BEFORE THE CORPORATION COMMISSION OF OKLAHOMA
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1 BEFORE THE CORPORATION COMMISSION OF OKLAHOMA IN THE MATTER OF THE APPLICATION OF ) RED ROCK BEHAVIORAL HEALTH SERVICES ) FOR A TEMPORARY WAIVER OF OKLAHOMA ) Cause No. PUD ADMINISTRATIVE CODE 165:59-7-6(h) AND ) FOR A TEMPORARY EXTENSION OF ) TELEMEDICINE FUNDING FROM THE ) OKLAHOMA UNIVERSAL SERVICE FUND. ) F~UG~2~ 0 HEARING: May 14, 2014 at 9:00 a.m. COURR,;oCLERK'S OFFICE. OKC 2101 North Lincoln Boulevard, Oklahoma City, Ok?~om~~~g~'SSION Before James Myles, Administrative Law Judge APPEARANCES: John W. Gray, Jr., Attorney representing AT&T Corp. and Red Rock Behavioral Health Services Dominic D. Williams, Assistant General Counsel representing Public Utility Division, Oklahoma Corporation Commission REPORT OF THE ADMINISTRATIVE LAW JUDGE Upon thorough review of all the evidence and other filings in this cause, and review of the arguments of counsel presented at the hearing on the merits, the undersigned Administrative Law Judge ("ALJ") submits this ("ALJ Report") to the Corporation Commission of Oklahoma ("Commission"). Included in this AU Report are the ALJ's recommended findings of fact and conclusions of law. I. SUMMARY OF THE RECOMMENDATION The recommendation of the ALJ is that the Commission should deny the request of Red Rock Behavioral Health Services ("Red Rock") for a temporary waiver of OAC 165:59-7-6(h) and the requested six month extension of funding from the Oklahoma Universal Services Fund ("OUSF") at the requested 2013 funding level.
2 Cause No. PUD ; Red Rock Behavioral Health Page 2 of 13 Report ofthe Administrative Law Judge II. PROCEDURAL HISTORY On March 12, 2014, Red Rock filed its Application requesting a temporary waiver of OAC 165:59-7-6(h) and a six month extension of funding at the 2013 approved funding level from the OUSF. On March 28, 2014, Red Rock filed its Motion for Procedural Schedule as well as a Notice of Hearing for the Motion. The Motion was granted by the Commission by Order No , issued on April 22, 2014, which set the Application for hearing on the merits before the ALJ on May 14, 2014, at 9:00 a.m. On April 14, 2014, the prefiled testimony of Vema Foust on behalf of Red Rock was filed. On April 25, 2014, the prefiled testimony of Marci White on behalf of the Administrator of the OUSF 1 was filed. The hearing on the merits was held before the ALJ on May 14, 2014, at 9:00 a.m. At the conclusion of the hearing, the AU admitted all pleadings into the record and stated that he would take the cause under advisement. III. SUMMARY OF THE EVIDENCE A. Red Rock Behavioral Health Vema Foust In her pre-filed testimony, Ms. Foust, Chief Executive Officer of Red Rock Behavioral Health Services, first stated that Red Rock is a Community Mental Health Center, that it is certified by the Oklahoma State Department of Mental Health and Substance Abuse Services I The Administrator of the OUSF is the Public Utility Division of the Commission per OAC 165: (a). References in this AU Report to the Public Utility Division or Staff should be considered to be synonymous with the Administrator of the OUSF.
