Posted on: Friday, May 17, 2002

Indictment 'touched a nerve'

By Jennifer Hiller
Advertiser Education Writer

A day after the O'ahu grand jury issued its first indictment relating to special-education services, state health and education officials insisted that widespread fraud and abuse do not plague the system.

But Attorney General Earl Anzai did not waver from his position that the 10-count indictment of Susan Puapuaga, formerly a therapeutic aide with the mental health services agency Alaka'i Na Keiki, represents the "tip of the iceberg" in an investigation into whether the hundreds of millions of dollars spent each year are actually benefiting special-needs children under the Felix consent decree.

Hawai'i's school system has been under federal court oversight since the state signed the decree in 1994, agreeing to improve special-education services required by federal law.

Anzai said more indictments are likely within a month. Investigators are looking into at least six other care providers, and the Medicaid Investigations Division office was inundated with phone calls yesterday from parents, as well as employees within social service agencies willing to provide insider information to investigators.

"I think it touched a nerve," Anzai said. "The calls that we're getting today suggest the problem is deeper than the departments suspect."

Department of Health officials also are investigating a few dozen care providers who have billed excessive amounts, but Health Director Bruce Anderson said the vast majority of the department's 1,274 contract employees are honest and dedicated.

Anderson also said he is comfortable with his department's billing and auditing system, which has seen additional safeguards since the state starting providing more special-education and mental health services.

"If nothing else, this investigation has been a wake-up call to the system," Anderson said. "Everyone is walking on eggshells now."

Any billing irregularities will be turned over to the attorney general, Anderson said.

Wednesday's indictment of Puapuaga is the latest chapter in the state's difficult and nearly decade-long effort to improve the special-education system. And it comes after months of work by legislators concerned about spiraling costs and the potential for waste or fraud.

Barb Gimlin, mother of 3-year-old Jamie, who was diagnosed as autistic last year, called the attorney general's hot line yesterday.

Gimlin said she has told people at DOH that she suspected a therapist who previously worked with her son was padding her hours, but never got much of a response from state officials.

"The therapist so rarely came by. I just had a hunch that we were getting billed," Gimlin said. "I can count on one hand the times she met with us."

When Gimlin looked at a billing report for October 2001 through February 2002, she was astonished: The therapist had charged for numerous visits that never occurred. One time, when the family bumped into the therapist at a restaurant and invited her to eat breakfast with them, the therapist billed it. Another time, the therapist asked to meet with Gimlin at Starbuck's before a scheduled meeting and charged the state for the coffeehouse visit.

"It would have been wonderful if she was paying that much attention to Jamie," Gimlin said.

Now Jamie is with a different therapeutic aide and therapist at a different agency, and he is flourishing with speech and behavior training, Gimlin said. He also attends a preschool at Makaha Elementary.

But Gimlin is most frustrated about the time that her son lost when he should have been receiving help from his first therapist. "It's just now in the last few months that he's been getting the best training. He's taken off. It should have been done all along, though. It's overwhelming and its frustrating. It's been a fight the whole way."

Anzai encouraged parents of special-needs students to monitor billing reports that the DOH sends them and to compare them against their own family's records of when their child received services.

In the Puapuaga case, a child's family notified officials about billing discrepancies and Auditor Marion Higa's office flagged the case as one for the attorney general to investigate further.

Alaka'i Na Keiki already has reimbursed the state for at least part of the $1,800 Puapuaga billed, Anderson said.

But Anderson said the $1,800 indictment does not amount to much in a system that pays $87 million a year to contract with care providers and handles 296,000 billings a year. "It's unfortunate that a few bad eggs leave a bad taste for everyone," he said.

There are about 21,000 special-education children in the state. About 10,000 of those are Felix-class, meaning that they require mental health services. The DOH handles about 2,700 of the most severe cases.

State schools Superintendent Pat Hamamoto also said the department has been working to make sure that it has the proper accountability procedures in place. "We're aware of many of the issues that were brought up by the investigative committee," Hamamoto said. "We do our own internal checks."

The state has spent more than $1 billion on Felix efforts without reaching court compliance, although federal court officials have indicated the state is on the right track to be found in substantial compliance at a June 10 hearing before U.S. District Judge David Ezra.

But members of a special legislative investigative committee remain alarmed that there are not sufficient checks to prevent fraud. While their efforts have been criticized by federal court officials, plaintiffs attorneys and some state health and education officials as a distraction, legislators are seeing the indictment and investigation as a vindication.

Anyone with information about false claims or irregular billing is asked to call the Attorney General's Medicaid Investigations Division at 586-1058. The office is working to set up a toll-free number for Neighbor Island residents.

Reach Jennifer Hiller at jhiller@honoluluadvertiser.com or 525-8084.