify that the District

has the capacity to implement and is implementing the plan. The

transitional receiver will continue to monitor the District’s performance

and by October 30, 2001, will submit recommendations to the court

regarding termination of the court orders.

Compliance Requires a

Fundamental Shift in

District Mental Health

Operations

Compliance with the Dixon Decree requires a fundamental shift in how the

District operates its mental health system, a shift that will not be complete

when the receivership returns control of the commission to the District by

April 1, 2001. Central to this change is the need for the commission to shift

its role from a direct provider of mental health services to that of a mental

health authority—a purchaser, regulator, and manager of mental health

care. Although its provider role will ultimately diminish, the commission

may continue to provide some level of acute care as well as fulfill its

additional role of providing services to federally detained and committed

individuals—services for which it has never been consistently reimbursed.

Both receivers developed initiatives aimed at moving the District toward a

community-based mental health system. The initial receiver introduced

initiatives which sought to change the way the commission delivered

services, but development and implementation were slow. The transitional

receiver, who took over on April 1, 2000, has taken more decisive action,

and has begun to implement a number of community-based initiatives.

Receiver and the District

Face Daunting Task in

Making Fundamental

Changes to the Delivery of

Mental Health Services

Meeting the requirements of the Dixon Decree requires a fundamental shift

in the District’s approach to mental health services. Currently, the

commission is the largest single provider of mental health services in the

District, employing close to 2,000 individuals in fiscal year 2000 and,

according to commission officials, providing various services to about

10,000 individuals annually. The commission operates both St. Elizabeths

Hospital and two community-based mental health centers—a dual

responsibility assumed by only 11 states.9

In addition to providing inpatient services and direct services in the

community, the commission is structured so that fiscal and clinical

9

According to a 1996 survey conducted by NASMHPD, these 11 states are Connecticut,

Delaware, Idaho, Louisiana, Missouri, Nevada, New York, North Dakota, Oklahoma, South

Carolina, and Texas. Four states did not respond to the survey.
Page 10 GAO-01-157 D.C. Mental Health Receiver’s Plan

decisions remain largely centralized. The commission contracts with

private providers for housing, employment, case management, and other

community-based services. The commission has often used a “slot” system

to allocate a defined number of clients to providers and has paid them a

fixed rate per client. Under this system, providers do not compete to attract

clients and are paid regardless of performance, client satisfaction, or the

actual delivery of services. Unlike other community-based providers in the

District, which may bill Medicaid directly for their services, commissioncontracted service providers bill Medicaid through St. Elizabeths hospital.10

In order for the commission to move away from its current role as a direct

provider of services, community-based providers will need to have the

capability to bill Medicaid for the services they provide.11 Thus, as the

commission restructures itself to become more of a mental health

authority, these provider-like functions will diminish and be replaced by

regulatory and oversight functions.

However, the commission is likely to retain some type of provider role in

order to provide mental health services to federally detained and

committed individuals.12 When operation of the hospital was transferred

from the federal to the District government in 1987, the Congress mandated

that federal agencies referring persons for admission to St. Elizabeths be

responsible for the cost of their care and treatment.13 The commission bills

several federal agencies for these costs on a monthly basis, including the

U.S. Marshals Service for federal court detainees who are either not guilty

by reason of insanity or not competent to stand trial, and the U.S. Secret

Service for persons admitted to the hospital as a result of a threat of action

against a federal official.

10Providers who do not have contracts with the commission or who operate their own

mental health clinics may bill Medicaid separately for mental health services. In 1997, D.C.

Medicaid spent over $40 million in direct payments to these providers.

11In addition, the federal Health Care Financing Administration (HCFA), which oversees the

Medicaid program, published a final rule on disaffiliation that, according to consultants, will

likely require providers who currently contract with the commission to be individually

certified as Medicaid providers and to bill for services independently.

12According to a commission official, construction of a new hospital is expected to begin in

October 2001. Although its size is uncertain, commission officials estimated that the new

facility would house forensic clients and a limited number of longer-term care beds for other

clients.

