Code of Virginia — Title 37.2 (Behavioral Health and Developmental Services), Chapter 5 (COMMUNITY SERVICES BOARDS)
§ 37.2-508. Performance contract for mental health, developmental, and substance abuse services.
A. The Department shall develop and initiate negotiation of the performance contracts through which it provides funds to community services boards to accomplish the purposes set forth in this chapter. In the case of operating boards, the Department may, notwithstanding any provision of law to the contrary, disburse state and federal funds appropriated to it for mental health, developmental, or substance abuse services directly to the operating board, when that operating board is authorized by the governing body of each city or county that established it to receive such funds. Six months prior to the end of an existing contract or, if no contract exists, six months prior to the beginning of each fiscal year, the Department shall make available to the public the standard performance contract form that it intends to use as the performance contract for that fiscal year and solicit public comments for a period of 60 days. Such contracts shall be for a fixed term and shall provide for annual renewal by the Board if the term exceeds one year.

B. Any community services board may apply for the assistance provided in this chapter by submitting to the Department its proposed performance contract together with (i) the approval of its board of directors for operating and administrative policy boards or the comments of the local government department's policy-advisory board and (ii) the approval of the contract by formal vote of the governing body of each city or county that established it. The community services board shall make its proposed performance contract available for public review and solicit public comments for a period of 30 days prior to submitting its proposed contract for the approval of its board of directors for operating and administrative policy boards or the comments of the local government department's policy-advisory board. To avoid disruptions in service continuity and allow sufficient time to complete public review and comment about the contract and negotiation and approval of the contract, the Department may provide semi-monthly payments of state-controlled funds to the community services board. If the governing body of each city or county does not approve the proposed performance contract by September 30 of each year, the performance contract shall be deemed approved or renewed.

C. The performance contract shall:

1. Delineate the responsibilities of the Department and the community services board;

2. Specify conditions that must be met for the receipt of state-controlled funds;

3. Identify the groups of individuals to be served with state-controlled funds;

4. Set forth specific goals and objectives related to the delivery of services to individuals with mental illness, developmental disabilities, or substance use disorders that are consistent with the purposes set forth in § 37.2-500;

5. Contain specific relevant, and measurable performance measures to assess the experiences and outcomes of individuals receiving services through community services boards;

6. Contain relevant benchmarks and monitoring activities for each performance measure;

7. Contain mechanisms that have been identified or developed jointly by the Department and community services board and that will be employed collaboratively by the community services board and the state hospital to manage the utilization of state hospital beds;

8. Contain provisions that enable the Department to enforce the performance contract in the event that the community services board fails to substantially comply with the requirements of its performance contract, which shall include:

a. Provisions to ensure that the executive director and chairman of the community services board are notified when the community services board fails to substantially comply with the requirements of its performance contract;

b. A remediation process to allow the community services board, after failing to substantially comply with its performance contract, to come into substantial compliance with its performance contract;

c. Provisions for withholding or reducing funds, repayment of funds, or termination of all or part of a performance contract in accordance with the provisions of subsection E in the event that the community services board fails to come into substantial compliance with the provisions of its performance contract despite utilization of the remediation process described in subdivision b; and

d. Provisions for appeal of an enforcement action undertaken by the Department; and

9. Include requirements for the community services board to report specific information about (i) its revenues, costs, and services provided; (ii) individuals served; and (iii) any other information deemed necessary by the Department, which shall be displayed in a consistent, comparable format developed by the Department.

D. The Department shall develop and implement a process for regular, ongoing monitoring of the performance of community services boards to ensure compliance with the requirements of performance contracts entered into pursuant to this section.

E. If a community services board fails to substantially comply with the requirements of its performance contract, the Department shall utilize the remediation process described in the performance contract to allow the community services board to come into substantial compliance. The Department shall notify the Board and the chairman of the community services board upon initiation of the remediation process and provide to the Board and chairman regular updates regarding the community services board's progress toward coming into substantial compliance.

If a community services board fails to come into substantial compliance after utilization of the remediation process, the Department shall, after affording the community services board an adequate opportunity to use the appeal process described in the performance contract, terminate all or a portion of the performance contract.

F. Upon terminating all or a portion of a performance contract pursuant to subsection E, the Department may, using the state-controlled resources associated with that performance contract and after consulting with the governing body of each city or county that established the community services board that was a party to the performance contract, negotiate a performance contract with another community services board, a behavioral health authority, or a private nonprofit or for-profit organization or organizations to obtain services that were the subject of the terminated performance contract.

G. No community services board shall be eligible to receive state-controlled funds for mental health, developmental, or substance abuse services after September 30 of each year unless (i) its performance contract has been approved or renewed by the governing body of each city or county that established it and by the Department; (ii) it provides service, cost, and revenue data and information, and aggregate and individual data and information about individuals receiving services, notwithstanding the provisions of § 37.2-400 or any regulations adopted thereunder, to the Department in the format prescribed by the Department; (iii) it uses standardized cost accounting and financial management practices approved by the Department, and (iv) the community services board is in substantial compliance with its performance contract or is making progress to become in substantial compliance through the Department's remediation process.

1968, c. 477, § 37.1-198; 1970, c. 346; 1972, c. 498; 1976, c. 671; 1980, c. 582; 1986, c. 176; 1998, c. 680; 2005, cc. 75, 716; 2012, cc. 476, 507, 805, 836; 2023, cc. 484, 754, 790.