Auditor: Manager of behavioral health programs not meeting contract terms

Legislative Auditor's report on DHH Office of Behavioral Health
Legislative Auditor's report on DHH Office of Behavioral Health

A private company that took over management of state behavioral health programs last year has not complied with contract terms, a state audit released Monday found.

The $354 million two-year contract with Magellan Health Services allows the state Department of Health and Hospitals to impose sanctions, but none have been, the Louisiana legislative auditor wrote.

The audit was conducted to provide information on implementation and transition issues for the Louisiana Behavioral Health Partnership.

The auditor looked at the experiences of the Capital Area, South Central and Metropolitan Human Services District as well as the Florida Parishes Human Services Authority.

The entities are in DHH’s budget. Part of their funding is self-generated. “The self-generated revenue budgets are overly optimistic and currently not being met,” the audit said.

Kathy Kliebert, the secretary of the Department of Health and Hospitals, said Monday, “Just focusing on these four providers out of 1,700 really does not give a fair picture in terms of what we are really providing in behavioral health partnership.”

The program has been successful, she said, by allowing DHH to expand access to care for more people and provide better service. It allowed DHH to increase the number of providers from 800 to 1,700.

Prior to the privatization, districts fee for services accounted for less than 2 percent of their operating budget. Under Magellan, as much as 15 percent is projected to be self-generated and that’s not being achieved.

The partnership launched in March 2012. Magellan began providing behavioral health management and all service providers were required to enroll as a Magellan provider and meet its provider requirements.

From March 1, 2012, to Feb. 28, the company received $156 million.

The audit found that claims payments “have been problematic” to four state-aligned agencies seeking reimbursement for mental health and addiction services. The reimbursement problems could “potentially limit their ability to deliver future services,” the auditor wrote.

Extra time and money spent by the agencies in dealing with claims administration is also taking away from services. Capital Area Human Services District reported a $270,000 spending increase in costs related to claims administration.

In an audit response, DHH Assistant Secretary Anthony H. Speier said the health agency and Magellan are working to rectify many of the issues “to support smooth operations and ensure people with behavioral needs receive necessary services.”

Speier gave updates on some of the work being done, including bringing Magellan in compliance on a required electronic health records system.

The contract requires Magellan’s records system, Clinical Advisor, to meet the “meaningful use” standard by March 1, 2013.

The auditor said Magellan did not meet the “significant technical requirements” standard for the system also required by the federal Centers for Medicare and Medicaid Services. Failure to meet the standard could jeopardize federal funding as well as potential grants.

Speier said DHH’s Office of Behavioral Health is negotiating a contract amendment that would extend Magellan’s time requirement to meet the standard.

“To date, we have not received a signed contract amendment,” the audit report said.

The report also detailed:

Conflicting regulations creating confusion and a possible gap in service for an at-risk population - substance abuse patients between age 18 and 20.

Claims payments that are difficult to reconcile with services delivered and claims filed.

Required provider agreements that include significant changes in billing practices from when the state managed the care, including which services are billed, who can provide the services and get paid and how claims are filed.