D.C. Government: Status of Transferring Saint Elizabeths Hospital to the District of Columbia

Published by the Government Accountability Office on 1990-03-26.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

    ’ _---
      Gus*” ...-“.                                     _.

      &Ilk I’<‘h I !j!)O
                                                                         D.C. GOVERNMENT
                                                                         Status of Transferring
                                                                         Saint Elizabeths
                                                                         Hospital to the District
                                                                         of Columbia

                                                                                        IIIIIllI -

I    .__-l._,_l_lll _..-_ ._... l-.--l”--__-._.--   _l_~--l_-______---
I    (;A~),~‘(;(;1)-!)0-7~11~1~
  United States
  General Accounting OfTice
 Washington,   D.C.20548
 General Government Division

 March 26,      1990

 The Honorable  Ronald V. Dellums
 Chairman,  Committee on the District
   of Columbia
 House of Representatives
 Dear Mr. Chairman:
 This report     contains    the information        you requested
 concerning    the implementation          of certain     parts of the
 Saint Elizabeths       Hospital      and District     of Columbia Mental
 Health Services      Act (Public       Law 980621),      which transferred
 ownership   and operating         responsibility      for Saint
 Elizabeths    from the federal         government     to the District      of
 Columbia.     Responses to your specific             questions   are
 summarized in this letter.             Detailed    responses to each
 question   are contained        in appendices      I through VI.
 Public     Law 98-621 provided            that effective         October 1, 1987,
 the District        of Columbia would assume responsibility                     for
 selected      functions,      programs,        and resources       of Saint
 Elizabeths       Hospital     and establish          a comprehensive        mental
 health     care system no later             than October 1, 1991.             The act
 also provided         funding     for the transition           by authorizing
 direct     federal      appropriations         for 6 fiscal       years (1986
 through      1991) and grants          from the Department           of Health and
 Human Services          (HHS) for 4 fiscal          years (1988 through
 1991).       Further,     the act required           the District      to assume
 a greater       share of the financial             responsibility        during     the
 transition       period but did not define              that requirement          in
 specific      terms.
 On October 1, 1987, the District              assumed responsibility
 for Saint Elizabeths        Hospital      and for providing       mental
 health    services   to District       residents    who were, at that
 time, at Saint Elizabeths.             The Commission on Mental
 Health Services      (CMHS) was created within           the District’s
"Department      of Human Services        (DHS) to be responsible         for
 these services.        It took over responsibility          for
 comprehensive      mental health       services    which were previously
 housed in the District's           Mental Health Services
 Administration.       The act was based on a commitment to
 community-based,      noninstitutional         care for patients.
Under this concept,   the inpatient   population  of Saint
Elizabeths is expected to decline     as community group
homes and mental health   centers   assume more of the patient
The CMHS Commissioner               told us that the implementation               of
Public     Law 98-621 is at least               1 year behind the schedule
necessary      to provide          a comprehensive       community-based
mental health         system by October 1, 1991.                He attributes
the delay to problems               in transitioning        from federal       to
District     control,          unexpected     increases     in the Saint
Elizabeths       population,         and both underfunding           and
inadequate       flexibility          to allocate     and
reallocate       funds among programs.               According     to the
Commissioner,         activities        that have been adversely           affected
include     services         for children       and youth,     services    for
special     populations          such as Hispanics        and the deaf, and
the resident        out-placement          program.
Despite these problems,          both the CMHS Commissioner      and its
Administrator     said that progress       is being made.      On
December 21, 1988, after          a survey of CMHS operations,       the
Joint Commission on the Accreditation            of Healthcare
Organizations     (JCAHO) awarded CMHS accreditation.1            Also,
according     to CMHS officials,      JCAHO's August 1989 follow-up
review showed that out-of-compliance           items had been
reduced to 21 items from the 204 reported            in December
With     regard   to your     specific     questions:
1. Have the District       and federal   governments    fulfilled
   their  funding    obligations    as federal   funding      has been
    The federal     government,   in fiscal      years 1988 and 1989,
    did not provide      the full   amounts of funding        authorized     in
    Public  Law 98-621 because of constraints             imposed by the
    Balanced Budget and Emergency Deficit             Control    Act of
    1985, otherwise      known as Gramm-Rudman.          For example,     in
    fiscal  year 1988 direct      appropriations       to the District
    were $28.7 million,       not the $30 million        authorized     by the
    act.   Similarly,      HHS made grants of only $28.7 million
    rather  than the $30 million       authorized.        Thus, the

