This is from a friend of McHenry County Blog who is concerned by the “irresponsible manner that The Advantage Group has been treated by various government officials.” Answers are provided below each question. The questions were posed by Patrick Ouimet in a comment to the story, “The Advantage Group (TAG) Sunsets,” an interview with its Executive Director Pat Owens.
1. The Advantage Group Foundation is currently under investigation by the Office of the Inspector General of the Illinois Department of Healthcare and Family Services for improper billing irregularities. See Northwest Herald Article dated October 18, 2012 entitled “Local treatment center’s billing practices under investigation”.
The investigation of OIG is the result of MHB staff and their attorney’s retribution of TAG because TAG filed a legal suit against the MHB alleging a Sherman Antitrust violation.
The MHB attorney made this report on TAG using information from the MHB Audit (see question 3).
In the ensuing months that followed, the MHB attorney charged the taxpayers of this county hundreds of thousands of dollars to convince the OIG to pursue TAG.
At this time, there is no report, there are no findings, and there has been no communication between OIG to TAG that they are fraudulent.
It appears this is part of an ongoing comprehensive witch hunt.
The current reality of TAG’s closing clearly substantiates the prediction of TAG (posted on the McHenry County Blog in 2012) that the Mental Health Board was trying to shut them down.
2. The improper billing practices under investigation include billing Medicaid and Private Insurers as well as The McHenry County Health Board (another taxpayer funded agency) for the same services performed for the same client. See http://www.nwherald.com/2012/10/16/local-treatment-centers-billing-practices-underinvestigation/
The MHB states that they are the last dollar in their contention regarding these improper billing practices.
However, this is in conflict with State practices in which the State is the last dollar in, and the State has always approved a blend of billings to substantiate the cost to deliver treatment.
This means is that if a group session costs $100.00 per person, the State pays $20 towards that service and approves billing other sources to make up the difference.
However, the MHB has arbitrarily decided that TAG could not make up the difference with other billing sources in contrast to how other MHB funded agencies are allowed by the MHB to receive blended funding in order to cover their costs.
3. That the McHenry County Health Board conducted an audit on the agency in question that alleges “the agency’s billing records contained errors and in some cases billed both the mental health board and patients’ private insurance company for the same counseling sessions.” Id.
The “errors in billing” that is constantly referred to by the MHB staff (with no defense allowed to be heard by TAG to date), is based upon 16 clients covering 4 years which amounts to less than 1% of all clients served by TAG over those periods.
The original MHB “Ethics Committee” approved only a one-year retrospective audit, however, the MHB staff once again, defied that mandate and went back four years.The entire MHB audit process completely lacks any professional auditing credibility because the MHB “auditors”
- had non existent auditing credentials,
- did not follow establish protocols,
- did not possess auditing tools or criteria, and
- hand selected those files that allowed them to arrive at their pre-ordained conclusions to find fault with TAG.
However, in regards to State level audit findings, over the last 26 years the State found 100% compliance and exercised their expertise in conducting multiple tiered in depth audits.
In addition, an independent National auditing firm assessed the entire MHB audit of TAG and identified the following concerns:
- Only a total of 16 client files were selected for audit covering 4 years (less than 1% of the client files). This is at odds with Generally accepted auditing standards to provide an audit sample that is representative of the population
- Does not appear that a random sampling method for testing (either statistical or non-statistical) was employed in the client file selection process.
- As a result, conclusions reached about such a sample cannot be extrapolated to the population as a whole, and in this case the results of the tests appear to have been improperly extrapolated by MHB to the entire population.
- The conclusions reached by MHB staff were either hastily arrived and inappropriate.
- Compliance audits performed by the State of Illinois have never found issue with TAG’s billing or processes in any year audited.
4. That the McHenry County Health Board filed a federal lawsuit seeking the return of $1,083,817.65 in taxpayer monies for disputed services against the agency. Id.
Where is that fact?
You mean that more money is being spent on legal fee’s to now file a Federal Law suit against TAG?
In the interest of transparency to the public, please provide documentation of the filing.
To be sure, a FOIA request should be issued on this matter because it appears this is newsworthy since it is not known to anyone but you.
5. That the agency in question violated IRS rules regulating unlawful political campaign practices by non-for-profit taxpayer funded entities.
Your statement, similar to Ms. Yensen, had no factual basis of IRS rulings on this matter.
Please view the following IRS web site comments regarding the issue of IRS rules regulating this issue.
The IRS Rule
The IRS uses what is called a “facts and circumstances” test to help it determine whether an organization has violated the prohibition on political campaigning. This means that the IRS will evaluate any potential misconduct within the context of the organization’s other activities and the current political climate. One rule of thumb that is used is whether or not the activity involves 5% or less of the orgainization’s budget i.e. is the activity immaterial to the overall budget of the organization? Also, an activity might be considered political campaigning two weeks before an election, but not two years before an election.
How Does the IRS Find Out About Violations?
Not surprisingly, in the heated atmosphere that usually accompanies a political campaign, people supporting an opposing candidate are often the ones to report any suspicious activities to the IRS. Your organization should remember that people are watching and they will report your group if you appear to intervene in a political campaign in a partisan manner.
Penalties For Violations
If the IRS believes that your organization may have violated the prohibition, it may send a letter or visit your organization for an on-site examination. Although the IRS has the power to revoke your
tax-exempt status, it typically uses this punishment only in the most egregious cases. More likely, the IRS will ask your organization to correct the violation and implement procedures to make sure the
violation will not occur again. If the organization’s funds were used to engage in the prohibited activity, the IRS may also impose excise taxes.
Found on the IRS’s website at www.irs.gov.
6. That “[TAG] could actually have survived without Mental Health Board funding” as stated by Ms. Owens in the above piece.
Two years ago, TAG was the most financially stable organization of MHB funded agencies.
However, due to the unfounded allegations and ongoing assault of TAG by MHB staff and attorney TAG was not funded by the MHB for over 2 ½ years—yet provided over 20,000 services to approximately 3,500 individuals and families in McHenry County.
It is ironic that TAG cared for and provided critical treatment to our youth in crisis yet the very government agency (MHB) charged with providing funding for these services to our community refused insure this work could continue, and that TAG received the necessary funding to continue to serve McHenry County.