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Health and Family Services Cabinet
Cabinet Reaches Agreement with the Bluegrass Regional MH/MR Board to Manage Oakwood

Press Release Date:  Tuesday, September 12, 2006  
Contact Information:  Gwenda Bond or Vikki Franklin

Partnership to be Modeled on Eastern State Hospital Transition

 The Cabinet for Health and Family Services (CHFS) has reached a groundbreaking agreement with the Bluegrass Regional Mental Health-Mental Retardation Board – a  Kentucky-based, non-profit organization – to assume full management of Oakwood, the state’s largest facility for mentally retarded adults, on Nov. 1, with a transition period beginning immediately.

“When this administration began uncovering some of the embedded issues at Oakwood, we worked to find solutions to improve the management of the facility – solutions that would meet the needs of clients, family members, staff and the state,” said Governor Ernie Fletcher. “Change is needed at the facility to ensure appropriate care for the residents. I am encouraged that Bluegrass is willing to partner with the state to bring about new management.”

The transition follows the successful model Bluegrass has achieved with the operation of Eastern State Hospital in Lexington, which it began running more than 10 years ago.

 "Bluegrass has proven successful both in caring for individuals with mental retardation and in managing the transition of a state-run facility,” said CHFS Secretary Mark D. Birdwhistell. “We see this as building on the long-standing partnership between Bluegrass and the Cabinet – a partnership based on common goals and beliefs."

Under the terms of the Memorandum of Agreement (MOA), the state will pay Bluegrass up to $56.75 million for the period of Nov. 1, 2006, through June 30, 2007. The amount includes the complete staffing, management and administration of the facility, similar to the arrangement between the cabinet and Bluegrass for the operation of Eastern State Hospital. Included in the amount is a $200,000 monthly management fee. (The contract with Liberty Healthcare, which expires Oct. 31, covers only the management and around one-third of the staff of Oakwood.) Bluegrass and the state may choose to renew the agreement for one year following the contract’s expiration in June 2007, then may renew every two years for an indefinite period of time.

During the transition, which runs from today (Sept. 12, 2006) through Oct. 31, 2006, Bluegrass will be reimbursed for actual costs and expenses plus an 8 percent administrative fee.

“The Bluegrass Regional Mental Health-Mental Retardation Board, Inc., is excited to have the opportunity to participate in an endeavor to join with the employees at Oakwood, the family members of the residents, and all other interested parties to have this facility be something that all Kentuckians can take pride in,” said Joseph A. Toy, president/CEO of Bluegrass.

Bluegrass has a proven reputation of excellence in caring for those with mental retardation, through both outpatient and community living services, serving more than 2,500 individuals with mental retardation and developmental disabilities annually.
At Eastern State, Bluegrass successfully transitioned state employees to its payroll and currently manages a state facility with a strong reputation for providing quality services. Over the past 40 years, Bluegrass has developed a wide network of resources at its disposal.

"We hope that this partnership will offer peace of mind to Oakwood residents' family members, staff and others concerned about Oakwood," said Secretary Birdwhistell. “We are not closing Oakwood. To the contrary, this partnership will serve to strengthen the facility.”

Oakwood employees in good standing will be offered a job with Bluegrass, with at least equal base pay and comparable, if not better, benefits. They will also remain in the state retirement system, with full retirement credit.

Although the agreement will result in what is considered a layoff under the state personnel system, all staff not under investigation for acts of abuse or neglect may choose to transition from the merit system to employment with Bluegrass.

Bluegrass personnel staff members are available on the Oakwood campus, located in Somerset, to inform employees about the benefits package and answer any questions. Representatives from CHFS’ human resources office and the Personnel Cabinet also will be at Oakwood to answer questions, explain employees’  transition to Bluegrass, and help those with merit status who wish to consider a transfer to a vacant state position. (However, the state has a limited number of vacancies in the region.)

"We share with Bluegrass the desire to help employees consider their options and make fully informed decisions about their future," said Secretary Birdwhistell. "To that end, we are dedicating significant resources to assist employees with the transition. Both Cabinet and Bluegrass staff are available to answer all questions and address any concerns employees may have."

The parents’ group, the Oakwood task force and the HB 144 Commission had input into the agreement.

Secretary Birdwhistell and his senior aides recently traveled to Washington, D.C., to brief Centers for Medicare and Medicaid (CMS) and Department of Justice (DOJ) officials on the agreement. The major management restructuring will be an integral part of the response to CMS’ request for information about how issues at Oakwood are being addressed. The response is due to CMS on Sept. 22.

Oakwood currently has 253 residents.



Last Updated 9/12/2006