3 Cause No. PUD ; Red Rock Behavioral Health Page 3 of 13 ("ODMHSAS"), and that it contracts with that state agency to provide mental health services to needy Oklahomans. She stated that Red Rock was founded in 1974 and has been in continuous operation for 40 years, that it also provides service to Medicaid eligible consumers, and that it has experienced significant growth over the years and now has almost 500 employees and 23 Locations. She explained that Red Rock provides a wide array of behavioral health services to adults and youth, that Red Rock's primary clients are individuals who are seriously mentally ill or youth that have a severe emotional disturbance, that the State of Oklahoma has nearly the highest per capita percentage of severe mental illness in the United States, and that more than 70% of adult Oklahomans with mental illness receive no treatment, mostly due to a lack of access to help. She testified that about half of Red Rock's funding is through Oklahoma's Department of Mental Health and Substance Abuse Services, with about half corning through Medicaid billing and a small amount from private insurance. She stated that Red Rock serves about 4,500 clients per month. Ms. Foust then testified that Red Rock had sought OUSF recertification in accordance with Commission rules and that they had been approved for funding, but at a reduced bandwidth levels from Because of this, Red Rock filed this case to request temporary relief from the new OUSF guidelines regarding bandwidth levels that will be funded. Specifically, Red Rock requests that funding levels be continued at the 2013 Level, until such time as federal funding can be secured, or through June 30, 2013, whichever comes first, to alleviate the negative financial impact ofthe OUSF changes to Red Rock.
4 Cause No. PUD ; Red Rock Behavioral Health Page 4 of 13 Report ofthe Administrative Law Judge She further testified that when Red Rock became aware of the possible reduced OUSF funding, it applied for supplemental funding through the federal Health Connect Fund, beginning those efforts in August of However, this has been delayed at the federal level Ms. Foust testified that the relief Red Rock requests in this cause is necessary due to the unaffordable financial burden placed on Red Rock by the lack of funding it has as a result of the delays in obtaining funding from the Health Connect Fund program. She stated that the delays were not caused by Red Rock, but were the result of issues with the provider of the funding and that Red Rock had made every effort possible to obtain the funding prior to January 1, Further, she stated there would be no double recovery if the relief were granted and that if not granted the relief, that Red Rock may be required to reduce services. Ms. Foust then testified that approval of the application would be in the public interest because Red Rock contracts with the ODMHSAS to provide services to the indigent adult and youth seriously mentally ill population, that a reduction of mental health services to consumers could be devastating to this population, and that telemedicine services are critical to providing mental health services in Oklahoma. Due to lack of psychiatrists in Oklahoma and especially in rural Oklahoma, telemedicine offers the only alternative to serve much of the mentally ill population. Finally, Ms. Foust, in response to the question of what the total amount of funding Red Rock would receive during the six month period if the application was granted, testified that she estimated that Red Rock would receive roughly $304,612 for January and February, assuming Red Rock successfully is awarded HCF funding beginning March 8, but that if not, the cost through June 30 would be an estimated $913,836.
5 Cause No. PUD ; Red Rock Behavioral Health Page 5 of 13 B. Administrator of the OUSF (Public Utility Division of the Commission) Marci L. White In her pre-filed testimony, Ms. Marci L. White, Sr. Technology Analyst of the Commission's Public Utility Division stated she was responsible for the review of the technical components of causes filed by telecommunications providers on behalf of schools, libraries and healthcare entities for reimbursement from the OUSF and that she also does on site visits to schools to determine their numbers of eligible building credits as well as to healthcare entities to evaluate their bandwidth requirement, connections and ensure they meet eligibility criteria. Further, Ms. White stated that she is responsible for the annual telemedicine recertification and that she has evaluated and made eligibility recommendations on approximately 500 funding requests from schools, libraries and telemedicine facilities and consulted on many additional causes. Ms. White