Anti-abortion group ordered to repay $1.5M
Investigators say the organization overpaid subcontractors and misspent state money
An anti-abortion group that came under fire for failing to provide services to thousands of Texas women must repay $1.5 million in overpayments and prohibited costs, state investigators said Thursday.
The findings, announced by the office of the health inspector general, are a new blow to the Heidi Group. The organization had hoped to replace Planned Parenthood as a top family planning provider but was cut off from millions in funding last year after failing to serve tens of thousands of low-income women.
The office said on Thursday it had uncovered “serious contractual violations” and is expanding its inquiry to the entire span of the Heidi Group’s contracts, going back to 2016. That could mean additional repayments.
Forensic accountants found the group had paid medical providers hundreds of thousands in excess fees, had overspent on payroll and fringe benefits, and had spent thousands in unallowable costs such as food, gift cards, clothing and retail membership fees, according to a copy of the internal investigation obtained by the Houston Chronicle.
The inquiry covered a sevenmonth period, from September 2017 to March 2018.
“It’s a travesty when you look at all the women who should have been receiving services and were not because of this,” said state Rep. Donna Howard, D-Austin. “We’re talking about women who
don’t have means to afford health care like many of us do.”
The commission originally awarded the Heidi Group $6.7 million, despite concerns it had never contracted with the state and had no experience serving women in clinical settings. The nonprofit, created years ago as an activist outfit, promised to serve nearly 70,000 women each year but served only a few thousand by 2017, according to health officials.
When the group’s clinics began falling short of their goals, officials were slow to shift money to higher performing providers.
Representatives for the Heidi Group quickly disputed the findings, saying the payments had been approved and budgeted from the beginning by the Health and Human Services Commission.
“Everything we did was according to the contract,” CEO Carol Everett said.
Everett and her attorney, former inspector general Stuart Bowen, insist they served several thousand more than the state reported, citing 30,500 patients over three years.
The report on Thursday said Everett had incentivized health providers with a $50 per claim “bonus,” which had never been authorized by the state. Everett “could not provide a budget amendment, adequate documentation, or a clear methodology to justify the added expenditure,” the report said. Combined, those extra payments alone totaled $769,000.
The Heidi Group had struggled financially before it contracted with the state in 2016, and there were inconsistencies in its tax filings, the Chronicle previously reported.
The group’s former accountant told investigators he had no experience with government accounting and had never been made aware of the financial requirements of the state contracts and Everett’s subcontractors, according to the report. Everett later fired him after state officials began raising concerns.
Leslie Willkom, a former employee who left the Heidi Group earlier this year and has been critical of its leadership, called the penalty “shocking.”
“It’s a shame,” she said. “They could have really done a lot with that money, and they just didn’t.”