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VOR Weekly E-Mail Update
March 14, 2008
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Table of Contents
STATE NEWS
1. OREGON: LEGISLATIVE PROGRESS TO HALT ABUSE DIES IN SHORT
SESSION
2. WASHINGTON STATE: $17 MILLION DAMAGE AWARD VALIDATES CASE
3. NORTH CAROLINA: Positive Medicaid ruling allowing an
individual to sue a state is upheld by federal appellate court
4. BY ANALOGY: The NORTH CAROLINA News & Observer investigative
series found that the state’s mental health reform led to
astronomical community costs, compromised care and fraud
===============================================================
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1. OREGON: LEGISLATIVE PROGRESS TO HALT ABUSE DIES IN SHORT
SESSION
-------------------------------------------------------------------------------------------------------------------------------
Oregon VOR Perspectives (newsletter)
March 2003, Vol. 2, No. 3
Editor: Sid Stuller, VOR Oregon State Coordinator
Several Bills were introduced in the short session of the
legislature, which might have helped to stem the tide of abuse,
neglect, and death among persons in state licensed 24-hour care.
These bills did not make it through the process, and died in
committee.
House Bill 3617, introduced by Rep. Sara Gelser, D Corvallis
would have created a list of persons unsuitable for employment
in facilities serving the MRDD population. According to some
sources, she will reintroduce this bill next January in the
longer session. HB 3617 did, in fact, make it through the House
committee on Human Resources and Women’s Wellness with a do pass
recommendation, following amendments.
The same fate arose with SB 1089 which made it through the
Senate Committee on Health and Human Services, and was forwarded
to Ways and Means where it stopped. SB 1089 would have empowered
the appointment of an outside person or entity to review the
functions of the Depart-ment of Human Services Mental Health
Services with the idea of presenting a report to the legislature
on improving, streamlining, and enabling the DHS to perform
better than it presently does. The Bill was Sponsored by
Senators Margaret Carter, D, Portland and Allen Bates, D,
Medford. This bill was also amended in committee.
The longer Legislative session may see some new faces following
the upcoming November election. This will call for another
educational effort by advocacy groups on behalf of persons with
MRDD.
Editor’s Note:
Editor (Sid Stuller) had this to say in his regular feature,
the “Curmudgeon’s Corner”: “While we were happy to note the
passage of a bill dealing with extra investigators to seek out
abusers of our young school sports participants, and the advance
of a bill to protect our canine friends, it certainly put into
perspective the relative position of our most vulnerable and
defenseless citizens with MRDD in state licensed facilities.
They appeared to be in line for legislative protection just
after the dogs. Thank you’s to Rep. Sara Gelser and those on the
House committee, which passed HB 3617. ODDC reports Rep. Gelser
will reintroduce this bill in the next session. Also, thanks to
legislators like Sen. Burdick who bothered to respond to appeals
for supporting SB 1089 behalf of persons with mental health
issues and who was and would have supported passage of HB 3617.”
--------------------------------------------------------------------------------------------------------------------
2. WASHINGTON STATE: $17 MILLION DAMAGE AWARD VALIDATES CASE
--------------------------------------------------------------------------------------------------------------------
Source: MORE LAW (Beckman, et.al vs The State of Washington), as
reprinted in Perspective (OR VOR, Sid Stuller), March 2003
In the year 2000, attorneys representing three
developmentally disabled men with IQs of less than 60 who were
placed in a state licensed Bremerton group home operated by Troy
Nelson. Nelson previously had been discharged from a nursing
home for suspected abuse. The state investigators failed to
follow up on these allegations, and Nelson got a group home
license. The plaintiffs said that the three severely disabled
men were raped and tortured at this group home during a 1 ½ yr.
residency. Twenty witnesses for the plaintiffs recounted
repeated efforts to warn DSHS by letters and faxes. Only after
the State’s attorney general’s investigator became involved, did
the State DSHS case workers respond. Nonetheless, the facility
and the alleged abusers continued to receive operational funds.
