The Willow Glen Resident Photograph by Skye Dunlap Lean Back and Say 'Ahhh': Dr. Anne Verstraete gives Sheena Torres a checkup. Many of the Indian Health Center's patients are non-Indian county residents. Indian Health Center battles state over Wilson administration's error Nonprofit center asked to pay back more than $600,000 in federal funds By Mary Spicuzza As a young woman guides her hesitant father into an examination room, Dr. Anne Verstraete squeezes past them and rushes down a narrow hallway. She stops to introduce herself, quickly explaining that she's the only doctor on duty all day. Spinning on her heels, Dr. Verstraete vanishes into a nearby room to meet another patient. With its busy doctors and crisp white walls, the Indian Health Center on Meridian Avenue looks like any other community clinic. It focuses on providing comprehensive health care to the county's 80 American Indian groups, but during its 21 years of service to the county, has worked with any resident in need of services--including low-income families with little or no insurance. But the center is fighting an unusual battle with the State of California. Due to an oversight by the Wilson administration's Department of Health Services (DHS), the clinic had received some federal money in error. Now, rather than receiving funds for its work with families in need, the center is being asked to pay for the state's costly error. Unless the Indian Health Center can successfully convince the state to reverse its decision, the center will be forced to pay nearly $700,000. Footing the bill would probably mean closing its doors, which have been open to county residents needing medical, dental, mental health services, disease-prevention and prenatal care for more than two decades. Administrators hope to rally support from local leaders and be granted an exemption from paying the misallocated funds. Assemblyman Mike Honda has been working on behalf of the center, and over the next few weeks he will step up his campaign. Last week, Sen. Liz Figueroa (D-Fremont) signed a letter written by Honda, urging County Supervisor James Beall, Jr. to submit a resolution in support of the Indian Health Center to the Board of Supervisors. Honda and Figueroa will then take the issue to the state legislature. The center's funding troubles began in October 1995, when DHS investigators audited the center's books. Shortly before the audit, the department realized that it had misinterpreted federal legislation and misallocated money to federally qualified health centers. Auditors learned that the Indian Health Center was one of them. The previous year, after being told by DHS staff that the center might qualify for reimbursements from Medicare and Medi-Cal, Indian Health Center employees had spent several months preparing documents. They were later notified that their application had been accepted, and they would receive retroactive funds from the department for the previous year. The state told the heath center that the funds would be retroactive to 1991. But they hadn't realized that only cases administered through Medicare were retroactive to that date. When the auditors went through the books, they saw that the center had received money for Medi-Cal cases, too. "They just stopped in the middle of the audit and left," the center's interim executive director, Barbara Miao, says. Rhonda McClinton-Brown, the health center's former executive director, was notified that the clinic owed the state $30,000 from 1993. An audit for the subsequent year found the health center owed the state $282,440. The state also withheld $77,427 it was to pay for services in 1994-95. McClinton-Brown says she didn't receive the investigators' findings until April 1996. During the years between the granting of funds and the audit, Indian Health Center directors had expanded services, extended office hours, continued struggling programs and moved to the larger Meridian Avenue space from a previous Santa Clara location. "We needed to move because we were expanding so rapidly," says Michael Cross, who has worked at the center for 15 years. Peter Long, director of development and programs for the center, says the center made key decisions based on the state's error. "If we didn't get that money we wouldn't have moved to a new location," Long insists. When the Indian Health Center filed an appeal in May 1996, Department of Health Services lawyers conceded that the money was paid in error, but insisted on its right to recover the money as public trust funds to be spent on the people of California. Administrative law Judge Cynthia H. Scanlon sided with the department and rejected the health center's appeal, saying the health center should have studied the rules of the program that provided its funding. "Both parties would be charged with the same responsibility to investigate thoroughly the application of federal FQHC principles to urban Indian health clinics," Scanlon ruled. Keith Honda, an attorney who works for his cousin, Assemblyman Honda, sees the situation quite differently. "I can't think of anything that the Indian Health Center could have done or should have done differently," Honda says. "It goes back to inherent roles. The department is relied upon to interpret [legislation] and make decisions." Assemblymember Honda's resolution argues that it's the Department of Health Services' responsibility to administer Medi-Cal, and a center that acted in good faith should not have to pay for a state agency's error. "The position of the DHS is simply wrong," Honda writes. "The DHS cannot penalize a nonprofit for following the directives issued by DHS and for providing expanded services to more people in need." If the appeal is not accepted, the Indian Health Center plans to take the issue to Superior Court. "For the department to seek to recover those funds now will result in serious injury to the Indian community, the community at large, the clinic, and its employees," Long says. "It's as if someone gave food to a starving man and encouraged him to eat, then handed him a bill for $70 dollars and asked, 'Why did you eat so much?'" For more information on the Indian Health Center or its services, call 445-3400. [ Back to Contents Page | Willow Glen Resident Home Page | Archives ] This article appeared in the Willow Glen Resident, January 27, 1999. ©1999 Metro Publishing, Inc. All rights reserved.