testified that PUD agrees that Red Rock is a SOl(c) not-for-profit organization, that PUD has verified with ODMHSAS that at the time of 2013 Telemedicine recertification, 13 Red Rock facilities were certified as Community Mental Health Centers ("CMHC") in Oklahoma and that Red Rock also had 2 Community Based Structured Crisis Centers (!lcbscc") and 6 facilities that were not certified as a CMHC, CBSCC or Community Comprehensive Addiction Recovery Center (!lccarc"). She further testified that PUD agreed that Southwestern Bell Telephone dba AT&T Oklahoma and SBC Long Distance have provided Special Universal Services to Red Rock in the past, but that at this time, it appears that many ofthe facilities are served by AT&T Corp and that AT&T Corp. has not sought reimbursement from the OUSF for telemedicine service to the
6 Cause No. PUD ; Red Rock Behavioral Health Page 6 of 13 majority of the Red Rock facilities. She explained that at the time AT&T Corp. seeks reimbursement, the eligibility and bandwidth needs of each facility will be further reviewed and referred to Exhibit A, filed with the testimony which is a complete list of Red Rock facilities that applied for recertification and the information obtained by PUD staffthrough that process. Ms. White then testified that PUD disagrees that the availability of funding from the Healthcare Connect Fund was the basis for changes to the bandwidth that would be funded from the OUSF effective January 1, Instead, consistent with 17 O.S (C)(2), the recommended OUSF funding was based upon a review of the telemedicine, clinical and health consultation services that each entity's equipment and service applications require. She stated that the funding level from the OUSF should not be affected based upon the receipt of funding by Red Rock from the Healthcare Connect Fund and that although the amount of OUSF funding will eventually be reduced to offset any amounts received from the Healthcare Connect Fund, until such time as that funding becomes available, the OUSF will continue to fund the entire amount of bandwidth determined to be appropriate during recertification. She then stated that the delay in funding from the Healthcare Connect Fund should not be a basis for continuing to fund Red Rock facilities at the 2013 levels beyond December 31, 2013 saying that the OUSF funds bandwidth to the extent that it is deemed necessary to meet the statutory requirements as set forth in 17 O.S (C)(2) and that the OUSF requires that eligible entities seek additional funding and only considers funding that is approved for eligible services. She continued by testifying that any services received through the Healthcare Connect Fund must qualify as eligible services and that funding of excess bandwidth creates a waste of OUSF dollars.
7 Cause No. PUD ; Red Rock Behavioral Health Page 7 of 13 Ms. White disagreed with the proposition that that Red Rock's ability to continue to meet the needs of Oklahomans in need of mental health services is hampered by lack of funding from the OUSF saying that although it might be difficult for Red Rock to meet its program objectives because of internal decisions Red Rock management has made, the OUSF will continue to fund sufficient bandwidth to support the telemedicine equipment and service applications that were reported to be in use by Red Rock during the recertification process. Further, she testified that the purpose of the OUSF is to support the telemedicine equipment and service applications, not ensure financial fortitude for the end user. Any additional equipment and services that have been installed subsequent to recertification should be identified when application is made for funding from the OUSF by AT&T Corp. Ms. White further testified that that the public interest would not be served by the Commission granting Red Rock a temporary waiver of OAC 165:59-7-6(h) and a six month extension of funding from the OUSF. She testified further that sufficient bandwidth was approved for the continued OUSF funding through telemedicine recertification and that extending funding for excessive bandwidth will cause all telecommunications customers in Oklahoma, who contribute to the OUSF, to be harmed by the additional funding requirements. Ms. White concluded her testimony stating that PUD's recommendation in this cause was that, consistent with 17 O.S (C)(2), only the bandwidth found to be sufficient for providing such telemedicine, clinical, and health consultation services as the entity's telemedicine equipment and service applications require be funded from the OUSF beyond December 31, Failure to report new and additional technologies cannot be addressed by this cause and would need to be requested in a new application from AT&T Corp.
