An official for the operators of Helemano Plantation says the decision by the state Medicaid Fraud Unit not to take any action at this time supports its contention that there was no basis for the investigation.

Michael Parrish, director of the attorney general's Medicaid Fraud Control Unit, sent a letter dated Monday notifying Susanna Cheung, head of the operators, Opportunities for the Retarded Inc., about the latest development.

Parrish said the unit will not take “;further action at this time with respect to the allegations against ORI by the Hawaii Disability Rights Center.”;

In the one-sentence letter to ORI, Parrish did not explain the reasons. He could not be reached for comment yesterday.

Ann Higa, ORI chief operating officer, said in a written statement that based on the letter, “;we feel validated in our assertions that there were no grounds for an investigation. We remain in good standing with all federal and state regulatory agencies.”;

Louis Erteschik, staff attorney for the Hawaii Disability Rights Center, which issued a highly critical report earlier this year raising questions about ORI management and finances at Helemano, said the center did its job in investigating ORI and issuing the report.

He said the decision by the Medicaid Fraud Unit was up to that office to make.

“;There's nothing more for us to comment on,”; Erteschik said.

Cheung's ORI and the disability rights center, a nonprofit watchdog agency, had been embroiled in a bitter dispute involving the center's investigation into Helemano, the Central Oahu facility that provides housing and services for adults with developmental disabilities.

The center issued its report on ORI in February. ORI strongly disputed the allegations and said the center's report was filled with misstatements and “;false insinuations.”;

After the center issued the report, the Medicaid Fraud Unit subpoenaed the center for documents “;regarding fraud in the Medicaid Program of Opportunities for the Retarded Inc. and fraud involving Medicaid clients/beneficiaries receiving services from (ORI).”;

The center said it gave about 3,800 sheets of paper to the unit.

The letter is the latest word on the unit's investigation.

The dispute between the two nonprofit agencies also included a push by ORI officials and Sen. Robert Bunda (D, Mililani Mauka-North Shore) for a legislative audit of the center. They questioned the way the center conducted the ORI investigation.

In October the state auditor reported no evidence of impropriety by the center and suspended further work on the audit. State Auditor Marion Higa said the center appeared to be operating within its federal mandate, which gives the center broad authority to investigate complaints.

She also said the center is audited regularly and that its management and operations have been reviewed and approved by federal officials.