Witnesses allege Three witnesses told a legislative investigative committee yesterday about alleged overbilling and double billing by companies providing services to special-needs students under the Felix consent decree.
companies charged
state too much for
special-ed services
A company official questions
the claims, saying it actually
has underbilled the stateBy Pat Omandam
pomandam@starbulletin.comInvestigating Committee Co-chairmen Scott Saiki and Colleen Hanabusa said they are only scratching the surface of the Felix billing problem. No figures were available on the extra costs to the state based on yesterday's testimony.
Dr. Kenneth Gardiner said before the joint House-Senate panel yesterday that one private services provider, Loveland Academy, had questionable practices that company officials refused to discuss with him.
Loveland officials denied irregular practices and said Gardiner never attempted to reach them.
Clinical psychologist Gardiner said those practices include double billings of services, the failure to provide services, questionable documentation and a refusal to allow case coordinators on campus so the state could track the progress of students there. Gardiner examines bills as overseer of mental health-care coordinators for 142 Felix cases at the Kaimuki and Kaiser high school complexes.
"Why are we paying for the service if the child is not improving? If that's the case, we need another show in town," said Gardiner, who added Loveland's contract is under a fiscal audit by the state Department of Health.
Dr. Maggie Coven, clinical director of Loveland Academy, in an interview after the hearing, challenged Gardiner's claims and said she has never heard of him. Gardiner told legislators he called Loveland 17 times without a response, but there are no records of any telephone messages from him over the past five weeks, she said.
Coven said the latest internal audit shows Loveland has actually underbilled the state by 30 percent. Moreover, the company has undergone three audits over the past year, both clinical and fiscal, and has passed all.
She confirmed Loveland Academy is the only day-treatment program specifically designed for autistic children that has extensive programs all at one place. And the campus is open to case workers, she said.
"We're very aware there are professionals in the community that are overbilling, that are doing too many services, that are not delivering the services that are billed. It is happening. The Legislature is right to be concerned," Gardiner said. "On the other hand, there are service providers in the community that are bending over backwards to give the kids not just what they're entitled to ... but everything they would be entitled to."
Hanabusa (D, Waianae) said yesterday the state is being held hostage by those offering exclusive services for special-needs children. So far, she said, it seems like almost every provider the committee has heard about has such a problem.
Saiki (D, McCully) added there seems to be a pattern where the state faces inflated contracts for Felix services even though in many cases the state Health and Education departments end up providing the service anyway, which amounts to double billing for the state.
"Simply to be able to ... accept it because you say no one else is going to provide the service -- that doesn't seem to be acceptable from our vantage point," Hanabusa said. "It's like saying, 'Yeah, you can rip us off all you want because there's nobody else out there providing the service.'"
Margaret Pereira, a former multisystemic therapist with the state Child and Adult Mental Health Services Division, told legislators she witnessed overbilling while working as a case manager for a Felix research project involving 200 children that was conducted by an agency in Kalihi in 1995-99.
Pereira testified case workers and therapeutic assistants were told by project managers to be "creative" so they would reach the minimum 25-hour weekly quota, even though they did not actually work that long.
For example, she said, some billed the state for taking Felix children to movies or for playing basketball games.
Other ways to be creative in their billing were to pad their office work, such as taking 15 minutes to walk from their desk to the file cabinet or to call Felix parents daily, even though it was unnecessary, just so that time could be billed to the state, she said.
Pereira estimates out of the average 500 hours billed weekly to the state by the 20 or so workers, about 200 hours were padded. She said the contractor billed the state about $65 for each hour.
She said some workers were honest in their billings but were afraid to come forward for fear of retribution. Some even threatened to leave their jobs, but stayed on after they were told they would get raises, which they did not, she said.
Pereira said she raised the issue but it was ignored by her superiors.
"We need some kind of oversight committee that these people can go to and not feel afraid of retribution," she said.
The joint legislative committee continues with hearings tomorrow and Saturday at the state Capitol. The panel was scheduled to hear yesterday from Dr. Judith Schrag, who has now agreed to appear at a later date.
Schrag was a member of a now disbanded court-appointed panel that provided the state with technical assistance on the consent decree.
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