Uncredentialed staff, questionable billing, failing to provide key services and potential fraud were some of the most serious concerns Orange County officials quietly raised about a controversial contractor at the Be Well mental health campus, according to records obtained by Voice of OC. 

A few months later, the campus’ residential drug treatment program shut down for what’s now estimated to be a year before a new vendor gets up and running.

OC Health Care Agency contract compliance officials raised serious concerns last year about the drug treatment contractor Telecare Corp. – including failure to provide required services, using staff who didn’t have required credentials and a lack of required planning and checking-in on how hundreds of patients did after being discharged.

“Telecare has continued to allow staff who are not properly credentialed to deliver Medi-Cal covered services and has claimed Medi-Cal reimbursement in reliance of those services,” the county Health Care Agency wrote in a report last March.

“This practice is viewed as fraudulent,” states the report.

They noted it’s “a continuation of a previously identified problem” going back several months, to the previous July.

Until now, the report and the serious concerns about Telecare’s performance haven’t been reported publicly. Voice of OC obtained the documents through a Public Records Act request.

County reports said Telecare failed to provide key services such as a required five hours per week of clinical services per week, didn’t do follow up phone calls with over 800 patients or have adequate planning on discharging people. A patient record review also found “a 91% non-compliance/failure rate of services and connected services reviewed.”

[Click here to read a report on the county’s concerns.]

Citing the failure findings, county officials recouped nearly $400,000 in payments to Telecare.

Telecare responded that they took “very seriously the concerns brought forth” and were fixing them, citing challenges in recruiting “scarce staff.”

After more reviews by county staff, yet more problems were found with Telecare’s services – and the contract was canceled last summer.

The county gave no public announcement or acknowledgement of the contract being canceled, nor of the problems they had found with services and billing of taxpayer dollars.

Before obtaining the records, a reporter asked top officials last month what happened with the Telecare contract. The officials described it simply as staffing issues that resulted in a mutual decision to go separate ways.

“It was just about staffing. No harm, no foul….we are very happy with their service,” said Dr. Veronica Kelley, who oversees the county’s addiction treatment and mental health services, in an interview last month.

After Voice of OC learned of records showing serious concerns, Kelley said further county reviews found it wasn’t fraud after all – and that county officials were diligent in discovering problems and calling them out.

Telecare was facing struggles like many service providers in finding qualified treatment staff during the pandemic, she said.

“We discovered in the course of our investigation that this billing of services by non-credentialed providers was not done intentionally, but as a result of an oversight by the administrators at the program and therefore not fraud,” Kelley said in a statement to Voice of OC Monday.

“[Telecare] stopped billing services performed by these clinicians immediately upon discovery and we disallowed all of the previous billing of services by these non-credentialed providers. That means the services were NOT billed for.”

County staff monitored Telecare weekly to identify problems, and took action, she said.

“Any issues noted with a contract provider are not shared publicly but are disclosed with the provider to try to correct any potential contract deficiencies,” Kelley wrote.

“If the issues are not addressed, this could result in further action and may include termination. Be Well is a new model for public/private partnership and there will be growing pains.”

[Click here to read Kelley’s full statement.]

Telecare emphasizes the decision was mutual to end the Be Well contract.

“Consistent with the communication from Orange County behavioral health, a mutual decision was made to discontinue these services and allow [Orange County Behavioral Health] to reconfigure them to meet their needs,” said company spokeswoman Daphne Phillips in a statement to Voice of OC.

OC Supervisor Katrina Foley said she was disappointed county staff hadn’t told her about the March letter laying out the fraud concerns and performance problems.

“Prior to today, I’ve never seen that letter, and I was unaware that the reason why they were terminated was due to the failures included in the letter,” Foley told Voice of OC on Monday after the news agency sent the letter to county supervisors.

“It was always my understanding that they were terminated due to failure to staff up appropriately. It’s very disappointing to learn this now.”

The only other county to respond to a request for comment was Vicente Sarmiento, who became a county supervisor last month and said he wasn’t familiar with the matter.

Substance Abuse Program on Hold 

The implosion of Telecare’s contract last summer means OC’s mental health campus – Be Well – is going without a residential drug and alcohol treatment for about a year.

A new vendor was recently selected, but it’s expected to take several more months before they’re licensed by the state to provide services at the campus.

When asked last month what happened with Telecare, the lead manager of the Be Well campus described it as a mutual decision to go separate ways.

“There was a point where all parties decided there was an opportunity for improvement and change, and hence a new provider coming in,” was how it was described by Marshall Moncrief, who leads the nonprofit Mind OC that manages the Be Well campus.

“I think there was a lot of good learning early on, and continues today – around aligning culture of different providers,” he added.

He didn’t mention anything about fraud concerns or the major findings that the vendor failed to deliver services.

Moncrief said he and his team were working as fast as possible to get a replacement vendor up and running, likely in the summer.

It comes as county officials decline to detail what happened to $38 million in taxpayer money they provided Mind OC in 2019 for the Be Well campus’ construction in the city of Orange.

County taxpayers are now slated to contribute $132 million towards Mind OC’s creation of a second Be Well campus, this time on county land in Irvine.

A History of Controversy 

It’s not the first time the Orange County officials found major problems with Telecare.

In 2019, county officials expressed “serious” concerns that a lack of oversight and care by the company was putting people at risk in a residential treatment center for people recovering from mental health crises.

Among the issues the county cited at the TREEhouse facility in Orange were a lack of activities and oversight of residents – which officials said led to boredom, an uptick in drug use, residents leaving the facility without permission, a dog bite injury, and an attempted suicide in front of other residents with a bottle obtained outside the facility.

“[The county Health Care Agency] has observed what appears to be a general lack of attention to the residents from [Telecare’s] Program Director and staff,” county officials wrote in their 2019 letter about TREEhouse.

Group sessions did not have clinical medical professionals and were more focused on chores than recovery, the county wrote. An incoming female resident was asked by a male staffer to take off her clothes and put them into a bedbug oven. And county officials said they received “disturbing” allegations of rape by a staff member.

When Voice of OC revealed the letter in 2019, a Telecare spokesman said the company did not dispute the findings and that they had since been fixed.

[Read: County Cited ‘Serious’ Concerns About Crisis Center Operator]

In 2018, a grand jury in Santa Cruz County found a lack of county oversight over Telecare’s contract there, and noted a local National Alliance on Mental Illness (NAMI) report from 2016 expressing concerns about the company’s care for patients.

Those concerns included services seemingly “in disarray” after a “significant” turnover in the company’s regional leadership, according to the NAMI report.

That same year, a member of the Orange County Mental Health Board said Telecare was not providing actual treatment at the Baymont Motel, where the county hired the firm to provide mental health services to homeless people who had been required to leave the Santa Ana riverbed.

[Read: Dozens of Mentally Ill Homeless People May Leave County Treatment Motel]

A Telecare employee later publicly told the Orange County Board of Supervisors the company “failed” homeless people despite the millions in taxpayer money it was receiving.

Nick Gerda covers county government for Voice of OC. You can contact him at ngerda@voiceofoc.org.

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