After many months of repeated warnings of abuse, the Office of
the Attorney General investigated the state-licensed facility
and determined that the developmentally disabled plaintiffs had
been "physically and sexually abused for several months at
least." The determinations were made by the Attorney General’s
lead investigator for the Office of Medicaid Fraud Control. Over
20 separate interviews and working on the case for two full
months followed. The abuse was occurring the entire time that
the warnings of abuse were being ignored by DSHS and its
caseworkers. The investigator also testified that DSHS
"stonewalled" his attempts to obtain information once he began
to follow leads to the case.
At trial, defendant DSHS attempted to persuade the jury that its
own determinations were merely internal department "findings"
and should not be interpreted as "judicial determinations."
Defendant DSHS attempted to persuade the jury that there was no
way of telling what may have happened since the residents could
not speak for themselves. Despite the determinations of the
Attorney General's Office, Defendant DSHS argued that the
plaintiffs were not injured and, if they had been injured, the
damages were not great and did not have any lasting physical or
psychological effects.
The trial lasted six weeks, and the jury found in favor of the
plaintiffs and awarded a total of $17 Million in compensatory
and punitive damages.
----------------------------------------------------------------------------------------------------------------------------------------------------------------------
3. NORTH CAROLINA: Positive Medicaid ruling allowing an
individual to sue a state is upheld by federal appellate court
----------------------------------------------------------------------------------------------------------------------------------------------------------------------
Summary: The Supreme Court declined to review a case in
which the 4th Circuit Court of Appeals ruled that individuals
could sue a state if it fails to provide Medicaid services for
which they eligible with "reasonable promptness." The Supreme
Court’s decision to decline review (denial of cert) lets stand
the favorable appellate court decision.
Positive Medicaid ruling allowing an individual to sue a state
is upheld by federal appellate court
The Fourth Circuit in Doe v. Kidd, 501 F.3d 348 (4th Cir. 2007)
ruled that Medicaid – which guarantees provision of medical
assistance with “reasonable promptness” – is privately
enforceable – meaning individuals have a right to sue if a state
fails to provide services for which they are eligible. The Court
did not rule whether an individual can sue claiming failure to
enforce the Medicaid’s freedom of choice provision because it
held that the plaintiff had failed to state a claim for its
violation.
In this federal case, Doe, a developmentally disabled adult
sought a waiver for community-based care from South Carolina but
only received respite care. After waiting several months and
exhausting administrative appeals, Doe sued South Carolina for
failure to provide community-based residential care with
“reasonable promptness.”
On March 3, 2008, the U.S. Supreme Court today denied the
Petition of the South Carolina Department of Health and Human
Services and the South Carolina Department of Disabilities and
Special Needs, refusing to grant cert., leaving intact the
favorable 4th Circuit opinion.
The 4th Circuit case can be found at http://caselaw.lp.findlaw.com/data2/circs/4th/051570p.pdf
----------------------------------------------------------------------------------------------------------------------------------------------------------------------
4. BY ANALOGY: The NORTH CAROLINA News & Observer investigative
series found that the state’s mental health reform led to
astronomical community costs, compromised care and fraud
----------------------------------------------------------------------------------------------------------------------------------------------------------------------
Summary: The following is an excerpt from the first in a
five part NC News & Observer series on the state’s mental health
reform efforts titled “Mental Disorder: The Failure of Reform.”
The series focuses on the aftermath of the 2001 mental-health
reforms which came about after several state studies and a 1999
U.S. Supreme Court decision (Olmstead) that caused state leaders
to conclude that they were relying too heavily on psychiatric
hospitals. That reliance ran counter to the high court's
decision that requires states to treat people with disabilities
in the least restrictive setting.
Yet, as the News & Observer series finds, the reform has led to
financial fraud, astronomical community costs, and compromised
treatment – the expected failings of aggressive
deinstitutionalization. It was predictable – people were
displaced from psychiatric hospitals before community services
were in place, costs were underestimated, privatization opened
the door for opportunistic providers who took advantage of every
loophole (and there were many). As a result treatment suffered
and costs skyrocketed. According to the News & Observer, in
January 2005, the state told the federal government those two
services, community support for children and community support
for adults, would cost less than $5 million a month. By February
2007, when the Health and Human Services accountability team
started an audit, the monthly bill was $93.5 million (per
month).
