CODE OF VIRGINIA

PERFORMANCE CONTRACT FOR MENTAL HEALTH, DEVELOPMENTAL, AND SUBSTANCE ABUSE
SERVICES (§ 37.2-508)

A. The Department shall develop and initiate negotiation of the performance
contracts through which it provides funds to community services boards to
accomplish the purposes set forth in this chapter. In the case of operating
boards, the Department may, notwithstanding any provision of law to the
contrary, disburse state and federal funds appropriated to it for mental health,
developmental, or substance abuse services directly to the operating board, when
that operating board is authorized by the governing body of each city or county
that established it to receive such funds. Six months prior to the end of an
existing contract or, if no contract exists, six months prior to the beginning
of each fiscal year, the Department shall make available to the public the
standard performance contract form that it intends to use as the performance
contract for that fiscal year and solicit public comments for a period of 60
days. Such contracts shall be for a fixed term and shall provide for annual
renewal by the Board if the term exceeds one year.

B. Any community services board may apply for the assistance provided in this
chapter by submitting to the Department its proposed performance contract
together with (i) the approval of its board of directors for operating and
administrative policy boards or the comments of the local government
department’s policy-advisory board and (ii) the approval of the contract
by formal vote of the governing body of each city or county that established it.
The community services board shall make its proposed performance contract
available for public review and solicit public comments for a period of 30 days
prior to submitting its proposed contract for the approval of its board of
directors for operating and administrative policy boards or the comments of the
local government department’s policy-advisory board. To avoid disruptions
in service continuity and allow sufficient time to complete public review and
comment about the contract and negotiation and approval of the contract, the
Department may provide semi-monthly payments of state-controlled funds to the
community services board. If the governing body of each city or county does not
approve the proposed performance contract by September 30 of each year, the
performance contract shall be deemed approved or renewed.

C. The performance contract shall (i) delineate the responsibilities of the
Department and the community services board; (ii) specify conditions that must
be met for the receipt of state-controlled funds; (iii) identify the groups of
individuals to be served with state-controlled funds; (iv) contain specific
outcome measures for individuals receiving services, provider performance
measures, satisfaction measures for individuals receiving services, and
participation and involvement measures for individuals receiving services and
their family members; (v) contain mechanisms that have been identified or
developed jointly by the Department and community services board and that will
be employed collaboratively by the community services board and the state
hospital to manage the utilization of state hospital beds; (vi) establish an
enforcement mechanism, should a community services board fail to be in
substantial compliance with its performance contract, including notice and
appeal processes and provisions for remediation, withholding or reducing funds,
methods of repayment of funds, and the Department’s exercise of the
provisions of subsection E; and (vii) include reporting requirements and
information about revenues, costs, services, and individuals receiving services
displayed in a consistent, comparable format determined by the Department.The
Department may provide for performance monitoring in order to determine whether
the community services boards are in substantial compliance with their
performance contracts.

D. No community services board shall be eligible to receive state-controlled
funds for mental health, developmental, or substance abuse services after
September 30 of each year unless (i) its performance contract has been approved
or renewed by the governing body of each city or county that established it and
by the Department; (ii) it provides service, cost, and revenue data and
information and aggregate and individual data and information about individuals
receiving services, notwithstanding the provisions of § 37.2-400 or any
regulations adopted thereunder, to the Department in the format prescribed by
the Department; and (iii) it uses standardized cost accounting and financial
management practices approved by the Department.

E. If, after unsuccessful use of a remediation process described in the
performance contract, a community services board remains in substantial
noncompliance with its performance contract with the Department, the Department
may, after affording the community services board an adequate opportunity to use
the appeal process described in the performance contract, terminate all or a
portion of the contract. Using the state-controlled resources associated with
that contract, the Department, after consulting with the governing body of each
city or county that established the board, may negotiate a performance contract
with another board, a behavioral health authority, or a private nonprofit or
for-profit organization or organizations to obtain services that were the
subject of the terminated performance contract.

HISTORY: 1968, c. 477, § 37.1-198; 1970, c. 346; 1972, c. 498; 1976, c. 671;
1980, c. 582; 1986, c. 176; 1998, c. 680; 2005, cc. 75, 716; 2012, cc. 476, 507,
805, 836.