1324 USC 225g.
Page 11 GAO-01-157 D.C. Mental Health Receiver’s Plan

Payment from these federal agencies, however, has been problematic for

some time. In 1993, the District filed suit against the United States for

payment for these services, seeking reimbursement from the U.S. Marshals

Service, the U.S. Secret Service, and other federal agencies.14 Although the

U.S. Marshals Service agreed to a settlement and has made payment in

full—about $13 million—for services rendered, other agencies have made

sporadic payments or none at all. The lawsuit is in active mediation at this

time. For fiscal year 1999, the commission provided close to 13,000

inpatient days of care—or approximately 6 percent of inpatient days—to

federal beneficiaries at a cost of about $5 million. With the exception of the

U.S. Marshals Service and the U.S. Virgin Islands, no other entity made

payments for services during fiscal year 1999.15

Both Receivers Focused on

Expanding CommunityBased Services

The movement from a hospital-based system to a community-based mental

health approach not only reflects a change in treatment nationwide, it is a

court-ordered requirement. Because the District had not made sufficient

progress in implementing such a system, the court ordered the commission

to be put into receivership 3 years ago. During this time, the two receivers

developed overarching goals aimed at enhancing the District’s communitybased mental health system. For example, in identifying key priorities for

the commission, both receivers cited the need to (1) develop initiatives to

increase housing options,16 (2) take better advantage of Medicaid to finance

14The lawsuit identified costs associated with providing services to 56 individuals referred

by the U.S. Marshals Service and 147 individuals referred by the U.S. Secret Service.

According to commission officials, the U.S. Secret Service continues to refer more

individuals to St. Elizabeths Hospital than any other federal agency. In addition to requesting

payment for individuals referred to St. Elizabeths by a federal agency, the lawsuit also

includes charges that the federal government failed to complete or pay for repairs and

renovations to the St. Elizabeths campus.

15Once a federal agency has referred individuals to St. Elizabeths, several circumstances

limit the District’s ability to return the individuals to their states for treatment. For example,

according to District law, any public hospital, including St. Elizabeths, is required to accept

any person who requires hospitalization if the hospital agrees there is a need for this level of

care. In addition, once a person is a resident of St. Elizabeths, District law requires that the

individual’s original state must be willing to accept him or her prior to a transfer back to the

state. According to commission officials, St. Elizabeths has executed compact agreements

with many states to facilitate such a transfer; however, in practice, these agreements have

been largely unsuccessful.

16According to commission staff, about 60 percent of patients currently in acute care units in

St. Elizabeths could be moved into the community if stable alternative housing were

available.
Page 12 GAO-01-157 D.C. Mental Health Receiver’s Plan

mental health services, (3) establish an administrative infrastructure

independent of the District, and (4) assume regulatory and oversight

responsibilities that are typically associated with a mental health authority.

Despite the introduction of such initiatives, the first receiver made little

progress in implementing these and other goals during his 2-year oversight

of the commission.

In preparation for the return of the commission to the District by April

2001, the second, or transitional, receiver assumed control on April 1, 2000,

and has taken more decisive action to implement a number of communitybased initiatives. He also developed broad program goals that should

enable the commission to finally comply with the court orders. For

example, he has continued efforts to develop and implement a pilot

initiative, called Carepoints, which transfers financial and clinical

responsibilities for clients to community providers. He has also initiated

discussions with local hospitals about the use of available beds for

inpatient psychiatric care. Finally, he has made progress in channeling

resources into development of an initiative intended to expand provider

capacity and increase Medicaid funding for mental health services, termed

the Medicaid Rehabilitation Option (MRO).17 If successful, these initiatives

will enhance the responsibility and accountability of community providers

and decrease the commission’s direct provider role. The commission then

will be able to assume more of the responsibilities of a mental health

authority, including the oversight and regulation of mental health services

in the District.

Most Strategies

Adopted by the

Transitional Receiver

Draw on Approaches

Used by Other States

The transitional receiver has drawn on his own and other expert

knowledge and experience to shape the development of a communitybased mental health system in the District. Although he is still in the

process of preparing his implementation plan, the transitional receiver has

17Under its rehabilitation option, the Medicaid program allows states to increase the scope

and number of mental health services reimbursable by Medicaid.
Page 13 GAO-01-157 D.C. Mental Health Receiver’s Plan

produced several broad program goals.18 These goals emphasize the

development of infrastructure, capacity, and accountability; the

strengthening of partnerships with providers, District agencies, and clients;

and the development of a community-based system of care in which the

commission acts as a mental health authority rather than as a provider.