The full series can be found at: http://www.newsobserver.com/2771/story/962049.html
and includes these articles:
Part 1: Reform wastes millions, fails mentally ill
Part 2: Companies cash in on new service
Part 3: Serious mental therapy fades
Part 4: Hospitals, nearly forgotten, teem with abuse
Part 5: Patients die from poor care
Reform wastes millions, fails mentally ill
Mental-health changes aimed to improve community treatment, but
providers took clients shopping, swimming and to movies for $61
an hour
By Pat Stith and David Raynor, Staff Writers
(emphasis added)
February 24, 2008
North Carolina's mental-health reform was supposed to
improve treatment for the mentally ill and provide good value
for taxpayers. It has done neither.
The state has wasted at least $400 million in an ill-conceived
and poorly executed plan to treat more mentally ill people in
their own communities and fewer in the state's four psychiatric
hospitals, a News & Observer investigation shows.
Local governments, forced to stop offering treatment, were
replaced by providers out to make a profit. Most of their
workers were high school graduates, not licensed professionals,
but the bill was stunning. In a few months, the cost of the
community support program was $50 million a month, more than 10
times what the state had expected.
Providers took some clients to movies or shopping, charging
taxpayers $61 an hour.
Meanwhile, some seriously ill people had to do without
treatment. Services that were more likely to help them avoid
hospitalization were in short supply.
It was almost a year before the state reacted.
Hundreds of providers have abused the system, the state now
says, charging for services that were unnecessary or were not
performed.
So far, the state Department of Health and Human Services has
demanded that the providers pay back $59 million. A government
review last fall of more than 12,000 people receiving a rapidly
expanding community service indicated that hundreds of millions
of dollars had been wasted. That review said 89 percent of the
treatment was medically unnecessary or given in the wrong
amount.
Since the General Assembly ordered sweeping changes in 2001, the
cost of caring for the mentally ill has more than doubled, to
$1.5 billion a year.
Here's one example of why: Last February, a worker employed by a
Durham provider spent five hours with a 13-year-old girl, asking
about her day at school and assisting with her homework,
according to a government audit. The worker, called a
paraprofessional, wrote that "While [the child] was reviewing
the vocabulary word, Paraprofessional went to the store for [the
child's] mother."
For that session, the company was paid $305.
North Carolina tried to change too many things too quickly,
according to Paula Cox Fishman of Greensboro, an activist who
has followed reform closely.
"It's a mess," she said. "It's going to be hard to turn this
runaway train around."
Responsibility for carrying out mental-health reform fell to the
Department of Health and Human Services, led for six years by
Carmen Hooker Odom, Gov. Mike Easley's appointee. Department
officials made key decisions that hobbled the program. They
defined too loosely the community support services companies
would offer, and they agreed to pay too much for it.
'Worse off right now'
Harold Carmel, president of the N.C. Psychiatric Association,
holds the Easley administration responsible.
"The devil was in the details," Carmel said in an interview.
"And they didn't think through all the details. They were
overwhelmed by the task. They still are."
Hooker Odom announced her resignation last May, two weeks after
informing the governor about what she called a "deeply
disturbing" audit of mental-health providers.
Easley and Hooker Odom, the two officials most responsible for
implementing mental-health reform, declined to be interviewed.
Rep. Verla C. Insko, a Democrat from Chapel Hill, was the
primary sponsor of the reform law. She is not proud of the
results.
"I think we're worse off right now," Insko said. "What they did
was bring in easy-to-serve people, maybe even people who ...
didn't need the service."
She said the lack of proper treatment is causing more people who
are mentally ill or who have a substance-abuse problem to be
taken to hospital emergency rooms -- or jail. And they're
rotating in and out of the state's psychiatric hospitals. On
some days, state hospitals are so full that they are refusing to
accept new patients.
Since 2001, at least 13 people committed suicide or overdosed on
drugs less than a week after being discharged from state
hospitals. Some died within hours.
In a case that grabbed headlines in May 2007, Stephen Ryan
Gibson led state troopers on a 70-mile chase in a stolen car.
The chase ended with his shooting death on Interstate 40 in
Raleigh. Gibson, 23, had been sent to Dorothea Dix Hospital on
an involuntary commitment order a month earlier.
Hospital officials decided outpatient care was enough and
released him in less than two hours. Records show the adult
admissions ward at Dix was at or over its capacity for much of
that week.
