"Who's supposed to pay for her stay at the hospital?" asked spokeswoman Charlene Brown of the state Department of Human Services, which operates the psychiatric facility in Winslow Township. "It costs us $24,000 a year to keep someone in a mental hospital. Think about that."
Brown said she could not comment on a specific case without violating a patient's confidentiality.
Ancora executive officer William J. Camarota, a defendant in the suit, could not be reached for comment. Also named as defendants are Drew Altman, commissioner of the state Department of Human Services, and Alan G. Kaufman, director of the state Division of Mental Health and Hospitals.
Linda Rosenzweig, director of the Division of Mental Health Advocacy, said her office was investigating Ancora to see whether Hance's complaint is part of a pattern. "We are seeking to determine how widespread a practice this is," she said. Rosenzweig said that Ancora acted as a "representative payee" for about a quarter of its 600 patients.
Also named in the suit is Otis R. Bowen, secretary of the U.S. Department of Health and Human Services. The federal department runs the Social Security Administration, and Hance accuses Bowen of allowing Social Security administrators to not comply with the agency's rules. No one from the agency could be reached for comment late yesterday afternoon.
Rosenzweig said Hance's ability to manage her financial affairs should not have been an issue in the case.
"She is capable of handling her own funds. It's their doctor - the defendant's own doctor that said that," Rosenzweig said. Action taken by Ancora and the Social Security Administration "stripped her of control of her own disbursements," she said.
Hance's suit offers the following chronology:
In September 1985, Hance was admitted to the hospital and an application for Social Security disability benefits was filed for her. Social Security administrators determined on Feb. 26, 1986, that Hance was eligible for benefits retroactive to July 30, 1985.
On March 5, 1986, Ancora submitted a request to the Social Security Administration to receive Hance's benefits. Three days later, Social Security informed Hance that Ancora wanted to be her representative payee and gave her 10 days to object.
On March 11, the day she received the letter, she wrote an objection and asked the Community Health Law Project to represent her. The next day, her doctor at the hospital examined her and determined that she was capable of managing her finances. His statement was forwarded to the Social Security Administration on April 4.
By that time, the agency had already named Ancora as Hance's ''representative payee," even though Ancora's request did not include a statement by a physician saying that Hance was incompetent and unable to manage her benefits.
On April 28, 1986, Hance learned that her retroactive benefits of $3,450 had been sent to the hospital. She was discharged two days later and did not receive any of her Social Security money, the suit said.
Donald Webster, fiscal officer for the hospital, said yesterday that he could not comment on any individual's case. "In general," he said, "if the patient is incapable, we will make a request" to be a representative payee.
He said the form requires an attachment from a physician stating that the patient is incapable and explaining why.
"It's not our rule. It's the Social Security Administration's rule and we follow it," he said.
Webster said that it is proper for the hospital, as representative payee, to apply some of the money it receives from Social Security to the patient's care at the hospital.
"You are supposed to contribute to the current needs and special needs," Webster said. "And if there is any money left over, it is appropriate for us to apply it to the cost of care. He said he could not imagine a situation in which all the Social Security money would be used for cost of care.
Rosenzweig, the advocate, said that Social Security laws would not allow someone to sue in court for payment of a hospital bill out of Social Security money controlled by an individual. Ancora "could not have received her money in court," she said, "so they did it this way."