Valley Mental Health, Utah's struggling nonprofit mental healthcare provider, is getting ready to battle Salt Lake County's decision to yank its administrative role of the $50 million country contract.---

Several days after Mayor Peter Corroon, according to several mental healthcare community experts, signed over the administrative part of the contract to East Coast-based OptumHealth, part of United Health, Valley's CEO Debra Falvo sent out a message employees stating Valley's intent to fight for the contract. Via her organization's internal mail system—the Orwellian-sounding "portal—she informed clinical and support staff that Valley did not win the contract to care the county's mentally ill.

"The decision was rooted in OptumHealth's assertion that they are able to provide greater cost savings through increased clinical efficiencies," Falvo wrote. The county, she continued, wants to extend the existing contract until June 30, 2011, when OptumHealth will take over running the contract. The County had made it clear that Valley would remain the primary service provider. 

What infuriated some in the mental health-care community, however, was that Falvo—whose radical restructuring plan, firings, rehiring interviews and so forth has battered employee morale—now warned that because of the county's decision "additional reductions in force will likely be forthcoming, impacting administration, clinical and support staff." Exactly why she decided to immediately embed more fear in the staff is difficult to determine, especially since the existing contract will last another year and Falvo apparently plans to fight to retain the contract.

Doubters should not count Falvo out just yet. Today she informed staff through the "portal" that she had requested copies of the RFPs "to investigate if there are any potential grounds on which to challenge the awarding of the RFP to OptumHealth. We hope to lodge any potential challenge within the next few days."

The stage is set for potentially a rather ugly fight, and one which Corroon may be leery of entering into because of his own campaign battles in the gubernatorial race. Furthermore, those familiar with Valley's operations wonder what OptumHealth might find when they take over Valley's books—but those questions are probably years from being answered.