Counties forced out
More than six years ago, the General Assembly voted
overwhelmingly to tear down, then rebuild, the way the state
treats mentally ill people, about 210,000 of whom seek state
help each year.
The state set out to reduce the use of its four hospitals and
shift treatment to communities. A study requested by legislators
said part of the additional cost could be paid for with money
saved by shrinking hospitals and staff.
Federal, state and local governments provide mental-health
services to the poor. A little more than a third of the cost is
borne by the state and local governments in North Carolina, the
rest by federal taxpayers.
Before reform, mental-health services were provided at the local
level by county and regional groups and the private providers
who, in effect, worked for them.
After reform, counties were forced to get out of the treatment
business. They formed local groups that were supposed to manage
the providers.
But the state got the plan backward, forcing the counties to
divest first.
"We were told to do it right away," said Yvonne Copeland,
executive director of the N.C. Council of Community Programs,
which represents the county entities.
Services at the local level started drying up with little or
nothing to take their place, and the state eliminated more than
500 hospital beds. No one expected that it would take years to
get approval for a new, supposedly improved package of community
services from the federal government.
Federal approval of the new services didn't come until late
December 2005. The state launched its new community services
three months later, on March 20, 2006.
The Department of Health and Human Services had planned for
years for that Monday in March, writing descriptions for the
services it wanted, figuring out how much to pay and haggling
with federal officials over the details.
Finally, on March 20, the state began offering an array of
mostly new services to people suffering from mental illness or
substance abuse. Seven of the services, including intensive
in-home therapy for severely emotionally disturbed children, are
most likely to keep people out of hospitals. Two other, more
basic, services were known as community support.
And from that day to this, community support services have
hemorrhaged money.
Stunning costs
In January 2005, the state told the federal government those
two services, community support for children and community
support for adults, would cost less than $5 million a month. [By
February 2007, when the Health and Human Services accountability
team started an audit, the monthly bill was $93.5 million.]
Now department officials say that estimate was flawed and should
have been increased.
As Carmel said, the devil really was in the details. The state:
* Set a $61-an-hour rate for services performed by workers with
only a high school diploma.
* Allowed providers to recruit clients and determine what
services they needed, which permitted providers to refer clients
to themselves.
* Allowed people to receive 30 days of service without
government authorization.
* Allowed companies to start work immediately and qualify later.
The latter two actions came because the state was concerned that
people who had been served under an old community program would
be denied or that there wouldn't be enough companies to provide
service.
"I think, with the benefit of hindsight, we made those initial
entrance criteria more liberal and loose than they needed to
be," said Leza Wainwright, deputy director of the Division of
Mental Health, Developmental Disabilities and Substance Abuse
Services.
Taxpayers would pay dearly for each of those decisions.
In the summer and early fall of 2006, officials at Health and
Human Services apparently paid little or no attention to the
bills pouring in. They saw that more people were being served,
but they had expected it, Wainwright said. They had hoped for
it.
If officials had been alert, they would have been stunned. About
90 percent of the money was going to the two community support
services.
In June 2006, the bill for community support was $27.5 million,
half as much as the state had expected to pay in a year. By
August, the bill had almost doubled, to $50.7 million. It
continued to grow.
By February 2007, when the Health and Human Services
accountability team started an audit, the monthly bill was $93.5
million.
"I've heard the analogy used here that this sort of lined up to
be the perfect storm," said Jim Slate, the director of budget
and analysis at Health and Human Services. "Did we know it was
going to do what it's done? No. Nobody had a clue."
Health and Human Services had expected that the child and adult
community support programs would be delivered, in part, by
people with college educations and even advanced degrees. The
department had agreed to pay a "blended" rate for that mix.
"The initial rate of $61 per hour assumed that the higher
skilled staff would be involved in about one-quarter of the
services rendered," Hooker Odom, the former secretary of health
and human services, told Easley in a letter last April. She said
her department's auditors had discovered that 98 percent of the
service was being provided by high school graduates.
What Hooker Odom did not say in her letter was pivotal: Her
department had agreed to pay high-skill wages without requiring
high-skill workers.
By November, when Health and Human Services declared a
moratorium on new providers, 784 were being paid for community
support -- but only 137 for more critical services.
