The authority over Alaska's only psychiatric hospital, Alaska Psychiatric Institute, will be handed over to a for-profit health care company.

This comes from a Friday morning announcement issued by the Alaska Department of Health and Social Services.

The commissioner for DHSS, Adam Crum, "invoked his authority under state law to immediately assume management" over API, according to the statement.

This means API will effectively be run by a national for-profit company, Wellpath Recovery Solutions, without public comment, or offering any other competing organizations an opportunity at the contract.

“I recognize this decision may take Alaskans by surprise, but it was not made lightly. Changes have been needed at API for a very long time,” said Commissioner Crum. “This decision will help us solve these long-standing problems at API, and then allow us to more effectively broaden our focus to address the entire continuum of behavioral health care across Alaska.”

Commissioner Crum said all staff at API will keep their jobs. Monday, nine employees from Wellpath will begin training API employees and instating new protocol.

Currently, only 35 out of 80 beds at API are occupied because of staffing issues.

Wellpath will be tasked with ensuring patient and staff safety, making sure the hospital is in compliance with state and federal certifying organizations, and working to bring all beds back into service.

The state will maintain oversight of the hospital until July 1, 2019, and if the company succeeds in the first phase of its operation, it will take full responsibility for API after July 1, according to a DHSS press release.

Commissioner Crum would not answer questions about the price of the contract agreement. Multiple sources, including a state lawmaker have told Channel 2 that the contract is for $1 million per month.

The decision to privatize has been met with mixed reaction.

The Executive Director for the union that represents workers at the hospital says that information given at Friday's press conference doesn't match with what DHSS told him and API leaders in a meeting before the press conference.

"I think there was questions raised about their history. We have serious questions about it. There have been a lot of lawsuits with Correct Care. These people are apparently an offshoot of Correct Care, but they've had their own legal problems. So we want to look into that more and we think that the Legislature and the state should look into that, too," said Jake Metcalfe, Executive Director of Alaska State Employees Local 52.

In a statement, the Alaska Native Tribal Health Consortium chairman said the group, "applauds the State's strong actions to ensure API is a safe place to work and for patients to receive care... ANTHC stands ready to support the State's efforts to improve access to mental health services."

The Alaska Mental Health Trust Authority CEO is more cautiously supportive.

"The Trust appreciates the urgency the Department has shown in the last two months to address long standing problems at API. We agree that the department's decision to bring in external resources to provide short-term leadership and supervision can be helpful and make important improvements in patient care," Alaska Mental Health Trust Authority CEO Mike Abbot said in a statement to Channel 2. "We remain committed to strengthening Alaska's system of community-based care to provide services and supports in home communities instead of institutional settings like API."

Anchorage Democrat Sen. Bill Wielechowski told Channel 2 he has concerns about the privatization and the process DHSS took in making the decision.

"If there's a million dollars a month lying around at API or somewhere else in this administration, why are they giving it to a private company to evaluate options when they could've been using that to provide much needed funding for staff," Sen. Wielechowski said. "There was no public opportunity to comment on this sole-source, no-bid contract. And you just have to ask a fundamental question of do we want to make the treatment of those who desperately need mental health services in the state of Alaska, do we want to contract that out to for-profit companies?"

Rep. Ivy Spohnholz, the most recent chair of the House Health and Social Services Committee, had a different view.

"Clearly something had to be done at API because staff and patients are in jeopardy. I am cautiously optimistic that the leadership transformation announced today will be successful in turning things around," Rep. Spohnholtz said in a statement.