Caregiver forced to give back $2.5m

A company run by the Cerebral Palsy Society was forced to repay $2.5 million to the Ministry of Health after audits found it had invoiced the ministry for tens of thousands more hours of home care than it provided.

Focus 2000, one of the Auckland region's largest providers of physical disability services in homes and residential facilities, was also the subject of a special audit commissioned by the ministry because of serious concerns about client safety, abuse and neglect, it was revealed yesterday.

Part of the reason for the audit, carried out in 2002 and known as an IBA or "issues-based audit", was because the company failed to report two deaths of clients.

The ministry's deputy director-general of disability services, Geraldine Woods, said last night that issues around Focus 2000's quality of care had since been addressed and the ministry was satisfied with the services it was providing.

"Focus 2000 has had very few complaints since that time," she said.

Ms Woods said the ministry was also satisfied with changes made to the company's invoicing system, but admitted that discrepancies found in a September 2004 financial audit between hours invoiced and hours of care provided were substantial.

"We were surprised," she said.

The company had repaid $2.5 million to the ministry in December 2004 after the audit, and the ministry had since conducted further audits and had more planned for this year.

"It is standard practice where significant overpayments have been identified for repeat audits to be carried out."

The September 2004 audit report was released under the Official Information Act yesterday.

It showed that between October 14, 2002 and June 22, 2003 Focus 2000 invoiced the ministry for 69,301 more hours of home care and personal help than it provided.

The shortfall averaged 3850 hours a fortnight and totalled almost $1.6 million for the 2002-3 and 2003-4 financial years.

An audit completed at the same time on a Focus 2000 subsidiary, Focus Nor-West, found it had billed the ministry $323,434 in the 2002-03 financial year and $344,626 in the 2003-04 year for services not provided.

Ms Woods said she did not believe Focus 2000, which is 90 per cent ministry-funded and received $38 million from the ministry in the 2001-2004 financial years, deliberately set out to defraud.

Rather, there had been differences in interpretation of policy on billing for hours, she said.

The company's chief executive, Anne Murphy, denied on National Radio any attempt at fraudulent activity.

"This was not a deliberate attempt. That is a shocking statement."

Ms Murphy also dismissed allegations put to her by Nine to Noon host Linda Clark about two clients in Focus 2000's care choking to death, calling the allegations "absolutely untrue".

Ms Clark said the allegations were contained in ministry reports, but Ms Woods said last night they were in fact in leaked internal memos.

Ms Woods said Focus 2000 had failed to notify the ministry of the two deaths, one of the instigating factors for the issues-based audit in early 2002, but the ministry had no concerns about the company's quality of care in relation to the deaths.

Any issue would have been referred to police or the coroner, she said.