lcongress   expressed     its intent   in Public Law 98-621 that
  CMHS maintain     its accreditation.      A JCAHO accreditation
  survey assesses a mental health        institution      against
 standards    addressing     such areas as staff     qualifications,
 physical   safety,    and record keeping.
       ; federal     funding     represented       96 percent  of the authorized
      : amount.        At the District        level,   the Mayor requested
         $159.8 million        for CMHS in fiscal         year 1988, but the
      : District's       final     approved CMHS budget was $152.1 million.
      : Similarly,       in fiscal       year 1989, the Mayor requested
      1 $157.9 million         and the District        approved $154.3 million.
     ) Thus actual         funding     to CMHS represented      95 percent   of the
     j Mayor's request           in fiscal      year 1988 and 98 percent     in
     j fiscal      year 1989.
     12. Is the District's        Commission on Mental            Health Services'
         estimate     of $25.5 million      in additional          federal funds
     I   for  capital    projects    complete?
         The July 1989 CMHS estimate              of a need for $25.5 million
         in additional           federal    funds for capital      projects    is
         incomplete.           It does not include       an estimated       $16 million
         for removing asbestos and PCB transformers                     from Saint
         Elizabeths.          CMHS was not able to include            these estimates
         because cost data were not available                 when it prepared the
         capital       projects      estimate.    Further,    at the time of our
         review CMHS had not yet developed                 a detailed
         justification           for $10 million     of its $25.5 million
    i 3. Is the      federal   government      maintaining      the clinical
         training       program at Saint       Elizabeths?
         The federal      government    is   not maintaining     the clinical
         training    program at CMHS.           HHS' General Counsel
         determined,      and we agree,      that the act does not obligate
         the federal      government   to    fund the program.       However, the
         clinical    training    program      is currently   supported    with
         CMHS funds.
     4. What is the status            of CMHS' staffing        and staff
         CMHS has worked to insure          its staff      meet District
         licensing      requirements.      On July 27, 1989, the Mayor
         signed District         Act 8-69, which enabled unlicensed
         clinical     staff    to obtain   District     licenses     that are valid
         for the sole purpose of working             at CMHS. As of March 16,
         1990, there were 11 clinical             employees,     all of whom had
         licenses     in other jurisdictions,          who were unlicensed       in
         the District.         All of these employees had applied            for a
         license,    and licenses       are expected      to be issued in April
         While CMHS has had staff        shortages     since October 1, 1987,
         such shortages      only recently     threatened    its Medicare
         certification.        For the short term, CMHS has hired or
         transferred    sufficient    staff   and taken other steps to
    maintain      its certification.            These steps include     hiring
    additional       support      staff    to free nurses from nonmedical
    duties     and improving         internal    medical   record keeping.
    For the long term, moving to a community-based                    mental
    health     system will       help to alleviate       some staffing
    problems,       according      to CMHS officials,       because the need
    for specialized         staff       at Saint Elizabeths     will  be lower.
 5. Has a determination   been made on whether Saint
    Elizabeths   firemen will be part of the District's                    fire
    department   or CMHS?
    An August 7, 1989, agreement between CMHS and the
    District      fire department       resolved    the question   of whether
    the firefighters          at Saint Elizabeths      would be members of
    the District's        fire   department      or CMHS employees.      It
    provided      that the firefighters         would remain CMHS
    employees,        but they would be trained        by the District's
    fire     department.
 6. Were supplies    that were specifically    stocked by the
    U.S. Department     of Health and Human Services    for the
    Saint Elizabeths     transition  used by other District    of
    Columbia agencies?
    Some supplies,     such as 200 beds transferred         to Lorton
    Prison and other supplies         used to repair   District
    facilities,    were originally      transferred  from CMHS to
    other District     agencies by the CMHS Supply Management
    Officer.    However, in March 1988, procedures            were changed
    so that no transfers        can be made without    the approval     of
    the CMHS Commissioner.         The CMHS Commissioner        now
    approves transfers,      and CMHS is reimbursed       by the
    receiving   agency.     Under this procedure,      CMHS provided
    $88,700 in supplies       in fiscal    year 1989 to other District
In order to answer the Committee's                  questions,    we
interviewed       District    officials       from CMHS, DHS, the fire
department,       and the Controller's           Office    and federal
officials      from HHS. We also reviewed District                 financial
statements,       purchase orders,         personnel     reports,
statistical       reports,    and the District's           mental health
system implementation          plan.       Further,     we reviewed
documents from HHS and the JACHO report                    on CMHS. We also
determined       whether federal        funding     of training    at CMHS was
within      the intent     of Public      Law 98-621.
*Our analysis      of capital  projects  funding was limited              to
 reviewing    existing    cost estimates  for completeness.               We
 did not evaluate      whether the scope of those capital
         projects   was   adequate to meet the health          care needs at
         Saint Elizabeths        or whether those projects         were justified.
         We also did not verify         the accuracy      of computer-generated
         data provided      by CMHS. We did our work between February
         and December 1989 in accordance             with generally    accepted
         government     auditing    standards.
         The U.S. Public       Health Service and the District       of
         Columbia government,        in commenting on a draft     of this
         report,    concurred    with the general  background     and
         findings.      Overall,    both agencies discussed    the status of
         the implementation       of Public Law 98-621 and their
         particular     views as to how remaining     implementation      should
         However, both agencies commented on capital            funding     under
         Public    Law 98-621, which was beyond the scope of our work.
         As discussed       in appendix II, we were asked only to assess
         the completeness        of CMHS' estimate    that $25.5 million      in
         federally     provided    capital   funding  is needed to complete
         the transition.         We were not asked to assess the federal
         government's      past capital    funding   nor its responsibility
         for future      capital   funding   under Public   Law 98-621.
         The complete     comments of the U.S. Public  Health Service
         and the District      of Columbia government are in appendices
         VII and VIII,     respectively.

