[April 17, 2012]

New River Service Authority needs more time

Apr 16, 2012 (Jefferson Post - McClatchy-Tribune Information Services via COMTEX) -- Despite hopes to officially cease operations sometime in April, the New River Service Authority will continue into at least next month to address legal issues, an ongoing Medicaid suspension, and the difficult task of completing a financial audit of an agency that no longer exists.

"We may have been overambitious thinking we could close things out in April," said Ashe County Manager Pat Mitchell, a non-voting member of the NRSA. "There are still loose ends we need to tie up, and I hope we can do so before the meeting next month." The board voted unanimously to settle a lawsuit with Crossroads Behavioral Healthcare, an Elkin-based local management entity, for one-third the amount it had demanded of the NRSA when it filed suit in February.

The board voted unanimously to pay $150,000 to Crossroads to settle a breach of contract. Crossroads had initially filed suit for more than $447,000 that Crossroads had paid NRBH last year to perform contract mental health services.

"That's for services they'd contracted with New River for, and never received," said Mitchell. "That money will also be paid for from New River funds, and will not be appropriated from the five counties." Board members also authorized up to $40,000 in a best faith effort to complete an audit on NRBH for 2010/11 and 2011/12.

"We made the motion to comply with the local government commission's requirement that we give a good faith effort to complete that audit," said Mitchell.

The NRSA board was told during last month's meeting they could face misdemeanor charges and fines if they could not produce audited financial statements for NRBH. The Director of the Fiscal Management Section of the N.C. Local Government Commission Sharon Edmundson told members that annual audits of NRBH were required under the N.C. Local Budget Fiscal Control Act despite the disarray of NRBH's financial records.

Mitchell said the board has not authorized a firm to complete the work yet, but did say Martin Starnes, the accounting firm the NRSA contracted with in late 2011 to answer questions about about NRBH's collapse, would not be chosen.

"That is no reflection of the work that Starnes has done for us in the past," said Mitchell. "We are perfectly pleased with the work that they did. We'd hired them as a consultant in the past, and said many times they weren't performing an official audit of New River. Hiring them to perform an audit now, may muddy the waters." The board also authorized a $10,000 expenditure to allow board attorney Bruce Kaplan to work with Raleigh-based law firm Poyner Spruill to resolve the issues surrounding the N.C. Division of Medical Assistance's Medicaid suspension.

The N.C. DMA suspended NRBH Medicaid reimbursements in October of last year after receiving what it called, "a credible allegation of fraud." The fate of more than $600,000 in Medicaid reimbursements NRBH is owed by the N.C. DMA remains an open question after the agency demanded payment of more than $2.1 million from the NRSA after the DMA determined it had overpaid NRBH for claims that violated Medicaid laws.

Mitchell said Kaplan may also consult with Spruill attorneys in regards to the lawsuit former NRBH employees launched earlier this month.

Former NRBH employees filed a civil suit in U.S. District Court in early April seeking payment for unused vacation and sick days owed them when NRBH collapsed last fall. The complaint, seeking more than $75,000, was filed against all 10 members of the NRSA, and the five counties, Alleghany, Ashe, Avery, Watauga, and Wilkes, that comprised NRBH.

Mitchell also addressed an injunction filed by former NRBH employees that halted the destruction of computers once owned by the mental health service provider. Employees were concerned financial and personnel records material to their lawsuit were stored on computers the NRSA was recycling.

"They (former NRBH employees) may have very well thought that because we were recycling computers, that we were destroying financial and personnel records," said Mitchell. "That's just not true. We were destroying information that HIPAA (Health Insurance Portability and Accountability Act) states can't be released." Mitchell said the board is storing sensitive financial and personnel records with Iron Mountain, an information services company that will house, protect, and manage NRBH records, with the exception of confidential patient records, that will be housed with Smoky Mountain Center in Sylva.

Concerns about the process led a group of former employees to seek an injunction last week to prevent further destruction of electronics.

"The injunction that was filed said we can't recycle anything else, but none of those records are on those machines," said Mitchell.

The next NRSA board meeting will be held at 9 a.m., May 11, in Boone.

___ (c)2012 the Jefferson Post (West Jefferson, N.C.) Visit the Jefferson Post (West Jefferson, N.C.) at www.jeffersonpost.com Distributed by MCT Information Services

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