[Fair Use: For Education and Research Purpose Only]

Millions kept from workers Money held for Medicaid claims, later released By Charles Siderius Staff Writer

About 4,000 Texas employees of a Denton-based nursing home chain are expected to receive their late paychecks after the state withheld some $2.9 million for Medicaid claims, money which it later released.

Texas Health Enterprises Inc.  which is operating 57 nursing homes while in the process of a bankruptcy reorganization  claims the state improperly withheld Medicaid money because of an accounting mix-up.

State officials say they have paid every legitimate Medicaid claim.

But, to help the corporation with its payroll crisis, the state "expedited" claims and other monies due the corporation, said Debra Green, assistant general counsel with the Texas Department of Human Services.

Stephen Moors, risk manager with the corporation, agreed that an arrangement was reached with the state Tuesday and said paychecks were supposed to be issued to affected employees today.

"They've agreed to free up $2 million," he said. "We've already issued memos to nursing homes. Payroll will be released by 10 a.m."

State officials released the money after agreeing to allow the corporation to guarantee the money by using some assets of nursing homes being divested as part of the bankruptcy filed last year, Mr. Moors said.

But the state and corporation continue to be at odds over how much is owed for Medicaid claims.

At the heart of the disagreement is the state's claims accounting system, which the corporation says is not producing the true amount owed the corporation for services rendered to Medicaid patients, Mr. Moors said.

The corporation claims it was owed $2 million for care provided Medicaid patients from Jan. 16 through Jan. 31.

In addition, the corporation claims the department of human services has withheld an additional $5 million owed for services rendered to Medicaid patients before Jan. 16, a statement from the corporation says.

"It just doesn't make any sense to us. They've just told us they are not paying us because they fear they've overpaid us," Mr. Moors said. "There are computer problems and accounting problems."

State officials say the corporation is mistaken and exaggerating how much is owed in Medicaid claims.

A statement released Tuesday by the department of human services says the state has satisfied "every legitimate claim by Texas Health Enterprises processed by DHS."

"Texas Health Enterprises alleged in a Feb. 14 news release that DHS had failed to make payments to the corporation," a statement released by the department said. "Prior to today's payments of $2.9 million, however, DHS paid Texas Health Enterprises $2.7 million in several payments since Feb. 1. Payments to Texas Health Enterprises since Feb. 1 now total $5.6 million."

Eric Bost, commissioner of the department of human services, in a letter to the corporation said, "I feel that you've done your employees a great disservice by falsely asserting that your alleged inability to cover payroll is the fault of the department."

The amount of any additional money owed is also in dispute.

"Texas Health Enterprises also alleges that DHS owes the corporation an additional $5 million," the statement says. "However, Texas Health Enterprises has failed to provide billing to DHS to support this claim."

Between now and the Feb. 28 payday, the corporation and the state will try to reconcile their accounts, Mr. Moors said.

"We've got some work to do between now and then," he said. "Hopefully, we'll be reconciling our account with them so we can find out exactly how much they owe us and get at these billing issues."

Despite not getting paid Monday as scheduled, nursing home employees continued caring for the about 3,500 patients, Mr. Moors said. "There's always a risk the employees will feel the need to leave...but our employees are devoted," he said. "They really, truly care about their jobs and who they are caring for."

Before filing for protection under Chapter 11 of the Federal Bankruptcy Code last August, Texas Health Enterprises Inc. was the state's second-largest nursing home chain.

Mr. Moors said the difficulties with the state are not helping the effort to reorganize.

"We're a company that is in reorganization. Part of the reorganization is that we need the state to pay in a timely way so we can have a steady cash flow."

The current difficulties with the state have "absolutely nothing" to do with the bankruptcy reorganization, Mr. Moors said.

In its bankruptcy filing, the corporation claimed it could not pay rents on nursing homes because the government was failing to properly provide monetary support.

The bankruptcy is moving ahead, and the corporation is in the process of putting its reorganization plan together for creditors, he said.

The corporation operates three homes in Denton County, Cottonwood Manor Nursing Home, at 2224 N. Carroll Blvd., Denton Development Center, located at 909 N. Loop 288 and Kern Manor, at 1700 Washington St. in Pilot Point. Mr. Moors could not immediately determine how many employees work at the Denton County locations.

CHARLES SIDERIUS can be reached at (940) 381-9595. His e-mail address is csiderius@dentonrc.com http://www.dentonrc.com/news1.asp

-- Dee (T1Colt556@aol.com), February 17, 2000

Answers

http://www.sao.state.tx.us/Reports-F.html any relationship to the current hijinks being reported on the hottest link in Texas? These people on current thread using training funds or is it just a massive system blow? Whole lotta shaking going on down here.

-- another government hack (keepwatching_2000@yahoo.com), February 17, 2000.

Thanks for your input AGH. Time will tell...hopefully.

-- Dee (T1Colt556@aol.com), February 18, 2000.