Nevada’s mental health homes: Conditions better, finances are a mess

Auditors say there’s good news and bad news in their most recent review of Community Based Living Arrangement homes for mental health patients.

The good news — the health division has made huge strides improving the deplorable conditions in some of those CBLA group homes they reported on in January.

The bad news — a new financial audit of payments to operators of those homes shows upward of $1.5 million in overpayments and potential fraud by providers.

Auditor Todd Peterson said there were so many problems discovered the issues have been turned over to the Attorney General’s office, Governor’s office and the Labor Commissioner.

“The finances, we expected would be as bad as the conditions of the homes,” said Behavioral Health Administrator Julie Kotchevar.

The earlier audit of conditions found mental health clients living in squalid conditions with broken plumbing, windows and filthy rooms in some of the homes. She said, however, the most recent inspections, “did not find any that had health and safety issues.”

Peterson said the financial audit identified far more service hours billed by providers than supported by staff timesheets, duplicate billings to multiple clients for the same service hours and other similar problems.

As an example, one provider billed the division for 553 service hours in a month when staff timesheets showed only 390 hours worked.

“Some provider staff recorded working 24 or more hours in a day,” the audit states.

Peterson said, however, the agency needs to thoroughly look into the overbilling issue because the system of recording staff hours is so archaic and complicated.

He said in reviewing the monthly home payments, the sample auditors tested found the state was overcharged in 49 percent of those cases.

“I’m sure some are intentionally overbilling and some are just unintentional errors,” he said.

“We’ve known we’ve been housing them in deplorable conditions and now we know we’re overpaying for it,” said State Sen. Ben Kieckhefer, R-Reno, a member of the audit subcommittee. “It’s a system I just see as broken right now.”

Audit Subcommittee Chairman, Assemblywoman Teresa Benitez Thompson, D-Reno, said there has to be a major change.

“Without some substantial change, we don’t have a way to stop this,” she said.

Kotchevar told lawmakers she’s working on that, hopefully moving to measuring whether those mental health clients are achieving outcomes and making progress instead of just counting hours of different services they receive.

She said one problem is all the staff in those homes are keeping their records of services provided on paper and in hourly units. She said an electronic record keeping system would dramatically improve things and moving to a daily payment rate per client would stop duplicate billing of hours and clean up much of the mess.

But she said first she needs to get issues with the financial reporting system fixed.

Peterson said one other issue uncovered is some employees in those homes were being paid less than the state minimum wage of $8.25 an hour and others were being treated as independent contractors to avoid employment taxes when, by job description, they aren’t independent contractors.

That issue has been turned over to the Labor Commissioner.

But in the review of the January audit that was sharply critical of conditions in many of those homes, Kotchevar said her staff has made major progress. She said they have conducted more than 300 inspections, showing up at those homes so often “some of the residents were annoyed at us.”

She said there are fewer homes on the list now because some providers closed down after the January audit was released and her division has closed some others. But she said none of those clients were left without a place to live as a result.

She said they’re continuing to work on the problems both financial and health/safety to ensure the mental health patients in those homes are well cared for and the state is paying only what it should to provide them with services.


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