         As arranged with the Committee,          we plan no further
         distribution      of this report   until   30 days after    the date
         of issuance,      unless you publicly     announce its contents
         earlier.       At that time, we will     send copies to interested
         parties      and make copies available     to others upon request.
         The major contributors      are listed          in appendix   IX.  If you
         have any questions     regarding    this        report  please contact me
         on 275-8387.
         Sin%erely    yours,     1

         Director,    Federal    Management     Issues
LETTER                                                                                  1
    I      Have the Federal and District    Governments                                 7
           Fulfilled Their Funding Obligations     as Federal
           Funding Has Been Reduced?
    II     Is the Commission on Mental Health Services'                                10
           Estimate of $25.5 Million  in Additional  Federal
           Funding Needs Complete7
    III    Is the Federal Government              Maintaining       the Clinical       12
           Training Program at Saint              Elizabeths?
    IV     What is the Status          of CMHS Staffing          and Staff             13
    V      Has a Determination     Been Made on Whether the Saint                      15
           Elizabeths  Firemen Will Be Part of the District's
           Fire Department     or CMHS?
    VI     Were Supplies    That Were Specifically  Stocked by                         16
           Department   of Health and Human Services    for the
           Saint Elizabeths     Transition Used by Other D.C. Agencies?
    VII    Comments of the U.S.          Public     Health      Service                17
    VIII   Comments of the District              of Columbia      Government           21
    IX     Major     Contributors      to This     Report.                             25
    I.1    Federal     Authorized      and Appropriated          Funds for     CMHS     7
    I.2    CMHS' Requested          and Approved     Budgets                            8

CMHS       Commission on Mental Health Services
DCFD       District    of Columbia Fire Department
DHS        Department    of Human Services
HCFA       Health Care Financing    Administration
HHS        Department    of Health and Human Services
JCAHO      Joint Commission on the Accreditation      of Healthcare


        APPENDIX I                                                                APPENDIX I

     1 For fiscal  years 1988 and 1989, both federal    and District      funding
     j has been somewhat below levels   authorized   or requested     for the
     j operation  of the Commission on Mental Health Services        (CMHS).
    /   The act authorized     specific   federal   funding   levels for direct
    )   appropriations     and Department    of Health and Human Services       (HHS)
    I   grants during    the transition     period.    However, as shown in table
    (   1.1, both have been less than authorized.
                                                Table 1.1:
                             Federal      Authorized     and Appropriated
                                             Funds for CMHS
                                             (in millions)
                                 Fiscal     year 1988                Fiscal   year 1989
                            Authorized       Appropriated        Authorized     Appropriated
    ( Direct                        $30            $28.7              $20            $19.7
      HHS grants                                                                       23.7
         Totals                                                                      $43.4

        According    to officials       at CMHS and HHS, the difference     between
        authorized     and appropriated      amounts for both fiscal    years
        resulted   from constraints        imposed by the Balanced Budget and
        Emergency Deficit        Control   Act of 1985, otherwise    known as Gramm-
        Public    Law 98-621 required     the District     to "...gradually       assume
        a greater    share of the financial      responsibility       for provision       of
        mental health     services  provided   by the system."         As shown in
        table   1.2, the CMHS fiscal      year 1989 budget was slightly           greater
        than the fiscal     year 1988 budget.       However, the District         has
        funded CMHS' budget at a lower level than requested                 by the Mayor
        for both years.


APPENDIX I                                                                  APPENDIX I
                                    Table 1.2:
                      CMHS' Requested and Approved           Budgets
            Mayor's                  Approved
            request                   budget                 Difference
1988        $159.8                      $152.la                  $7.7
1989         157.9                       154.3                    3.6
aDoes not      include    a $3.4 million      supplemental       to fund   a pay
CMHS' Fiscal       Year   1988 Budget      Experience
In fiscal   year 1988, CMHS received    an approved budget of $152.1
million,   which was supplemented   with $3.4 million   to fund a pay
raise.    However, it spent only $146.1 million.
CMHS did not spend all budgeted funds because of a variety                     of
factors.      One factor,     according   to the CMHS Administrator,           was
the hiring     freeze    imposed to deal with the District's           projected
fiscal    year 1988 budget deficit.         The District     imposed a hiring
freeze for part of fiscal          year 1988 on all job classifications              at
CMHS except those in the clinical           area.    At the time of the
freeze,     CMHS had selected,       but not hired,    113 individuals       to fill
nonclinical      vacancies.
A second factor      was that CMHS officials          assumed that procurements
and other proposed actions           sent to the Department       of Human
Services     (DHS) and the District         for execution    were approved
unless they were otherwise          notified.      This assumption      proved to
be incorrect.       CMHS officials       said that after     the fiscal     year
1988 independent      audit of the District          began, they learned      that
certain   proposed actions        had been disapproved       at the DHS and
District    levels.    The CMHS financial        officer    said they did not
complete    planned expenditures         for supplies     and major equipment as
well as for the personnel          discussed    above.
CMHS officials     also told us they were           not aware that the CMHS
budget was supplemented        by $3.4 million         to fund a pay raise.
Only in July 1989, after        we requested        that DHS verify    CMHS'
budget,    did CMHS officials     learn from        DHS that they had been
allocated     the supplemental    funding.         Consequently,    CMHS funded
the pay raise from the $146.1 million.
CMHS' Fiscal      Year    1989 Budget      Experience
For fiscal year 1989, CMHS' approved budget was $154.3 million.
However, according to the CMHS financial  officer, it absorbed                     a
8       *
        APPENDIX I                                                             APPENDIX I
        $2.9 million     cut due to the District's       potential     overall    deficit,
        thus bringing      available  funds to $151.4 million.           He said the
        cut will    reduce expenditures     for personnel      and such equipment as
        a new trash truck and ambulance.           The CMHS Administrator         said
        that CMHS will      not know for sure how much was spent until              the
        independent     audit of the city     is complete.      However, he does not
        expect as large a difference       between budget and expenditures               as
        in fiscal    year 1988 because of a better         understanding       of the
        District's     operations.
APPENDIX II                                                                 APPENDIX II

