A group that helps with substance use across 21 western Colorado counties will shut down, citing a new state law

Hart Van Denburg/CPR News
A cyclist on Main Avenue in Durango, Friday, Feb. 26, 2021.

An organization that manages funding for substance-use services across Colorado’s Western Slope will shut down at the end of the year, but its leadership promised on Friday to work with state officials to ensure there will be no disruption for clients. 

The leaders of Durango-based West Slope Casa say the decision is the result of a new “conflict of interest” law passed by the state legislature, among other changes. Once it takes effect, the law will make the organization’s current staffing arrangement illegal.

The shutdown also comes after Summit County leaders complained that the organization is inherently unfair in how it distributes money to substance use service providers. And one sponsor of the new law said that it was aimed specifically at organizations like West Slope Casa.

West Slope Casa is one of four “managed service organizations,” or MSOs, in Colorado. The organization doesn’t provide any care directly, but it passes along about $10 million of federal and state money to a network of local providers each year.

The organization serves 21 counties of largely rural and “frontier” lands — an official term for some remote areas. It distributes money for services like substance-use treatment, distribution of naloxone, and sober living houses.

MSOs take on the paperwork and administrative burdens of dealing with government funding and contracts, which some providers can’t do themselves. And their leaders may know the particular needs of the various regions of Colorado better than state-level officials do.

MSOs, when they work properly, “are more directly connected to the community,” creating a bridge between state programs and local needs, said Breeah Kinsella, executive director of the Colorado Providers Association, a group representing behavioral health providers.

But Summit County commissioners have raised concerns that West Slope Casa wasn’t treating all providers in its area equitably. West Slope Casa is owned by three of the providers in its network — Mind Springs Health, The Center for Mental Health, and Axis Health — according to a December 2021 letter from the commissioners to state officials.

The commissioners were concerned that “the corporate structure of West Slope Casa does not promote fair allocation of resources across the communities they represent. Decisions about contracting are made by the West Slope Casa management team comprising the three owner/providers and, as a result, funding has historically been concentrated to the organizations these owners represent,” the letter stated.

Shelly Burke, the former board president of WSC, said the organization is owned by the three providers because they were the ones who could respond when the state launched the MSO program in the 1990s — not because of any intent to benefit themselves.

“The three mental health centers organized to respond to the (request) the state put out, knowing the state needed someone to step up,” Burke said. “If you think back to 1994, the mental health centers were the core of the provider resources on the Western Slope.”

Burke, who ended her service on the board recently, is also the CEO of Axis Health System, one of the providers that owns the MSO.

She acknowledged that funding was initially “concentrated on the partner agencies that were responsible for the MSO,” but she said that West Slope Casa has spread the money to new providers over the years. About half of the current annual funding goes to providers beyond the MSO’s owners, she said.

West Slope Casa plans to shut down on Dec. 31, according to an announcement made Thursday.

The state and federal money for those services will still be available, but officials may have to move quickly to ensure that providers that currently work with West Slope Casa get the funding to keep running without disruptions, Kinsella said.

“I think that the potential for disruption is there. My hope is that the state system is working so well that we have someone to pick up the slack for what happens next,” Kinsella said.

In its announcement, West Slope Casa said it has to shut down because of a new state law, SB22-106, which aims to address “conflicts of interest in regional organizations responsible for public behavioral health services.” 

Among other changes, the bipartisan law prevents employees of an MSO from simultaneously working for a provider in the organization’s network, and it says contracted providers can only make up half of an MSO’s board.

West Slope Casa’s board of managers has two members, both of whom are executives for providers in its network. The organization was willing to change its board, but it could not find a way to replace its administrative staff without relying on the mental health centers, Burke said.

The organization has only a few full-time staffers, but they would be difficult to replace with independent new staffers given the rural region and the complexity of the job, Burke said.

“West Slope Casa’s administrative staffing functions have historically been performed by provider employees. While this helped to keep the administrative costs historically low, this structure does not comply with the legislation,” the organization said in its announcement.

The law is meant to prevent situations where someone working at an MSO might use the position to unfairly benefit a particular provider.

“This bill was basically written because of this type of MSO,” said state Sen. Chris Kolker, a Democratic sponsor of the bipartisan bill. “And there are actually other organizations who are already MSOs ready to step in in their place, who do not have this conflict of interest. So, I don’t foresee service interruption at all.”

Officials with the state’s new Behavioral Health Administration said they were working to prevent disruptions.

"Access to care is the primary focus of the Behavioral Health Administration and we are currently collaborating with West Slope Casa on a plan for continuity of services through a six-month contract. The administration's plan is grounded in our values, supporting the staff at West Slope Casa, the people they serve, and the community through a collaborative and thoughtful transition," wrote spokesperson Stefany Busch in an email.

West Slope Casa’s program director, Carmen Iacino, didn’t immediately respond to a request for comment.

Asked for her opinion of the state’s changes, Burke did not criticize the new law, but she called for continued increases in behavioral and mental health funding.

“Change has to happen. It needs to happen. And I think we need to see some evolution,” she said. “Everybody wants to make sure that patients and communities have access to care, and that is a fundamental truth that all of us hold.”

Editor's note: This article was updated on Aug. 22, 2022, with comment from the Behavioral Health Administration.