Joel Hopkins is no longer a basketball coach, but he's still recruiting. Instead of finding hoops stars, he's looking to sign clients for his mental-health business.

Hopkins, the former Shaw University coach, built Dominion Healthcare Services by having workers go door to door in poor neighborhoods, looking for people to sign up for a mental-health service called community support.

In 18 months, Dominion charged taxpayers $33.9 million for the service, more than all but one other agency, billing up to $61 an hour for services that included taking clients to school appointments and to charities for free clothes.

Dominion has operated in up to nine North Carolina counties. The company, based in Raleigh, has about 1,000 employees and an aggressive marketing strategy.

"We have community fairs, friends and family days, and we do present our services to the whole entire community," Hopkins said of the company he started in 2001. "It's called community support, and we want the community to be aware. We go to churches, civic groups, Boys & Girls Clubs, all over the community, to let people know where there are services out there for them."

State officials now say that some clients of Hopkins' company -- and others like it -- don't need mental-health services. They're having second thoughts about some of the companies they allowed to bill the government for community support.

The state has demanded repayment of $59 million from companies that broke the rules; it has asked Dominion to repay $1.5 million. The state is trying to stop the company from billing Medicaid, the federal health insurance program for the poor and disabled.

Last year, workers from local mental-health offices reviewed client records on 493 companies and found problems ranging from paperwork errors to the provision of community support to thousands of people who didn't need it.

Community support is a new service, born in 2006 as the state sought to move treatment out of government offices and into people's homes, schools, community centers -- places where they live their lives. Community support was one of more than a dozen services that the federal government agreed would qualify for Medicaid funding, but it ended up costing far more than everything else combined.

Hundreds of companies flooded the state's new mental-health market to offer the lucrative community support services. In the first three months, through June 2006, 277 companies received taxpayer money to provide community support. At the same time, far fewer companies signed up to provide more intensive treatment.

By the end of last year, the pool of companies offering community support had nearly tripled, to 784. The rules were designed to allow almost anyone who made the right promises into the business.

"When community support got started, the threshold for qualification was pretty low," said Dempsey Benton, secretary of health and human services.

It's the state's responsibility to set the standards for providers, he said. "We're trying to catch up in that part of the program."

Where the money was

In 2001, a legislative initiative set the state mental-health system on a new course. The old order, in which county mental-health offices provided most of the services, was flawed, nearly everyone agreed. County offices decided what services they would offer, and clients had limited choices.

Legislators received studies showing that the state relied too much on its psychiatric hospitals. They ordered the county offices to become monitors -- rather than providers -- and opened the way for private companies to dominate community care.

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