Maryland agencies need to improve oversight of group homes, officials say

Signs of financial mismanagement can go unnoticed by regulators, they acknowledge

July 24, 2014|Doug Donovan, The Baltimore Sun

State officials said at a legislative briefing Thursday that their agencies must do more to flag financial mismanagement at group homes — problems similar to those that went unheeded at an Anne Arundel County facility where a 10-year-old disabled foster child died this month.

Maryland's health and human resources secretaries appeared together before a joint committee of state lawmakers in Annapolis to answer questions about oversight of LifeLine, the operator of the group home where the boy died. They also recommended legislative action to enhance their oversight of contractors that care for such foster children.

The hearing was triggered by a Baltimore Sun investigation revealing that the state awarded contracts worth millions of dollars to LifeLine despite numerous issues — problems with past care, an imprisoned founder, unpaid taxes, and allegations of abuse and neglect — that several lawmakers said should have prompted officials to act sooner.

"How many chances do we give these providers?" said state Sen. Joanne Benson, a Prince George's County Democrat. "Do we keep on giving them chances hoping and praying that it'll get better?"

Maryland Health Secretary Dr. Joshua M. Sharfstein shot back: "Absolutely not."

He defended health inspectors, saying they acted quickly once serious issues with LifeLine's care were identified this year. But he and Ted Dallas, secretary of the Department of Human Resources, said both agencies need to do more when contractors display questionable management.

"I think we probably give people too many chances on the administrative and financial side," Sharfstein said. "That's why we're here very clearly saying we can do better and that the way that we can do better is to pay more attention, have more tools and be able to be more aggressive around administrative and financial issues before they start to affect clinical care."

Dallas, sitting next to Sharfstein before two dozen lawmakers, provided a similar message: "We think both agencies need to be more sophisticated and have better resources when we're looking at fiscal issues as opposed to quality of care."

The state began the process of removing 11 children from LifeLine's Laurel-area apartments in early June, after confirming complaints of poor care in February and May, and after learning from The Sun that the company had failed to report numerous calls to Anne Arundel police and fire departments alleging abuse and neglect.

But on July 2 — before all of the children were moved to a new facility — Damaud Martin died. His LifeLine nurse told The Sun that the apartment he was living in was understaffed that night. Officials are investigating his death and whether inadequate care might have played a part in it; they have said it is too early to draw conclusions.

LifeLine officials did not respond to requests for comment Thursday.

Lawmakers went out of their way not to blame state agencies for LifeLine's problems. But several took issue with the distinction Sharfstein and Dallas made between effective monitoring of care and ineffective monitoring of the company's financial problems.

"It is my feeling that when you have administrative violations and you have fiscal problems that this is definitely going to impact the quality of care," said Sen. Joan Carter Conway, the Baltimore Democrat who called for the briefing. She said a company facing substantial tax debt — LifeLine had an IRS lien of more than $1 million — would start "cutting corners" and use its funds to pay down that debt.

Sen. Edward Reilly, a Republican from Anne Arundel County, agreed: "If an organization is under financial pressure, the quality of care will suffer."

The Sun's investigation found that state officials were not aware LifeLine had broken its lease on its Laurel headquarters office early this year. The company failed to tell state officials that it filed for bankruptcy protection in August 2012 — listing its founder, Randall Martin Jr., as the sole shareholder. Martin was sentenced to 50 years in prison in February 2013 after being convicted of setting fire to his former mistress' rowhouse.

Despite a state audit that found LifeLine was insolvent, the state extended the company's contract in March 2013. Six months later, the state awarded LifeLine a nearly three-year contract worth $4.9 million.

Dallas told lawmakers Thursday that the six-month extension gave the company time to provide a plan to fix its financial problems and allowed his agency to start planning to remove LifeLine's children if necessary. "Doing that in less than a month was not something we thought was safe and prudent, and we wanted to give ourselves more time on both fronts," he said.

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