Senate bill could force school districts to pay private mental health centers for education of students

JUNEAU — The Alaska Senate on Thursday passed a bill by Sen. Cathy Giessel, R-Anchorage, that could force school districts to pay privately owned mental health treatment centers for the education of students there.

Giessel said in a speech on the Senate floor that the bill would improve the education of students at the treatment centers, who, she argued, are not getting adequate attention from local school districts.

But Democrats and some advocates countered that the bill targets a problem that doesn't actually exist, citing a lack of complaints about instruction at the treatment centers. Instead, they said, the legislation is narrowly tailored to ease the transfer of public money to an Outside corporation whose Alaska subsidiary, North Star Behavioral Health System, would be subject to few educational standards.

At issue is the instruction received by students with mental health disorders who are taking classes at private treatment centers rather than public schools. Under the current system, school districts send teachers to the centers, paying the teacher salaries and monitoring the instruction. Giessel's bill would change that, requiring school districts to pay the treatment centers for the cost of instruction, with the treatment centers themselves hiring teachers and designing the curriculum.

In Anchorage, home to the state's biggest school district, 10 Anchorage School District teachers are assigned to work with students at North Star's treatment centers.

"We've got no complaints from parents," Dave Fleurant, the executive director of the Disability Law Center of Alaska, said in a phone interview Thursday. "This is North Star pushing this deal."

The bill, Senate Bill 103, passed by a vote of 11 to 6, the bare minimum. In favor were Giessel, Republicans Lesil McGuire and Kevin Meyer of Anchorage, Click Bishop and Pete Kelly of Fairbanks, John Coghill of North Pole, Mike Dunleavy and Charlie Huggins of Wasilla, Anna MacKinnon of Eagle River, Peter Micciche of Soldotna, and Bill Stoltze of Chugiak.


Against were Democrats Berta Gardner and Bill Wielechowski of Anchorage, Dennis Egan of Juneau, and Republicans Gary Stevens of Kodiak, Bert Stedman of Sitka, and Mia Costello of Anchorage.

A spokeswoman for the Republican-led Senate majority said Giessel wasn't available for an interview Thursday. In her floor speech, she said her bill is about providing "a sound education and an opportunity for success" for children with mental health problems.

Some of the treatment centers, she said, have found that "some school districts fail to collaborate and support their patients' education during the time that the children are hospitalized."

"Consequently, psychiatric treatment centers are seeking to make up for this gap," she added, without specifying which ones.

Documents accompanying Giessel's bill also include two letters from parents who complained about inadequate support at treatment centers from teachers and staff, as well as difficulty getting records needed for the transition from a treatment center back to regular school.

To fix the problem, the legislation creates what Giessel called a "pilot program" that sunsets after three years.

It requires school districts to pay a treatment center for educational programming if the center's proposed contract includes 21 different provisions and charges a "reasonable" reimbursement rate.

The provisions include that the treatment centers hire certified teachers, give descriptions of "written objectives for student achievement," a program schedule and calendar, and a teacher-to-student ratio. But the legislation specifies no required curriculum, no minimum student-teacher ratio, and no definition of what a "reasonable" reimbursement rate is.

One of the opponents of the bill, David Kohler, who sits on the Governor's Council on Disabilities and Special Education, said the group first learned of the bill in 2014, when a draft was provided by North Star's director of education, Evelyn Alsup.

Alsup told the group that North Star's parent company, Pennsylvania-based Fortune 500 company Universal Health Services, had submitted similar legislation in "several other states," Kohler said in written testimony. North Star's Juneau lobbyist, Ray Gillespie, has an $80,000 annual contract with the company.

In late 2014, UHS's vice president for specialty education, Michael Lyons, submitted a public records request asking the Anchorage School District to account for the total revenue generated for the district by students at North Star's facilities. (There are three in Anchorage.)

The amount, according to the district's response, was $830,000, with $815,000 actually spent on serving students at North Star, according to documents provided by the district. There are about 100 district students at North Star facilities during the school year, though the numbers fluctuate, according to district officials.

North Star has been persistently critical of the district, with Alsup writing in a March letter to lawmakers that the company has "pleaded" with the district for six years to "step up and fulfill its obligations to this class of students."

Only this year, after the legislation picked up steam, Alsup wrote, "has this district taken any interest in correcting the lack of education for these students." Her complaints include a "lack of clear transcript alignment with neighborhood school," "lack of curriculum assessment and plan," and a "slow and cumbersome enrollment process."

On the Senate floor, Micciche, the Soldotna Republican, said the opposition to the bill from some of his colleagues "seems to be about protecting an institution," implying the Anchorage School District.

Supporters, he added, are "united in concern for the best outcome for children suffering from mental illness."

North Star officials didn't respond to an interview request, sending instead a prepared statement from Alsup that said passage of Giessel's bill marked "a good day for children with mental health issues and their parents and a good day for education."


Anchorage School District officials, however, rejected claims by lawmakers and North Star that they were neglecting students at the mental health treatment centers, saying the district has taken a series of actions to improve its programs.

In its own written testimony, the district said it recently installed 92 computers and a new wireless network at North Star facilities, increased teacher staffing from six to 10, named a special schools principal, Sue Doherty, and established weekly meetings between North Star and district officials.

It also said Giessel's legislation is unconstitutional by spending public money for the direct benefit of a private educational institution.

"We have to look at incentives here. Our incentive is to provide the best possible educational services for our students while they're with us," Doherty said in a phone interview Thursday. "I'm concerned that if this were not underneath our domain, it would not work. I don't think the focus would be on the needs of the students to the level that it needs to be."

Giessel's legislation seems to be targeting a problem between North Star and the Anchorage School District, not one identified by parents, said Fleurant, the Disability Law Center of Alaska's executive director.

Fleurant's group says it has no record of contact from parents or guardians complaining about schooling at a mental health treatment center. And according to the Disability Law Center's written testimony, the last complaint filed with the state education department was recorded in 2006 and filed by the Disability Law Center itself.

The debate over Giessel's legislation has not included testing data from students at North Star that could be used to assess whether the Anchorage School District's instruction there is working or failing, Fleurant added.

"There needs to be some objective monitoring or assessment of the educational programming that's going on," he said. "This bill doesn't do it — it's primarily a funds transfer."


The opposition to the legislation from mental health advocates isn't uniform, however, with the measure drawing support from the Alaska Mental Health Trust Authority, a state entity that's dedicated to assisting residents suffering from mental illness and disabilities.

CEO Jeff Jessee said in a phone interview that Giessel's legislation includes "a lot of standards and criteria" that mental health treatment facilities must meet. And he cited what he described as shortcomings of the instruction offered by the Anchorage School District at North Star, particularly with regard to technology.

"I don't have any guarantee North Star is going to do better," he said. "But what's happening doesn't seem to be working."

Giessel's bill now heads to the House, where a companion bill sponsored by Wasilla GOP Rep. Wes Keller's education committee currently sits in the House Finance Committee.

Last weekend, the committee canceled a hearing on the legislation and a new one has not been scheduled.

Nathaniel Herz

Anchorage-based independent journalist Nathaniel Herz has been a reporter in Alaska for nearly a decade, with stints at the Anchorage Daily News and Alaska Public Media. Read his newsletter, Northern Journal, at natherz.substack.com