                      FEDERAL FUNbING NEEDS COMPLETE?
CMHS estimates      it needs an additional      $25.5 million       in federal
funds for capital        projects,  such as renovating      buildings         on the
Saint Elizabeths       campus and acquiring     the off-campus        facilities
needed to move to the community-based           system.     While otherwise
complete,    the CMHS estimate      does not include     approximately           $16
million   required     to remove asbestos and PCB transformers                from
various   buildings      at the Saint Elizabeths     campus.
Amount Needed to Meet Capital             Funding    Requirements
As of June 1989, CMHS had received              a total     of $36.0 million       in
federal    and District      funds for capital        projects.       This included
$26.8 million       provided     by HHS to fix national           and District
building     code violations       that had been identified           by HHS in 1986
at Saint Elizabeths.           It also included       $9.2 million       provided   by
the District       for capital     projects,    such as the renovation           of the
Hurt Home and the Region I Community Mental Health Center.                         The
District's      funding    was directed      at assisting       the move to a
community-based        system.
In July 1989, CMHS reviewed            its capital      funding       requirements      and
identified      the need for from $23.5 to $25.5 million                    in additional
federal     funds and $6.0 million          in District      funds.       The funding
would be used to convert          the Nichols      and Haydon buildings             from
patient     care to office      use and to acquire          community-based
facilities.        This estimate     brings the total          identified       funding
for conversion,        fixing   code violations,        and acquiring          community-
based facilities         to $67.5 million.        According        to the CMHS
Commissioner,       without   the additional        federal      funding      CMHS will
have to defer renovation          projects,     originally         to be funded by the
$26.8 million       from HHS, in order to fund the Nichols                    and Haydon
buildings      conversion.
We reviewed CMHS' $25.5 million      cost estimate.       Of the total,  $10
million   is to be used to acquire community-based         facilities,  such
as housing for deinstitutionalized        patients.     But CMHS had no
detailed    estimates of housing initiatives        for us to review.
Our review of the detailed          cost estimate     for the remaining         $15.5
million   for the Nichols        and Haydon conversions       found that the
estimate    included    appropriate     cost estimation     elements,      such as
overhead,     profit,   design fee, and contract         administration       fee.
However) the removal of asbestos and PCB transformers                   from
various   buildings,     including    Nichols   and Haydon, had been
omitted.      According    to the CMHS Administrator,         the actual      costs
10        *
 APPENDIX II                                                         APPENDIX II
 ,will    depend on whether CMHS has to remove asbestos               and PCB
  transformers       from both Saint Elizabeths'          east and west campuses
  or only the east campus, where hospital                and headquarters
  operations     are    to be consolidated.          If CMHS has to remove
  asbestos     and PCB transformers          from both campuses, the
; Administrator        believes    the total     costs would be about $16
imillion,      $12 million      for asbestos removal and $3 to $4 million
i for PCB transformers.
j The Administrator     said he did not include    the $16 million in his
  July 1989 estimate      because the complete cleanup costs were not
  available   at that   time.    In addition  he was not sure how much
  longer CMHS would     need the west campus.

APPENDIX III                                                                    APPENDIX III
Both Public    Law 98-621 and its accompanying           House Report contain
language supporting     the,continuation        of federal   research,
training,   and demonstration      programs at Saint Elizabeths.
However, the federal      government      is not maintaining     the clinical
training   program,  and HHS has concluded          that there is no legal
mandate for continued      federal     involvement.
Section    2(b) of Public         Law 98-621, part of the policy                  section    of
that statute,        provides     that 'I... The federal           government      continue
high quality        mental health        research,     training       'and demonstration
programs at Saint Elizabeths                Hospital."        The House Committee on
the District        of Columbia report          accompanying        Public     Law 98-621
contained      language endorsing           continued      federal      funding    for the
clinical     training      program.        The report      said the federal
government       should " . ..continue        to operate       and fully       fund quality
mental health        research,      training,      and demonstration           programs of
national     character,       such as those currently              being conducted        at
Saint Elizabeths         Hospital."
HHS has determined           that   the act imposes no legal        funding
obligation        on the federal        government.    In his October 1986 review
of an HHS status          report    on the transfer      of Saint Elizabeths,       the
HHS General Counsel said              that "In our view, the transfer         statute,
Pub. L.98.621,         does not     obligate    the Federal    Government to fund
any training        programs at       the hospital   following    its transfer      to
the District...*'
Our review of the legislation                  supports     the HHS legal          opinion.
We determined        that the language of the act as well as the
legislative       history     indicates        congressional        intent      to continue
federal     involvement       in Saint Elizabeths'             training       following     the
transition.         However, the statutory             language does not by its
terms mandate federal             participation        in these programs.              The
statute     describes      continued        federal    involvement         in the programs
as an object       of congressional            intent    rather     than a legal
requirement.         Further,      the provision         is located        in the policy
section     of the statue.           It is a well settled             principle       of
statutory      construction        that the policy          section      of a statute
serves to articulate            the purposes and reasons behind enactment                       of
a piece of legislation             rather      than to establish           binding
Without   federal  funding,   the clinical   training   program continues
because CMHS funds the annual cost of about $4.4 million.
However, according     to HHS and CMHS officials,     the health  research
and demonstration     programs are being maintained      by the National
Institute    of Mental Health.
12        y
APPENDIX IV                                                                    APPENDIX IV

