Attending his first meeting of the Oklahoma Department of Mental Health and Substance Abuse Services Board on Friday, interim Commissioner of Mental Health Greg Slavonic provided a broad update on his priorities, the agency’s ongoing “reorganization” and the need to flip over an “upside down” financial picture that portends potential service cuts.
With six weeks on the job following the Legislature’s removal of prior Commissioner Allie Friesen, Slavonic referenced his early meetings with legislative leaders, Gov. Kevin Stitt — who hired a special counsel in May to investigate the agency’s fiscal issues — and ODMHSAS staff members, with whom he met on his first day at work.
“One of the things I had heard was that we have a cultural issue here, and I did not want to get off on the wrong foot with them, because this agency has had a lot of negative news in the press. Much of it, I think, was maybe unfounded but yet could be considered as founded,” Slavonic said. “I want to make sure that this agency, moving forward, all of the press that we get is good news, and I want to keep us out of the paper.”
Slavonic missed the board’s prior meeting in June, where members voted to “reestablish” an Internal Audit Division in the hope of identifying future issues more quickly and independently.
“First of all, I’d like to apologize to the board for my absence last month at the meeting. It was only my second week, and I didn’t put it on my calendar,” Slavonic said. “But I had a pressing meeting over in Tulsa to meet with a doctor who was going to be a possible player with helping us through our consent decree.”
Slavonic, a retired U.S. Navy rear admiral, said “resolving the consent decree” has become his top priority. The court-approved agreement stems from a class-action lawsuit filed on behalf of criminal defendants deemed incompetent to stand trial. Such defendants have faced lengthy delays — up to two years — in receiving competency restoration services, leaving many languishing in county jails that are under-equipped to provide services that would be available at the backlogged Oklahoma Forensic Center in Vinita.
“As citizens of Oklahoma and taxpayers of Oklahoma, we should all be interested in the consent decree and it being resolved as quickly as possible, because this will be a three- to five-year project, and the amount of money the state will have to pay to resolve this is — if we look back at the Pinnacle Plan, we can kind of get a snapshot of how much this could possibly cost the state of Oklahoma,” Slavonic said. “The money we could save (by resolving these issues) would then be able to — I hope the Legislature could then redirect that money to this agency. That would be my hope.”
In May, the Oklahoma Legislature adjourned without crafting a full Fiscal Year 2026 budget for ODMHSAS. While lawmakers provided a $27.4 million supplemental appropriation to avoid projected payroll defaults at the end of FY 2025, they delayed decisions about the agency’s full fiscal needs until its proverbial pot of pecuniary pasta could be strained and drained.
With the charter of the reestablished Internal Audit Division approved by the ODMHSAS Board on Friday, Chairman Hamel Reinmiller praised the direction of the agency’s reforms.
“I think it gives an independent voice for internal audits directly to the board that has never existed before,” he said. “That does not imply that there is some shielding going on there. That is not the case. I think it’s industry standard. I think having an independent voice reporting directly to the board is the cleanest and most appropriate way for internal audits to happen and for honest discussions to happen about how we can improve our processes.”
Concern renewed about ‘retroactively’ cutting substance use treatment payments
What exactly led ODMHSAS to the brink of payroll default earlier this year remains unclear, although state leaders have publicly discussed some details. For years, the agency apparently:
- Paid prior-year Medicaid reimbursements with next-year appropriations;
- Swept unencumbered portions of contractor agreements together to make “pended payments” to certified community behavioral health centers (CCBHCs) that serve Medicaid and uninsured patients; and
- Extended “value-based payments” to substance use disorder (SUD) providers despite the conclusion of federal funding for the program.
Appointed to lead ODMHSAS in early 2024 by Stitt, Friesen sounded alarm bells early this year when she realized the agency’s funding gap had derailed its Medicaid obligations. But in doing so, Friesen’s team blindsided SUD providers with an email saying at least two prior quarters of value-based payments would not be reimbursed for care already provided. SUD providers alerted their legislators to the decision, which surprised lawmakers and intensified criticism of Friesen’s administration as it provided a string of ever-changing budget hole estimates.
In her final weeks as commissioner, Friesen indicated the stalled value-based payments would be honored by the agency. However, that no longer appears to be the case.
On July 10, Slavonic sent SUD providers an email similar to the one that caught them off guard in March. The email said in part:
ODMHSAS is currently evaluating its financial position for both state Fiscal Years 2025 and 2026. We recognize many of you have questions regarding the status of the Q3 value-based payments. These payments are not contractually obligated, and the federal funding that previously supported this initiative is no longer available to the department.
At this time, we cannot make any commitments regarding value-based payments. We will determine our ability to issue any value-based payments for FY 25 as more information becomes available. Our priority is to align funding and partnerships with the highest standards of accountability and stewardship of state resources.
