A Worcester, Mass.-based health care company that provides substance abuse and mental health services to teens, prison inmates, and others improperly billed the state for more than $17 million in management fees over a 10-year period, according to a report issued by State Auditor Joseph DeNucci last Thursday.
The company, Spectrum Health Systems Inc., is one of the largest providers of health services to clients whose care is paid for by the state.
Spectrum offers outpatient psychological and counseling services at a facility in Fitchburg, and also provides a range of services to inmates at the state prisons in Concord and Shirley.
DeNucci's office last Thursday released a detailed audit of the company's operations covering 1992 to 2002. In the report, auditors found that the company paid excessive fees totaling $10.2 million to its for-profit management company, CiviGenics, for which it then received reimbursement from the state.
The audit also found that the company paid a former chairman nearly $1 million for consulting fees when he lived in Alaska and Florida; purchased a financially strapped clinic from CiviGenics for $3.3 million; and used taxpayers' money to offset losses for programs it operates in other states.
In response to the audit, Spectrum management acknowledged that the company was "disserved" in its relationship with CiviGenics, which was responsible for Spectrum's day-to-day operations and with whom it has now severed ties.
"It's important to keep in mind that this agreement (with CiviGenics) ended almost two years ago at this point. This is not the same company that it was two years ago," said Spectrum CEO Chuck Faris.