8 Cause No. pun ; Red Rock Behavioral Health Page 8 of 13 IV. ANALYSIS The OUSF Statutory Scheme The relevant statutes to this cause are outlined below. The OUSF was created by the Oklahoma Legislature within the Oklahoma Telecommunications Act of 1997,2 at 17 O.S (A).3 Its purpose is expressed by the legislature "to promote and ensure the availability of primary universal services, at rates that are reasonable and affordable and special universal services, and to provide for reasonably comparable services at affordable rates in rural areas as in urban areas.,,4 (emphasis added) facility" as: 17 O.S (26) defines "Special universal services" as:... the telecommunications services supported by the OUSF which are furnished to public schools, public libraries, not-for-profit hospitals and county seats as provided for in Section ofthis title. Further, 17 O.S (C)(2) states: Each not-for-profit hospital, county health department, city-county health department, not-for-profit mental health and substance abuse facility as defined in Section ofthis title and federally qualified health center in this state shall, upon written request, receive, free of charge, one telecommunications line or wireless connection sufficient for providing such telemedicine, clinical and health consultation services as the entity's telemedicine equipment and service applications require. The telecommunications carrier shall be entitled to reimbursement from the Oklahoma Universal Service Fund for providing the line or connection. In no case, however, shall reimbursement from the fund be made for an Internet subscriber fee or charges incurred as a result of services accessed via the Internet. (emphasis added) 17 O.S (17) defines a "Not-for-profit mental health and substance abuse... a facility operated by the Department of Mental Health and Substance Abuse Services or a facility certified by the Department of Mental Health and Substance Abuse Services as a Community Mental Health Care Center, a Community-Based 2 17 O.S. 139.l01 through 17 O.S. 139.l09 ("the Act") 3 "A. There is hereby created within the Corporation Commission the 'Oklahoma Universal Service Fund' (OUSF)." 4 17 O.S (B)
9 Cause No. PUD ; Red Rock Behavioral Health Page 9 of 13 Report ofthe Administrative Law Judge Structured Crisis Center or a Community Comprehensive Addiction Recovery Center. Finally, 17 O.S (E) grants the Commission certain discretion in reviewing applications for Special universal services. This section of the statute provides: The Corporation Commission shall have authority to investigate and modify or reject in whole or part a Special Universal Services request under subsection C of this section if the request does not meet the specified criteria, if the Corporation Commission's investigation determines that the entity has not provided sufficient justification for the requested services, or if the Corporation Commission determines that granting the request is not in the public interest. (emphasis added) Red Rock is an entity elhdble for OUSF funding It was not disputed that Red Rock is an entity eligible for OUSF funding. In fact, Red Rock has been receiving funding through Red Rock, through the recertification process recently established, was approved for funding going forward, but not at the level previously granted. This because the Administrator had determined that Red Rock had been being funded at levels over and above the bandwidth that currently was in use, or capable of being used. Administrator's Recommended Denial of the Application Red Rock has requested Ita temporary waiver of OAC 165:59 and a six month extension of funding from the OUSF." (Application, ~ 9) In addition, it has stated that it is "requesting temporary relief from the new OUSF guidelines regarding bandwidth levels that will be funded. Specifically, Red Rock requests that funding levels be continued at the 2013 Level, until such time as federal funding can be secured, or through June 30, 2013, whichever comes first, to alleviate the negative financial impact of the OUSF changes to Red Rock." ( Testimony of Vema Foust, P. 3, Lns )
10 Cause No. PUD ; Red Rock Behavioral Health Page 10 of 13 Red Rock has requested that the Commission waive its rules in order to grant it an extension of OUSF statutory funding. Funding is not provided pursuant to the Commission's rules. The Commission's Chapter 59 rules implement the statute and are to be read in context with the statute. (OAC 165:59-1-3) The funding that is being sought by Red Rock is in excess ofthat which is allowed by the statute. 17 O. S ( C)(2) provides that the special universal services allowed to an eligible entity are to be provided n.. as the entity's telemedicine equipment and service applications require." In other words, at the bandwidth that the entity can utilize, no more. The Commission cannot waive its rules to allow funding at an amount greater than the statute allows. This is the reasoning used by the Administrator to deny the funding pursuant to its authority under 17 O.S (E). That portion of the statute provides that the Commission can deny a funding request n if the request does not meet the specified criteria," (e.g., the proper bandwidth). The Public Interest Among other things, the OUSF was created to provide for special universal services. To paraphrase, as relevant to this case, Special universal services are defined as one free telecommunications line sufficient to allow the eligible entity to provide telemedicine services at the size that the entity's equipment and service applications require. Red Rock argues that it is vital to them to have the funding extension they seek to keep providing the level of service to the community that it currently does and for that reason, the request is in the public interest. However, this stretches and misinterprets the public interest portion ofthe statute.
