The Legislative Audit Committee authorized the state auditor to draft a bill that would investigate 17 nonprofit community mental health centers that were granted “non-compete contracts and a privileged rate status for nearly 60 years, without meaningful oversight.”

The audit was requested in January by Reps. Dafna Michaelson Jenet, D-Aurora and Colin Larson, R-Littleton, and Sens. Robert Rodriquez, D-Denver and Julie Gonzales, D-Denver, all members of the audit committee.

In December, the Colorado News Collaborative reported that the centers “collectively have treated fewer clients during the pandemic than before it, despite skyrocketing mental health needs. At the same time, more than half the centers have been sitting on liquid reserves of $10 million or more. Denver’s center kept more than $40 million in liquid reserves while its clients faced record-long wait times for care,” the report said.

Among the report’s findings:

The state’s payment system inadvertently created a financial incentive for the centers to take on fewer ill people and charge higher costs, while also protecting them from competition;

The centers have been charging taxpayers up to 17 times more than independent Medicaid providers for the same services, but with little transparency about the expenses those rates are based on;

Several centers, including those in communities with sizable immigrant populations, have had no Spanish-speaking care providers;

Some centers have been paid for programs they’ve not provided, with no pushback from the state agencies funding and regulating them.

In January, the CEO of Mind Springs, one of the 17 centers, and which provided behavioral health services in 10 Western Slope counties, resigned.

The request from the lawmakers asked for a look at the roles of the Colorado Department of Human Services and the Colorado Department of Health Care Policy and Financing and their effectiveness in overseeing the behavioral health care services.

The auditor told the audit committee Tuesday that they could do a standard performance audit under their authority, but if the committee authorized it through legislation, an audit could look at the oversight issue as well as examine processes and records from the nonprofits.

The committee chose to authorize a bill draft, which they could review as soon as their next meeting, scheduled for March 22.

The auditor letter noted the timing of the audit as it applies to the creation of a Behavioral Health Administration, which is being consider under House Bill 1278. This week, lawmakers introduced the first of several bills that will direct the spending of $450 million in federal American Rescue Plan Act dollars on behavioral health services related to the pandemic.

This article previously appeared in ColoradoPolitics.com.