                            WHAT IS THE STATUS OF CMHS
                           STAFFING AND STAFF LICENSING?
Since inception,    CMHS has worked to address staffing         problems
associated    with the transition    to the District.    As of October
1989, it had resolved     the problems associated,with       the staff
licensing   issue but had not resolved     its staff   shortage     problems.
Staff    Licensing       Issue   Resolved
Public    Law 98-621 required    that employees being transferred         from
federal    to District  employment meet all District       license
requirements     within 18 months of the October 1, 1987, transition
date-- March 31, 1989.      According  to a CMHS official,       as of April
7, 1989, 47 CMHS clinical      employees had not yet obtained        District
To address the licensing             issue, the District         took two actions           in
1989 that were accepted after               congressional      review.       On April
17, 1989, the Mayor signed District                 Act 8-23 temporarily
extending       the March 31, 1989, deadline           by 225 days to January 18,
1990.     On July 27, 1989, the Mayor signed District                     Act 8-69,
which permanently           changed the deadline        to December 31, 1989.
This act also allows CMHS employees who were employed at Saint
Elizabeths        prior  to October 1, 1987, and do not meet all District
licensure       requirements       to be issued a limited          license.        The
limited     license     will    be subject    to the provisions,          limitations,
conditions,        or restrictions       established      by the appropriate           review
board or commission.             It also would be valid         only as long as the
employee worked for CMHS.
According       to a CMHS official,         each clinical      employee not
currently       holding     a District    license    would be eligible      for
licensing       under this act.         The official      said that as of March 16,
1990, 11 clinical           employees licensed       in other jurisdictions       but
still    unlicensed       in the District       had applied     for a license    under
the act.        The official       expects licenses       to be issued in April
1990.       These clinical       employees will      be required     to maintain
their     licenses      in other jurisdictions.
Recurring     Staffing      Problems     Exist   at CMHS
CMHS has experienced          staffing    problems since it was established
in October 1987, when 419 Saint Elizabeths                 staff took early
retirement     before the transition           from the federal    to the DiStKiCt
government.       Several outside        reviews of CMHS operations       have
found continuing        staff    shortages.       JCAHO surveys in 1988 and
1989 found insufficient            staff   coverage by nursing     personnel,
activity    therapists,       and support staff.        Further,   on August 9,
13      *
APPENDIX IV                                                                 APPENDIX IV
1989, the Health Care Financing     Administration      (HCFA) advised
CMHS that it would lose its Medicare certification          on December 5,
1989, unless it resolved   certain    staff   shortages   in providing
institutional  psychiatric  services.
The CMHS Commissioner         said that critical     shortages     of registered
nurses,    physicians,     activity   therapists,    medical    technologists,
and certain      skilled   workers cannot be eliminated         as long as CMHS
operations      continue   to be dominated by institutional-based              mental
health    services.      He believes   CMHS will    have to operate with
vacancy rates of 10 to 20 percent            in these disciplines       in the
near future.
CMHS has taken some actions               to meet the immediate           problems of
maintaining       its Medicare certification.              It began hiring
registered       and practical       nurses and psychiatric            nursing
assistants       and transferred        registered    nurses from residential
care to those treatment             areas covered by Medicare.               It also hired
additional       support   staff     to free nurses from nonmedical              duties
and improved internal           medical record keeping.              HCFA resurveyed
CMHS in November 1989 and determined                that CMHS marginally            met the
staffing      requirements       but still     had medical      record keeping
deficiencies.         HCFA extended CMHS' medicare             certification        for 1
year but warned that CMHS must maintain                  its forward         momentum.
Further,      HCFA required       CMHS to report      at 60-day intervals           on its
efforts     to increase      the number of hospital           staff.
The CMHS Commissioner         and its Administrator         believe   that the
long-term   solution      for staffing      problems is progress        toward a
community-based      mental health       system.      A community-based       system,
providing   noninstitutional         care, will     require    more social     workers
and fewer hospital        personnel,     and officials      believe   that there is
an adequate pool of social           workers to meet CMHS needs.            In our
opinion,   a major determinant          of progress     toward this goal will         be
the level of continued         funding    support.

14        *
v    ~APPENDIX V                                                                      APPENDIX V

                           HAS A DETERMINATION BEEN MADE
      Pursuant   to the coordination   agreements between CMHS and the
    i District   of Columbia Fire Department     (DCFD), the firefighters    at
    j Saint Elizabeths    will  remain as part of CMHS and be trained     by
    / DCFD.
      1 At the time of the transition,               the Saint Elizabeths         firefighters
      / became CMHS employees detailed               to DCFD. Under a September 29,
        1988, agreement           between CMHS and DCFD, CMHS assumed
        responsibility          for the operation        of a Fire Prevention         Unit on the
        Saint Elizabeths           campus.     On August 7, 1989, a Program
        Coordination       agreement was signed to implement               the September 1988
        agreement.        Under the August 1989 agreement the firefighters                      will
        remain part of CMHS. According                 to the CMHS Administrator,            the
     ) firefighters        will     have job descriptions        and a retirement         plan
        comparable      to what they had when they were federal                 employees,       but
    1 they will        have a slightly         higher pay structure.          Their titles
    i will     change to Emergency Response Specialists.                     The August 1989
    ( agreement also requires              DCFD to provide       training     to the CMHS
    I firefighters.           According      to a CMHS official,         as of August 23,
    i 1989, 12 firefighters              were attending      DCFD training      classes.

