Auditors: State wrongly charged disabled residents millions in fees

Money wrongly charged to disabled residents in Maryland may never be returned.

For years, the state agency that oversees people with disabilities erroneously charged monthly fees to largely poor people who live in residential facilities. And they might never get any of the millions of dollars back.

State auditors reported this week that more than 2,500 people might have been charged fees exceeding $4 million during just one year of their review from February 2012 to April 2014, but the payments were likely assessed for a much longer period.

Officials at the Developmental Disabilities Administration said they discovered the problem before the audit and told contractors who run the facilities to stop charging a fee, meant to offset the cost of services. But an old record-keeping system can't easily be searched to see how much each person actually paid. That's if the amounts were even recorded.

Agency officials told the auditors from the state Department of Legislative Services that costs of investigating would likely outweigh the benefits. The officials also said they didn't believe they were legally obligated to return the money.

Further complicating any refund is that residents are largely Medicaid recipients, who risk being disqualified from the federal-state health program if they have too much cash.

Auditors and advocates say at least some money should be returned to residents, who tend to live on very little and often go without basics such as dental care.

"It's a big deal to them," said Nancy Pineles, managing attorney for the Disability Rights Maryland. "My quick math came up with $1,600 for the average person a year that was paid."

Pineles said she understands the complexity of determining what everyone paid, and was pleased the fee collection had stopped. She also said the agency's accounting and oversight troubles do seem to be improving — auditors noted that they weren't finding as many repeat problems from audit to audit, meaning the agency's performance was no longer "unsatisfactory." That's how the agency was rated during the last report in 2013.

Pineles said perhaps money could be doled out to residents in stages, or there could be a different kind of award, such as a discount in the residents' rent.

Department of Health and Mental Hygiene spokesman Chris Garrett said repaying the money would depend on the agency "having a means for determining the correct sums collected by the providers, based on the providers' records."

Thomas J. Barnickel III, the lead legislative auditor on the report, said the agency agreed to present the issue to the General Assembly for guidance.

Barnickel said the agency should try to do something for the residents.

He said agency officials also have other problems to address. Auditors found the agency still can't confirm that the 25,000 people it supports are getting all the services they are due.

Barnickel said agency officials acknowledged problems and began site inspections, but they didn't give their findings to auditors, so the extent of problems was unclear.

The agency still has poorly constructed contracts that don't allow for negotiation of costs, Barnickel said.

Garrett said a new team at the agency "is evaluating processes and oversight, and is taking corrective action."

But it's those millions in payments charged to residents that Barnickel is most concerned about.

"To me, it's about doing what's right," he said, "as opposed to what's expedient."

meredith.cohn@baltsun.com

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