DALLAS - MetroCare's losses in 2000 hit $4 million Audit shows mental-health service provider also made billing errors

10/06/2000

By Ed Housewright / The Dallas Morning News

The area's largest provider of mental-health services to low-income people has lost $4 million this year, written $1.2 million in checks it couldn't cover and made erroneous billings, according to an audit commissioned by the agency.

Dallas MetroCare Services, formerly Dallas County Mental Health and Mental Retardation, ordered the review after a third of its board members asked the state in June to take over the agency because of fiscal problems.

According to the audit, MetroCare "continues to have cash flow shortages. ... Payments to vendors have been delayed, and checks have been returned due to insufficient funds."

The auditors, Deloitte & Touche, also found inefficiencies in the billing process, billing inaccuracies and duplicate billings.

David Phillips, vice chairman of MetroCare's board, said MetroCare is taking steps to improve its finances and bookkeeping.

But he said some of the losses sustained by the quasi-governmental agency have been unavoidable. MetroCare probably will have to reduce services to low-income patients to survive, he said.

"The question is how drastic will the measures be," Mr. Phillips said.

MetroCare's board members are appointed by the Dallas County Commissioners Court.

The audit addressed concerns raised in a June letter to state mental-health officials by MetroCare board members Rick Davis, Joe Hernandez and Michael Petty.

Karen Hale, commissioner of the Texas Department of Mental Health and Mental Retardation, rejected the three board members' call for a state takeover, saying such a drastic measure would be warranted only as "a last resort."

Dr. Davis said the audit was indicative of severe financial problems at the agency. He said he was "terribly discouraged" by the "lack of financial accountability."

"It's getting worse and worse," he added.

The audit credited MetroCare with undertaking "increased efforts to enhance cash flows" and with trying to make other improvements.

MetroCare's management has attributed its financial problems largely to NorthSTAR, a managed-care system for mental-health and drug-abuse services that was put in place in July 1999.

In addition to Dallas County, Collin, Rockwall, Ellis, Kaufman, Hunt and Navarro counties are part of NorthSTAR.

MetroCare officials have said state legislators didn't provide enough money for the new system.

"There are fundamental flaws in the NorthSTAR pilot," Jim Blagg, MetroCare's chief executive officer, said in a recent report to the state MHMR board.

"Direct care dollars have been taken out of what was already an underfunded system. No amount of efficiency on the part of providers can recapture those funds."

MetroCare board member John Olsson also complained about NorthSTAR at a public meeting Tuesday on the status of the new system.

He said that NorthSTAR has had a "major negative impact" on MetroCare's finances and that its reserves have been depleted.

"If we are forced to close our doors ... the impact on clients could be catastrophic," he said.

State officials hope MetroCare "will survive and do well," said Dave Wanser, who heads NorthSTAR for the state MHMR department.

"We want to provide all the assistance we possibly can," Dr. Wanser said.

Dallas County Judge Lee Jackson and Commissioner Mike Cantrell have recently met with Dr. Wanser and some MetroCare board members to discuss the agency's fiscal condition.

"NorthSTAR has produced some benefits for consumers, but it continues to be a challenge for Dallas MetroCare to be self-supporting in this new managed-care environment," Mr. Jackson said.

"We didn't anticipate all the billing and eligibility and reimbursement complications of this first year of operation."

http://www.dallasnews.com/metro/185869_metrocare_06me.html

-- Doris (reaper@pacifier.com), October 06, 2000