APPENDIX VI                                                     APPENDIX VI

Some CMHS supplies  have been transferred      to other District
agencies.   Initial transfers  were authorized     by the CMHS Supply
Management Officer.    Since March 1988, however, such transfers
must have the CMHS Commissioner's    approval.
The CMHS Supply,Management    Officer   told us that before March
1988, he authorized   the transfer    of some supplies    to other
District   agencies.  For example,    200 excess beds were sent to
Lorton and some supplies    were used to repair     other facilities
within   DHS.
However, procedures       were changed in March 1988, and no transfers
are to occur without        the approval    of the CMHS Commissioner.    The
Commissioner      said he has authorized       some transfers.    For
example, CMHS transferred          500 cots to DHS' Commission on Social
Services   and received       $22,000 in return.      According to the
financial    officer,    CMHS provided     $88,700 in supplies    to the
District   agencies    in fiscal     year 1989 under the new procedure    and
has been reimbursed       for this amount.
APPENDIX VII                                                                        APPENDIX VII

                                      COMMENTS FROM THE
                             U.S.      PUBLIC HEALTH SERVICE

               DEPARTMENT    OF HEALTH    & HUMAN      SERVICES                        Public tieelth Service

                                                                                       Rockviile   MD 20857

           l    Mr.   Richard    L. Fogel
                Assistant     Comptroller   General
                United    States    General Accounting             Office
                441 G. Street,       N.W., Room 3858
                Washington,      D.C. 20548

                Dear   Mr.   Fogel:

                Enclosed      are the Public       Health    Service’s       (PHS) comments on your
                draft    report    “Status     of Transferring         Saint   Elizabeths     to the
                District      of Columbia.”        The comments represent            the tentative
                position      of PHS and are subject           to reevaluation         when the final
                version     of this     report   is received.
                We appreciate      the opportunity            to   comment   on this      draft       report
                before   its  publication.
                                            Sincerely         yours,

                                            Wil@rd,      J.    Forbueh
                                            Office      of    Management,     PUS


                                                                                       *   1

APPENDIX VII                                                        APPENDIX VII

                                 JANUARY 25, 1990

         General   Comments
         We concur with and support8 the general background on which the
         General Accounting Office (GAO) draft report is based.
         The transfer     of Saint Elizabeth6    Hospital  (Hospital) reflected
         the intent of the Congreae that the District         of Columbia (D.C.)
         operate    a high quality,   integrated   community-based public
         mental health system which meets the need8 of the local
         Public Law (P.L.) 98-621, "Saint Elizabeth8 Hospital and
         District     of Columbia Mental Health Service8 Act" provided for
         significant       change8 in Federal jurisdiction     and in the
         etructure     and purpose of the Federal budget for the Hospital.
         The moat baeic change wa8 from direct support of hospital
         function8     to the provision   of a series     of declining
         transitional       grant payments through Fiscal Year (FY) 1991 to
         assist D.C; in the assumption of full operations              and controls.
         P.L. 98-621 also encouraged extensive collaboration              and
         authorized      Federal payment to aeaiat in the transition          from
         Federal to D.C. administration        of the Hospital and the payment
         to satiefy      fully the Federal Government's responsibilities
         mandated regarding renovation,        personnel transfer,       and
         maintenance of the Hospital campus.
         The Department believe8 that reeponeibilities       required and
         epecified  in P.L. 98-621 have been substantially       completed,
         and/or commitments and plans initiated      for full compliance by
         the end of the financial  transition   period terminating      in 1991.
         Our specific    comment8 are limited only to those questions
         pertinent    to the Federal Government responsibilities   contained
         in the report as followa:

         GAO Question
         1)    Have the District  and the Federal Governments fulfilled
               their funding obligations  a8 Federal funding ha8 been

    t    I

I       A/l?PENDIX VII                                                              APPENDIX VII

                    Page 2

                    Department     Comment
                    We concur in the GAO statement on the Federal grant subsidy to
                    the Dietrict's      Commission on Mental Health Services.    FYs 1988
                    and 1989 budget requests were submitted for the full amounts
                    authorized     in P.L.  98-621.  AEI GAO notes, both years were
                    subjected to Congressional      enacted adjustments   to the
                    appropriations      for payment of the Federal obligations   for
                    operations     of the Hospital.

                    GAO Question
                    2)    18 the DiStriCt'8  Commission on Mental             Health SerViCe'
                          estimate of $25.5 million   in additional            Federal funds for
                          capital  project8 complete?

