A state agency improperly collected more than $4 million from its disabled clients and then decided it would be too expensive to figure out how to refund the money.
That's just one finding in a state legislative audit of the Developmental Disabilities Administration of the Maryland Department of Health and Mental Hygiene released yesterday.
The agency oversees the care of about 25,000 people with developmental disabilities, including Down Syndrome. It has consistently failed to monitor the contractors it hires to provide services to this vulnerable population, which are mostly paid for by the federal Medicaid program. The small co-payments by the clients (or their families) were taken for years, and the agency did not realize they were improper.
The last three audits have show similar problems. After a 2013 audit, the DDA (that's the acronym for the Developmental Disabilities Administration) hired consultants to get the books and management straight. This new audit found that DDA did not manage these consultants competently. "The contract rates for four vendor employees ranged from $195 to $416 per hour," the auditors wrote. "Furthermore, DDA lacked an effective means to monitor payments and control costs because the contracts did not contain the anticipated effort (hours) to complete the related deliverables. Moreover, the full contract values were paid even though some deliverables were not received; DDA did not attempt to modify the contract to reduce its payments for those deliverables."
In other words, the state agency hired expensive people to do vital work and then paid them in full even though the work was not completed.
In its response to the audit, DDA Secretary Van T. Mitchell wrote that it disagrees with the auditors' recommendation that it write contracts so that "deliverables" (i.e. work to be done) are more precisely specified, and payment denied for tasks not completed or completed but paid for more than once: "The DDA has agreed that the deliverables were broad and that the DDA lacked an effective means to monitor payments for contract deliverables; therefore, it would be difficult to identify specific work performed under each contract to determine any duplicate payments as suggested in the recommendation."
The auditor suggests DDA work with the Attorney General to determine whether some of the costs of this contract could be recovered—particularly the deliverables which were not delivered. The DDA disagrees with that as well, saying it would be "difficult to implement."
As in previous audits, the auditor found that DDA had failed to bill Medicaid for services in a timely manner, and so forwent more than $200,000 in interest. The DDA concurs with that adding that it has improved vastly over the years: "In FY 2002, the OLA cited the potential loss of $4 million. The November 2009 audit cited the potential loss amount to $421,000. The amount was further reduced in October 2013 to $262,000 and has now been identified as only $210,000 or less than 0.025% of all federal revenue collected during the audit period."
So, progress is being made. The DDA also says it will soon be able to speed up reimbursement requests because the state legislature has allowed it to stop paying its providers (the ones it has not monitored very well) in advance for the services they render.
"Pursuant to legislation passed in 2014, the DDA will be able to make the change once an independent, cost-driven rate setting study is complete," Mitchell writes. "The study is currently underway and the final report with recommendation is due January 2017."