The numbers tell the story: From March 2006 through January
2008, community support for children and adults cost nearly $1.4
billion, 90 percent of new community spending. During that same
period, the government spent $78 million -- 4.9 percent -- on
the seven services more likely to reduce the need for
hospitalization.
Officials had intended to spend more on those more intensive
services than on community support.
The department concedes that it set the rate too high for the
two community support programs and too low for most of the other
services for more seriously ill people. It cut the rate for
child and adult community support last April but still has not
raised the rates paid for the other services.
Audit reveals abuses
Recollections differ now as to when Health and Human
Services officials realized that mental-health reform spending
was out of control. By some accounts, it was October or November
2006, but officials waited until early 2007 to do anything about
it.
"I guess we just did not foresee the magnitude of the problem,"
Wainwright said.
On Jan. 16, 2007, auditors were finally ordered to saddle up.
Dan Gerlach, senior adviser to the governor, was stunned when he
learned Jan. 17 about the explosion in spending: "I said, 'Holy
cow!' " He notified legislative leaders the same day.
After the audit results were in, Hooker Odom huddled with top
officials of her department on Wednesday, April 4. She told a
subordinate to poll her Rate Setting Review Board, some of whom
had already left for Easter. They agreed to slash the rate paid
for community support to $40 an hour.
Hooker Odom, in a memo to the governor two weeks later,
described some of the abuses her auditors had uncovered:
Providers had been taking children swimming, or to a movie, or
out to eat, all for $61 an hour.
They went to the mall, too. A bill from a company in Greensboro
showed a worker taking an 18-year-old on a two-hour trip to
improve his social skills. "He went to the game room and talked
with one of the kids there ... Progress made."
The bill: $122.
A Pinnacle company worked on even more basic skills. "Staff
suggests client to get up," one document reads. "Client agreed
to get up." Other activity included suggesting eating breakfast
and taking a shower. They later went for a ride. The bill was
$366.
The state saw bills such as these and cut the rate. The outcry
from providers was immediate.
On April 26, the department backtracked, raising the rate to
$51.
But the damage had been done: Setting the rate for community
support too high, and leaving it there for slightly more than a
year, cost taxpayers $118 million.
The overpayments have continued on a lesser scale: The state is
still paying high-skill wages but won't start requiring
high-skill workers until March 1.
In the last week of April, Hooker Odom began telling
subordinates that she would resign to take a job as president of
Milbank Memorial Fund in New York, a foundation that studies
health policy.
Easley said she had been planning her move for months. He issued
a statement praising her.
"She has handled one of the most challenging jobs in the state
with great skill," he said.
Assigning blame
Easley has tried to distance himself from mental-health
reform. He blames legislators, saying Hooker Odom "vigorously"
opposed the sweeping changes approved in 2001.
"It just happened sort of overnight in late October [2001], and
we never thought they would do it," Easley told reporters at a
December news conference.
Easley blames the agencies formed by county governments, which
were partly responsible for keeping an eye on those providers.
"All we are is the banker," the governor told reporters. "We can
audit, and we can offer suggestions, but they're not accountable
to DHS [Health and Human Services]. DHS has been getting a black
eye over the system not working, and they don't have any way to
control it."
The state in November hired Mercer Health Benefits LLC for
$794,000 to evaluate the county programs. That study is due May
15, in time for the legislature to consider it this summer.
Copeland, representing the county groups, said her members
aren't blameless, but she says the governor is off-base.
"The counties did not close up the hospitals," she said. "Let's
be clear that the [counties] have no authority. They only
administer the state's policies. That's it."
Insko acknowledges that legislators tried to do too much too
fast. She wishes they had started the program on a small scale.
But she rejects Easley's recent statement about her reform bill.
"I understand that the governor has said that the secretary
opposed it," Insko said, referring to Hooker Odom. "She never
told me she opposed it. No one in the department ever told me
they opposed it."
Hooker Odom's replacement, Dempsey Benton, is trying to repair
the mental-health system. The former Raleigh city manager has
cut spending on community support by 19 percent, taken direct
control of the state's psychiatric hospitals and won the
confidence of legislative leaders.
"This program is going to have to be doing much better in terms
of balancing the expenditures with the quality of service,"
Benton said. "I expect it to be under a microscope."
----------------------------------------------------------
Tamie Hopp
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