Unbiased Information For Policymakers + Media
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News Release
September 28, 2015
Contact: Lead Author, Dr. E. Fuller Torrey
September 28, 2015
Contact: Lead Author, Dr. E. Fuller Torrey
torreyf@stanleyresearch.org
301-571-2078
New report suggests that $4 to $8 billion in public mental
health funds are being lost to fraud, waste, and excess profits.
These funds
are sufficient to provide significant psychiatric services to most of the
estimated 216,000 individuals with serious mental illness who are homeless as
well as the 350,000 who are in jail or prison. (Full report)
(New
York. NY) Public mental illness services have markedly deteriorated over the
past three decades. The “mayhem du jour” includes mentally ill individuals
carrying out mass killings; overflowing jails and prisons; being kept in
emergency rooms for days while awaiting a psychiatric bed; being killed by law
enforcement officials; and taking up permanent residence on the nation’s
sidewalks and other public spaces. It is widely assumed that the cause of the
problem is a decrease in public funds for mental illness treatment programs,
when in fact the funds available to state mental health agencies in constant
dollars have increased modestly since 1982. So where does the money go?
A new
report, “Fraud, Waste and Excess Profits: The Fate of Money Intended to Treat People with Serious Mental Illness”, suggests a partial answer. Between $4 and
$8 billion, which is 10 to 20 percent of the $40 billion spent annually by
state mental health agencies, is being lost to fraud, waste, and excess profits
to for-profit managed care companies. For example:
1.
In 2014 we identified 18 media accounts of mental
health Medicare and Medicaid fraud, totaling approximately $1 billion. A nurse
in Iowa submitted more than 6,000 false claims; a social worker in North
Carolina submitted claims for 64 hours of therapy in a single day; and a mental
health center in Louisiana submitted $258 million in false Medicare claims for
partial hospitalization.
2.
California voters in 2004 approved a special tax
to generate new revenue for providing services for individuals with serious
mental illness. The tax produces over $1 billion each year. However, some of
the MHSA funds have been wasted by being diverted to activities such as yoga,
line-dancing, therapeutic drumming, and community gardens.
3.
For profit managed care companies are commonly
allowed to keep up to 20 percent of state contracts for administrative costs
and profit. In Florida WellCare was given a contract to provide mental health
care to the state’s Medicaid population. A WellCare vice-president was recorded
as claiming that the company was keeping 50 percent of the contract. Three
WellCare executives were subsequently convicted of fraud and sentenced to
prison.
Such
findings suggest that Richard Kusserow, the former Inspector General of the
Department of Health and Human Services, was correct in 2014 when he claimed
that “many healthcare fraud investigators believe mental healthcare givers,
such as psychiatrists and psychologists, have the worst fraud record of all
disciplines.”
The
present report also makes several recommendations. The federal Health Care
Fraud Prevention and Enforcement Action Team (HEAT Task Force) should be
significantly expanded since it has been shown to pay for itself. State mental
health agencies should exert active, assertive oversight over community
programs. This oversight should include vigorous examination of Medicaid and
Medicare claims; unannounced audits of community mental health programs looking
for fraud and waste; and a prohibition on the use of for-profit managed care
companies. Such corrective actions are unlikely to happen unless mental health
advocacy groups and the public in general demand it.
In
commenting on the report, lead author Dr. E. Fuller Torrey, Associate Director of the Stanley Medical Research Institute noted: “The core
problem is not how much money is being spent, but rather how much money is
being misspent. Until we mental health professionals clean up our act, just
throwing more money at the problem is not going to solve it.”
The other authors
of the report are D.J. Jaffe, Executive Director of Mental Illness Policy Org.; Dr.
Jeffrey L. Geller, Professor of Psychiatry at the University of Massachusetts
Medical School; and Dr. Richard Lamb, Professor of Psychiatry at the University
of Southern California Keck School of Medicine.
The
complete report is available at http://www.mentalillnesspolicy.org/national-studies/wastereport.pdf
