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.

Those companies flocked to provide community support, with the work done largely by workers with high school diplomas. That's where the money was.

Among the entrants was Dominion, selling mental-health services the way some publishers sell magazine subscriptions.

Community support, the most basic of the new services, is supposed to help people with mental illnesses or addictions stay in their homes or in school by focusing on needed skills. The guidelines provided leeway for workers to help meet individuals' needs.

An adult, for example, may be taught how to manage bus schedules or a budget, while a child may be focused on ways to stay out of trouble in school.

Within the first few months, community support was costing taxpayers $50 million a month, 10 times more than state administrators had expected. About a year after the service started, the state cut the $61-an-hour rate it was paying by about $10. By that time, the state had spent $619 million in 12 months.

While money flowed to community support, serious treatment suffered. From March 2006 through the end of January 2008, community support cost $1.4 billion, 90 percent of all spending. During that period, the government spent $78 million -- 4.9 percent -- on the seven services that department officials say are more likely to keep people out of hospitals.

Officials had intended to spend more on intensive services than on community support.

In September, 43,579 people received federally funded community support, at a cost of $74.6 million. Assertive community treatment, a more intensive service for severely mentally ill adults, was the second-most costly service that month. Companies were paid $2.2 million to help 1,698 people.

Dominion has one psychiatrist under contract who is the company's medical director, but she does not bill through the company for individual treatment. Dominion makes nearly all its money from community support.

Searching for clients

Traditionally, companies receive referrals from county or regional mental-health offices, social workers, schools or juvenile courts. Sometimes, a potential client will get a recommendation from a friend or family member.

Local mental-health officials complained about Dominion's practice of searching neighborhoods for clients and sometimes having a minister make follow-up calls.

Wake County's mental-health administrators called Dominion customers in October 2006 to find out how they came to sign up with the company. One mother said her child's therapist mentioned the company, "but then they were going door to door ... they came to our door handing out flyers," Miki Jaeger, head of the Wake mental-health office's quality management team, wrote in a letter to the state Mental Health Division.

State officials don't like the companies' scouring neighborhoods for clients, but they allow it.

"We do not, to our knowledge, have any authority to stop that from happening at this point," said Tara Larson, an acting deputy director in the state Medicaid office.

In a little more than a year in the community support business, Dominion received more in Medicaid payments than older nonprofit corporations such as Easter Seals UCP.

Notes by a Dominion community support worker detailing activities with a client, a woman, described the same activities day after day. The worker refers to herself by the initials CSSQP, for community support services qualified professional. The worker and client spent 3 1/2 hours together each time, according to the notes on April meetings, allowing a bill of about $180.

For April 23, 2007, the worker wrote she and the client did this:

"CSSQP prompted consumer for a community outing. CSSQP talked to consumer about actions she needed to be successful in fulfilling aspirations. CSSQP discussed with consumer about having a mentor and how she felt about having a female role-model to look up to because she will have someone to help her. CSSQP discussed [with] consumer how the program will be linking her to programs and other services to help her."

For April 24, 2007, she wrote:

"CSSQP prompted consumer for a community outing. CSSQP talked to consumer about actions she needed to be successful in fulfilling aspirations. CSSQP discussed with consumer about having a mentor and how she felt about having a female role-model to look up to because she will have someone to help her. CSSQP discussed [with] consumer how the program will be linking her to programs and other services to help her." This section of the note was identical to the previous day's, except for the last sentence: "CSSQP discussed with [consumer] some activities that needed to change in her life."

The state wants Dominion to pay back $1.5 million, and state and local mental-health offices are trying to strip the company of its licenses to bill Medicaid.

An administrative law judge said the state can't act until the company runs through its appeals. Hopkins has hired well-known trial lawyer Willie Gary to sue the state, one of its contractors and several local mental-health offices for $1.3 billion. Dominion claims the counties are discriminating against the company because its owners are African-American.

