As state mental hospitals struggle, lawmakers eye the agency overseeing them
One bill this session proposed creating an independent hospital authority to oversee the state’s nine psychiatric facilities
Eastern State Hospital in James City County is one of Virginia’s eight publicly run mental hospitals, which have struggled with understaffing and an influx of psychiatric admissions. Expanded mental health services under Medicaid were intended to reduce admissions at state-run facilities. (Virginia Department of Behavioral Health and Developmental Services)
Virginia’s state-run psychiatric hospitals have been in crisis mode for years. But the last nine months have brought a series of new emergencies, from the July decision to temporarily close to new admissions to a recent lawsuit against the state for failing to admit a juvenile patient going through a mental health crisis.
The turmoil has brought renewed scrutiny to the agency charged with running the facilities. Legislation filed this year by Sen. Siobhan Dunnavant, R-Henrico, proposed removing the state’s nine hospitals from under the authority of the Department of Behavioral Health and Developmental Services and establishing an independent body to oversee them.
The bill didn’t pass, but legislators did add budget language directing Virginia Secretary of Health and Human Resources John Littel to convene a workgroup focused on potential restructuring. While the final budget agreement is still being debated, the language — if included — specifically tasks the group with evaluating whether certain services should be shifted to another state agency, or if hospitals should be managed under a different model or structure.
“I knew this would be a shot across the bow — a conversation starter,” Dunnavant said. “But we need to rethink what we have. Because I think we can all agree that we haven’t done a very good job of addressing our mental health crisis so far.”
It’s not the first time that a Virginia lawmaker has suggested changing the model for state-run psychiatric hospitals. More than a decade ago, then-Gov. Tim Kaine proposed closing and potentially privatizing several state facilities, including Virginia’s only publicly run mental hospital for children and adolescents. Dunnavant amended her bill to leave the model open-ended, but her original legislation proposed creating a hospital authority operated by a chief executive officer and board of directors.
In a committee hearing on the bill, Sen. Janet Howell, D-Fairfax, said shifting the facilities from state control would be a “precipitous” change for Virginia, which founded the nation’s first public institution for patients with mental illness in 1773. But proponents argue that state oversight has compounded problems at the hospitals, making it harder for them to respond to challenges in a timely way.
Dunnavant pointed to severe understaffing that prompted former DBHDS Commissioner Alison Land to halt new admissions at five state facilities last July. The agency had spent months warning lawmakers that burnout and low pay, combined with the ongoing COVID-19 pandemic, were driving employees out of the field. At the time, salaries for direct care staff started at $11 an hour, and most hospitals were operating at 100 percent of their patient capacity with around 65 to 70 percent of the needed staff.
Land was able to divert some emergency funding to hire contract workers and offer bonuses to remaining staff. But the agency had to wait another month for the General Assembly to allocate federal rescue dollars toward more permanent pay increases. Even now, it’s unclear how much state funding will be directed to further raise salaries and whether it will be enough to recruit more workers to the facilities.
“For these hospitals to be accountable to the process of state appropriations — that’s an almost insurmountable challenge,” Dunnavant said. Keeping them under DBHDS authority is another concern.
Even lawmakers who were skeptical of the proposal acknowledged that running state facilities has always been a heavy lift for the agency. Over the years, DBHDS has been tasked with licensing and overseeing both state and private behavioral health services, along with residential substance use disorder treatment and services for Virginians with developmental disabilities.
“They have so much to say grace over that someone is going to feel like they’re getting left out constantly,” said Sen. Creigh Deeds, D-Bath. “And it might be time to reorganize the department and separate those functions.”
When it comes to privatization, though, Deeds isn’t convinced. While current budget language would allow the administration to study a range of options, it specifically lists public-private partnerships as a model for the state to consider.
Under the authority model proposed in Dunnavant’s original legislation, oversight of the facilities would be outsourced to a CEO and nonlegislative board of directors confirmed by the General Assembly. While it wouldn’t completely remove state control, she suggested it would function more like a private health system, drawing from industry expertise and potentially contracting out state bed space to private hospitals.
While there was little outright opposition to the suggestion, some lawmakers and mental health advocates said it wouldn’t address the root causes of Virginia’s ongoing bed crisis.
“It could be helpful in certain instances, but I just don’t see this as a situation where if we just change who’s in charge, that alone will fix this problem,” said Del. Mike Mullin, D-Newport News. “Because it is really an issue of lack of access to care at the appropriate level.”
