Colorado’s only psychiatric hospital west of the Front Range is in danger of closing in the coming months if it doesn’t receive a cash infusion, the head of its parent organization warns, after the facility spent its reserves trying to prove it had fixed problems flagged in state audits.

West Springs Hospital, in Grand Junction, has 48 beds for inpatient treatment of mental illnesses and substance use disorders, and is one of only 11 behavioral health hospitals in the state. The facility also operates a psychiatric emergency room, which is an alternative to a general emergency department for people in crisis.

John Sheehan, CEO of West Springs’ parent organization Mind Springs Health, said shutting the hospital down isn’t inevitable at this point, but without help, it soon could be. West Springs has asked the state government for $6.6 million to get through the immediate cash crunch, but so far neither the governor’s office nor state health agencies have offered any assistance, he said.

“It is a matter of weeks before we have to make a decision,” Sheehan said.

But at least one state agency, the Colorado Behavioral Health Administration, told The Denver Post on Monday that it has offered “significant support” to West Springs, including advance payments, and remained in communication about the hospital’s financial situation. The Colorado Department of Health Care Policy and Financing said Tuesday that it doesn’t have any pots of money to assist hospitals that West Springs would qualify for.

“The state is focused on ensuring that patients can access critical mental health care services, and will continue to offer support through all means available,” Behavioral Health Administration officials said in a statement Monday.

West Springs’ troubles come at a time when demand for behavioral health care in Colorado remains high. While most people with mental health conditions or addiction don’t need to be hospitalized, state leaders have spoken about the need to increase access to all levels of treatment.

On the Western Slope, Mind Springs Health employs more than 550 people across its mental health facilities, including the Grand Junction hospital, which has 222 employees.

West Springs has been losing money for five years, but the situation got worse in the last few months because it cost more than $10 million to get back into compliance with state and federal rules after audits turned up numerous problems in 2022, Sheehan said.

Among other changes, the state ordered West Springs to open its long-dormant emergency room, construct a pathway that would make it more difficult for patients to run away while moving between buildings and pay a management company to help retrain its staff and rewrite its procedures.

“We burned through our reserves,” Sheehan said. “We’ve asked the state for help, and they’ve not been responsive.”

In addition, Rocky Mountain Health Plan, which administers Medicaid on the Western Slope, has increasingly refused to pay for patients’ stays and directed them to Denver-area hospitals, which are cheaper, Sheehan said. That comes on top of an increase in patients who cannot pay because they lost Medicaid coverage when the COVID-19 public health emergency that had prevented disenrollments ended, he said.

Rocky Mountain Health Plan said West Springs’ allegations were inaccurate.

“Rocky Mountain Health Plans works with the state of Colorado to ensure providers are compliant with federal and state requirements, and we’ll continue to work with Mind Springs as they navigate their operational challenges,” the company said in a statement Tuesday.

Another Western Slope behavioral health provider, Integrated Insight Community Care, also has reported difficulty getting paid by Rocky Mountain Health Plan, as first reported by the radio station KVNF. The health plan told the station that it was fulfilling its contractual duties to Integrated.

Two rural Colorado hospitals that had cash crunches in 2023, Delta Health on the Western Slope and St. Vincent Health in Leadville, got a reprieve when the Department of Health Care Policy and Financing advanced them some of the provider funds they were due to receive later in the year. (General hospitals in Colorado pay fees to the state, which uses that money to get federal matching funds, some of which then go back to the hospitals that pay the fees.) Psychiatric hospitals don’t pay into that fund, though, so that lifeline isn’t available for West Springs.

So far, Sheehan said, the only financial help West Springs has received came from Intermountain Health, which owns St. Mary’s Regional Hospital in Grand Junction. Intermountain already had committed to making $2.5 million in donations over the next 10 years, but sped up its giving pace and deferred collecting $500,000 that West Springs owed for technical assistance.

The clinical situation at West Springs finally had started to improve after a difficult year. The hospital temporarily lost the ability to bill Medicaid for newly admitted patients in October 2022, following a complaint by two former employees. Medicaid payments resumed in January 2023 after state inspections determined West Springs had fixed all the major problems and had a plan for some smaller ones.

In 2022, Mind Springs, the community mental health center that operates the hospital, also faced allegations of serious prescription errors and falsifying patient records. A state audit didn’t find any misconduct, though it did determine the services Mind Springs offered weren’t always what communities needed.

The most recent inspections of West Springs, in response to complaints in October, November and February, didn’t turn up any problems. The documents that state agencies post publicly don’t identify the nature of complaints unless inspectors find evidence to substantiate them.

Most hospitals in Colorado are in tight financial circumstances, with about 70% having profit margins below the 4% they consider sustainable, said Julie Lonborg, senior vice president of communications at the Colorado Hospital Association.

To her knowledge, however, West Springs is the only one on the brink of closing, which would be “incredibly troubling” when the need for behavioral health care remains high, she said. Denver Health also has asked the state for financial help to offset an increase in uncompensated care, but executives have indicated they aren’t contemplating a shutdown.

“This is a potentially terrible circumstance,” Lonborg said of the possibility of a West Springs closure.

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