Data Shows County Overspent for Care Given to Homeless

Times Staff Writer

Los Angeles County’s program for the homeless mentally ill has paid hundreds of thousand of dollars to private residential care programs, even though they have delivered little or no service to the homeless, an examination of reports to the state Department of Mental Health shows.

These reports also indicate that some homeless care providers were charging more than 10 times the usual rate for providing counseling and other psychological services to the homeless mentally ill.

The information--which was provided by health care firms to the county Department of Mental Health and submitted to state officials in year-end reports--was obtained by The Times and confirmed in interviews with county officials.


In some cases, county officials were critical of their contractors.

Contract Terminated

In one case, exasperated Los Angeles County officials said they terminated a contract with a San Gabriel Valley provider in December after waiting for more than a year for a homeless-care program to get under way. Another facility in South Los Angeles, which had provided only limited service for homeless clients, also suddenly dropped its homeless program last summer after a dispute with the county. Funds were nevertheless provided to the private facilities from the time contracts were supposed to take effect.

County mental health officials acknowledged that during the first years of the state-funded homeless program, some private contractors had reported to them that little or no direct care had been provided the homeless.

But county officials also expressed sympathy with these providers because of the difficulty and expense involved in setting up residential programs for the homeless. Among the difficulties they cited were finding trained personnel, getting neighbors to agree to the opening of residential facilities and persuading the homeless to leave the streets and live in a supervised environment.

Added expenses also arose in finding a site and refurbishing it.

“Those contractors may have had licensing delays or problems obtaining facilities for their residential programs,” said Ambrose Rodriguez, a deputy director in the Mental Health Department in charge of contracts and program services.

Some Barriers Overcome

Blaming the need to overcome community opposition to some mental health sites and such hurdles as local planning requirements, Rodriguez said contractors during the early years of the county’s homeless program had encountered a number of problems that were eventually overcome.

“The programs we have out there now, though, are very effective,” he added.

Nevertheless, the county has changed the way it supervises these programs. John Davis, head of the county’s contracts and grants division, said the county now is trying to inspect every facility each year to make sure services are provided.

The disclosure of the failure to deliver services comes as the county’s Mental Health Department is under fire for alleged mismanagement of its budget of more than $230 million. It has been accused of wasting money while cutting down services to the homeless and others.

In the case of privately administered homeless programs, a former official of the department said that the county awarded contracts without close scrutiny and, in a “hopscotch fashion,” placed more emphasis on “glossy” presentations than substantive proposals for the mentally ill homeless.

“When the money first came out, what happened is that people who were the smartest and slickest got much of the money, not necessarily those with the best or the most effective programs,” said Dr. Rodger Farr, a homeless expert who retired last summer from the Mental Health Department.

Farr was reluctant to single out Los Angeles for criticism and said the entire statewide program for the homeless mentally ill has failed to live up to expectations.

But for some critics, the problem is particularly acute in Los Angeles County, where the latest allegations contend that money was paid to private contractors who provided little or no “units of service” during the first years of the homeless program.

The homeless program, which was known as the Mental Health Services Act of 1985, provided for more than $20 million a year statewide--and more than $7 million for Los Angeles County--for new programs for the mentally ill homeless.

According to cost-report documents submitted to the state, the county Department of Mental Health allocated in the first year of the program about $135,000 to private contractors who reported providing “no units of service”--meaning service to no one. A unit of service is a government measure that is used to determine whether particular services are provided to homeless mentally ill clients. During the second year of the program, another $450,000 went to similar contractors that reported no units of service to the state.

In the meantime, about $969,000 went to half a dozen contractors that first year which provided services to the mentally ill at rates which far exceeded the normal rates charged to local governments for mental health services.

For example, the clinics apparently provided services at rates ranging from $225 per unit of service to $2,100 per unit of service, when the normal rates ranged from $50 to $80 for such services as community outreach and residential services, according to private contractor and county records.

In the second year of the effort, some of those programs--with more than $575,000 in contracts--were still charging much higher rates per unit of service, according to the cost reports.

County officials do not dispute the basic accuracy of the cost reports, except in two cases where they said the units of service had been either coded incorrectly or entered erroneously in the cost reports. In the overwhelming number of cases, they said that the contractors had reported the large fees while apparently not delivering services to homeless clients.

Money that was paid, they said, was used for start-up costs, rather than for health care, officials said.

Roberto Quiroz, director of the county Mental Health Department, has staunchly defended his administration of the homeless program.

But Nathan Shappell, chairman of the Little Hoover Commission, last week called on the Board of Supervisors to investigate why Quiroz returned $3.15 million in homeless money to the state at a time when local programs for the homeless mentally ill were struggling.

And Assemblyman Bruce Bronzan (D-Fresno), chairman of the Legislative Audit Committee and a leader in the mental health field, said he also has asked the state auditor-general’s office to launch an inquiry into the department.