Colorado’s behavioral health commissioner is finding hope despite facing funding headwinds

When Dannette Smith was appointed commissioner of Colorado’s Behavioral Health Administration, she had three goals: build a solid organizational foundation for policy, communications and finances, recruit “the best” talent; and set the organization up for sustainable, long-term success.  

Just over one year into the job, Smith said she feels like all the pieces are coming together. 

The Vail Daily talked with Smith about the future of the Behavioral Health Administration, how uncertainties around federal funding are impacting services and the role the state can play in filling service gaps on the Western Slope. 

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A new model for behavioral health in Colorado

Colorado’s legislature created the Behavioral Health Administration in 2022 within the Department of Human Services to streamline the state’s behavioral health and addiction services. Gov. Jared Polis appointed Smith to become its second commissioner in March 2024, following Morgan Medlock. 

Medlock, who was let go from the position in April 2023, has filed a federal lawsuit against the state, claiming that she was wrongly terminated due to her race, according to The Denver Post. 

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The administration has launched mobile behavioral health units in rural communities, a program offering six free therapy sessions to youth, a care model to provide culturally-responsive care to tribes, programs to support the behavioral health workforce and more.  

The vision for the administration’s future is rooted in a new statewide model for behavioral health services, which the Behavioral Health Administration is set to launch this summer, Smith said. 

The model will create four regional Behavioral Health Administrative Service Organizations aimed at increasing community access to services and helping providers address local service gaps. Rocky Mountain Health Plans will lead the organization in northwest Colorado, while Signal Behavioral Health will lead the other three regions.  

Smith said the model will “ensure that people in those various regions have a more community-based approach to how they access behavioral health.” 

There are three primary things that Smith believes the regional organizations can accomplish. 

First, it will help provide ease of access to services.  

“The most important goal for me is that people feel on day one they have access and they know where to go,” Smith said.

The second thing these organizations will do is help support providers in providing the level of service needed in the region.

And third, the organizations will help identify gaps in service, so that the state agency, its partners and community providers are creating the necessary services over time, Smith said. 

The administration and regional organizations will not be able to create a comprehensive, “big” system all at once, she added. 

“We’re going to take a phased approach and make sure that, yes, it’s a large, new model, but we’re going to take a sliver of it and implement it as we go so that we can course correct as we’re doing the implementation,” Smith said. “And we’re making sure that the model is indeed meeting the needs of that particular region and Coloradans throughout the state.” 

Battling budgetary constraints

With a tight state budget and federal uncertainty, funding may be one of the primary challenges in addressing these regional gaps.   

“Funding is very fluid right now and at risk,” Smith said.

As these new Behavioral Health Administrative Service Organizations identify gaps, there are going to have to be “difficult discussions” around how communities can meet these needs, Smith said. 

“With no money, but more need, we’re going to have to figure out how we collaboratively work very differently,” Smith said.

This will include conversations with other state agencies to find ways to collaborate and address challenges, she said. 

Part of the current challenge comes from uncertainty at the federal level. 

“The world of behavioral health right now is going to be shifting regardless of whether we want it or not. We’re seeing it at the federal level,” Smith said. 

In March, Colorado’s Behavioral Health Administration was notified that it would lose nearly $23 million in funding from the mental health block grants in the COVID-era American Rescue Plan Act. 

The notification came from the federal government and indicated that the termination was an effort to comply with President Donald Trump’s cost efficiency initiative under the newly created Department of Government Efficiency, according to the state Behavioral Health Administration. The notice indicated that because the COVID crisis was over, the grant was no longer needed. 

These dollars were going to around 50 providers that were providing community-level behavioral health support, Smith said. 

While these funds were set to expire in September, the sudden loss with “no warning” put the Behavioral Health Administration in a holding pattern, she added.  

A coalition of states, including Colorado, sued the administration over the grant cancellations, claiming it was abrupt and unlawful. In total, Colorado is set to lose $229 million in health services funding from the cuts made by the U.S. Department of Health and Human Services. A federal judge in Rhode Island ordered that the funding be temporarily reinstated in April, according to the New York Times.    

The temporary restraining order issued by that court has allowed Colorado behavioral health providers to resume services, Smith said. However, a lot remains up in the air about potential impacts as the case plays out. 

“We are playing a wait-and-see game,” Smith said. “Internally, we are doing some preparatory work to make sure that we understand those cuts, but things are very fluid from day to day and so I don’t know what it means. As long as we have the funding, we are committed to providing services.” 

Additionally, the state agency is watching closely as Republicans in the U.S. Congress contemplate making significant cuts to federal Medicaid funding. 

The Behavioral Health Administration has been working closely with Colorado’s Department of Health Care Policy and Financing to provide behavioral health access and quality regardless of insurance status. 

“The kind of work that (the Colorado Department of Health Care Policy and Financing) is doing definitely supports people staying healthy, being able to address their social determinants of health and other areas of their life,” Smith said. “And those things are looking like they could walk away, and we don’t want that. But we are keeping our eyes on it and looking at how we can better support.”

Given the fluidity, all the state administration can do is execute on “good planning,” Smith said.  

“What we’re trying to do here at (the Behavioral Health Administration) is to make sure that we have a plan, and that we can execute on that plan,” Smith said. “And if things tend to get in flux or very fluid, that we own that and decide what we feel we can do around the behavioral health space. I’ve got big plans, but I may end up having to drill it down to something very small, core services.”

What can the state do to address behavioral health service gaps?  

These challenges make it difficult to address Colorado’s main challenge when it comes to behavioral health: accessibility. 

“Right now, given the budget crunch, we can’t offer money, but what we can do is offer technical support,” Smith said. “The state is here to provide guidance and support.” 

In northwest Colorado, accessibility concerns rose with the March closure of Mind Springs Health’s West Springs Hospital in Grand Junction. As the only inpatient psychiatric hospital between Salt Lake City and Denver, its closure left a gap in service. While Vail Health will help fill this gap in May with the opening the Precourt Healing Center, a 28-bed inpatient facility, in Edwards, there are still gaps across the Western Slope when it comes to behavioral health access. 

This spring, Smith attended a community meeting in Grand Junction to discuss the closure of West Springs and the community’s needs. As the community discussed what options it had to meet service needs — options like creating a crisis stabilization unit and acute treatment unit — the state’s capabilities are limited to providing technical support.

“We stand ready to help as best we can to get that up and running if that is what the community chooses to do,” Smith said.

Despite shifts and challenges, Smith said conversations like the one in Grand Junction show that there is hope and people willing to work together toward solutions. 

“I heard people willing to take risks, not only with their individual agencies, but they were looking for opportunities to partner with people in a different way,” Smith said. “The good news about crisis is that it makes you have to work together and think together. And that’s what I heard when I was in Grand Junction.”