A hearing to decide how much Santa Barbara County has to pay back to the state in improper Medi-Cal payments is scheduled today at 10 a.m. in Los Angeles.

An audit of the county's Medi-Cal billing from the 2002-03 fiscal year found that nearly $3 million had been overpaid by the state, said Bob Geis, county auditor-controller.

The county has since filed an appeal to the state Department of Health Care Services stating that the county is only responsible for $771,679.

County officials believe they have the documentation that would support their appeal at the hearing, according to an annual financial report prepared by county staff.

The informal hearing is between county and state Department of Mental Health (DMH) representatives. A hearing auditor from the state Department of Health Care Services (DHCS) will also be present, according to Jennifer Turner, a public information officer for DMH.

Once the hearing has concluded, an informal conference decision will be agreed upon by DHCS, and the county will have 30 days to accept or appeal the decision to a formal level, which would be an administrative law judge, Turner said.

The county Board of Supervisors was notified of the large discrepancy Oct. 14, but a letter announcing the appeal hearing was received Aug. 12 by the Alcohol, Drug and Mental Health Services Department (ADMHS).

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Although this hearing would only account for one year of improper Medi-Cal billing and ineligible Medi-Cal claims, it would set the tone for the following years where the same billing practices were continued.

Based on the state's findings for the 2002-03 fiscal year Medi-Cal payments, Geis predicted that the county could have accrued $17 million in overpayment costs as of June 30.

Also, based on a 2002-03 fiscal year audit by the state Department of Mental Health, Geis estimated that the county could also have to pay back $14.4 million in ineligible Medi-Cal costs.

Many issues led to the more than $30 million discrepancy, including lack of sufficient progress reports, failure to bill Medicare before Medi-Cal, and a 15 percent filing fee to county contractors.

Potentially, the most expensive billing issue was that the county was funneling probation, public health and social services Medi-Cal claims through the ADMHS department, which is a faulty billing scheme, Geis said.

“There is an appeal pending, so the dollar amount may change,” said Nancy Kincaid, chief of communications for the state Department of Mental Health. “Any comment from us would be speculation and inappropriate at this time.”

The appeal hearing is open to the public and scheduled to be held at 10 a.m. at 660 S. Figueroa St., Suite 1250, in Los Angeles.

October 28, 2008