                    Department     Comment
                   Pureuant to the transfer          legislation,        the Federal Government
                   provided the D.C. Government with sufficient                     funds
                    ($26.8 million)       to bring the physical plant into compliance
                   with all relevant national           and District        building     Codes. This
                   provision      applies to all hospital         facilities        which the District
                   indicated      that it would assume for use within the mental health
                   treatment      system.      The conversion of Nichols and Hayden
                   building8      to office     space and the renovation            of community-
                   based facilities         are not mandated a8 part of the HHS
                   responsibility        under requirements       of P.L. 98-621.          This
                   rationale      is based on the fact that funding was provided for
                   repairs and improvements to buildings                 identified      in the
                   Diatrict'a       Congressional    approved System Implementation             Plan
                   including      $4,574,000 to renovate Nichols and Hayden buildings
                   for patient use. To the extent that further                      changes are now
                   proposed for the permanent mental health ayetem, determinations
                   should be made exclusive          of HHS to the extent that additional
                   buildinga      are required by D.C., and funds so appropriated
                   by D.C.
                   The estimated cost of $16 million   for removal of asbestos and
                   PCB transformers   should be based on the future use of the West
                   campus by D.C. PHS has already included $1,326,000 for
                   asbeetos and lead paint removal a8 part of the $26.8 million
                   code compliance funding for buildings    on the East campus. The
                   buildings   on the West campus were not required by D.C. to
                   operate the comprehensive mental health system and therefore
                   were not included in the Federal Government's payment to D.C.


APPENDIX VII                                                          APPENDIX VII

      Page 3

      In compliance with current EPA regulations,  we are working           with
      D.C. on a cooperative  effort to remove the PCB transformers
      from the West campus.
      GAO Question
      3)   18 the Federal Government maintaining       the clinical
           training program at Saint Elizabetha?

      Department     Comment
      We concur
            ..    in the GAO statement and
                                         -- findings
                                             --~         in response to this
      questxon.     GAO agrees that P.L. 98-621 doe8 not obligate      the
      Federal Government to fund the clinical      training    program at St.

' AP+ENDIX VIII                                                                            APPENDIX VIII

                                                     COMMENTS FROM THE
                                          DISTRICT     OF COLUMBIA GOVERNMENT

                                                     THE DISTRICTOF COLUMBIA
                                                      WASHINGTON.D.C. 20004
         N   OARRY.   J".

     I                                                 March 12, 1990

               Mr. Richard           L. Fogel
               A88iStant     Comptroller     General
               United    State8 General Accounting
               441 G Street,     N.W.
               Washington,     D.C.      20548
               Dear Mr.          Fogel:
               Thank you for providing  copies of your draft    report,                     D.C.
               Government:   Status of Transferring  Saint Elizabetha                       Hosuital     to
               the    District        of Columbia.         The GAO finding8      were carefully
               reviewed          by the Department         of Human Services      which prepared
               specific          comment8 enclosed         with this letter      as a separate     report.
               In general,  we are in agreement with the findings       of the report
               and have taken the opportunity   to discuss   their   potential
               implications  for the upcoming House District      Committee Oversight
               If you have any questions                   about the comment8 or specific  issues,
               you may wish to contact                  the Commissioner  of the Commission on
               Mental Health Services,                  Dr. Robert A. Washington,  on 373-7276.
               Again,       thank     you for providing        the opportunity       to review    your
               report       before     its publication.


1   APPENDIX   VIII                                                                         APPENDIX        VIII

                                       Comments On GAO Draft Report
                           D.C.       Government:   Status of Transferring
                        of Saint       Elizabeths to the District   of Columbia

                      The District         Government    concurs    with  the   findings
                      described    in the Draft Report.        Most of the information
                      contained    therein    was provided    to GAO by the Department
                      of Human Services        (DHS) and staff    of the Commission on
                      Mental Health Services        (CMHS).
                      Our remaining    comments deal primarily    with the context
                      for this   Report and the effect    of various   findings   on
                      outcomes potentially     resulting from the House District
                      Committee Oversight    Hearing now planned for the end of
                      We agree that the transition            contemplated     in P.L. 98-621
                       (Act) is at least one year behind schedule.                  The reasons
                      for the delay are accurately               described    in the Report.
                      The effect        of the delay has been to create            a budgetary
                      position         for     CMHS wherein       assumed     reductions       in
                      institutional         programs consistently      are being implemented
                      in budget          planning   before     the savings       are actually
                      achieved.          As a result,      the Commission experienced            a
                      deficit       in its FY 1989 budget and expects another deficit
                      in FY 1990.
                      The problem of inadequate                staffing      is also exacerbated
                      by retention       of institutional             census.       As described          in
                      the      Report,       staffing         problems         reached         critical
                      proportions       because approximately                410 SEH staff            took
                      advantage      of early       retirement        opportunities         created       by
                      the Act.         Early     retirement         was included          in the Act
                      because it was assumed that significant                      inpatient       census
                      decreases     would have been achieved which would reduce the
                      number of staff          necessary         to implement          the transfer.
                      Since this did not occur,               staff     shortages       have resulted
                      in skyrocketing        use of overtime and serious problems with
                      retention      of Medicare          and Medicaid        certification.               In
                      order     to retain       certification           - necessary        to receive
                      annual revenues of about $25 million                     - additional          staff
                      have been diverted              from residential            programs        to the
                      inpatient      programs       comprising         the Hospital's          Distinct
                      If census reductions           had been achieved,         the level       of
                      staffing      shortage       would   be   much lower,        if      census
                      reductions       are      achieved,      this     problem       will      be
                      substantially       eliminated     in the future,

