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The Honolulu Advertiser
Posted on: Saturday, February 9, 2002

Mental health services mismanaged, audit says

By Alice Keesing
Advertiser Health Writer

The Department of Health's adult mental health division has mismanaged its contracts with private service providers, resulting in services that are not cost-effective and placing patients at risk of harm, according to a draft report by the state auditor.

State health director Bruce Anderson countered that the report, which has yet to be officially released, is outdated and does not take into account federal court orders the department is following.

"I am also disappointed with the strong language used in the report suggesting there is some intentional wrongdoing," Anderson said. "I don't believe there is any evidence of any intentional wrongdoing."

The report from state auditor Marion Higa cites several practices that, it said, could result in fraud, cronyism, favoritism or theft.

The division serves about 4,500 adults with mental illnesses such as schizophrenia or manic depression.

As mandated by the federal court, the division has moved an increasing number of patients from institutionalized settings such as the State Hospital to private, community-based services.

Because of the increased services, the adult mental health division's budget nearly doubled from $20 million in fiscal year 1999-2000 to nearly $40 million in 2000-2001. During 1999-2000, the division paid 21 private agencies about $12 million for services ranging from crisis intervention to residential arrangements and treatment programs.

After reviewing 20 percent of those contracts, Higa's draft audit concluded they were not awarded in the most cost-effective way.

The audit also said the division is lax in its oversight, resulting in incorrect payments and placing patients at risk of harm.

Health Department officials acknowledge there have been oversight and management problems, but say they already are addressing them through a four-year plan.

"It's a disservice to the public to leave the impression that problems remain and haven't been addressed," Anderson said.

The division is developing the systems to ensure patients get the best services, said the division's clinical-medical director, Tom Hester. It also is developing an automated information management system.

The auditor also recommended that services be authorized before they are performed. In one case, the report found that a contractor received permission to deliver services to a patient more than two months after the fact.

But Hester said prior authorization is impossible in crisis situations, such as threatened suicides, where a speedy response is important.

The draft report also notes the auditor's "serious concern" over a business relationship between a division employee and a contractor, Helping Hands Hawai'i, which received $7 million of the $12 million spent on community-based services in 1999-2000.

The employee later left the department to work for Helping Hands Hawai'i, but kept an office at the department.

"Such advantageous arrangements give the appearance of a conflict of interest and possible collusion," according to the draft report.

Deputy director for behavioral health Anita Swanson said the employee did not sit on the panel that approved the contract to Helping Hands Hawai'i. But she agreed there was the appearance of a conflict of interest when he remained on department premises while working for the contractor.

The relationship was ended when it came to her and Anderson's attention, she said. The man was later hired back at the department as an emergency hire.

Reach Alice Keesing at akeesing@honoluluadvertiser.com or 525-8014.