Excess mental health costs: $226 m

North Carolina spent up to $226 million in unnecessary costs after launching ill-fated mental health reforms in 2006.

The legislature's Program Evaluation Division released a report today saying that the Enhanced Services Package portion of mental health reform that the legislature put in place cost $2.4 billion between April 2006 and Febuary 2009. Most of that was federal money, but the state paid $827 million.

The Program Evaluation Division reported that advanced planning and oversight could have saved at least $177 million and as much as $226 million. Division staff are scheduled to present their findings to the division's oversight committee at 2 p.m. in room 544 of the Legislative Office Building.

Read more after the jump.

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The state's mental health reform was aimed at moving consumers out of hospitals and into community-based treatment. The Enhanced Service Package leveraged more federal dollars, and it included Community Support services, which were designed to help people with mental illnesses or addictions to gain skills, such as how to manage bus schedules or a household budget.

But costs rocketed as providers billed for questionable activities such as taking groups of children to sports events and movies, and taking clients for repeated trips to stores and the gym. Audits by state and local officials found that about 36 percent of the services provided were not medically necessary.