Louisiana Legislative Auditor
Daryl G. Purpera, CPA, CFE

October 5, 2015

Central Louisiana Human Services District Unable to Bill for $1.8 Million in Services; DHH Contract Billing Issues Cost the State Millions

A legislative audit report released Monday found Central Louisiana Human Services District (CLHSD) experienced continued difficulties with the problematic Clinical Advisor billing system used by DHH’s private contractor Magellan Health Services (Magellan). This meant CLHSD was unable to bill Medicare, third-party providers, and private-pay patients for services totaling nearly $1.8 million last year.

Of that $1.8 million unbilled on June 30, 2015, the report found that more than $926,000 was for services performed more than 12 months earlier, and now may be uncollectible. Magellan used Clinical Advisor to manage billing for services for the state’s behavioral health programs.

This trouble with billing means that CLHSD, in its first year of full operation, generated only 25 percent of the annual budget DHH set for the human services district to collect in self-generated fees. DHH budgeted that CLHSD would bring in just over $2 million in fees for its services. Instead, CLHSD collected $498,000. The Legislative Auditor in a Sept. 21, 2015 report had noted similar billing and budget struggles at the Northeast Delta Human Services Authority.

This is the third year in a row that the state auditor’s reports have alerted DHH that Magellan’s Clinical Advisor billing system is confusing, time-consuming and expensive for human services districts to use and is jeopardizing the delivery of critical behavioral health services.

In 2013, a year after DHH contracted with Magellan to manage the Louisiana Behavioral Health Partnership program, the Legislative Auditor reported that numerous district or authority claims for payment were being rejected or denied. (See Aug. 14, 2013 DHH Office of Behavioral Health Report.)

That year, new employees necessary to operate Magellan’s new billing system were costing human services districts across the state hundreds of thousands of dollars. The 2013 report noted that Magellan often took weeks or months to send payments for services. Yet, DHH was expecting each district to raise a much higher percentage of its budget in self-generated fees than previously expected -- and under a new system in which it was very difficult to get paid.

The Legislative Auditor in 2013 urged DHH to better monitor Magellan’s contract and enforce the contractual requirement that Clinical Advisor meet the “meaningful use standard.”

In 2014, the Legislative Auditor reported that problems with Clinical Advisor were still causing human services districts to lose money, leave jobs unfilled and delay services to clients. (See Sept. 24, 2014 DHH Louisiana Behavioral Health Partnership Follow-Up Report.)

The 2014 report noted that Clinical Advisor was not designed to accommodate private payers or third-party payments like Medicare and private insurance. Three districts at that time had more than $1 million in claims that were beyond the one-year expiration date for collection. The report noted that, beginning July 1, 2014, DHH was going to require four more human services districts to use Clinical Advisor, even though DHH knew the program “was inadequate for billing third-party claims.”

The 2014 report also noted that the five human services districts reviewed that year had been able to generate only 64 percent of the self-generated fees DHH budgeted for the districts to collect. Still, that year DHH had extended Magellan’s $544 million contract through Feb. 28, 2015.

The Legislative Auditor again in that 2014 report urged DHH to correct billing problems and enforce contract terms requiring Clinical Advisor to meet the “meaningful use standard.”

“The warning signs were there in 2013 and 2014 that this problematic billing system was threatening the delivery of critical behavioral health services to vulnerable Louisiana citizens,” said Legislative Auditor Daryl Purpera. “It is regrettable that failure to address those issues has now cost the state millions over the last two years, and that DHH has continued to set self-generated fee budgets that are unreasonable for these human services districts under the current billing process.”

CLHSD provides community-based health care to citizens with mental health issues, addictions and developmental challenges in eight medically underserved parishes in central Louisiana. After DHH created the Louisiana Behavioral Health Partnership in March 2012, it turned its former regional offices into 10 separate Human Services Districts around the state. CLHSD was established in July 2013 and began full operations July 1, 2014.

Magellan’s contract with DHH ends on Nov. 30, 2015. The human services districts will then transition to contracting with each of the Bayou Health private insurers to provide behavioral health services under a managed care system.

For more information contact:

Legislative Auditor
225.339.3800



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Office of the Louisiana Legislative Auditor | www.LLA.La.gov