Administrator says hospital 'vindicated'

RIVERSIDE'S SUBSTANCE ABUSE FUNDING WILL BE REIMBURSED BY STATE COMMISSION

The Texas Commission on Alcohol and Drug Abuse will reimburse Houston's
Riverside General Hospital for substance abuse treatment it provided while
its state funding was suspended during an investigation.

A Riverside official said Tuesday that the hospital expects to receive some
$2 million in back claims for services rendered but not reimbursed during
an investigation of Riverside and other TCADA contractors.

In a letter last month to Riverside officials, TCADA Executive Director
Terry Faye Bleier said the hospital is now in good standing with the agency.

TCADA agreed in November to reinstate up to $1.6 million budgeted for
Riverside in the current fiscal year, pending financial and program reviews.

Riverside General and its administrator, Earnest Gibson, were key targets
in the statewide investigation into alleged misuse of funds by scores of
TCADA contractors. During the probe, TCADA withheld payments on existing
contracts with Riverside General.

"I feel the hospital and myself have been vindicated following the state's
investigation," Gibson said. "I think it was clear the hospital provided
exceptional services to this community.

"We were hopeful that it would take no more than 90 days to resolve the
dispute, but it dragged on nearly three years," Gibson said. "My real
regret is the devastating effect this had on the substance abuse industry
in the state of Texas. I believe it was all unnecessary."

TCADA administers state funds used to pay contractors who provide substance
abuse treatment. During the probe, state investigators and auditors
questioned claims totaling more than $50 million by 158 TCADA contractors.
Riverside's questioned claims totaled about $7 million.

Texas Department of Public Safety investigators said that more than 22
programs statewide would be referred to local authorities for possible
prosecution.

And a legislative committee investigating allegations of wrongdoing among
TCADA contractors even hired a private detective to probe Gibson's
financial compensation.

But only a few indictments were returned. And though Texas Rangers
presented Harris County prosecutors with evidence against six Houston-area
providers, including Riverside General, none was indicted.

The $7 million in questioned claims at Riverside has been whittled to
$238,000, and the hospital is challenging that. The $50 million questioned
statewide has shrunk to $6.8 million.

The rest turned out to be legitimate and adequately documented under state
guidelines, TCADA officials now say.

In all, the investigation cost thousands of man-hours and more than $6
million, including $3.6 million paid to a private auditing firm.

Bleier's letter appears to follow the recommendation of a senior
administrative law judge. After listening to more than a month of testimony
last year, Earl Corbitt, a senior administrative law judge with the State
Office of Administrative Hearings, found that TCADA did not act in good
faith during negotiations prior to terminating Riverside General's
contracts. The judge also found that TCADA's decision was "arbitrary and
capricious."

Corbitt recommended that TCADA reinstate all of Riverside's contracts
except an outpatient program for women, and said that one could be
reinstated if Riverside met certain management and personnel conditions.

The judge's recommendation was submitted to the TCADA Board for a final
decision, but it never came to a board vote because of the agreement
between Riverside and TCADA staff to restore this year's fiscal year funding.

Copyright 1997 Houston Chronicle