Disabled DDSN Clients Overcharged for Room and Board, Ex-Commissioner Claims

August 29, 2014

Investigative Reports

Print Friendly, PDF & Email

Disabled DDSN ClientIntellectually or physically disabled clients under the care of at least three local service providers that contract with the S.C. Department of Disabilities and Special Needs have been overcharged for room and board, an outspoken former DDSN commission member contends.

Deborah McPherson of Columbia, whose term on the commission wasn’t renewed this year by Gov. Nikki Haley, told The Nerve she was informed that Chesco Services in Chesterfield County, the Greenville County DSN (Disabilities and Special Needs) Board, and the Orangeburg County DSN Board haven’t been properly crediting U.S. Housing and Urban Development (HUD) subsidies to room-and-board costs charged to clients. She voiced her concerns during an Aug. 21 meeting of the DDSN commission, naming the three service providers.

“I strongly urge DDSN to complete its audit of providers with HUD homes and ensure that all consumers overcharged are provided restitution of their funds,” McPherson told the commission, reading from a prepared statement that she provided afterward to The Nerve. “It is not a question of whether it’s complicated or whether HUD requires restitution to be provided up to five years, but rather what is the ethical thing for DDSN to do for the individuals with disabilities it serves.”

DDSN clients typically have low incomes, many of whom receive Supplemental Security Income or Social Security disability payments, advocates say.

“I did it (went public) because I knew if I didn’t, nothing would get done,” McPherson, who served five years on the commission after being appointed by former Gov. Mark Sanford, told The Nerve in an interview this week. “What’s wrong is a state agency that’s supposed to be advocating for people with disabilities, and they don’t seem to want to do the right thing.”

DDSN serves about 33,500 eligible persons with intellectual disabilities, autism and head and spinal cord injuries, according to its most recently available annual accountability report, though it is not known how many of them are eligible for HUD subsidies. The agency is governed by a seven-member commission appointed by the governor with consent of the S.C. Senate; its total budget for this fiscal year, which started July 1, is $634.4 million.

‘Not in the business of making money’

Contacted Thursday by The Nerve, John Cocciolone, executive director of the Greenville County DSN Board, said his organization has been correctly deducting HUD subsidies from clients’ room-and-board charges, noting that an independent auditor “gave us a statement that we are doing it correctly.”

Asked if his organization has ever overcharged clients, Cocciolone, who noted he’s been on the job for a year, replied: “Why would we do that? We are not in the business of making money.”

Cocciolone acknowledged, though, there is “confusion” among service providers statewide about “what’s the best method” of crediting HUD subsidies, noting that some providers charge clients full room and board, then later refund the subsidy amount to the clients.

In an email Thursday evening to The Nerve, Terry Rogers, executive director of Chesco Services, said, “Chesco has complied with all HUD regulations and even contracts with a 3rd party HUD consultant to ensure we operate within the federal guidelines. According to our consultants, we are in full compliance.”

“Therefore,” Rogers continued, “we are unaware of any overcharges that you are alleging nor have any been found by our auditors who have HUD experience.”

Ron Lofts, executive director of the Orangeburg County DSN Board, did not respond Thursday to a phone message from The Nerve seeking comment.

A revised DDSN directive approved by Beverly Buscemi, the agency’s director, in December 2012 states that the amount of HUD subsidies allocated to DDSN clients “must be considered in determining the amount of earned and unearned income to apply toward room and board. The HUD subsidy must be applied first toward the room and board charge before applying unearned and earned income.”

McPherson told The Nerve that she first found out about the problem in May when a director of a local service provider informed her about discrepancies between room-and-board charges for a client whose HUD subsidies reportedly were not being properly credited after that person was transferred to another local provider.

“I’m talking about millions of dollars,” McPherson recalled about what the local director told her about the potential extent of the problem statewide.

McPherson said she was informed that in later July or early August, DDSN held a meeting with representatives of six local providers at which the Chesterfield, Greenville and Orangeburg county organizations were identified as having problems with not properly crediting HUD subsidies.

