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Auditers to Developmental Disabilities Administration: Millions lost due to incompetence, waste

October 15, 2013

When legislative audits come out, the length tells you how bad it is. At 47 pages, the audit of the Developmental Disabilities Administration doesn’t disappoint. It tells of millions of dollars lost because of amazing procedures that perpetuate waste.

DDA, as it is known, is a division of the Department of Health and Mental Hygiene. The Administration spends about $800 million each year to serve 24,000 people–an average of more than $33,000 per person per year. This is not necessarily a big number, as Maryland spends about $5,000 less on each “consumer” than New York State spends on each of its developmentally disabled consumers. There are some 7,000 developmentally disabled people on DDA’s waiting list, so not wasting money might pay some real dividends for the consumers, who have intellectual disabilities and/or conditions such as Down syndrome.

A lot of the cost for these services is reimbursed by the federal government, mainly through Medicaid. Keeping that money flowing is a key job for the DDA, and it’s been a key failure. A federal inspector general report of DDA expenditures in 2011 found a 95 percent error rate and asked for $20.6 million back from the state of Maryland.

The people whose job it was to make sure that people were getting the services that were paid for did not. Not even the forms were filled out, the legislative auditors found. And the other part of the job—making sure the consumers remain eligible for federal funding for the services they’re receiving (or not)—was not done either. The Auditors:

Specifically, according to DDA records, as of July 2012, 28 consumers had lost Medicaid eligibility as early as March 2009, because the resource/service coordinators did not provide the required eligibility reassessment documentation in a timely basis.

On the per-consumer basis, things were shaky. But the department also failed on the larger Medicaid reimbursement front, dropping another $2.4 million:

this resultant billing rate was understated because each year’s rate was calculated based on prior year consumer costs, without adjustments for actual costs, which historically have risen each year (as evidenced by the continually increasing federal fund reimbursable rates).1 Furthermore, DDA included all consumers in its consumer cost calculation rather than just including Medicaid-eligible consumers.

Another $5.2 million was lost by prepaying contractors and then asking them to submit bills later so the state could be reimbursed by the feds. “However, DDA did not monitor the providers to ensure they actually submitted the claims,” the auditors wrote. “Furthermore, since the providers were paid in advance, the providers did not need to submit the claims to receive their payments.”

The department failed to make claims for about a third of the expenses it might have been reimbursed. It lost interest income on that money as well. The interest alone was $262,000.

The department also did not follow up on claims it made that the feds rejected—32,000 of them—which cost the state another $2.2 million.

The consumers themselves could have kicked in $4.8 million more for their own care than the department collected from them, the audit found.

And this: The department took $610,000 from a new alcohol tax and, on an “emergency” basis, bought cars for 23 consumers. Average cost: $26,521 (the audit says “more than $15,000”). Quoth the auditors:

However, its policies did not define what constituted an emergency situation and did not contain provisions that allowed for policy deviations for those situations. Furthermore, our review of five vehicle purchases ranging in cost from $30,600 to $41,300 and totaling $188,000 disclosed that, although there was documentation indicating the need for transportation for the consumers, there was no indication that DDA had authorized the purchases based on the existence of an emergency.

In a letter to the auditors, the Administration—in the person of DHMH Director Dr. Joshua Sharfstein– disagreed with the finding. He says the rules allowed for the adaptation of vehicles or for “other” expenditures meant to “help children and adults with developmental disabilities avoid crisis situations and to remain in their own or in their family home.” [Emphasis in original]

The auditors respond by saying buying cars is not the same as adapting cars. “Given the significant expenditures involved, it would seem reasonable that the policy would specifically identify vehicle purchases as an allowable use if that was the intent. Nevertheless, the SSD program has been discontinued.”

In all there were 13 findings, including six of the 14 findings from the last audit which were repeated.

In June, Sharfstein replaced DDA director Frank Kirkland with Acting Director Patrick Dooley, assisted by a consulting firm.  But don’t worry: no administrators were harmed. Kirkland is now a “special adviser to the acting director.”

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  • 1017

    Incompetence, waste, and sheer ARROGANCE with contempt because DDA is not subject to the rules by which everyone else must abide. Everyone needs a good new car. Why were these 23 people chosen from among the hundreds begging for permanent cost free “emergency” transportation to “avoid [getting into] crisis situations. It’s comes down to who you know. What’s new?

  • Clancysrider

    I’d like to see the full report. Any ideas on how I can obtain one?

  • Edward Ericson Jr