Fairview plans psychiatric hospital at Bethesda site

Fairview Health Services is planning to tear down Bethesda Hospital in St. Paul and replace it with a 144-bed psychiatric and substance-abuse hospital if the project gains necessary support from the Minnesota Legislature.

The health system announced on Thursday that the facility would be operated in partnership with Acadia Healthcare, which is one of the nation's largest behavioral health providers but settled a controversial Medicaid fraud case with the Justice Department in 2019.

The construction plan represents a more than $50 million investment in mental health care and addresses a statewide psychiatric bed shortage, said James Hereford, Fairview's chief executive. He added that Fairview is the largest mental health provider in the region and is joining with a national company in Acadia with a reputation for good clinical outcomes.

"Improving access to and the quality of acute, inpatient mental health and addiction care is an important part of that commitment," he said.

Bethesda is the preferred site, but others in the east metro have been considered. The project would be the latest in a series of changes in east metro care by Fairview, including the reduction of Bethesda as a long-term acute care hospital in early 2020 followed by its conversion to one of the nation's only standalone COVID-19 hospitals early in the pandemic. It was closed as a hospital in fall 2020 and converted under a lease with Ramsey County into a homeless shelter. A Fairview spokesperson said that the county has opted not to continue that lease after May 2022.

Fairview also shut down general hospital operations at St. Joseph's Hospital in St. Paul, but is providing inpatient mental health care at the downtown facility through June 2022. Construction and opening of the new hospital would take much more time, leaving a gap in inpatient mental health care if Fairview shut down operations at St. Joseph's on that schedule.

The new site would expand adult and geriatric psychiatric care at the same time as Children's Minnesota has planned to open a pediatric psychiatric care unit at United Hospital in St. Paul. Health care providers have reported increased and more severe cases of depression, anxiety and other mental disorders during the pandemic.

The first public notice of the project came in November when Fairview — a clinical arm of the M Health Fairview system — wrote to the Minnesota Department of Health and asked for a public interest review of the project. New hospital construction is blocked under state law without exemptions from the Legislature, which often leans on the health department's review and recommendation.

Lawmakers have generally favored inpatient psychiatric expansion, voting earlier this year to allow PrairieCare in Brooklyn Park and Regions Hospital in St. Paul to add more mental health beds.

Republican lawmakers were at odds this week with Mayo Clinic, threatening in a letter to deny state funding to the Rochester health system or any system with restrictive COVID-19 worker vaccine mandates. Emails to lawmakers were not returned Thursday about whether Fairview's vaccine mandate was restrictive and could disrupt legislative support for the expansion.

The Fairview announcement raised concerns for some mental health advocates, as it would bring in a publicly traded company with some controversies. The U.S. Department of Justice in 2019 reached a $17 million settlement with Acadia over claims of fraudulent billing to Medicaid.

"While we desperately need more inpatient psychiatric units, NAMI Minnesota is concerned that this hospital will only provide psychiatric care and will not have an emergency room" that ensures open access to care, said Sue Abderholden, executive director of NAMI Minnesota. "At this point in the development of our mental health system, we are advocating for more integrated care where psychiatry is a part of a regular hospital, not as a standalone."

Abderholden added that Medicaid typically doesn't pay for care in standalone psychiatric hospitals, which could limit access for poor and disabled people who need it. However, a Fairview spokesperson said discussion with state and federal regulators is underway to address funding inequities and that patients regardless of payer type would receive care at the new hospital.