From the Winston Salem Journal 10.21.11
With the losses at New River Behavioral Healthcare rising to at least $6.5 million over the past two fiscal years, the provider could become the single largest failure in the state’s multibillion-dollar attempt at reform.
New River, based in Boone, serves nearly 13,000 clients in need of behavioral-health services in eight counties — Alleghany, Ashe, Avery, Iredell, Surry, Watauga, Wilkes and Yadkin. It has about 300 employees.
The $6.5 million figure was made public Tuesday at a Wilkes Board of Commissioners meeting by county manager John Yates.
Yates said Thursday that the source of his information was a preliminary, unaudited report by a consultant, Ann Wilson, hired by the previous board of New River Service Authority to look into the provider’s financial status.
“We’re very stunned that the losses have reached this level,” Yates said, speaking of the county managers. “We knew it was going to be bad, but not to this extent.”
Wilson’s report showed New River’s losses resulted largely from overestimating accounts receivable, Yates said. According to Pat Mitchell, interim manager of Ashe, overstated revenues and poor accounting practices also were factors in the losses.
Wilson reported New River lost $2.91 million in fiscal 2010 and $3.64 million in fiscal 2011.
In contrast, the Wilkes Journal-Patriot has reported an audit by Lowdermilk, Church & Co. of Morganton showed New River lost $765,705 in fiscal 2010. The firm hasn’t provided its fiscal 2011 audit.
Renee McCoy, a spokeswoman with the N.C. Department of Health and Human Services, said it is accurate “to classify New River as one of the top-five largest providers to face this type of situation.”
“It is certainly one of the larger provider failures in terms of number of consumers serviced and volume of service delivered. To my knowledge, we don’t have data to compare the three to four other large failures we have had.”
Some statewide advocates point to the 2010 shutdown of the Mental Health Association of N.C., based in Raleigh, as likely being one of the five largest with losses in the multimillion-dollar range. It refused to provide a public figure of its losses. It faced more than $1.5 million in Internal Revenue Service liens after failing to pay payroll taxes for years.
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