Hopkins, 39, is best known as NBA star Tracy McGrady's high school coach. He coached at Durham's Mount Zion Christian Academy for eight years and at Shaw University for two years. Dominion is an extension of his long-held desire to help children, Hopkins said.

In the early 1990s, law enforcement agencies around the Southeast investigated a nonprofit organization Hopkins ran with his brother, John. Triangle Housing/Homeless and its spinoffs used poor children and homeless people to canvass for donations.

Dominion was incorporated by a church that never existed, Hopkins acknowledges. The incorporation papers listed the incorporator as Dominion Christian Church, with the address of a home in Bahama in northern Durham County. Hopkins said he intended to start the church, but he didn't.

Troubled history

Before it found gold in community support, Dominion ran youth group homes in Wake County. The state sanctioned the company for not doing enough to keep children from running away and for failing to conduct criminal background checks of employees.

One of Dominion's state directors, Jerry Wright, was convicted in 2002 of 10 counts of obtaining property under false pretenses after a Medicaid fraud investigation into his work at Lutheran Family Services. Wright, a former foster parent supervisor there, was ordered to pay $25,021 in restitution.

Hopkins defended hiring Wright, who he said does not handle money at Dominion.

In the past 14 months, state and local mental-health offices' investigations and reviews of Dominion's practices and patient records found billing problems, people getting community support who did not need it and the company charging for work it didn't do.

About a year ago, investigators called Dominion patients in the Charlotte area. One of the complaints was that Dominion was offering community support as a mentoring service.

In calls to 11 patients or their guardians, investigators found that eight did not know they were receiving a mental-health service and did not know what their diagnosis was. Ten of 11 did not know that community support is a mental-health service.

Hugh Eighmie II, a lawyer with Gary's firm who is working on the Dominion case, said company workers told clients they were signing up for mentoring so they wouldn't be scared away from mental-health treatment.

Mental illness carries a heavy stigma, especially in minority communities, Eighmie said, and it's important to talk to clients in terms they can understand.

"They do understand terms like 'mentoring,' " he said.

Others questioned, too

Dominion is not the only company with bills attracting attention.

Workers at American Health & Human Services, a community support agency in Elizabeth City, billed Medicaid for picking children up for school, watching them take tests and eat lunch, and watching them play after school, according to company records.

One community support worker spent eight hours with an elementary school student. His goal for the day was to "increase frequency of on task behavior and following directions."

This is the worker's report of what happened from 10:01 a.m. to noon on Jan. 3, 2007:

"1. Client entered gym class quietly. Mentor extended verbal praise to client for his behavior. Client responded by saying thank you.

2. Client participated in the class activities. Mentor complimented client for his class participation. Client responded by saying thank you.

3. Client listened to the gym teacher instructions. Mentor complimented client for being attentive. Client responded by saying thank you.

4. Client lined up quietly to go to lunch. Mentor complimented client for following teachers' directions. Client responded by saying thank you."

The worker made similar notes for the rest of the school day and for two hours after, logging an eight-hour day and allowing American Health & Human Services to charge $488.

Reviewers from the regional mental-health office criticized the services for not building skills or working toward clients' goals.

The state wants the agency to repay about $500,000. American Health & Human Services owner Andrea L. Simpson has repaid some money but said he would appeal the most recent repayment order for $211,957.

Simpson said the company stopped sending workers into schools, though he thinks workers still need to be there.

"You have to teach a child a skill," he said. "If you cannot get their behavior under control first, then you can't teach them a skill."

He blames the state for the confusion about what companies are allowed to do; early on, the state did not require training in community support. Then, when his workers went to training sessions, he said, instructors would not give answers about what's right or wrong.

Wayne Peel of Williamston, who runs an independent company that trains community support workers, said the early lessons the state required did little to help providers new to the mental-health field.

"The training in the beginning was inadequate," Peel said. "I don't think you would find anyone that disagreed with that."

State officials underestimated how many people with little knowledge or training in mental health would start offering community support, he said. "Didn't have any," Peel said of some of the providers' experience. "Nada. Zero."