Strategies being implemented by the transitional receiver include methods

actively employed across the nation or in specific states as well as those

that are modeled on national trends but adapted to meet the needs of the

District. In some cases the strategies adopted or furthered by the receiver

are considered “best practices” by mental health experts and other

organizations and are often consistent with national trends in mental health

care (table 1).

Table 1: Comparison of District Strategies With Other Mental Health Systems

18 In summary, these goals seek to (1) create the capacity to function as a mental health

authority separate from any provider role; (2) build a community-based system of care that

maximizes principles of accessibility, recovery, and consumer choice; (3) create

infrastructure to support the strategic direction; (4) create and reward a culture of

accountability and performance improvement; and (5) forge strong partnerships among

District agencies that participate in the provision of services to individuals with mental

illness.

District strategy Description Similar models

MRO • Federal approval is required for an MRO, which

increases the number and scope of mental health

services reimbursable by Medicaid.

• The commission plans to implement the MRO no earlier

than March 2001.a

• More than 30 states have used an MRO to cover

mental health services.

Carepoints • A single community provider is responsible for the full

array of client services, including assessment, inpatient

and outpatient services, and housing and employment

assistance.

• Target enrollment is 300 individuals; current enrollment is

approximately 25.

• Carepoints incorporates aspects of programs in other

jurisdictions, including Wisconsin; Baltimore,

Maryland; and Long Beach, California.

New antipsychotic

medications (NAM)

• NAMs offer significantly fewer and less severe side

effects than older medications.

• As of May 31, 2000, the commission budgeted funds for

NAMs to cover 1,800 persons in the District.

• The commission plans to increase the number of clients

using NAMs to 3,100 or 83 percent of the eligible

population by the end of fiscal year 2001.

• Mental health advocates state that access to the

newer medications is important to the treatment of

mental illness because they have significantly fewer

and less-severe side effects than older medications.

• Other states have also undertaken efforts to increase

the use of NAMs in their mental health community,

including Virginia and Texas.
Page 14 GAO-01-157 D.C. Mental Health Receiver’s Plan

a

Some providers have indicated that the March 2001 implementation of an MRO is not likely.

b

While the commission has developed these ACT-based programs, mental health advocates noted that

programs in place do not have all the elements of a true ACT model.

In some cases, the strategies used by the transitional receiver are tailored

specifically to the District’s needs and resources. For example, three of the

commission’s MCOTTs have recently begun to operate group houses based

on the Oxford House model for substance abuse. Started in 1975 in Silver

Spring, Maryland, the Oxford House model is a democratically self-run

independent group home that is typically used by persons with substance

abuse problems. The District has adapted this model to serve persons with

mental illness. Similar to the national model, residents are provided

affordable housing and an opportunity to share in all aspects of house

operations.

Finally, to create a mental health authority function separate and distinct

from any provider role, the transitional receiver will rely on his experience

as Commissioner of Mental Health in Indiana and Texas, and advice from

MCOTTs and

Homeless Support

Team (HST)

• These initiatives offer a comprehensive service delivery

model that provides community-based treatment to

people with severe and persistent mental illness.

• Five MCOTTs and two HSTs provide community-based

services to more than 500 individuals.

• D.C. Medicaid has requested federal approval to allow

Medicaid reimbursement for MCOTT services.

• ACT includes case management, initial and ongoing

assessments, psychiatric services, and housing and

employment assistance.b

• At least 35 states have implemented programs based

in part on ACT.

Home First II

Program

• Provides rental subsidies and community living

expenses, emphasizing client choice.

• Current enrollment is approximately 310; capacity is 450.

• Supported housing models can be found across the

country and in other nations.

• Supported housing emphasizes elements such as

regular housing, client choice, and appropriate

supports, such as self-help; it strives for client

independence and integration through community

living and enhanced quality of life.

Section 8 Housing • The commission currently can assist 90 clients with their

housing rental costs.

• The federal Section 8 program, funded by the U.S.

Department of Housing and Urban Development,

assists low-income families, the elderly, and persons

with disabilities with renting housing in the private

sector.

• Mental health advocates cite this program as a

primary, mainstream resource for persons with mental

and physical disabilities.

Cornerstone, Inc. • Cornerstone is a nonprofit housing finance intermediary

that provides grants and loans to providers to subsidize

the purchase of housing for persons with mental illness.

