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Cascadia nailed by Medicaid audit

Overbilling questions, county format change among financial woes
by: , FORD

Cascadia Behavioral Healthcare, the biggest provider of mental health treatment services in Oregon, may owe the government up to $2.7 million for overbilling Medicaid, the health insurance system for the indigent and disabled.

Investigators at the Oregon Department of Human Services identified the potential overbillings in a preliminary audit, and now are engaged in negotiations with Cascadia over the precise amount to be repaid, according to DHS spokesman Ken Palke.

At press time, no one at Cascadia was available to discuss details of the audit, which was performed by the state Office of Payment Accuracy and Recovery. But Palke confirmed that the nonprofit is on the hook for as much as $2.7 million unless it can persuade state regulators that its Medicaid billings were proper.

The Medicaid audit is the latest in a series of financial blows for Cascadia, which suffered through an acute budget shortfall this fall.

Money was so tight that the nonprofit suspended direct deposit for employee paychecks, received shut-off notices from utilities, and at one point owed $325,000 to its own health insurer, Kaiser Permanente.

In the scramble to stay afloat, Cascadia slashed dozens of positions and halted new client intakes. Several high-level executives departed.

'We did go into a cash-flow crisis,' Cascadia CEO Leslie Ford said last week in her Northeast Portland office, her desk swamped with paperwork. 'We sweated making payroll.'

Nonetheless, Ford said, the agency managed to survive the autumn crunch without cutting services, thanks to a cash infusion from Multnomah County totaling nearly $500,000.

Cascadia, which has an annual budget of $60 million and some 1,400 employees, provides a wide range of mental health services in Multnomah County. It maintains a walk-in clinic and provides housing, case management and outreach services.

Last year, Cascadia served 23,000 clients statewide, and it is by far the biggest such provider in Multnomah County, treating 75 percent of the county's low-income residents who have mental illness.

Cascadia's earlier cash-flow problems surfaced last summer, when the county changed its reimbursement system.

During the transition, Cascadia submitted hundreds of thousands of bills that the county's computers kicked out because they were in the wrong format, according to Karl Brimner, director of the county's Mental Health and Addiction Services Division.

Due to a glitch in Cascadia's computer system, however, the nonprofit did not realize those bills had been rejected.

Meanwhile, Cascadia was forced to quit accepting new clients in August because average caseloads were too high - at one point hitting 75 per caseworker, far above the government maximum of 50.

'Our concern was that the high caseloads could affect the quality of services,' Brimner says. 'If a counselor has too big a caseload, they may not be able to see clients as often as they should.'

The crisis grew so acute that by mid-October the agency's new chief financial officer, Scott Dickison, quit after one week on the job.

'I literally walked in on Monday morning and learned there was a strong likelihood they wouldn't make payroll that week,' said Dickison, who promptly returned to his old job as an executive at Regence of Oregon.

The outlook for Cascadia brightened last month, when the county agreed to repay the agency for the bills that initially were rejected, easing the cash crunch. So far, the county repayments have amounted to $466,000, with more potentially on the way.

In addition, the agency reduced its average caseload to 50 and now is accepting new clients.

The impact of the Medicaid audit is unclear, but it clearly represents a potential setback. 'I can't really comment,' said Judy Watson, Cascadia's chief operating officer. 'We remain hopeful that we'll be able to arrive at a solution that will work for Cascadia and meet Medicaid requirements.'

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