The transition to private management of state behavioral health services continues to create problems for area groups that provide care for those with mental and substance abuse problems, a legislative audit report released Monday found.

The report, a follow-up to one issued last year, looked at the experiences of five human service districts since Magellan of Louisiana took over as part of the Jindal administration’s privatization push. The initiative is called the Louisiana Behavioral Health Partnership.

The auditor’s report looked at the transition issues encountered by regional human services districts based in Baton Rouge, New Orleans, Lafayette, Hammond and Houma.

“While some of the issues noted previously have been fully or partially corrected, difficulties remain for the districts,” Legislative Auditor Daryl Purpera concluded. “Some districts continue to struggle with the challenges of meeting Magellan requirements, maximizing self-generated revenues, and delivering the services needed for their clients.”

In an audit response, state Department of Health and Hospitals Assistant Secretary Rochelle Head-Dunham said her agency continues to work with Magellan “to address the ... issues and will continue to work with all providers, including the Local Governmental Entities, to support smooth operations and ensure people with behavioral health needs receive necessary services.”

Among audit findings were that:

  • The five districts reviewed continued to be unable to meet their self-generated revenue budgets, resulting in reduced staffing levels, higher caseloads, longer waits for services and drops in services delivered. On June 30, 2014, the collection was $8.1 million against a budget of $12.7 million.
  • Three of the districts could not collect on third-party billings — i.e., private insurance, Medicare — because Magellan’s electronic claims system — Clinical Advisor — could not handle them. It is likely the districts did not collect on over $1 million in claims.

“Issues with Clinical Advisor included a lack of successful training for the use of Clinical Advisor, inability to bill third-party claims, and confusion in required claims coding,” the auditor said.

  • Magellan still had not met “significant technical requirements” required in the original 2012 contract, including connecting with Louisiana’s Health Information Exchange, which allows providers to safely share information about clients to improve patient safety, quality of care and health outcomes. The tracking has not met the “meaningful use” federal standard.

District officials reported that the system is unreliable in tracking patient care.

The original Magellan contract of $357.6 million began March 1, 2012, and ended Feb. 28, 2014. The state opted to extend the contract until Feb. 28, 2015, increasing the total contract to $544.8 million.

In a four-page written response, Head-Dunham detailed corrective action taken since the last auditor’s review, including training of human service district employees in use of the claims system and lifting the timely filing of claims requirement because of “issues beyond the control of the providers” so they can be reimbursed for services delivered.

“Given that services were provided in good faith, claims had to be processed through a new and complicated system. ... DHH determined that an exception was warranted in the standard timely filing requirements,” Head-Dunham wrote.

Head-Dunham said Magellan had anticipated meeting health information exchange requirements by June 30, 2014. “However, circumstances both within and beyond Magellan’s control have delayed its progress,” she wrote. Now completion is expected by October, she said.

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