    22    *
’ APPENDIX   VI I I                                                                   APPENDIX        VI I I

                In addition      to deficit         spending,      delays in implementing
                the transition         have resulted           in the unavailability           of
                funds     derived       from       institutional         savings       for    the
                outplacement         initiatives            originally       envisioned         to
                accomplish     the Commission’s            census reduction      goals.      This
                represents     a classic       “cart-before-the-horse”           or “chicken-
                and-egg”     problem for the Commission.                 It requires       funds
                to stimulate       the development             of affordable       housing      to
                accomplish      outplacements          which are theoretically             to be
                derived    from institutional             savings resulting         from those
                Lack of institutional            savings coupled with the failure
                of the funding expectations              described      in the Report will
                continue     to prevent       CMHS from breaking          out of the cycle
                of investing       operating        funds in institutional             programs
                far above those        expected        in the operating        budgets.          If
                the Commission had not been required                 to expend funds for
                its   professional        training       program,     it would have had
                approximately        $4.4       million      in    additional          spending
                authority     per year to spend on outplacement                 initiatives.
                This amount, coupled with lost federal                   funding      resulting
                from sequesters       would have gone far toward breaking                      the
                cycle described       above.

                Regarding      capital     funding , it must be recognized            that the
                additional       funding      requirement    described      in the Report
                for on-campus facilities             is mostly to fund conversion             of
                buildings      to new uses which were described                in the Final
                Mental Health System Plan.               In particular,      conversion        of
                the Nichols         and Haydon buildings            for office         uses is
                absolutely        necessary       to accomplish         consolidation          of
                Commission programs on the East Campus. In addition,                         new
                information,        reflected      in the GAO Report,        regarding       the
                extent of the requirements             for asbestos and PCB abatement
                far    exceed the minimal              amounts earmarked          for     these
                purposes     in the $27.6 million          appropriation        passed in FY
                The Commission’s          interest       in directing      capital      funds to
                off-campus     initiatives          represents      its effort      to make the
                fundamental      goal of creating           a community-based          system of
                care      a concrete         reality.          The material          originally
                prepared     by CMHS for GAO on off-campus                  capital       funding
                envisioned      significant           investment       of any forthcoming
                additional     federal       funds for additional          clinical       program
                facilities,       particular          acquisition        of the Region           II
                Community Mental Health Center (CMHC).                        This situation
                has changed somewhat because of the District                     government’s
                decision    to include         local capital

APPENDIX VIII                                                                            APPENDIX VIII
        funds ($9.7 million)               for this facility         in its proposed
        FY 1991 Capital            Budget.          This is a very encouraging
        development       because it not only allows the Commission to
        direct     a greater     share of any additional              federal     capital
        funds to housing            initiatives          - an item which will             be
        discussed       in greater             detail      below    - but      it     also
        represents      direct,       tangible        evidence of the District's
        willingness       to invest substantial              local funds in capital
        development        of CMHS programs.               This commitment should
        provide      persuasive         evidence        to the Congress         that      an
        additional         federal          contribution         is    already      being
        "matched"      with local         funds.
        Regarding            funding          for     housing        development,            the
        Commissioner            is now convinced             that outplacement           goals
        enumerated          in the Final Plan cannot be achieved                        absent
        direct       investment          of government          funds in housing             for
        Outplacement           eligible       patients.        While it is likely          that
        future      expenditures           for rent subsidies            can be absorbed
        within        the Commission's               operating       budget       base once
        significant          reductions         in the inpatient        census have been
        achieved,         the funds necessary               to stimulate        development
        of housing opportunities,                   which now do not exist,                is a
        prerequisite            to this        support.         For this       reason,       the
        Commission has developed a plan for subsidizing                               capital
        development           initiatives          which will        produce       long-term
        affordable               housing           as        an      alternative               to
        institutionalization                 for chronically         mentally        disabled
        persons.         This plan will be described                during the upcoming
        hearings.            However,       availability         of an interest            free
        federal        appropriation            to supplement         other      sources       of
        capital        funds is a crucial                part of any plan of this
        nature because minimization                     of debt service         costs is an
        essential         part of developing             affordable      housing.
        On a more positive         note, there is concurrence            with GAO's
        finding      that     most     of   the     organizational          problems
        experienced       during    the first       two years of Commission
        operations      have been remedied.           Commission staff          appear
        to have completed            the process       of learning          District
        operating     procedures      and integrating      themselves        into the
        District     workforce.       They now represent         one of the more
        effective     components of DHS. Problems with acquisition
        of supplies       and equipment       have been resolved            with the
        exception        that    budgetary        constraints         still        pose
        difficulties       with maintaining         adequate      levels      of non-
        essential     supplies     and replacement       equipment.
        The District    Government is very hopeful         that the issues
        discussed    in the Report and those discussed             above can
        provide a suitable     framework for meaningful       dialogue    with
        the House District         Committee    and for agreements         for
        supplemental     financial     assistance      from    the    Federal
        Government which will        make the transition       contemplated
        bye the Act a reality.

            APPENDIX IX                                                            APPENDIX IX

                                 MAJOR CONTRIBUTORS TO THIS REPORT
            Earl   F. Walter,    Assistant     Director,    Federal   Management    Issues
            rhomas E. Johnson, Assignment            Manager
            Thomas G. Keightley,        Evaluator-in-Charge
            Lillie   J. Collins,     Evaluator
            gelson S. Payne, Evaluator
            *larsha A. Matthews,       Secretary

            (426883)   *
‘L’ht~w is it 25% diswtmt~ on orders for 100 or Inow twpiw   niailtd   to a
sirrglth addrws.