Officials Try to Head Off Added Health Care Losses

Resigned to paying $15.3 million to settle Ventura County’s Medicare fraud case, officials are now scrambling to keep a lid on other potential revenue losses stemming from outstanding federal and state audits.

There are three cases that could cost the county millions of dollars more:

* The U.S. Health Care Financing Agency alleges that the county violated federal organizational rules during the months it merged its social services and mental health departments. That probe is expected to cost the county about $350,000.

* Health care agency officials also allege that many of the county’s 43 public health clinics are receiving a higher Medicare reimbursement rate than allowed under new regulations. If the reimbursement rate is lowered for all clinics, the county could lose as much as $2 million per year, officials said.

* The state Department of Mental Health warns that the county could be stripped of $5.3 million in annual funding unless it fixes what auditors say is a deterioration in services for the mentally ill.

In the Health Care Financing Agency probe, County Counsel Jim McBride said the county would not be penalized for the full nine months of the botched superagency, but for only 43 days--from April 7 to May 19.

During those six weeks, mental health doctors were not working under the county hospital administration as required by federal law. They were working for the newly created superagency.

County officials corrected that problem by naming Chief Administrative Officer Lin Koester as operations manager, with doctors reporting to him, rather than to agency directors, McBride said.

“The merger broke the single line of authority,” McBride said on Wednesday. “It moved the mental health department out of direct line with the hospital and put it onto another agency.”

To settle that matter, McBride said he is working out a deal with federal officials in “the neighborhood of $300,000.”

The county is reimbursed about $8,000 a day from Medicare for patient services. For the 43 days in question, the county could be ordered to repay at least $344,000.

“It’s pretty well wrapped up,” said McBride, adding that the deal may be settled as early as next week. “We’re still talking, but all indications are that the organizational structure was acceptable, except for the April to May period.”

Meanwhile, county officials are also attempting to bring closure to the two outstanding issues uncovered by the failed merger.

The clinic dispute centers on the county’s contention that the facilities are outpatient satellites of the Ventura County Medical Center--a designation that entitles the county to higher Medicare payments.

But in April, federal officials said that many of the clinics were operating independently from the medical center and should not have been billing Medicare at the higher rate.

Since then, nine clinics have qualified for a higher reimbursement rate. The county will not seek a higher reimbursement rate for at least 11 clinics, officials said, but is working to bring the remaining 23 clinics into compliance.

“We expect to submit proposals for the additional clinics this week,” Health Care Agency Deputy Director Mike Powers said on Wednesday. “We’re trying to address their concerns.”

In response to the state probe, officials have vowed to improve services for the mentally ill. In a July 29 report to the state, Behavioral Health Director David Gudeman outlined ways he planned to repair the system.

State officials had warned that the mental health care for children and adults has declined so much in recent years that Ventura County no longer qualifies as a state leader, a standing that entitles it to $5.3 million in extra funding per year.