A state House panel challenged the Dunleavy administration’s approach to bring stability to the Alaska Psychiatric Institute during a two-hour hearing on Tuesday.

In February, the Department of Health and Social Services entered into a sole-source management contract with Wellpath Recovery Solutions that’s worth $5 million for the first phase and could be worth $44 million annually, according to testimony.

But some members of the House State Affairs and Health and Social Services committees questioned why the state never considered Providence Health & Services Alaska and why Wellpath’s legal history was never brought to the state procurement office’s attention.

The 14-member panel also questioned whether the administration carefully vetted Wellpath, citing in broad terms civil suits the company faced under a different name.

Rep. Ivy Spohnholz, D-Anchorage, challenged Health and Social Services Deputy Commissioner Albert Wall on what she deemed the administration’s failure to consider Providence.

“I question some of the logic that has been used to underpin this,” she said. “I understand that there’s challenges at API, that we need to make sure we’re properly staffing it.

“But there were other alternatives and none of them were meaningfully explored and one of them that has already been described today is Providence Hospital does operate inpatient acute psychiatric hospital care in the state of Alaska. And they do emergency care as well — they have a psych emergency room where they can care for people who have not consented to be there, but have been taken there by the police — to operate API. Did you ever ask them, 'Would you be willing to operate API?,' Deputy [DHSS] Commissioner Wall?”

Albert Wall said he talked with PHSA's CEO, Preston Simmons, and stood by the decision to hire Wellpath.

“I don’t believe I asked Preston that straight out, so I won’t say that I did,” he said. “I will say we’ve had conversations about in the past, and there is concern about how fast they could have gotten there in that setting."

In a March 6 letter to Spohnholz and Rep Tiffany Zulkosky, D-Bethel, Simmons offered several occasions going back three years where the health care system brought up a takeover of API, including:

  • May 31, 2016 – Simmons' predecessor, Bruce Lamoureaux, told former DHSS commissioner Valerie Davidson that PHSA had an interest in operating API
  • Sept. 6, 2018 – Providence advocacy manager Emily Ford met with Davidson expressing an interest “in partnering on the long-term operations of API”
  • Feb. 14, 2019 – Simmons wrote he met with current DHSS Commissioner Adam Crum and reiterated an interest to develop “a long-term solution for API”

Simmons closed the four-page letter by saying, in part: “API has serious and immediate challenges that require attention and a need for a consistent, long-term vision in order to be successful.”

Earlier in the hearing, Rep. Adam Wool, D-Fairbanks, asked the state’s chief procurement officer, Jason Soza, if Wall or anyone from DHSS informed him of Providence’s interest in API.

Later in the hearing Rep. Gabrielle LeDoux, R-Anchorage, asked if the procurement office knew of Wellpath’s background and history, which she says included court judgments and lawsuits. In each case, Soza told the panel he was unaware.

Wool also asked, “Do you think you should have been informed about lawsuits, litigation and deaths at other facilities that this contractor was perhaps involved with?”

“That would have been helpful information to have considered as well,” Soza replied.

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