Is The New Mental Health Contract Rigged?

During the first year of his first term, Supervisor Ted Williams correctly pointed that Mental Health Services in Mendocino County should be competitively bid, not handed over to the Schraeders Anchor Health Management (aka Redwood Community Services) on a no-bid contract extension year after year. Williams said that the contract should be broken down into smaller segments so that other local outfits, including some of the Schraeders’ subcontractors, could bid on the parts of the contract that they could carry out, thus making them competitive (sort of, or at least for parts of the services), and also eliminating an extra layer of administration that the Schraeders rake in as the Administrative Services Organization (ASO) which, prior to privatization of mental health services, was conducted by the Mental Health Department itself. Williams has complained several times after that about the no-bid, no option nature of the Schraeders’ continuing contract.

Over the years, however, nothing has been done. Mental Health Director Dr. Jenine Miller told Williams time and again that they were working on an new RFP so that local that Mental Health providers could competitively bid for mental health services and contract administration. But Dr. Miller never said anything about breaking up the services/contract into smaller, biddable segments as Williams had requested. And Williams never proposed anything resembling that approach.

Next Tuesday, the long-awaited RFP for Mental Health Services — aka Administrative Services Organization (ASO) — is scheduled to be rubberstamped for posted for bidding by the Supervisors.

On the surface, it looks like the RFP seeks competitive bids, although there’s nothing in the RFP (misleadingly titled “Specialty Mental Health & Recovery Services”) saying that bidders can pick and choose which services they can provide or bid for or in what area of the County.

The accompanying Board presentation says the County intends to “contract with Anchor Health Management, Inc. (the Schraeders), Mendocino Coast Hospitality Center (a Schrader subcontractor in Fort Bragg), Mendocino County Youth Project, Redwood Community Services (RCS, the Schraeders), and Tapestry Family Services (a Schraeder subcontractor).”

Except for Anchor Health/RCS, each of these outfits specializes in one kind of mental health service or another.

According to the presentation package for next Tuesday, Anchor Health Management had 326 people “enter” services in 2022/2023 and 277 in 2023/2024. 431 “utilized crisis services” in 2022/2023 and 205 in 2023/2024. Are these the same people? We are not told. The 431 is said to be “(38.3%)” and the 204 is said to be “(19%)” of something, again not specified. 431 is 38.3% of 1125, but there’s no mention of the 1125 or what that number represents.

The relatively small Coast Hospitality Center had 50 people “enter services” in 2022/2023 and 41 in 2023/2024. The Youth Project had 75 people “enter services” in 2022/2023 and 84 in 2023/2024. Redwood Community Services had 343 people “enter services” in 2022/2023 and 391 in 2023/2024. Tapestry had 431 people “enter services” in 2022/2023 and 357 in 2023/2024.

There are proportionate numbers for each organization listed in various subcategories as compared to the Schraeders numbers.

But, as usual, the numbers are unexplained, confusing and out of context. The percentages are not explained. the subcategories are amorphous, the overlapping of client numbers is not explained, and the terminology is misleading.

For example, the Coast Hospitality Center reportedly “housed” 32 people in 2022/2023 and 26 people in 2023/2024; most of them have reportedly remained housed for the reporting period. Redwood Community Services, however, despite having a much larger client count, “housed” 12 and 20 respectively; less than half of them remained housed. The other three outfits didn’t “house” anybody.

Obviously, the numbers don’t add up and don’t provide much in the way of useful management information.

In theory, the County could contract with each of these organizations for the services they can provide. But in practice, there would still need to be some kind of coordination between the organizations since the “patients” are not exclusive to one outfit or service and commonly qualify for more than one, or transition from one to the other as they age, or as their conditions or circumstances or addresses or ability to pay or be funded changes. And, of course, at present, most of them are already deeply intertwined with the Schraeders organization in several ways.

The cover letter for the RFP specifically says that the County intends to award only one contract and that the winning bidder must provide “all Medi-Cal specialty mental health services,” and “have the ability to provide timely and satisfactory specialty mental health services including but not limited to billing, utilization management, quality assurance, data collection and reporting.”

So even though there are five local outfits listed as possible bidders, only one of them can claim to have experience and capability to provide “all Medi-Cal specialty mental health services” as well as the required specialized administrative functions. (Medi-Cal billing alone is extremely complex and time consuming.)

If the County wanted competitive bids they could have broken the RFP down into separate smaller RFPs by category as Williams once suggested, such as age, area (coast or inland), crisis/non-crisis, residential, medication management, case management, etc.

As it is, however, despite all the time and effort and rhetoric about competitive bidding and cost savings, the entire exercise looks like the same old Schraeder same old, since the smaller outfits are clearly not capable of providing the full range of services the RFP calls for, unless the smaller outfits turn around and subcontract parts of the contract with each other or the Schraeders — an unworkable approach.

Since there’s no narrative or explanation of the confusing, if not misleading or negative, statistics for each provider, there’s no way to know if this “new” contract will improve services as it claims to require. And the only real measure of whether this “new” RFP will save any money will be to see if the resulting contract is cheaper in real terms than the current arrangement with the Schraeders. But given the amorphous nature of the full range of contracts and services provided by the Schraeders, getting an apples to apples independent comparison will be impossible for all practical purposes.

By virtue of their years-long monopoly, the Schraeders are only one outfit in Mendocino County that’s even remotely positioned to bid on this “competitive” RFP.

Tuesday’s Mental Health Services RFP presentation is little more than a clumsy marketing opportunity for the Mental Health Director and the Schraeders to provide the Board with another collection of nearly meaningless info under the cover of a “new” mental health services RFP.