Capital Grants Available for Remodeling/Building New Psychiatric Units

August 20, 2015

To:               CEOs, CFOs, and Government Affairs Staff
                     Please forward to Strategy Officers

From:          Chelene Whiteaker, Policy Director

Staff Contact:
Chelene Whiteaker at 206-216-2545 or

Subject:      Capital Grants Available for Remodeling/Building New Psychiatric Units

The purpose of this bulletin is to inform you of newly available capital grants to remodel or build a psychiatric unit or facility to serve involuntarily detained mental health patients. WSHA successfully lobbied the Washington State Legislature to allocate at least $5.5 million dollars in a competitive pool for hospitals and other organizations to build new psychiatric treatment capacity. We have reason to believe the overall competitive pool amount may be increased. The Washington State Department of Commerce will administer the grants.
Individual hospital projects can apply for up to $2 million in capital funds. Hospitals licensed under Chapters 70.41 or 71.12 RCW that are awarded a grant by the Department will also qualify for an exemption from Certificate of Need for the number of psychiatric beds associated with the project.
WSHA and its members are dedicated to expanding psychiatric treatment capacity. We encourage you to consider whether your hospital or health system is interested in providing or expanding involuntary mental health treatment. If seriously interested, apply for the grant. Decisions by the Department of Commerce on successful applicants should be announced before December 2015.
Grant Application Information
Applications to the Department of Commerce are due by October 1, 2015. The final grant award amounts may depend on the number of competitive applications received by the Department. Click here to be directed to the Department of Commerce’s website.
The 2015-2017 capital budget provides the following direction for the grant awards:

The Department of Commerce, in collaboration with the Department of Social and Health Services, will issue grants to hospitals or other entities to establish new community hospital inpatient psychiatric beds, free-standing evaluation and treatment facilities, enhanced services facilities, triage facilities, or crisis stabilization facilities with sixteen or fewer beds for the purpose of providing short-term detention services through the publicly funded mental health system.
Funds may be used for construction and equipment costs and may not be used for operating costs associated with the treatment of patients using these services. The Department shall establish criteria for the issuance of grants and priority must be given to those proposals to establish new community hospital inpatient psychiatric beds or free-standing evaluation and treatment facilities. The criteria must include: 

     (a) Evidence that the application was developed in collaboration with one or more regional support networks;  

     (b) Evidence that the applicant has assessed and would meet gaps in geographical access to short-term involuntary detention services in their region;  

     (c) A commitment by applicants to serve persons who are publicly funded and persons detained under the Involuntary Treatment Act;  

     (d) A commitment by the applicant to maintain the beds or facility for at least a ten-year period;  

     (e) The date upon which structural modifications or construction would begin and the anticipated date of completion of the project;

     (f) A detailed estimate of the costs associated with opening the beds;

     (g) The applicant’s commitment to work with local courts and prosecutors to ensure that prosecutors and courts in the area served by the hospital or facility will be available to conduct involuntary commitment hearings and proceedings under chapter 71.05 RCW; and 

     (h) A lack of local resources, including non-Medicaid operating reserves, and regional fund balances that are not contractually encumbered.
Relief from Certificate of Need
In addition to our efforts to secure a capital funding pool, WSHA also successfully lobbied to get legislation enacted that exempts hospitals from Certificate of Need (CN) for new psychiatric beds when a capital grant is awarded for the project.
HB 2212 states, “For a grant awarded during fiscal years 2016 and 2017 by the department of commerce under this section, hospitals licensed under chapter 70.41 RCW and psychiatric hospitals licensed under chapter 71.12 RCW are not subject to certificate of need requirements for the addition of the number of new psychiatric beds indicated in the grant. The department of commerce may not make a prior approval of a certificate of need application a condition for a grant application under this section. The period during which an approved hospital project qualifies for a certificate of need exemption under this section is two years from the date of the grant award.”
WSHA and its partners were very involved in the lawsuit that stopped the boarding of mental health patients in violation of their civil rights. However, the court ruling clearly demonstrated the need for additional psychiatric treatment capacity.
We are thrilled the Washington State Legislature stepped up during the 2015 session to address the issue of psychiatric boarding and lack of available beds. The substantial funds combined with the Certificate of Need exemption present a remarkable opportunity for hospitals and health systems to expand capacity. We hope our members will take advantage of the opportunity – it is unlikely to be available again for at least two years, if at all, in the future.


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