County Superagency Given Thumbs Down

Ventura County’s massive Human Services Agency fails to meet federal organizational requirements and stands to lose as much as $15 million in annual medical reimbursements, authorities said Monday.

The county may also be ordered to repay hundreds of thousands of dollars in Medicare and Medicaid funding that it has received since April, when supervisors voted to merge the mental health and welfare services departments to create one superagency.

The county’s third revision of the restructuring plan was rejected because it did not show that a direct line of authority still exists between Ventura County Medical Center and doctors at the county’s mental health unit.

“Our review of the latest materials again demonstrates that your new organization structure is not acceptable for Medicare/Medicaid,” Janice Caldwell, a top federal health care administrator, wrote in a letter faxed Monday to the county.

“For each day they continue to keep the structure this way, they dig themselves into a deeper hole,” Caldwell said in an interview from her San Francisco office. “They also leave themselves vulnerable in the way they have been billing for services.”

Lin Koester, the county’s chief administrative officer, rushed home from vacation early when he learned the federal agency might notify the county of its decision on Monday.

Before the board’s 3-2 vote in April, Koester had recommended keeping the agencies separate but fostering increased partnerships between doctors and social workers to serve the mentally ill.

Koester has called for “urgent action” on the matter at today’s Board of Supervisors meeting. Koester said he will ask the board to reverse its action of April 7 until the legal problems associated with the merger are resolved.

“We need to do our best to make the necessary changes and modifications . . . because of the potential fiscal impact,” Koester said.

Chairwoman Judy Mikels, who along with Supervisor Frank Schillo voted against the merger, said Monday she plans to urge her colleagues to return to the original configuration, in which the county hospital was directly in charge of the doctors who serve the mental patients.

“To me, it’s very clear that the board has got to go back to the way we were or jeopardize a lot of money,” Mikels said. “It’s a matter of undoing what was done, undoing the merger.

“It might not necessarily be permanent, but let’s undo it for now, take a year or whatever it takes and then do it in a way that [federal authorities] can agree to,” she said.

Schillo said that under the current structure, the county may be forced to repay as much as $2 million in federal health care reimbursements since last spring. He chided his colleagues for voting to go forward with the merger before fully exploring the potential financial risks.

“It was an ill-conceived plan and it was carried out with a cavalier attitude,” Schillo said. “It was done with no public study, no public input. It just happened. I voted against it because I didn’t have the slightest idea what it was then, and I still don’t. We have to go back immediately to the original way the departments were run.”

At today’s board meeting, Schillo said he plans to question Steve Kaplan and Barbara Fitzgerald, the top two managers of the new Human Services Agency, about why they did not warn supervisors about the financial threat posed by the merger before it was proposed.

“They did not do their homework,” Schillo said. “I don’t know exactly how much [the other supervisors] relied on them for information about the [legality of the] merger. But they obviously have a gross misunderstanding about how their operation works.”

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Supervisor Susan Lacey, a strong advocate of the merger, said authorities from the federal Health Care Financing Administration have failed to recognize the county and its departments as one entity. In the end, supervisors oversee all operations, including the Human Services Agency, she noted.

“That is the direct line of authority,” Lacey said. “You can’t get any more direct than that.”

Lacey said the objective all along has been to avoid placing mentally ill people in the hospital and instead move toward helping them learn to live independently. She said the team approach would better serve the mentally ill.

“I don’t want to fit people into a category,” Lacey said. “I want to do whatever it takes to get them out the door and into a better life. . . . Having them reach their full potential, that is what this is really all about.”

She added, however: “We’re not going to jeopardize the money, we’ve said that from the beginning.”

Supervisor John Flynn agreed.

“We’ll go back to ground zero and take a look at the whole operation,” Flynn said. “There is no way we are going to lose funding.”

Lacey said the combined Human Services Agency may not have to be dismantled, as long as the governance of the county’s mental health unit returns to the hospital.

“We’ll work through it,” Lacey said. “If we have to rearrange the system a bit then that’s what we’ll do.”

Caldwell said she and other federal officials will wait to see what happens at today’s meeting before taking further action.

“It just depends how quickly they undo it and how cooperative they are,” Caldwell said. “We’ve tried to do this in a very reasonable way. The ball is now in their court.”