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State clears Fairview plan for new psychiatric hospital in St. Paul, but raises concerns

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Due to a lack of inpatient beds in Minnesota, a new free-standing mental health hospital in St. Paul is in the public interest, state regulators determined Monday.

The ruling sets the stage for Minneapolis-based Fairview Health Services to move forward with construction of a $62 million facility on the site of the old Bethesda Hospital just north of the state Capitol.

But the Minnesota Department of Health also raised concerns about the plan because of the net loss of comprehensive services with the closure of nearby St. Joseph’s Hospital, which Fairview this summer converted to a non-hospital wellness center.

The new facility won’t include an emergency room, which earlier this year prompted patient advocate and competing hospitals to question whether access will be limited for low-income patients and those with the most complex care needs.

Lawmakers in June responded with legislation, calling for monitoring by state regulators to ensure the new hospital treats Medicaid patients and takes transfers from other facilities. In its decision Monday, the Health Department noted that the ongoing scrutiny was a “key element” to finding the project is in the public interest.

“The public review of this proposal shows how much need there is for additional mental health beds in Minnesota,” state Health Commissioner Jan Malcolm said in a statement. “As we seek to address the acute shortage we are facing, we hope this review highlights the need for policy makers, health care organizations, mental health care providers, employers and insurers, and patients to work on solutions to fully meet the state’s mental health needs.”

Last November, Minneapolis-based Fairview proposed the plan for tearing down Bethesda Hospital and building the new $62 million hospital in conjunction with Tennessee-based Acadia Healthcare.

Minnesota has a moratorium that blocks construction of new hospital beds, but that state can grant exceptions following the completion of a public interest review by the Health Department. Normally, the review is a precursor to a final decision by the Legislature, but lawmakers opted to flip the process for the psychiatric hospital, giving final word to the state agency.

In a summary of findings issued Monday, the Health Department said “there will be significant inpatient care gaps remaining after the establishment of the facility that other providers will need to fill.

“For example, the new facility lacks an emergency department for receiving patients undergoing a mental health crisis, and because it does not offer a full complement of medical care, it will only serve a subset of mental health patients,” the department said. “In addition, the facility is scheduled to operate under a leaner staffing model than is the norm nationally and in Minnesota.”

As part of its review, the Health Department held a public meeting on June 9 and received 67 written public comments. Most comments recognized the need for more inpatient beds for mental health patients.

Supporters acknowledge that Fairview is a “trusted community partner,” the Health Department said, and that the facility would help those who struggle to find needed services.

In addition to concerns over whether the facility would serve all patients, critics questioned the quality of care by Acadia Healthcare nationally, the Health Department said, as well as whether the facility would take transfers from other health care providers.

This is a developing story. Check back for updates.

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