One of the state’s largest nonprofits, which pours millions of dollars each year into Sunflower County, has recently come under scrutiny by a Jackson-based conservative think tank.
Mississippi Center for Public Policy has released a series of articles on its website detailing the finances Delta Health Alliance, along with other perceived issues with the Stoneville-based nonprofit.
DHA has been in existence since 2006, and according to its CEO, the organization spends as much as $14 million per year in Sunflower County alone addressing educational and health needs in the area.
The largest program DHA operates in Sunflower County is the Indianola Promise Community.
Overall, DHA employs around 100 people in the county, CEO Karen Matthews said.
Matthews told The E-T last week that she was surprised by the articles, which addressed hers and other administrative salaries, as well as an apparent deficit the organization ran in 2017 and $1 million in grant money DHA has agreed to pay back to the Department of Health & Human Services over a 10-year period, due to “disallowed” purchases that were made nearly a decade ago. Matthews said that she was more puzzled by the fact that MCPP’s investigative editor Steve Wilson had not reached out to her or anyone else at DHA for comment.
The E-T spoke with Wilson late last week, and though he did not wish to be interviewed for the article, he did confirm that he did not and does not plan to reach out to DHA for further explanation or information regarding the contents of MCPP’s articles.
The articles are largely being disseminated through social media, mainly Facebook, as sponsored content.
Big Salaries and a 2017 Deficit
The series on DHA began with the revelation that the organization is seemingly top heavy when it comes to executive pay, considering the tens of millions of taxpayer dollars it brings in from the state and federal level each year.
According to MCPP, Matthews’ most recent salary was listed at $417,576, including bonus pay, while DHA Vice President of Finance & Administration was compensated to the tune of $217,191.
All the while, in 2017, DHA ran an apparent deficit of around a half million dollars.
Matthews does not dispute the salary totals, which are reported for public consumption.
“Those numbers are accurate,” Matthews said. “We make no secret of those numbers. We post them on our 990. I was hired by my board. They use a pay scale scenario based on levels of experience and the amount of money we deal with, and the government has approved that.”
Matthews said that DHA did run a $533,422 deficit in 2017, but that was due to the organization having a difficult time getting money for a project that had already been allocated by the Legislature released to DHA by the Department of Medicaid.
“In that slice of time, on June 30 (2017), that was correct because Medicaid withheld some funds that we had requested that had been authorized by the Legislature,” Matthews said. “We were having a hard time receiving it, so we had to go into deficit, waiting on that or we would have had to have stopped the project.”
Matthews provided multiple years of financial data to The E-T that shows the organization normally runs at a surplus, including $1.5 million in 2016 and just over $336,000 in 2018.
Medicaid Cools on Project
The second article dropped by MCPP last week focused on a letter sent to a number of state legislators in December 2018 by Mississippi Department of Medicaid Executive Director Drew Snyder recommending the state no longer fund the Mississippi Delta Medicaid Population Health Demonstration Project.
The project’s main focus is on using data to identify those in the Delta who are at risk for becoming diabetic and begin treating them to prevent that from happening, Matthews said.
The project was launched initially in 10 counties.
“The results were so good that last year the Legislature wanted to expand it to another seven,” Matthews said.
Matthews said that it has been an expensive endeavor, when accounting for the computers, the data collection and other costs, but she says that the results DHA has gotten in the project’s short life show an overall savings to Medicaid of thousands of dollars per patient, versus standard Medicaid treatment.
“We showed we could save money,” Matthews said. “It’s an expensive startup, but if you can change the parameters in the way we treat patients and the way we try to get ahead of a disease before it starts, that’s kind of a new and inventive way of thinking about things. Some people don’t have to get sick at all.”
Matthews said the first couple of years have not been easy for the project, and she would like to see the number of patients seen under the program quadrupled.
Snyder, according to his letter addressed to members of the House and the Senate, has not been impressed with the pace of the project’s progress.
“While I am able to speak favorably on a number of people involved in the Project and the overall concept, I remain unable to endorse the Project in its existing form as cost-effective use of taxpayer dollars,” Snyder said in the letter. "In four years, more than $10.6 million in state support dollars have been sent to DHA. According to the most recent information available to DOM, the project has served a few hundred beneficiaries.”
Snyder went on to say in the letter that DHA was due to give updates in January on the project.
In a statement to The E-T last week, Snyder said, “I occasionally offer recommendations and insights to legislators to help inform their policy decisions, and I strongly believe in being a careful steward of taxpayer dollars. As part of a progress report on the Population Health Demonstration Project submitted in accordance with the Division of Medicaid’s Fiscal Year 2019 appropriation bill, I commented that the project in its existing form was not a cost-effective use of taxpayer dollars. I stand by those comments.”