• Cornerstone has secured housing for 650.

• The commission has awarded $9 million to Cornerstone

since 1994.

• The National Technical Assistance Center for State

Mental Health Planning recognizes partnerships

between state mental health agencies and housing

finance and development agencies as a best practice

in housing.

(Continued From Previous Page)

District strategy Description Similar models
Page 15 GAO-01-157 D.C. Mental Health Receiver’s Plan

consultants and other state mental health authorities. While still developing

the blueprint for this transformation, he has identified a number of

functions that are essential to an authority, including quality improvement

and accountability initiatives, such as certification of providers; and

financial powers, such as budgeting and procurement. In addition, the

transitional receiver intends to tailor national performance standards

developed by SAMHSA to meet the District’s needs.

Significant Challenges

Remain to Comply

With the Dixon Decree

Significant challenges remain as the transitional receiver finalizes the

District’s plans to achieve compliance with the Dixon Decree. The

transitional receiver’s strategic plan will span a period of 3 to 5 years; thus,

at the time of the commission’s return to the District, many strategies and

initiatives will be only partially implemented or still in a planning stage. For

example, plans to enhance Medicaid reimbursement through an MRO and

to build a solid base of community providers will, at best, be in the early

stages of implementation. The transitional receiver has taken steps to

identify needed improvements in the commission’s management processes,

identifying personnel, procurement, and information systems as key areas

that require attention. Finally, the extent to which the commission and the

District foster relationships among District agencies relevant to the

commission will also affect the long-term success of its mental health

system. Achieving compliance with the Dixon Decree will require that all of

these initiatives—transformation to a community-based system,

modernization of and improvements to District operations, and

coordination across District government agencies and services—be

undertaken.

Despite Progress, the

Success of the Receiver’s

Plan Will Be Uncertain

Most mental health and community providers, consumer advocacy groups,

and other mental health organizations believe the transitional receiver is

taking positive steps to build a solid foundation for implementation of the

District’s community-based mental health system. In general, those we

interviewed expressed optimism regarding the efforts of the transitional

receiver and noted his ability to be decisive and apply innovative

approaches to revamping the District’s mental health system. For example,

both advocates and providers noted his quick appointment of new financial

leadership in response to issues raised in an external management review.19

Similarly, community organizations complimented his pursuit of the MRO

to increase Medicaid funding for mental health services.
Page 16 GAO-01-157 D.C. Mental Health Receiver’s Plan

However, a few individuals expressed concern that the transitional

receiver’s longer-term focus may not reform community-based programs

that are already under way and in need of improvement. For example, the

commission stated in a July 2000 report that clients must receive services

at least once every 90 days in order to remain active in community care.

However, in the same report, the commission presented data that showed

that three of the MCOTTs, which are expected to provide comprehensive

services for individuals with severe and persistent mental illness, did not

provide direct patient service to 35 of the approximately 310 enrolled

clients over a 90-day period. A mental health provider asserts that this lack

of contact with clients is unacceptable since MCOTTs currently have a

waiting list to enroll.

Most District officials and others with whom we spoke acknowledge that

the commission will be in the midst of many changes when control is

transferred to the District, leaving the long-term success of the transitional

receiver’s initiatives unclear. In fact, although the transitional receiver’s

plan has not yet been finalized, its overarching goals are based on a 3- to 5-

year implementation timeframe.

Thus, when the commission is returned to District government, several of

the transitional receiver’s key initiatives will still be in a planning stage or

newly implemented. Of particular concern is the MRO, which forms the

basis of funding community services and enhances provider autonomy and

capability to actively participate in the commission’s mental health system.

While the current plan is that the MRO will be implemented in March 2001,

certain providers have expressed doubt that this can be accomplished so

quickly. The commission is still determining which services will be covered

under the MRO as well as working with HCFA on implementation issues.20

With some of the most basic administrative issues yet to be finalized, it is

questionable whether community providers will be equipped to bill the

Medicaid programand hence receive reimbursementby next spring.

For example, some providers currently do not have the administrative

infrastructure to do the billing and clinical recordkeeping that Medicaid

requires.

19See Pricewaterhouse Coopers, Commission on Mental Health Services Management Audit

(Apr. 13, 2000).

