ANCHORAGE (KTUU) — Alaska Department of Health and Social Services Commissioner Adam Crum announced on Monday that the second phase of the state's contract with Wellpath Recovery Solutions for long-term management of Alaska Psychiatric Institute has been removed and will be opened up to bidding pending the completion of a psychiatric hospital feasibility study.
The first phase of the contract for management in the short-term remains in place at a cost of $1 million per month and has been extended through Dec. 31, 2019.
Phase Two, which was poised to begin in September, was expected to cost the state $225 million over a five-year period.
The change to the contract stems in part from a lawsuit filed by the Alaska State Employees Association in State Superior Court last week to halt the Wellpath contract.
ASEA also requested a temporary restraining order to prevent Wellpath from completing what it referred to as a "transition phase" at the hospital, including staff selection, orientation, integration and training.
At a press availability Monday afternoon, Crum said the decision to alter the Wellpath contract was made around three weeks ago, prior to the filing of the ASEA lawsuit. He says that decision however was made public during a court hearing regarding the ASEA restraining order on Monday.
DHSS says the short-term contract with Wellpath was extended to allow for additional time to complete a psychiatric hospital feasibility study which is currently being conducted by Massachusetts-based Public Consulting Group.
The press release states that "DHSS is taking this step not due to any violations of the procurement process but rather so Alaskans have trust in their governments and know that decisions are being made in the best interest of the safety of our patients and staff."
In a separate release, DHSS said that Matt Dammeyer would be stepping in as CEO of API. Dammeyer previously worked as the COO at Central Peninsula Hospital in Soldnotna.
This story will be updated.