Valley CEO Gary Larcenaire said the agency learned 12 days ago that it will receive $2 million less in 2014, due to the county's 5.5 percent cut across the board for Medicaid programs.
Valley leaders decided to limit their care to adult patients with the most acute problems, he said such as those being released from jails, prisons or from mental health units at area hospitals.
Adults who don't suffer from acute mental illnesses will have to contact OptumHealth for referrals to physicians or therapists in its networks, Larcenaire said.
Based on an evaluation of its caseload by clinical and medical staff, Valley has identified about 2,200 patients likely to be affected by the change, he said. Letters will go out to the first 350 patients on Monday, with more to follow as the staff works through case files.
The letter refers patients to an 800 number where they can reach an Optum caseworker, Larcenaire said. "The goal is to make sure that no one will fall through the cracks," he said.
Optum officials believe the transition will be seamless because it has a network of more than 200 Medicaid providers who are ready to absorb Valley's patients, said Richard Elorreaga, the company's executive director of public sector solutions.
Optum and Tim Whalen, director of the county's behavioral services, dispute the $2 million loss cited by Valley officials.
Salt Lake County's budget cuts are driven by a combination of factors, including a reduction in how much state and federal sources pre-pay for services, the county's struggle to meet its required 20 percent Medicaid match, and a depletion in one-time budget appropriations, Whalen said.
The county learned in mid-May that it will receive just under $60 million from state and federal sources, but even with its matching funds, it determined the budget would not cover the costs anticipated in 2014, Whalen said.
Instead of closing programs, the county decided to "just ask everyone to take a 5.5 percent reduction (in funding) and keep services going," he said. "Never has it been represented that any medical client will not be receiving services."
Whalen sent a letter to all providers about the cuts on June 11.
Cuts to Valley total only $1.2 million or a 4.9 percent cut because some of the services it provides are protected by legislative earmarks for Medicaid services, he said.
Elorreaga said Valley leaders began talking with Optum executives earlier this year about its planned focus on the acutely mentally ill, and began to outline a transition plan months ago.
Larcenaire contends the changes that prompted Valley to send the patients to other providers are specific to its contract with Optum and Salt Lake County.
The agency will continue to provide a full spectrum of services to other clients, including those in Summit and Tooele counties, he said.
"We are adapting to a particular payor's purchasing power," Larcenaire said, "and trying to develop a model that we think will maximize a return on investment for them."