Providers say they face cuts amid $43 million Oklahoma mental health department shortfall

OKLAHOMA CITY – The state’s mental health commissioner on Tuesday said the agency is dealing with a $43 million shortfall, which some say has resulted in cuts to providers.

Commissioner Allie Friesen spoke with providers who contract with the Oklahoma State Department of Mental Health and Substance Abuse Services during  an emotional meeting where providers expressed frustration with the sudden cuts.

Oklahoma Department of Mental Health and Substance Abuse Services Commissioner Allie Friesen speaks to news reporters after a Contingency Review Board meeting in October 2024 at the state Capitol in Oklahoma City. EMMA MURPHY | OKLAHOMA VOICE

Officials originally believed the shortfall was $63.7 million, she told providers.

“So, the $43 million is the number,” Friesen said during the meeting. “It’s a fun, super fun dance to try to manage the Legislature and the executive branch. They hate each other, and I can’t win.”

She said she doesn’t have the tolerance for politics getting in the way of patient care.

“If we can remove the political egos from the situation and focus on those that need our care, then we’ll get it figured out,” Friesen said. “So that’s what I am going to be advocating for, and that might mean I get fired.”

A spokesperson for the agency, Kelsey Davis, later said the exact amount of the shortfall is under investigation.

Gov. Kevin Stitt’s office did not respond to a request for comment.

Friesen, who was appointed by Stitt in January 2024, said the agency will likely ask for a larger budget request for fiscal year 2026 than it has ever had, but it is unlikely it will get it.

Oklahoma Voice also asked the agency for more specifics about the cuts following the meeting.

“At this time, no payments have been canceled,” Friesen said in a statement. “An email was sent to providers regarding potential changes to value-based payments, but we continue to evaluate the best path forward.”

Janet Cizek is CEO of Community Treatment Integrations with offices in Tulsa and Bartlesville and attended the meeting. Her organization specializes in treating substance abuse disorders and cares for about 8,000 clients a year.

It received value-based payments for good outcomes, such as a client’s sobriety or maintaining employment. Value-based care payments reward providers who give high-quality care that improve health care outcomes.

On March 18, Cizek said providers received an email saying the contract had been terminated retroactively to Oct.1, meaning no reimbursement for some services already provided. Without the services, some may go to jail and others may die, she said.

“Claiming that no contracts have been cut is disingenuous at best,” she said.

Last month, Stitt called for an audit of the agency after Friesen brought the financial issues to his attention.

Legislative leaders said the Legislative Office of Fiscal Transparency will determine why the “unacceptable shortfall exists, in its breadth, and how to prevent it from ever occurring again.”

Last month, Stitt said the agency’s chief financial officer had been replaced.

Richard Edwards, former chief financial officer, said he resigned under the threat of termination.

In a letter to lawmakers provided to Oklahoma Voice, Edwards wrote that he was “taken aback” by Friesen’s allegations and denied any wrongdoing. He offered to cooperate with the investigation.

Edwards said Tuesday he was a “convenient scapegoat,” for the current leadership, which continues to blame prior leaders for the financial situation.

Some of the problems the agency is having are related to Friesen’s leadership, Edwards said.

A number of high-level staff, chiefs or deputies were brought in under her tenure, he said.

The agency also purchased furniture, vehicles and other items that contributed to the financial problems, although in a relatively small way, he said.

Davis, the mental health spokesperson, said it would not be appropriate to comment on remarks from a former employee.

House Appropriations and Budget Committee Chairman Trey Caldwell, R-Faxon, said the agency’s past administration had been paying prior year bills with new money, and it caught up with them.

He said a supplemental appropriation is possible, but lawmakers need a firm number from the executive branch.

The shortfall figure keeps changing, he said.

Meanwhile, the agency has asked the Oklahoma Legislature for another $124 million to cover overrun costs for the construction of a new inpatient mental health hospital, the Donahue Behavioral Health Campus in Oklahoma City.

It is intended to replace the Griffin Memorial Hospital in Norman.

Oklahoma Voice (oklahomavoice.com) is an affiliate of States Newsroom, the nation’s largest state-focused nonprofit news organization, supported by grants and donations. Oklahoma Voice provides nonpartisan reporting, and retains full editorial independence.