Tri-City approves agreement for new behavioral health unit

Tri-City Medical Center in Oceanside.(Hayne Palmour IV / Union-Tribune)

Deal now requires approval from the County Board of Supervisors

Tri-City Medical Center directors unanimously approved a preliminary agreement for a new 16-bed psychiatric unit Thursday night, agreeing in principle to participate in a new system of care focused on providing more and earlier access to mental health services for the ever-growing number of people requesting help across the region.

If approved by the supervisors on Sept. 10, the points listed in a memorandum of understanding between the two parties would not only provide millions of dollars to build a free-standing inpatient psychiatric unit on the hospital’s Oceanside medical campus, but it would also represent a new approach to how the county allocates Medi-Cal funding for mental health care, extending additional compensation for efforts to follow up closely with patients after hospitalization.

Reading from a short prepared statement, Tri-City board chair Leigh Anne Grass noted that it was a coalition, led by chief executive Steve Dietlin, that spent months in negotiations to arrive at an agreement that will address both the hospital’s need to upgrade the physical care setting and to insure that the hospital can afford to keep the service open.

“We’ve been working diligently to find a sustainable solution for inpatient mental health services,” Grass said.

In June, supervisors balked at a request for $14 million to rebuild a new 12-bed psychiatric unit, which the hospital shuttered in October. Supervisors said they wanted a deal closer to a 50/50 partnership rather than covering the entire cost, which some said looked like a bailout.

Speaking before the board voted Thursday, county Supervisor Jim Desmond said the new agreement came together “despite obstacles that were out there, despite adversity and despite threatening letters.”

“I can’t wait to vote for it,” Desmond said.

His letter-writing reference hinted at a recent written demand from fellow Supervisor Nathan Fletcher and state Assemblywoman Tasha Boerner Horvath that threatened a state audit if Tri-City didn’t quickly come up with a plan to re-open its unit, which stopped taking patients in October of 2018.

“This Tri-City deal is a positive step forward, and it’s something I’m prepared to support,” Fletcher said. “I’m grateful to Tri-City for being willing to be a partner in bringing these facilities back online. This is a small piece of a much broader regional effort, and we’re going to need a number of successes like this in order to build out the regional system that meets this need.”

A Tri-City official said a specific location on the Tri-City campus has not yet been chosen for the new facility which will be of modular design, making it quicker to build out. Officials estimated that if the permitting process moves smoothly, the facility could be finished in 12 and 18 months.

In the meantime, the county is working on a short-term solution to provide relief in coastal North County for patients who need emergency mental health help. Other hospitals in the area, especially Palomar Medical Center Escondido, have seen significant increases in emergency behavioral health traffic since Tri-City’s units went offline last year.

In June, the county announced a regional approach that would open “crisis stabilization” centers in North County where those suffering immediate mental health crises could receive help for up to 23 hours, allowing a period of quiet decompression before a decision about hospitalization is made.

Dr. Luke Bergmann, director of behavioral health services for the county, said Thursday that efforts to get one of the stabilization centers up and running are ongoing, both in North County and other areas across the region.

“We are working full steam ahead on the crisis stabilization front, and we will be offering updates in October,” Bergmann said.

He added that the Tri-City agreement, while it is created to address certain particulars unique to the North County facility, also serves as a kind of template for the change that he hopes will ripple throughout San Diego County.

The agreement commits to providing Medi-Cal reimbursement rates for hospital-based psychiatric care that are “sufficiently proportional” to enable Tri-City “to operate the program and remain sustainable.” That’s a significant change, given that Tri-City and every other hospital in the region have routinely said they lose millions of dollars each year caring for mental health patients and specifically those covered by Medi-Cal, the state’s insurance plan of last resort for needy and disabled residents.

The agreement also mentions creating a “market-driven cost model” that would provide financial incentives based on how many patients are treated and how long they stay.

“I really feel that this is pretty awesome,” Bergmann said. “In the midst of establishing new beds, we are also establishing incentives for creating a more-robust chronic illness management system.”

Finances, particularly the millions of dollars that would have been necessary to bring its aging behavioral health wing up to new federal standards, were a main sticking point that the Tri-City board cited when it voted to stop taking inpatient behavioral health patients last year. Emergency services have continued, though law enforcement is, in most cases, no longer dropping off those picked up on 5150 holds when a person is deemed to be a possible danger to themselves or gravely disabled.

The MOU specifies that the county would pay half of the cost of building the new facility which is estimated in the agreement at $10 million, though that number could change as additional planning work proceeds. If the deal moves forward, the county would front the full construction cost and would structure half of that funding as a no-interest loan that Tri-City would re-pay with cash or certain mutually-agreed-upon in-kind contributions. Tri-City would also receive a credit for the appraised value of the land that would be occupied by the unit.

Such a credit would reduce the amount of the no-interest loan that the hospital has to repay. For example: If the unit costs $10 million to design, permit and build, and the land that Tri-City contributes is appraised at $1 million, the hospital would end up owing the county $4 million. That’s $5 million — half of the total cost — minus the land value.

The agreement also indicates that in-kind contributions can be used like cash to pay back the loan.

Bergmann said Thursday that the agreed-upon premise of in-kind contributions is that there will be a “dollar-for-dollar cash equivalence” in terms of loan-repayment credit. However, he also stressed that it will only be certain types of in-kind contributions that will counted toward paying off the loan..

“What is really critical here is that the county and TCMC would collaborate to determine (which) behavioral health services are eligible for ‘in-kind’ status based upon the impacts of these services on long-term health outcomes and commensurate health care costs,” Bergmann said.

Preliminary in-kind discussions, he added, have centered around care coordination which the director said represents a significant opportunity to solve one of the biggest long-standing issues that hospitals have with caring for behavioral health patients. In many cases, he said, there is nowhere to send a patient after they are stable and have completed several days on in-patient treatment.

Providing additional compensation to help hospitals follow up quickly and reliably with patients should, he said, make it easier for them to be discharged home.