It’s not the first time that DDSN has come under scrutiny over room-and-board charges. In September 2012, the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services recommended that the S.C. Department of Health and Human Services, which administers the state’s Medicaid program, refund to the federal government more than $4.8 million, which represented the federal share of room-and-board costs that DDSN had improperly claimed on its Medicaid waiver cost reports, according to an OIG report.

Short on Specifics, Long on Defense

The Nerve this week sent written questions to DDSN seeking specifics on the HUD-subsidy issue, including whether it had confirmed McPherson’s claims about the three local providers, how many DDSN providers statewide receive HUD subsidies, how many DDSN clients are eligible for the subsidies, and the total amount of subsidies provided annually in South Carolina.

In an email responses Wednesday and Thursday to The Nerve, DDSN spokeswoman Lois Park Mole didn’t answer those questions but defended the agency’s handling of the matter.

“DDSN promptly took several actions when the concern of consumer room and board charges was brought to the agency,” Mole said. “First, it began a review of the specific concern. DDSN then sent a written communication to residential service providers reminding them that consumer housing assistance benefits are to be applied toward room and board before applying their income. Third, DDSN officials met with HUD.”

“DDSN also convened meetings with a sample of residential service providers who serve potentially-effected consumers,” Mole continued. “Through these meetings DDSN determined it needed to conduct a statewide review to determine if consumers were being charged room and board costs appropriately.”

Mole acknowledged that local providers are “doing this different ways,” though she added it does not “automatically translate to a ‘right’ or ‘wrong’ way.”

As for possible restitution owed to DDSN clients, Mole said, “DDSN will ensure any identified overpayments made by consumers within a specified time period are returned to them once the review is completed,” adding that the agency is in the “process of reviewing and revising its department directive to further clarify required accounting of HUD payments.”

Contacted Thursday by The Nerve, Larry Knightner, director of HUD’s Columbia field office, said McPherson has spoken with him, though he had not been contacted by either Buscemi or other DDSN officials.

“We can’t go out and do anything until we find something more substantive,” Knightner said. “I’m not able to address something when I don’t have the facts.”

Still, when asked how HUD would respond if the DDSN statewide review confirmed that overcharging clients had occurred, Knightner replied, “We will not sit on something once we know what’s being done, and we would want that money paid back.”

‘Quality of Life’ Issues

Gloria Prevost, executive director of the Columbia-based nonprofit Protection & Advocacy for People with Disabilities, said Thursday when contacted by The Nerve that one of her organization’s attorneys attended last week’s DDSN commission meeting.

“I certainly think it is something we all would want to see explored,” Prevost said about McPherson’s claims. “It certainly can impact both the quality of services and individuals’ access to money that they need.”

Contrary to Mole’s assertion to The Nerve, McPherson said DDSN has not acted quickly to resolve the problem. She said she notified Fred Lynn, then the commission chairman, in May about the situation and sent emails in July to all commissioners alerting them of the matter after learning Buscemi had not informed all of them at that time, adding that Buscemi made no mention of the issue at either the June or July commission meetings. She said she decided to speak publicly at last week’s commission meeting because she felt the agency was not adequately addressing the problem, noting, for example, that Buscemi in July told her she didn’t plan then to discuss the matter publicly because it had “gotten very complicated.”

McPherson was not afraid to voice her opinions while she was a commissioner. At an August 2013 meeting, for example, McPherson convinced the commission to review certain policies and practices after The Nerve revealed details of an investigation into the alleged mishandling of public funds by the nonprofit South Carolina Autism Society, which is listed as a DDSN service provider.

McPherson, who cares for a disabled adult daughter and worked in state government for 33 years, including 14 years at DDSN and tenures with the Governor’s Office, Lt. Governor’s Office and HHS, before becoming a DDSN commissioner, said she was not trying to hurt DDSN by speaking publicly at last week’s meeting. But overcharging DDSN clients is wrong, she said.

“This money can be used for clothes, dental procedures or wheelchairs not covered by Medicaid,” McPherson said. “This money can make a difference in their quality of life.”

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook or Twitter @thenervesc.