SEKMHC Executive Director Nathan Fawson testifies at the Kansas House Health and Human Services Committee hearing Tuesday./Kansas House Youtube capture
TOPEKA – Kansas Representatives on the House Health and Human Services Committee raised questions on Tuesday about a possible management conflict between tax-financed reimbursement structures that fund Southeast Kansas Mental Health Center, and whether or not SEKMHC’s purchase and operation of Ashley Clinic in 2023 fits Kansas medical compliance.
SEKMHC has been under scrutiny since last spring when 2023 501c3 tax filings obtained by the Kansas Informer revealed compensation in excess of $600,000 for SEKMHC’s executive director Nathan Fawson, as well as salary packages for other key managers at the primarily Medicaid-funded organization that far outpace comparable positions among the state’s 25 other mental health service districts. The following year Fawson’s salary was raised again, updated tax records show, further raising the ire of county commissioners in the 6-county region who subsidize the organization.
Committee members questioned Fawson for more than an hour on the operations and finances of the six-county mental health service district. Those questions focused on state and federal Medicaid reimbursement models and other management aspects of the organization.
Fawson briefly outlined for legislators the process by which SEK gained certification and the advanced Medicaid reimbursement qualification to become a Certified Community Behavior Health Clinic, and its cost-based reimbursement process that allows it to tally costs and bill them to Medicaid. CCBHCs offer 24/7 crisis care for mental health and substance abuse services as well as integrated physical health care, a move that commanded drastically expanded Medicaid reimbursements that allowed its employment/staffing growth since receiving certification in early 2024.
That expansion of staffing to more than 500 employees in 30 locations across the 6-county service area brought with it a compensation package of more than $800,000 for Fawson and hundreds of thousands in pay and benefits for other mangers which county commissioners criticized as excessive. Those salaries were approved by SEK’s county-appointed board of trustees based on a consultant’s recommendation, and county commissions in the district opted to withdraw their county tax subsidy payments to the organization for 2026, which averaged a little less than $100,000 each per county. A number of those counties also replaced some or all of their trustees.
Fawson told legislators SEK was “significantly underpaying” staff prior to certification, and that higher salaries for front line therapists and other staffers were required in order to attract quality service providers to fit SEK’s plan to expand and offer more integrated care. That plan included the February 2023 purchase Ashley Clinic and February 2025 purchase of Yates Center Dental Clinic. He said Ashley Clinic had applied for a “look alike” federal reimbursement designation formerly known as a Federal Qualified Health Center which would also expand revenues by allowing for a prospective payment system for Medicaid/Medicare, but that designation had not yet been granted.
Fifth District Rep. Fred Gardner (R-Garnett) questioned Fawson on the makeup and management of SEK and Ashley Clinic’s application for FQHC status, noting Kansas law required county commissioners to appoint mental health center boards of trustees, while FQHCs fell under federal guidance that require 51 percent of those boards to be made up of community members receiving services there.
“That appears to be quite incompatible,” Gardner said. “How are we going to deal with that?”
“We feel confident that our governance structure meets both the state and the federal criteria,” Fawson said. He said it would take about a year to find out if the FQHC designation was approved for Ashley, and if so, criteria would have to be in place that directed county commissioners to appoint board members with consideration to whether or not they were receiving FQHA services. If Ashley did not qualify as an FQHC, Fawson said later, Ashley Clinic might be closed.
Gardner also noted the contrast between SEKMHC salaries and that of others in the state’s regional mental health system, which he figured were some 4-5 times the salaries of other mental health districts. Fawson said boosting salaries and attracting qualified providers was the focus of a consultant paid by an initial grant to pursue the CCBHC designation. Fawson said that goal was to move SEKMHC into the 50th percentile of the consultant’s recommended comparable salary range over a period of years.
Median income in the SEKMHC district is about $33,000 annually; the statewide is about $70,000 according to U.S. Census figures.
Committee chair Will Carpenter (R-El Dorado) questioned Fawson on whether SEK had the legal authority to operate Ashley Clinic. Fawson didn’t reply directly, but said the Kansas Department of Aging and Disability Services had documented changes in Ashley’s billing for services and later in its direction cease billing services to KDADS.
The Kansas Board of Healing Arts prohibits a general business entity from the practice of medicine by employing or contracting with physicians, with certain statutory exceptions. The Substance Abuse and Mental Health Services Administration (SAMHSA) most often allows for a Partner model in which the entity performs required screening/monitoring as a CCBHC, but delivers broader primary care through a relationship with an FQHC, physician group or hospital-owned clinic.
Carpenter asked Fawson to provide an explicit documentation of that authority to the committee at a later date.
Dane Hicks is a graduate of the University of Missouri School of Journalism and the United States Marine Corps Officer Candidate School at Quantico, VA. He is the author of novels "The Skinning Tree" and "A Whisper For Help." As publisher of the Anderson County Review in Garnett, KS., he is a recipient of the Kansas Press Association's Boyd Community Service Award as well as more than 60 awards for excellence in news, editorial and photography.
