There is no way to determine precisely how much money the state has wasted on mental-health reform. This is how The News & Observer concluded that amount was at least $400 million:

The primary element was a government audit. This past fall, the state completed a review of community support provided to about 12,000 people. Auditors determined that 36 percent of the services they received were medically unnecessary.

At that point, through September 2007, Medicaid had paid $1.147 billion on community support, with more bills for that period on the way. Applying the 36 percent figure against that total amount results in potential waste of $413 million.

To be conservative, we assumed no medically unnecessary treatments have occurred since Oct. 1, and we rounded down to $400 million. There are other circumstances that could raise that figure, although some of those would duplicate the waste found in the audit:

* For 12 months, the department paid $60.96 an hour for services that it later said were worth only $51.28 an hour. Had the state paid that lower hourly rate, it would have saved about 16 percent. At that point, those services had cost the government about $739 million. Sixteen percent of $739 million is $118 million.

* Since April, the state has paid $51.28 an hour for the two community support services, a number that is still too high given that the state is paying for, but not requiring until March 1, a blend of professionals and workers with high school diplomas. A proper rate to pay for a service provided overwhelmingly by workers with only a high school diploma has not been established.

* The state has said providers overbilled by $59 million, although that number continues to shrink as some win on appeal.

Mental Health series

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