20HCFA, in the U.S. Department of Health and Human Services, has oversight responsibility

for the Medicaid program.
Page 17 GAO-01-157 D.C. Mental Health Receiver’s Plan

Similarly, the initiative to expand the number of clients receiving NAMs is

also longer-term in nature, with a substantial increase in access to new

medications planned by 2001. Finally, certain housing initiatives will

continue to evolve over the next several years. Some provider and

advocacy organizations expressed concerns that these initiatives need to

be farther along in the implementation prior to the transition so that efforts

to comply with the Dixon Decree are ultimately successful.

Improvement in

Management Processes and

Working Relationships Is

Essential

Compliance with the Dixon Decree will also hinge on the transitional

receiver’s and the District’s ability to improve management processes and

coordination among District agencies who share in the responsibility of

providing necessary services to persons with mental illness. A recent

external management audit identified several problem areas within the

commission, including the lack of (1) a linkage between service delivery

goals and the budget process; (2) appropriate training, education, and

performance expectations for key management staff; and (3) a strategy to

work with providers in building a strong community-based system.

In an effort to improve management processes, the transitional receiver

has developed a work plan in response to the management audit and used

his authority to create a new commission management structure, recruit

qualified managers, and hire at least seven individuals with various types of

expertise, including procurement, information systems, and financial

management.21 In addition to issues identified in the audit, the transitional

receiver and District officials acknowledged the need to strengthen the

commission’s management information system, which, according to

commission officials, cannot currently produce an accurate count of

individuals participating in the District’s mental health system.

In addition, District officials acknowledge that historical inefficiencies and

problems in District government in areas such as accountability,

technology, procurement, and working relationships must be resolved

when the District reassumes control of the commission. Recognizing these

problems, a District official and the transitional receiver told us that they

21Positions filled by the transitional receiver include the Chief Operating Officer, Chief

Financial Officer, Director of the Office of Accountability, Director of Community Services

Administration, Acting and Deputy Chief Information Officers, and Deputy for Procurement.

The Chief Financial Officer has since resigned and will need to be replaced.
Page 18 GAO-01-157 D.C. Mental Health Receiver’s Plan

continue to discuss these systemic issues and to collaborate on solutions

with each other and the plaintiffs’ counsel.

Finally, collaboration among the various District agencies that also provide

services to this population is critical for a smooth transition and for

compliance with the court orders. The transitional receiver reported that

he is meeting with all key District agency heads in an effort to create a

structure that will allow the development of reformed and accountable

systems. For example, he is working with the District’s Medicaid agency to

implement the MRO and with District child and youth agencies to develop a

cross-agency plan for high-risk children in residential care. In addition, the

District has worked with SAMHSA to obtain grant funding for a

comprehensive system of care for District children with severe emotional

disturbances who are at risk of residential placement outside of the

District. Commission officials provided examples of other collaborative

efforts with the Office of Early Childhood Development, Child and Family

Services Agency, and the Deputy Mayor for Children, Youth and Families.

However, additional opportunities for improved collaboration exist. For

example, efforts to improve coordination with the D.C. Jail are ongoing, but

are not fully developed. Because incarcerated individuals at the D.C. Jail

may have a history of mental illness,22 the commission has a jail liaison that

works to link persons being released to community-based services. In

addition, the District has a Jail Diversion Task Force, which is charged with

developing initiatives (such as police education) that may appropriately

divert persons into the commission’s mental health system. A successful

diversion program could reduce the $2.3 million that the D.C. Jail annually

spends to provide mental health services to incarcerated individuals.

Coordination with housing agencies in the District could also be

strengthened. While a certain level of coordination has occurred, such as

joint efforts with the D.C. Housing Authority to apply for Section 8 housing

certificates and meetings with high level officials, the commission and

others with whom we spoke recognize that more coordination is needed.23

Recognizing that interagency coordination is critical, the District, in

consultation with the transitional receiver, appointed a transition

22In her October 28, 1999, testimony before the U.S. District Court for the District of

Columbia, the Director of Mental Health Services at the D.C. Jail said that 63 percent of

detainees admitted to the D.C. Jail in June 1998 had some prior mental health history.

