County Chiefs Point Fingers in Medicare Fiasco

Ventura County officials, who face repayment of $17 million to Medicare, sparred Wednesday over who should take the blame for years of faulty billing practices in the county’s mental health department.

Supervisor Frank Schillo and chief county executive Lin Koester lay the blame on former mental health director Randy Feltman. Feltman points the finger at Health Care Agency Director Pierre Durand, accusing Durand of orchestrating a campaign to make him the fall guy.

Durand, while declining to make public comment, provided a packet of documents that appear to implicate Feltman.

Meanwhile, Ventura County taxpayer advocate Michael Saliba says the Board of Supervisors is ultimately accountable for what has become the county’s biggest financial fiasco in recent history.

“We elect our Board of Supervisors to oversee these things and to make decisions based on complete public input and complete input by staff,” Saliba said. “That was not done in this situation.

Federal attention was drawn to billing practices in the county’s mental health department as a result of a vote last year by three supervisors--Susan Lacey, Kathy Long and John K. Flynn--to merge the county’s mental health and social services agencies.

Nine months later, the board rescinded the merger after it became clear that federal regulators believed the reorganization violated Medicare billing rules. Opposing camps in county government--those who supported the merger and those who did not--have been at war ever since.

Saliba called the merger vote the “worst” board decision he has seen in his six years as president of the Ventura County Taxpayers Assn. If the full $17-million repayment is required, Saliba said, it will take years for the county to rebuild its reserves, potentially affecting services ranging from health care for the poor to roads and sewers.

“The county is going to have to tighten its belt in the next few years,” he said.

The latest squabble stems from the disclosure that Ventura County may be forced to repay as much as $17 million in Medicare reimbursements as a result of improper billing practices that have taken place since 1990. Investigators contend Medicare bills were submitted under doctors’ names for services conducted by lower-paid health care workers.

The county is attempting to negotiate a lower repayment figure with the U.S. attorney’s office and a final settlement will likely not be made for several weeks, officials said. A separate federal review of health care billings, which could result in the loss of further Medicare funding, is also pending.

A $17-million hit by the U.S. attorney’s office would seriously deplete the county’s $25-million reserve fund, officials said. Facing such a large payment, attacks and finger-pointing among opposing camps of county officials intensified Wednesday.

Schillo, a merger opponent, said Feltman--who wrote an early proposal supporting the merger--is squarely to blame for improper billing practices.

Feltman, who now heads the county’s welfare-to-work program, was director of the county’s mental health department in the early 1990s, a portion of the period being reviewed by federal regulators. While there, Feltman designed a mental health system that required the county to bill for reimbursements in a way that violated federal rules, Schillo said.

“Clearly, in my mind, this has Randy Feltman’s name written all over it,” the supervisor said.

Schillo is backed by Koester, another merger opponent, who said an initial investigation by his office also places fault with Feltman.

They say a March 1993 letter from the U.S. Health Care Financing Administration, addressed to Feltman, proves that federal regulators gave him the opportunity to restructure the clinics in a way that would make them compliant with billing requirements.

And they say other documents show Feltman ignored that advice and continued with a billing system that rewarded the county with higher reimbursement payments even though it violated billing rules.

After Feltman left the mental health department in 1995, the billing system continued under his successor, Stephen D. Kaplan, officials say. Kaplan was ousted earlier this year for his role in the failed merger.

The probe by the U.S. attorney’s office was launched late last year after doctors complained their names and provider numbers were being used on Medicare claim forms for services actually provided by social workers, psychologists and nurses.

Feltman contends that the billing practice was legal at the time, and was even encouraged by the state of California, which had adopted a more coordinated approach for care of the mentally ill.

Mental health teams, including doctors, would hold a meeting to discuss the best therapies, medication and other treatments for an individual patient. A treatment plan would then be drawn up and signed by the physician on the team, Feltman said.

The billings then went out as if the doctor had ordered the services, a practice Feltman contends was allowable. Any changes in the treatment plans were done in an open process that was reviewed and approved by Medicare, he said.

“We completed treatment plans in accordance with the rules as we understood existed at the time,” he said. “We tried to comply with all the regulations.”

Feltman believes that Durand, with whom he clashed while he was mental health director, is now selectively providing documents to Koester and supervisors that tie Feltman to billing decisions. But in truth, Feltman says, Durand’s office handled the billings and agreements with Medicare.

“I am disappointed but not surprised that Supervisor Schillo would criticize me since Pierre Durand is orchestrating the information he has received,” Feltman said in a statement. “ . . . Pierre signed all the correspondence and agreements related to Medicare and supervised the billing staff and functions.”

Koester and Schillo say Durand had some billing duties, but that oversight of the claims signed by doctors rested with Feltman.

“People who were doing the billings were not questioning who signed the billings, that was not their responsibility,” Schillo said. “Randy understood how the system was supposed to work and he didn’t follow through.”

Flynn said there are “several levels of blame,” starting from the supervisors and trickling down to department heads. But Flynn said he sees no benefit in trying to find a scapegoat. He believes the problems are systemic and caused, in part, by federal and state billing requirements that are complex and often contradictory.

“I wouldn’t blame Randy for any of this,” Flynn said. “Nor Pierre. It’s just got to be resolved.”