Scoop: Philadelphia to stop contracting with major mental health provider

Mayor Cherelle Parker 's administration is ending a $3.7 million contract with a long-standing mental health services provider early, per records obtained by Axios.

Why it matters: The West Philadelphia Community Mental Health Consortium , or simply the Consortium, has served the region for five decades and says 12,000 people rely on its mental health and addiction services. Many are low-income or uninsured.

Driving the news: The city notified the Consortium in mid-July that it plans to stop contracting with the group at the end of the year due to violations of its agreement, which was set to expire June 2025.

• The provider is now petitioning for the Parker administration to reconsider its decision.

The big picture: The Consortium provides the city with mobile crisis teams made up of behavioral health experts, along with other services.

• City officials boosted funding for mobile crisis services after the fatal police shooting of Walter Wallace Jr. in 2020.
• Wallace was a patient at the Consortium and received treatment there days before he was shot by police.

Zoom in: Tierra Prichett, deputy commissioner of the city's Department of Behavioral Health and Intellectual disAbility Services, sent the Consortium a notice letter on July 18, citing the nonprofit's failure to maintain its tax-exempt status with the IRS and submit completed yearly audits to the city.

• Prichett also said the city received a "fraudulent" letter showing the nonprofit had purportedly hired a firm to conduct a 2022 audit.

What they're saying: Consortium CEO John White blamed some of his agency's problems on a former employee whom he says allowed paperwork to lapse. And he tells Axios the nonprofit reported the issue with the letter to the city once it was discovered.

• White is concerned that patients will "bear the brunt" of the decision, and questioned why it's necessary since the nonprofit's tax-exempt status was reinstated in June .
• He said the Consortium is catching up on audits from the last three years, which should all be completed in the coming months.

Between the lines: The city also mentioned supporting the Consortium through financial struggles, including providing the nonprofit with $8 million to settle back taxes owed to "various governmental entities" and improve its operations, per the letter.

• White says the $8 million payment was part of an agreement with former Mayor Jim Kenney's administration for the city to purchase the University Avenue building where Consortium is headquartered.
• White says the nonprofit has paid back about $1 million it borrowed to cover payroll expenses.

What's ahead: The city will work with Consortium over the next six months to find new providers to "ensure a smooth transition," per the letter.

• Meanwhile, White says he's making it his mission to get the contract reinstated.