Janet Cizek, a professional counselor who runs Community Treatment Integrations in Tulsa and Bartlesville, said Slavonic’s email renewed tensions among her peers.
“We received an email notifying us about the Department of Mental Health’s intention to retroactively cut payments for contracted services. Obviously, this is concerning,” Cizek said. “We are continuing conversations with legislative leaders and the department as we assess the best way to provide care for Oklahomans who desperately need it.”
Asked about the value-based payment situation for SUD providers Friday, Slavonic deferred comment to ODMHSAS communications coordinator Maria Chaverri.
“Interim Commissioner Gregory Slavonic is conducting a comprehensive review of more than 800 contracts, which include the value-based contracts with private providers,” Chaverri said. “For contracted SUD providers, value-based payments were previously supported through a mix of state and federal funds. With the expiration of that federal support, a responsible reassessment of the VBP model is underway.”
Reinmiller also addressed the value-based payment uncertainty after the meeting.
“The Department of Mental Health wants to reward contract providers that are dotting their I’s and crossing their T’s and delivering good service — to the extent that we can,” Reinmiller said. “There is a lot that goes into getting our arms around the fiscal position for the Department of Mental Health. It’s a big organization. We obviously have a CFO transition, we have a commissioner transition. There’s a lot to that, and I think the commissioner is simply saying, look, we want to reward the organizations that we are partnered with that are doing good work to the extent that we can, but we’ve got to get our arms around our ability to do so.”
Reinmiller said Slavonic was “just giving an honest answer” with his email to SUD providers.
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“There is a shifting financial model with mental health,” Reinmiller said. “We’ve got federal funds that are eroding. The state is going to have to backstop more than we have in the past, and that puts a squeeze on this department, and we’ve all got to work together. That includes all of our contracted partners, everybody at DMH, everybody that is trying to provide services for those in Oklahoma that need it.
“We’ve all got to work together to bring costs down and bring revenue up so that we can continue to deliver at the level we are at.”
For his part, Slavonic said he is still learning the lingo and details at ODMHSAS.
“This agency has worse acronyms than the Navy,” Slavonic joked after Friday’s meeting.
He told board members he has faced a steep learning curve as someone not previously familiar with many programs and practices.
“This is really kind of an unknown territory for me,” he said. “But I was asked by the governor to come on board and try to steer the ship in the right direction, keep it afloat and then provide correction for the agency.”
To that end, Slavonic said he has been offered additional help by Stitt, who opposed Friesen’s removal as commissioner and who has criticized the agency’s past contracts with CCBHCs, the nonprofit organizations tasked with creating a service safety net for Medicaid patients and the uninsured.
“The governor offered up that he would detail a CFO to this agency to help us on the financial side because the financial side of this agency is really upside down, and so we are working very hard to be able to make it right and get it headed in the right direction,” Slavonic said, adding a dab of sarcasm. “Although the governor has put out that we are in need of a CFO from another agency, it has been crickets from other agencies. For some reason, I don’t know why, no one wants to come to work here at the agency.”
Moments before Friday’s meeting began, Slavonic encountered Robert McCampbell, the special counsel hired by Stitt to “investigate mismanagement” at ODMHSAS.
“We’re still going forward with this investigation?” Slavonic asked McCampbell.
McCampbell, who reports to the governor’s office, replied: “That is certainly my opinion.”
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‘The agency has been underfunded for many years’
Like a new plumber who has inherited old clogs, Slavonic has no shortage of messes to manage.
Of course, he has experience mopping a weather deck. From March 2023 through May 2024, Slavonic served as interim director of the Oklahoma Department of Veterans Affairs, an agency facing its own dysfunction at the time.
On Friday, Slavonic said he recently ended the hybrid remote-work model at ODMHSAS — with options for exemptions — to return agency employees to their office assignments after years of pandemic-era flexibility.
“That’s the only way we’re going to be able to do the work that needs to be done to be successful,” Slavonic said. “The next priority is changing the culture here — working with reorganization. And the third is getting the money needed to operate this agency and our 11 facilities that we operate. I believe the agency has been underfunded for many years.”
To make that point, Slavonic referenced ODMHSAS’ aging facilities in Vinita, Norman and elsewhere. While the new Oklahoma Psychiatric Care Center in Tulsa (106 beds) is nearing completion to replace the current Tulsa Behavioral Health Center (56 beds), a similar hospital project in Oklahoma City fell apart amid budgeting blunders, which included a $7 million false start that expended philanthropic funds and an audible toward adding crisis and competency restoration beds at a shuttered St. Anthony building in southwest OKC. The revised project is pending approval from the Vatican, which wants Oklahoma to lease the building while it mulls the sale.