The Legislature did not heed Snyder’s recommendation, however, and appropriated $4.1 million toward the project during the last legislative session.
DHA told The E-T that data from 186,056 Medicaid beneficiaries were used in the 10 counties to identify patients at risk of developing preventable medical conditions. As of December, 3,229 patients had been identified in the diabetes project and 144 were identified for the preterm birth portion of the program.
“The prediabetes intervention had served 302 patients, the preterm birth intervention served 257 patients and 764 individuals were served by community outreach activities, totaling 1,323 participants,” DHA said in a separately released statement. “Actual savings after two years for prediabetes patients were projected to be $1,713 per patient.”
Matthews told The E-T that while she has had positive conversations with DOM and Snyder, she was disappointed in the letter Snyder sent to lawmakers in Jackson, especially since DHA says some of the issues when it came to getting more people involved in the project were due to DOM delays.
“With respect to the State Medicaid Director’s choice to not endorse the Mississippi Delta Medicaid Population Health Demonstration project, Mr. Synder’s recommendation was based on results from a program that was in its infant stages due to delays by Medicaid to get the project off the ground in a timely manner,” DHA said. “These significant savings in Medicaid were the reason that state legislators saw the benefit of funding the Mississippi Delta Medicaid Population Health Demonstration project and did so, disregarding the opinion of the State Medicaid Director.”
A $1 Million Clawback
The latest article posted by MCPP – as of press time – highlighted DHA’s settlement with the Health Resources and Services Administration to pay back $1 million in grant money to the office due to “disallowed” purchases by DHA.
DHA said in a statement last week that the settlement was reached in order to end the expensive litigation required to fight the demand.
DHA will pay the $1 million off over a 10-year period, according to the agreement.
The saga with HRSA began after a disgruntled employee leveled allegations of misspent federal funds against Matthews and DHA to the U.S. Attorney's Office Northern District, DHA claimed in its statement.
“Following an exhaustive, four-year investigation, during which DHA voluntarily disclosed emails, accounting records, expense vouchers and Board minutes, and a grand jury subpoenaed other records and heard testimony from numerous witnesses, the U.S. Attorney’s office took no action, obviously concluding that the employee’s allegations were wholly without merit or substance,” DHA contends. “For reasons about which DHA can only speculate, shortly after the U.S. Attorney’s office began its investigation, HRSA, ONC (Office of the National Coordinator for Health Information Technology) and USDA (United States Department of Agriculture) all notified DHA that they intended to conduct audits of DHA’s expenditures of grant funds awarded by those different agencies. The audits by ONC and USDA resulted in no disallowances of costs.”
HRSA was the lone agency to conduct an “Incurred Cost Review,” DHA said, for the period beginning July 1, 2009, until November 30, 2011.
During that time, DHA expended $59.4 million in grant funds, the nonprofit said. “Initially HRSA disallowed, and directed repayment of, $2,154,670 in direct and indirect costs,” DHA said. “Following a series of administrative appeals, during which HRSA added another $99,000 to the amounts disallowed, the amount has been reduced to $1,065,500.77 (1.79 percent of the amounts reviewed and less than 1 percent of the total grant funds expended). Throughout that appeals process DHA asked HRSA for clarification of its disallowances but those requests, especially for the current disallowed costs, were ignored. Unlike ONC and USDA, which readily provided DHA with detailed explanations and careful guidance from which DHA could explain those agencies’ cost concerns, HRSA did not provide any such documentation or guidance.”
DHA claims that HRSA never claimed in any repayment demands that any funds were misspent or that the funds were not spent to support the nonprofit’s overall mission.
“Virtually every expenditure that HRSA asked DHA to repay was an approved expense by HRSA personnel prior to any payment through a HRSA pre-approval process,” DHA contends. “Even though that documentation was provided, HRSA inexplicably continued to pursue its demand for repayment. The amount of expenses questioned was less than one percent of the total grant funds expended by DHA.”
Also, DHA says that in subsequent years, HRSA awarded millions of dollars to the nonprofit, citing its financial standing.
“The applicant organization has strong fiscal and programmatic controls in place for successfully monitoring multiple streams of funding and programs, i.e., partner projects, sub-awards, contracts and grants,” HRSA said, according to documents provided by DHA, in its review of DHA’s proposal for a $3.5 million five-year Health Start Initiative grant awarded in 2014.
“That finding is entirely consistent with other grant awards made to DHA, including grants from HHS, the U.S. Department of Agriculture, and the U.S. Department of Education,” DHA said. “In December 2012, the Department of Education awarded DHA a five-year, $30 million Promise Neighborhoods implementation grant, and in September 2013, the Department of Agriculture awarded DHA a $900,000 grant to expand electronic medical records in rural communities.”