Lawmakers blast health care agency for accounting gimmicks

DENVER - Legislators grilled the state's health care agency Monday over multi-million dollar mistakes and the firing of a whistleblower, but the agency denied there was any wrongdoing.

"A smoke-and-mirrors game is being played," said Rep. Frank McNulty (R-Douglas County) on the legislative audit committee. "Something is dead wrong at the Colorado Department of Health Care Policy and Financing (HCPF) and we need to figure out what it is."

The department was called before the legislative audit committee Monday after 9NEWS interviewed a state accountant, Annemarie Maynard, in early July who said the department tried to deceive auditors about owing Medicaid $8 million from programming and human accounting errors.

In a recorded meeting led by controller Adel Soliman on April 24, budget analyst Josh Block, and others discuss ways to change information to make it difficult for auditors to notice how much money Colorado owes the federal government.

Block apologized to lawmakers Monday for his comments.

"Any statement that might imply that we are trying to hide something from auditors or that we were attempting to conceal any error is inexcusable in any context," said Block. "For my remarks, I am truly sorry.

Block said he "would not be surprised" if he had asked his co-workers to change other documents in the past.

HCPF Executive Director Joan Henneberry told lawmakers Block's statements were unacceptable but said they were not trying to conceal anything.

"There were multiple discussions over periods of weeks and months to delve into and find the problem and decide the right way," said Henneberry. "There is a process we follow in when and how we ask for spending authority and additional funds to pay back the federal government and the staff was following that process."

The department said it paid back the federal government $3.29 million for what it owed this year. It still has to repay about $5 million for prior years. It plans to ask the Joint Budget Committee for the funding in January 2009.

Henneberry says Block has been reprimanded, but would not get into specifics because of personnel issues.

In April, Block was named employee of the year for the department.

"He is the Tiger Woods in Colorado State budgeting, perfectly awesome but somehow I think he will continue to improve. Can we clone him?" wrote supervisor John Bartholomew on the nomination form about Block.

Republican lawmakers questioned why Block still has his job while Maynard, who brought the problems to light, has been fired.

"We should be praising those state civil service members, not firing them," said McNulty.

Maynard was fired after she went public with her concerns.

The agency said she was not terminated as retaliation.

"She was terminated for performance issues over four years of employment as a result of progressive discipline process," said Deputy Director Jennifer Evans.

Maynard was accused of workplace violence directly after the meeting on April 24, when she refused to change her work files and deceive auditors. While her co-workers urged her to make the changes, Maynard refused, saying: "I'm not going to lie."

According to the written request for an investigation into the workplace violence issue, her co-workers said Maynard was argumentative and insubordinate because she would not change her records. Maynard denies being aggressive, hostile or insubordinate during the meeting.

"If there is a culture of intimidation, if state employees who are coming forward as whistleblowers are being intimidated or fired or otherwise held down and the information held back, then we need to know about that because we need to go in and fix it," said McNulty.

"I think we need to air out a particular culture of behavior and how that department works," said committee chairman Rep. Jim Kerr, (R-Jefferson County).

Kerr called for another hearing on the issue in August.

In a letter delivered to lawmakers at the hearing, Gov. Bill Ritter's office said it investigated the issue and found the department did not try to cover-up accounting problems.

"To the contrary, based on our reviews, it is apparent that the department was proceeding in a deliberate and orderly fashion to assess, correct and rectify the long-standing accounting problems that were discovered," said Stephanie Villafuerte, deputy chief of staff for the Office of the Governor.