State health chief pledges to safeguard public mental health dollars

Maryland's top health official said Monday that his agency would do all it can to ensure that scarce mental health resources are spent properly after a Baltimore Sun investigation into Baltimore Behavioral Health Inc. uncovered the nonprofit clinic's large Medicaid billings and other concerns.

"We will take steps that are necessary to be sure the public dollars are being spent appropriately," said John M. Colmers, secretary of the Maryland Department of Health and Mental Hygiene. "Suffice it to say, the issues raised in the article intensified our interest in what is going on at BBH."

The health department had launched an investigation into BBH after The Sun started its examination of the mental health clinic in Southwest Baltimore. Colmers declined to detail the scope of his agency's probe. Dr. Brian Hepburn, executive director of the Mental Hygiene Administration, part of the health department, has acknowledged that his agency may have waited too long to monitor the billings.

Some in the mental health community said the state should ensure that taxpayer dollars are spent wisely and expressed concern that BBH's alleged practices would affect all mental health providers and reduce public support for community-based behavioral health services.

If increased scrutiny "helps the state do a better job of monitoring these agencies that do this work, the people that use the services are better off, and so is the taxpayer," Herbert S. Cromwell, executive director of the Community Behavioral Health Association of Maryland, an association of 50 care providers.

According to The Sun's investigation, former BBH patients and employees, as well as some outside doctors, say the clinic has been diagnosing mental illness — and collecting public money to treat it — in some patients whose main affliction is drug addiction. As billings to Medicaid increased in recent years, so did the salaries of top BBH executives, several of whom are related.

In addition, The Sun found that BBH offers many of its patients a bed in unregulated rental homes scattered around Southwest Baltimore. More than a dozen former patients and staff members described illicit drug use by patients at some of the houses and at BBH facilities.

Founded in 1997, Baltimore Behavioral Health specializes in treating co-occurring drug abuse and psychiatric illness. It mostly bills Maryland's public mental health system, principally Medicaid. A patient's main affliction must be psychiatric rather than drug addiction for treatment to be billed to that system..

Chief Executive William "Kris" Hathaway did not respond to a request for comment Monday. In the past, he has emphasized that his organization — which in fiscal 2009 received about $17 million and another $11 million the year after in public mental health funds — provides quality care by blending kindness and clinical rigor to address patients' physical and mental needs.

"We work very hard to fulfill our mission," Hathaway said in May.

Cromwell criticized the six-figure salaries of top BBH executives, calling them "just mind-blowing" for the sector. BBH is not part of the Community Behavioral Health Association network.

Cromwell also faulted BBH for not having an independent board of directors. Members of one family hold six of eight seats on its board. Among the association's members, he said, the typical practice is to have 10 to 20 volunteer members, as well as a paid chief executive or executive director.

Addicts who go to BBH are three times more likely to be deemed mentally ill than are addicts treated at other centers in Maryland, state data show. And BBH has long funneled patients into costly outpatient treatment programs that require a diagnosis of psychiatric illness. Some years, it has received 85 percent of public funds spent on intensive outpatient mental health care statewide.

In August, state health surveyors examined files of 12 randomly chosen patients and found numerous deficiencies that can cause "a significant health or safety consequence, a violation of rights or infringement on quality of life." Records indicated that three of the 12 had attended separate drug treatment sessions and mental health sessions at the same times.

On Friday, Hathaway said the audit was not based on the complete record.

BBH has until early next month to submit a plan of correction. The surveyors' findings are under review by the Mental Hygiene Administration and the health department's Office of Inspector General, said department spokesman David Paulson.

Cromwell said members of his association, who serve 60 percent of the 117,000 Marylanders treated by the public mental health system, do not want the public to make broad generalizations.

"The agencies that do this work, both on the mental health and addiction sides, are incredibly ethical, incredibly challenged to do what they're doing in the face of demand that exceeds their budgets," he said.

Colmers, the health secretary, made a similar point. "I don't want to lose sight of the fact that this is an extraordinarily difficult population to treat," he said. "For many of them, the issues of both mental health and substance abuse co-exist."

State data show that by 2004, BBH stood out from other providers for its use of high-cost treatments. Yet the state officials in charge of the public mental health system say they noticed this only in 2007. They did not take steps until the fall of 2009 to address BBH billings.

One of the actions taken by Hepburn, of the Mental Hygiene Administration, was to limit the ability of all providers to bill for intensive outpatient treatment, which is meant for patients who are on the verge of needing inpatient psychiatric treatment. He said the cost-cutting move was made with BBH in mind.

Cromwell said his members were frustrated because "the entire provider network is penalized" by such an across-the-board restriction. "A lot of people paid the price for that," he said.

Cromwell said the salaries paid to BBH executives were far above average. Last year, the six family members who sit on the board made a combined $1.4 million. For example, Dr. Nicholas G. Scotto made $320,000 as chief physician, according to tax filings. His wife, Susan Scotto, a licensed clinical social worker, made $274,000 as chief clinical officer. Hathaway is Susan Scotto's brother.

The salaries are "far higher than numbers typical of almost every provider I know about," Cromwell said.

In October, the state Office of Health Care Quality informed BBH that it is in violation of a state law passed in 2005 that governs the composition of boards at nonprofits that receive public mental health funds.

Under the law, no one can serve on the board of such an organization if an "immediate family member" works for that organization. In BBH's case, investigators concluded, the law applies to all six family members. BBH has yet to respond to the state's notification.