23See table 1 for a description of the Section 8 program.
Page 19 GAO-01-157 D.C. Mental Health Receiver’s Plan

coordinator to enhance and facilitate collaboration among the transitional

receiver and the multiple District agencies that provide services to persons

with mental illness. The transition coordinator will also oversee the

transfer of the commission back to District government. In this regard,

determining whether the commission will operate as an independent entity

or operate as part of the District Department of Human Services remains a

key unresolved issue.

Conclusions For more than 25 years, the District’s inability to care for some of its most

vulnerable citizens has been the source of repeated judgments and court

orders, ultimately resulting in the most recent receivership. Under the

transitional receiver, a plan is emerging to provide individuals with severe

mental illness with adequate housing, treatment, and care in a communitybased setting. Plans are under way to move the District from its

longstanding hospital-based system of care to a system that considers the

needs of an individual within a framework of a community-based provider

responsible for all aspects of mental health and supportive services needs.

However, important decisions must still be made and implementation of

various initiatives will be far from complete when the transitional receiver

is scheduled to return control of the commission to the District

government. Plans to enhance Medicaid reimbursement and build a solid

base of community providers—critical steps in creating a communitybased mental health systemwill be, at best, in the initial stages of

implementation. In addition to the uncertain timing of these and other

critical initiatives, reforms must be designed and overseen in a manner that

ensures that progress will continue as the commission returns to the

District. While strategies employed by the District and the transitional

receiver draw on the experience and expertise of other mental health

systems, they must be implemented within the District—a jurisdiction that

acknowledges the need to improve its management processes and

interagency coordination capabilities. Progress on these various fronts is

critical to the District’s ability to comply with the Dixon Decree and

provide quality mental health services to eligible individuals.

Agency Comments We provided a draft of this report to the transitional receiver and to the

District of Columbia’s Special Counsel for Receiverships and Institutional

Litigation in the Executive Office of the Mayor for their review and
Page 20 GAO-01-157 D.C. Mental Health Receiver’s Plan

comment. They concurred with our findings and also offered clarifying and

technical comments, which we incorporated as appropriate.

We are sending copies of this report to Dennis R. Jones, Transitional

Receiver for the Commission on Mental Health Services; and Grace M.

Lopes, Special Counsel for Receiverships and Institutional Litigation for

the Executive Office of the Mayor of the District of Columbia. We will also

provide copies to others on request.

If you or your staffs have questions about this report, please contact me at

(202) 512-7114. This report was prepared by Susan Anthony, Laura Sutton

Elsberg, and Emily Gamble under the direction of Carolyn Yocom.

Kathryn G. Allen

Director, Health Care—Medicaid and Private Health Insurance Issues
Page 21 GAO-01-157 D.C. Mental Health Receiver’s Plan
Page 22 GAO-01-157 D.C. Mental Health Receiver’s Plan

Appendix I

Major Court Actions Related to District Apendxies

Compliance With the Dixon Decree ApendxiI

a

24 USC 225(b)(1) and (2).

b

24 USC 225b(a)(1).

c

The special master’s powers included the ability to require compliance reports, make formal and

informal recommendations to the parties, and mediate disputes.

Date Court action

1974 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.

1975 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 means.” This ruling is known as the Dixon Decree.

1980 To comply with the court order, the involved parties drafted a Final Implementation Plan (FIP) that generally required

an assessment of plaintiff class members and periodic reports on progress in establishing a community-based

system.

1984 The Congress enacted legislation that required the District to establish an integrated coordinated mental health

system by October 1, 1991.a The Congress transferred sole responsibility of establishing the required local mental

health services to the District.b

1992 The court determined no progress had been made to comply with the FIP. The involved parties therefore developed a

second approach, known as the Service Development Plan (SDP).

1993 The court appointed a special master to oversee implementation of the SDP.c

1995 The court determined that the District was still unable to comply with the terms of the SDP. As a result, the involved

parties negotiated a third plan, the Phase I agreement, whose goals the District met.

1996 The parties negotiated and began to implement Phase II, which was significantly broader in scope and required

activities such as hiring personnel and developing a homeless service plan.

1996 The District admitted noncompliance with the Phase II plan, and the plaintiffs requested the appointment of a receiver.

1997 On September 10, the court appointed a receiver, ruling 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.”

2000 On March 6, with agreement of all parties, a new receiver, referred to by the court as a transitional receiver, was

appointed. He officially assumed his role on April 1, and is scheduled to return control of the commission to the

District between January 1 and April 1, 2001.

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