Summary of Report 02-052

June 2002

Report Number 02-052

The Department of Mental Health and Mental Retardation (MHMR) and the Department of Human Services (DHS) do not adequately establish and monitor their community service contracts to ensure that client services result in appropriate outcomes and that funds are properly managed. As a result, MHMR and DHS may be unaware of providers that are providing substandard services and have weak fiscal operations.

Additionally, the Health and Human Services Commission (HHSC) has not fully complied with Texas Government Code, Section 2155.144, which requires HHSC to develop contract management processes for health and human service agencies. While MHMR and DHS need to take appropriate action to improve their contract administration, some of the weaknesses identified at MHMR and DHS can be addressed through HHSC's compliance with this statute.

The Interagency Council on Early Childhood Intervention (ECI) has generally adequate procedures to establish and monitor client service contracts.

• MHMR appropriately identified that it could recoup $2.4 million at 27 community mental health and mental retardation centers (community MHMR centers) because these centers were not meeting contractual performance targets during the last three quarters of fiscal year 2001. MHMR took no action to recoup these funds. However, MHMR recouped approximately $700,000 from the first quarter of fiscal year 2001.



• MHMR should strengthen its administration of community MHMR center contracts by establishing contract provisions that adequately address client outcomes. Furthermore, MHMR should improve its contract monitoring to ensure that services result in appropriate outcomes and funds are spent appropriately.



• MHMR needs to continue to closely monitor the financial health of community MHMR centers involved in the NorthSTAR managed care program.



• DHS should improve its contract administration to focus on outcomes of community care services. While DHS' community care contracts contain output and efficiency measures, they lack provisions to assess client outcomes. Additionally, DHS' monitoring of community care contracts does not adequately assess contractor performance.



• DHS needs to strengthen its fiscal oversight of the Star+Plus managed care program to ensure that program funds are used in the most efficient and effective manner.
  

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