Saying that the mentally ill will suffer if health care funds are drained, Ventura County supervisors Tuesday voted to use tobacco settlement money to help lift the county out of a financial crisis sparked by years of bungled Medicare billing practices.

"It would not be wise to penalize our patients for a situation we had been living with for 10 years," Supervisor Judy Mikels said. "This would allow us to move on and make sure it never happens again." The county was ordered in August to repay $15.3 million in Medicare reimbursements to the federal government. The order came after federal auditors discovered a decade of faulty billing practices in the county's mental health department. Despite requests that the money be used for badly needed services, supervisors decided Tuesday to use all the tobacco settlement money the county received this year--slightly more than $3 million--for the first of five annual Medicare payments. "I agree with Supervisor Mikels; we must move on," said Supervisor Kathy Long, who had earlier suggested that some of the settlement money go toward a regional homeless shelter. "It would be wrong for us to turn around and harm the [mentally ill] clients." Supervisor Frank Schillo cast the sole dissenting vote. "There's no way I can support this motion," he said. "We're paying . . . with money that should be set aside to deal with health-related problems." Ventura County is one of many counties that will benefit from the $206-billion settlement between major tobacco companies and the 46 states that sued them to recover the cost of treating ill smokers. Next fiscal year, the county is expected to receive $8 million, then $10 million each year until 2025. Supervisors may choose to spend the funds as they wish. Although he acknowledges that the county is undergoing its worst financial crisis ever, Schillo was adamant that the money be used for health-related services and programs. "I've been agonizing over this," he said. "I used to think of budget [adjustments] as a challenge. Now, it's turned into depression." Before the vote, Ventura Mayor Jim Friedman rebuked supervisors for considering using tobacco funds to pay for their pricey mistake. The federal audit that discovered the faulty billing came after supervisors merged the county's mental health and social services departments. The agency merger angered county psychiatrists, who believed that it stripped their authority. After psychiatrists discovered that their provider numbers and names were being used on Medicare forms for services actually conducted by social workers and nurses, they alerted the U. S. attorney's office. That office determined that the practice was illegal, and the county settled the matter for $15.3 million. Authorities also ruled that the merged agency violated federal organizational rules; supervisors dismantled the agency in December. Besides the $15.3 million, the county is expected to lose many millions more as a result of other federal and state audits sparked by the failed merger. Friedman chided supervisors for suggesting that the tobacco settlement money be used to bail the county out of debt, especially when the county's 10 cities need the money for crucial services such as housing for the mentally ill. He also complained that officials from the cities have not been asked their opinion about how the money should be spent. "We urge the board not to take action on this significant revenue source until the cities have had an opportunity to meet with representatives of the board and participate in developing a long-term strategy that will benefit all our communities," Friedman told the board. Mikels said city officials had no right to claim the settlement money. "None of the cities have spent money on [treating] county health care [patients]," she said. "I think it's sort of sad that people see a bag of money out there and say, 'Where's my share?' It belongs to the county." The county also formed a committee, made up of department managers and two board members, to devise a long-term plan on how the settlement money should be spent over the next quarter of a century. Mikels and other supervisors said committee members would seek input from city officials when drafting the plan.

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