Lawmakers seek competitive contract to run psychiatric institute

House Health and Social Services Committee co-chair Rep. Ivy Spohnholz, D-Anchorage, questions Chief Procurement Officer Jason Soza of the Department of Administration in a joint meeting with the House State Affairs Committee in Juneau on Tuesday. The committee was examining procurement procedures that led to a controversial contract to manage the Alaska Psychiatric Institute. Rep. Jonathan Kreiss-Tomkins, D-Sitka, co-chair of the House State Affairs Committee is on the right. (Photo by Skip Gray/360 North)

Five House members who chair committees have urged the state’s chief procurement officer to halt the state’s contract with Wellpath to operate the Alaska Psychiatric Institute.

In a letter, the lawmakers — Health and Social Services Co-chairs Ivy Spohnholz of Anchorage and Tiffany Zulkosky of Bethel; State Affairs Co-chairs Zack Fields and Jonathan Kreiss-Tomkins; and Judiciary Committee Chairman Matt Claman — said the state Department of Health and Social Services should seek a competitive contract to operate the facility.

Department of Health and Social Services Deputy Commissioner Albert Wall, left, and Department of Administration Chief Procurement Officer Jason Soza field questions from members of the Health and Social Services and State Affairs committees in Juneau on Tuesday. (Photo by Skip Gray/360 North)

House Health and Social Services Co-chairwoman Ivy Spohnholz co-wrote the letter. She said the department didn’t provide enough information to Chief Procurement Officer Jason Soza for him to be able to adequately review the contract, which would pay Wellpath $225 million over five years.

“The department did not properly educate or inform our state’s chief procurement officer about the scope of this contract, the other alternatives that were available, and about the potential risks in awarding this contract,” Spohnholz said.

Wellpath critics have said the company has had too many health and safety violations across the country and noted it’s been sued 1,400 times.

Soza said on Tuesday in a joint committee meeting that he would have sought more information if the department had told him about the lawsuits.

“The evidence presented to me described the awarded vendor as the only one capable of performing these services,” he said.

Wellpath divisional president Jeremy Barr said in a statement that more than 90 percent of the lawsuits were dismissed. Barr said the company is making improvements at API, including hiring four new psychiatrists.

The state hired Wellpath in February, after the federal Centers for Medicare and Medicaid Services said it planned to revoke API’s certification. This could have forced the hospital to close.

Providence hospital has expressed an interest in operating API. But department leaders said Providence wasn’t in as good a position as Wellpath to take over in February.

State Deputy Commissioner Albert Wall said in the committee meeting that it would make sense to keep Wellpath if it’s making the benchmarks the state set for it.

“If they can stabilize the hospital, if they can maintain our certification, our licensure, if they can open more beds and bring on more providers, and if the safety of our patients and staff has increased, then why would we destabilize the hospital for any period time and put it back into chaos that it was back in, in order to go out and find another provider who could maybe do it a different way?” Wall said.

The state is scheduled to decide whether to keep Wellpath for the rest of its contract by June 15. The state must study the feasibility of privatizing API under its union contract before permanently privatizing the hospital.

Andrew Kitchenman is the state government and politics reporter for Alaska Public Media and KTOO in Juneau. Reach him at

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