HEALTH AGENCY AUDITED; VENTURA COUNTY, STATE EXAMINE IRREGULARITIES AFTER BOTCHED MERGER.

Byline: David Greenberg Daily News Staff Writer

County and state officials have launched separate investigations into the Behavioral Health Department to determine whether money earmarked for mental health has been spent to run the debt-ridden Ventura County Medical Center.

Chief Administrative Officer Lin Koester opened an in-house audit at the request of state Sen. Cathie Wright, R-Simi Valley, whose concern about the mental health operation has sparked a series of investigations.

``When mental health is paying more for services from the hospital than any other department or agency that use that facility, I can only believe mental health is paying for the overhead of that hospital,'' said Wright. ``And they were never supposed to do that.''

Wright also is behind a probe by the state Mental Health Department to determine whether a $5.3 million-a-year state allocation is being spent appropriately.

Her budget subcommittee on health and human services asked state investigators to look into allegations that Pierre Durand, director of the Health Care Agency that oversees Behavioral Health, inappropriately spent mental health money on the debt-ridden Ventura County Medical Center.

There also are concerns, officials said, that patient care at the county's 15 outpatient and six residential-care facilities may have been affected.

``We see this (audit) as a real high priority,'' said Gary Pettigrew, deputy director of state Mental Health, adding that the county could lose its state appropriation if the money has been misspent.

Durand did not return phone calls.

But county Supervisor Frank Schillo said allegations of financial mismanagement are false and that he and Durand - with whom he spoke - welcome the audits.

``Somebody's out there telling lies with regards to patient care,'' Schillo said. ``From the public relations standpoint, sure let (the state) do it. Every bit of information it generates is going to be in favor of Pierre's actions. Let's get the facts on the table.''

With 588 employees, the Behavioral Health Department provides mental health, drug and alcohol addiction and drunk-driving programs to some 30,000 residents a year.

The department has been at the center of a firestorm of controversy since last spring, when its top officials encouraged a merger with the Public Social Services Agency, creating a $171 million-a-year Human Services Agency.

But the federal Health Care Financing Administration said the merger violated federal guidelines for seeking health-care reimbursements. And federal officials still are trying to determine whether Ventura County should be reimbursed for some $15 million in claims made while the Human Services Agency was in operation.

In trying to untangle that financial problem, Durand determined that the Behavioral Health Department could be facing a deficit of up to $1.5 million. Auditor Thomas Mahon has been reviewing that issue and is expected to release his findings this week.

The nearly 80-year-old Ventura County Medical Center has been embroiled in financial and operational troubles for much of the decade, and a proposed $51 million bond measure to renovate the facility was defeated by voters during a heated election in 1996.

A grand jury in 1997 found the hospital's facilities in such a deplorable state that it called for replacing more than half the buildings at the center.

PROBES IN PLACE

Various investigations have unfolded since the failed merger in December of the county's Behavioral Health Department with the Public Social Services Agency.

The U.S. Health Care Financing Administration is reviewing billing procedures to determine if Behavioral Health followed requirements.

The state Department of Mental Health has opened a three- to six-week review to determine whether the $5.3 million the county receives each year is being spent properly and if patients are receiving adequate care.

The Ventura County Auditor's Office is reviewing Behavioral Health books on reports that the department has an estimated $1.5 million deficit for 1998.

County chief administrative officer orders another audit to determine whether mental health money is being spent to operate the Ventura County Medical Center.

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BOX: PROBES IN PLACE (See text)