Problems within Virginia’s mental health system have spanned decades. According to a 2014 policy paper by Mira Signer — now a chief deputy commissioner for DBHDS — the U.S. Department of Justice began investigating state-run hospitals in the 1990s for inadequate care that, in some cases, led to patient deaths. The department pushed the state to deinstitutionalize, leading to a more than 600-bed reduction at state facilities over an eight-year period.
Virginia’s investment in community mental health services, though, didn’t keep pace with the reduction in beds. Deeds described funding as a yo-yo, pointing to the 2007 Virginia Tech shooting as an example.
In the months following the massacre, perpetrated by a student with mental illness who then took his own life, state legislators allocated $42 million to the state’s community service boards — publicly funded agencies that offer safety net services for behavioral health and developmental disabilities. Described as a “down payment” for better mental health services, the funding was almost entirely eliminated over the next four years during the Great Recession.
“There was this grand study and those recommendations have basically gathered dust on a shelf,” Deeds said. Then, in 2014, he spearheaded what’s now known as Virginia’s “bed of last resort” law, which requires state hospitals to admit patients after an eight-hour period if a bed can’t be found at another facility — including private hospitals with behavioral health units.
The legislation originated from personal tragedy. In 2013, Deeds’ son, Gus, seriously injured Deeds and then killed himself during a mental health crisis after state officials were unable to find him a psychiatric bed.
Deeds described it as a necessary policy, but it’s also led to unintended consequences, including a steady reduction in the volume of involuntary psychiatric admissions accepted at private hospitals. Anna Mendez, executive director of the Charlottesville-based nonprofit Partner for Mental Health, said Virginia’s problems stem from a slew of cascading effects — underfunding of existing state hospitals, a lack of investment in community-based services and continued tension between DBHDS and the state’s private hospitals, along with a broad shortage of mental health professionals.
“We’ve just created this perverse feedback loop,” she said. “So I’m not at all opposed to the idea of creating a hospital authority, but I think its ability to really improve outcomes is going to be fairly limited if we’re continuing to work with insufficient resources.”
Dunnavant’s legislation didn’t address a funding mechanism for the authority, though she suggested that the state could allocate even more money in the beginning to get the concept off the ground. Four of the state’s nine hospitals have also lost accreditation from the U.S. Centers for Medicare and Medicaid Services over the years, and Dunnavant said an agency solely focused on running the facilities could expedite the re-accreditation process, allowing Virginia to leverage more federal funds.
Experts say the billing issues are much more complicated. Lauren Cunningham, a spokesperson for DBHDS, said the agency didn’t take a position on the proposed legislation. But federal laws exclude state-run psychiatric facilities from traditional Medicaid reimbursement, and Virginia’s public health plan doesn’t typically cover forensic patients who enter state hospitals through the criminal justice system and often have long-term needs that should be managed by community providers.
“We are planning to look into additional programs and different structures the system can take to enhance public hospital operation, build community service access and accountability, stimulate private provider development, and enhance private hospital engagement,” Cunningham said in a statement. Some legislators are also hopeful that proposals for the state’s next budget cycle will lead to gradual improvements in the system.
While the House and Senate have yet to come to an agreement, both chambers are suggesting around $50.5 million to fund the final three services in STEP-VA, a statewide program intended to ensure that each of the state’s community service boards offer the same options for mental health treatment. In late 2021, Virginia also expanded Medicaid coverage to six new behavioral health services, and both budget proposals include at least a one-year increase in reimbursement rates to providers.
“I think we need to move forward and see what happens with that,” said Del. Mark Sickles, D-Fairfax, who — like Deeds — hoped a steady expansion in outpatient services would gradually reduce the need for psychiatric hospitalizations. But it’s still an open question whether the incremental increases in funding will be enough to meet local needs.
The state has been gradually funding services in STEP-VA since the program was codified in 2017. But community service boards are also facing major workforce challenges, and it’s not clear whether every agency is truly capable of offering all nine treatment options.
“Prudence dictates that we’d want to circle back around to the first few services to ensure the original funding is still adequate,” said Jennifer Faison, executive director of the Virginia Association of Community Service Boards. One of the very first steps requires the agencies to offer same-day assessments. But Mendez said one of her recent clients approached his local board for a substance use assessment and was told he couldn’t be seen until June.
“There’s this history in Virginia of being unwilling to make a real investment,” she said. “So even fully funding STEP-VA is going to leave us well short of where we need to be.”
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