One reason the proposed Donahue Behavioral Health Hospital project fell apart in OKC involved an inability to sell the Griffin Memorial Hospital property in east Norman for the $50 million price tag state leaders had hoped.
On Friday, the ODMHSAS Real Property Trust — comprised of the same members as the ODMHSAS Board — approved selling half of a neighboring property to the City of Norman, which has leased the land for decades to operate as Griffin Park. The city will pay about $3.36 million to acquire the 156 acres containing its baseball and softball fields, while the adjoining 160 acres that Norman leases to operate Sutton Wilderness Park would require statutory changes to legalize any sale, agency officials said.
Board member Hossein Moini asked what the agency plans to do with the $3.36 million generated by the Norman property sale. Reinmiller replied, “There is a list of (infrastructure) needs.”
Meanwhile, ODMHSAS is about to move forward with the sale of two adjoining properties totaling 10 acres in north Tulsa, which feature a 16,000-square-foot building in which Palmer Addiction Recovery Services operates a center serving women and children. The property carries an $895,000 appraisal and is to be sold at auction.
After Friday’s meeting, Reinmiller talked about the importance of finding new revenue.
“I think the department is doing a fantastic job under current leadership of streamlining waste, fraud and abuse. I don’t mean to say that there was any fraud. I don’t think that was going on at all,” he said. “But I think there was spending that could be tightened up, and making sales like that, trimming costs and increasing revenue does nothing but help the department. So that’s all we’re trying to do — trim costs and increase revenue so that we can help the folks of Oklahoma that need mental health services.”
During his opening remarks Friday, Slavonic referenced another “issue” he is trying to help resolve with elected officials in Oklahoma County, which has begun site work for a new behavioral health center to abut the new jail planned for southeast OKC. Slavonic noted that he worked with Oklahoma County Clerk Maressa Treat in U.S. Sen. James Lankford’s office. He said Treat had inquired about ODMHSAS’ plans for the former St. Anthony building amid the awkward possibility that two new behavioral health centers might be launched in south OKC at the same time, potentially with different operators competing for the same employees and resources.
Treat told NonDoc that ODMHSAS owes the county $1.5 million of American Rescue Plan Act funding that had been designated for use at the now-stalled Donahue hospital project, and she discussed her “relational, brainstorming conversation” with Slavonic.
“As an Oklahoma County Budget Board member, I wanted to discuss a few key issues, one being the new behavioral health center the county is building with ARPA funds. I was interested in hearing his thoughts on possible alignment of efforts between ODMHSAS and the county,” Treat said. “Over the years, the admiral and I have successfully collaborated on various projects. We both care deeply about spending tax dollars responsibly and working with key partners to find effective solutions. Mental health is an issue I care deeply about, both professionally and personally. Regardless of whether anything specific comes as a result of this conversation, I believe it’s critical that we continue strengthening our working relationship with ODMHSAS. These kinds of conversations are how progress starts.”
Speaking of progress, Slavonic is hoping a meeting held Wednesday with the CEOs of all 13 certified community behavioral health centers will move difficult conversations forward about the need to reform CCBHC rules, requirements and revenue models.
Ten minutes before Friday’s ODMHSAS Board meeting began, Slavonic emailed a handful of legislative leaders and Stitt administration officials to say his team and CCBHC leaders “came together to strengthen collaboration, improve transparency and chart a sustainable path forward.”
For months, CCBHC leaders have been deeply concerned about the possibility that ODMHSAS will end “pended payments” without providing alternative funding for safety net providers. At the end of fiscal years, “pended payments” have been divided among CCBHCs as a way to support their contracts and cover costs for the uninsured. The money has historically been drawn from otherwise unexpended ODMHSAS contracts.
Uncertainty over the status of “pended payments” has been exacerbated by September’s anticipated conclusion of CCBHCs’ enhanced Medicaid matching rate. That looming change could require Oklahoma to dedicate about $20 million more just to maintain its funding levels for Medicaid patients seen by CCBHCs currently, and Slavonic hinted at the significant uncertainty in his email Friday morning.
“The discussion acknowledged the financial realities we all face, with a shared focus on sustaining and strengthening the CCBHC model within the constraints of the FY 26 budget,” Slavonic wrote. “As part of the session, the department announced plans to bring in a national consultant to assess Oklahoma’s CCBHC system and provide recommendations aligned with best practices. Providers have also been invited to submit cost-saving strategies and help prioritize the services most critical to behavioral health services for their regions.”
Slavonic has also scheduled a meeting Monday with legislative leaders and Stitt administration members to review ODMHSAS contracts, a contentious topic between industry leaders and the governor, who has lambasted certain CCBHC leaders for taking large salaries and who has questioned how ODMHSAS contracts were awarded in recent years.
