Junction Bailout in Dispute

In a brief action at a recent meeting, the Carroll County Board of Commissioners granted Junction, a substance abuse treatment facility, a $6,500 bailout of outstanding debt. A county health department official says that debt is part of an ongoing audit to verify accusations that Junction mishandled state grant funds.

Larry Leitch, county health officer, said he was surprised that the board of commissioners Nov. 29 granted Kevin Dayhoff, Junction board member, $6,500, without debate and considering there is an audit in progress. 

"I'm concerned about why they went ahead and voted to give him $6,500 out of my budget before they even asked me what the other side of the story is," Leitch said.

"They made a big decision like this without fully understanding or talking to me or having me and Kevin (Dayhoff) there to get both sides of the story," he said. "That's my big disappointment."

Leitch said that he is not sure the commissioners can legally take the money out of his budget. The county health department functions under the purview of the state health department.

"I asserted that I will not make any further payment to Junction until the auditors complete their report and we find out what is going on here,” Leitch said.

“I want the final report done, I want to act on a formal, professionally done final report, and I've asserted that all along," Leitch said. 

Junction closed in June after 40 years of service. As previously reported by Patch, Junction board members said that the agency closed as a result of losing grant funding.

Dayhoff told Patch that Junction was unable to pay all of its bills and employees after it closed because the health department withheld state grant funds.

Leitch said that an audit conducted by his office led him to the conclusion that Junction employees intentionally ignored state policy in spending state grant money. He said he withheld the state grant funds while the Maryland Department of Health and Mental Hygiene (DHMH) conducted its own audit to determine if state grant funds had been misused.

According to Leitch, the state's Drug and Alcohol Abuse Administration implemented a new business model five years ago that forced substance abuse treatment agencies to bill insurance companies to cover operating costs.

The model "essentially minimized the amount of state funds that were distributed to these treatment programs," Leitch said.  "These programs were going to have to live, to a much larger degree, on collections--billing insurance companies for their services."

Leitch said that there remained a small amount of state grant money that came through the County Health Department to be distributed to the substance abuse programs in Carroll County. State policy, he said, dictated that state grant funds were only to be used for patients with no insurance -- what he called "the poorest of the poor."

According to Leitch, even though the state gave agencies roughly two years to train employees and implement new billing systems, Junction failed to transition into the new model.

He said that his office conducted an investigation into Junction’s spending of state grant money in the spring of this year. He said his staff reviewed 247 Junction files and determined that Junction staff was knowingly using state grant funds to treat clients who had insurance.

"State policy says that if a treatment program is going to use state grant funds, taxpayer money, it has to be for patients with no insurance, who have nothing, the poorest of poor," Leitch said. "That's what state grant funds were to go for, that is state policy."

Dayhoff said that the new model was complicated and confusing and that the issues were simply clerical errors made by staff members who were doing the best they could with a cumbersome system.

"I will say that it simply moves my bar of amazement if the Health Department wishes to categorize clerical errors or confusion negotiating the challenges of filling out mountains of bureaucratic paperwork for a new protocol, as ‘illegal’ or misuse of state funds," Dayhoff said.

Leitch responded that the problems went beyond clerical errors.

"The scope of it appears to us that there was an intent to not spend state money the way it was supposed to be spent," Leitch said. "The scope would indicate that it was not just sheer carelessness. We found Junction basically had not set up any robust machinery to bill health insurance companies.

"They may have had some, but they got it nowhere near where it should be to earn enough money to survive," Leitch said.

Last fall the Maryland DHMH began a routine audit of the Carroll County Health Department. According to Leitch, the state began its own audit of Junction in July. Leitch said he expects that the state audit will result in the same findings as his investigation.

"In my opinion, if they had been billing the way they should have been billing ... they could have stayed open without the state grant funds," Leitch said. "If you're not billing as much as you should be, then obviously the state grant funds mean a lot more than it would otherwise."

Thomas Russell, Maryland DHMH inspector general, confirmed that Junction files are currently being reviewed by his auditors.

"We are currently conducting a review of funds that come from that department," Russell said.  "An audit and investigation are one in the same. We will complete this administrative process and if we suspect any type of criminal behavior we will refer it for prosecutorial review, but we won't know that until we finish the review."