11 Cause No. PUD ; Red Rock Behavioral Health Page 11 of 13 It is clear that Red Rock's services serve the public interest. Red Rock is well known in the community and serves the community well. But, the public interest test that is placed in the statute is not that of whether the entity deserves the funds it seeks from a public interest standpoint. If it was, it would be easy for me to recommend that Red Rock is deserving of the funds. The public interest test within the statute is for the Commission to detennine if an entity seeking funds should NOT be entitled to what they seek. Here is such a case. Red Rock has been receiving funds from the OUSF in Per the Commission rules, it sought recertification. In its investigation to detennine whether Red Rock should be recertified, the Administrator detennined that Red Rock did not have sufficient equipment to utilize the amount of bandwidth that it had been receiving credit for. Therefore, it denied recertification for any amounts over and above that allowed by statute. Red Rock then argued that those amounts were justified by the public interest. However, the Administrator detennined that, in essence, if Redrock were to continue to receive the funds in 2014 at the 2013 levels it would be "overfunded". This would cause a drain on the OUSF which definitely would not be in the public interest for two reasons. First, Red Rock would be granted more money than it was entitled to. Second, this situation would cause the contributors to the OUSF to have to "over contribute" more than they would be required to but for the overfunding granted Red Rock. The OUSF was created to provide special universal services for the use of the eligible entities, not to provide an additional funding source for those entities. It is not in the public interest to disregard a statute's specific requirements in order to fund public programs.
12 Cause No. PUD ; Red Rock Behavioral Health Page 12 of 13 Conclusion Therefore, based upon all of the above, I recommend that the Commission adopt the following Findings of Fact and Conclusions of Law and accept the Recommendation that follows. V. FINDINGS OF FACT AND CONCLUSIONS OF LAW 1. THE COMMISSION FINDS that it has jurisdiction in this cause pursuant to Article IX, Section 18 of the Oklahoma Constitution and 17 O.S , et seq. 2. THE COMMISSION FURTHER FINDS that notice was proper in the cause and in accordance with Commission rules and Oklahoma law. 3. THE COMMISSION FURTHER FINDS that 17 O.S (E) grants the Commission authority to investigate and modify or reject in whole or part requests for Special Universal Services. The Commission can modify or reject requests if the request does not meet the criteria specified in the statute. In addition, it can modify or reject a request if it determines that the entity has not provided sufficient justification for the requested services, or if the Commission determines that granting the request is not in the public interest. 4. THE COMMISSION FURTHER FINDS that the request of Red Rock does not meet the specified criteria of the OUSF statute, in that it asks for funding over and above that which would fund "one telecommunications line or wireless connection sufficient for providing such telemedicine, clinical and health consultation services as the entity's telemedicine equipment and service applications require." (17 O.S (C)(2)) 5. THE COMMISSION FURTHER FINDS that it is not in the public interest to provide OUSF support to Red Rock in an amount that exceeds the bandwidth that it can utilize.
13 Cause No. PUD ; Red Rock Behavioral Health Page 13 of THE COMMISSION FURTHER FINDS that the Application of Red Rock for a waiver of OAC 165:59 and the additional funding it would receive as requested should be denied. VI. RECOMMENDATION I recommend that the Commission deny the request of Red Rock Behavioral Health Services for a temporary waiver of OAC 165:59-7-6(h) and the requested six month extension of funding from the Oklahoma Universal Services Fund. Respectfully submitted this 12th day ofaugust, 2014.
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