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Archive for the ‘OGB, Office of Group Benefits’ Category

The Jindal administration has announced plans to jettison 24 more positions at the Office of Group Benefits (OGB) as a cost cutting measure for the cash-strapped agency but is retaining the top two positions and an administrator hired only a month ago.

The effective date of the layoffs is Aug. 15.

The latest cuts will leave only 47 employees when the agency is relocated to the Claiborne Building basement to share office space with the Office of Risk Management. The Claiborne Building also houses the Civil Service Department, the Board of Regents, the Department of Education, the State Land Office and the Division of Administration.

The layoff plan submitted to the Department of Civil Service on June 14, said there was insufficient work to justify all 71 positions.

Affected by layoffs are eight Benefits Analyst positions, three Group Benefits Supervisory spots, one Group Benefits Administrator, seven Administrative Coordinators, an Administrative Assist, two Administrative Supervisors, one IT Application Programmer/Analyst and one Training Development Specialist.

OBG Chief Executive Officer Susan West, one of those being retained, will be making a physical move back into her old offices. She previously worked for ORM before that agency was gutted by Jindal’s grand privatization scheme and she moved over to OGB.

West, who makes $170,000, and Interim Chief Operating Officer Charles Guerra ($107,000) are not affected by the layoff nor is Elis Williams Cazes ($106,000)) was appointed as Group Benefits Administrator on June 23.

Cazes was previously employed by Blue Cross/Blue Shield of Louisiana which serves as the third party administrator of the OGB Preferred Provider Operation at a cost to the state of $5.50 per month per enrollee, which computes to an amount a little north of $70 million per year.

Her position was created—and the requirements reportedly written especially to her qualifications—as the Medical/Pharmacy Administrator responsible for benefit plan management and vendor performance with the primary responsibility to “continuously monitor medical and pharmacy benefit plans to seek out modification of plans or implementation of new plans that reduce claims costs and provide efficiencies for the state and plan participants,” according to the justification given for retaining her position.

Well, we can certainly see where her position is as indispensable as West’s and Guerra’s.

All this takes place at a time whe OGB’s reserve fund has dwindled from $500 million at the time of the agency’s privatization in January 2013 to about half that amount today. Even more significant, the reserve fund is expected to dip as low as $5 million by 2016, just about the time Jindal leaves town for good.

Completing the trifecta of good news, we also have learned that health benefits for some 200,000 state employees, retirees and dependents will be slashed this year even as premiums increase.

In June, West broke the news to the OGB employees. She erroneously said the 47 remaining employees would be reassigned other duties and some might see pay reductions and that those with seniority could bump junior employees in desired positions. The Civil Service Department, however, said salaries could not be cut and bumping is no longer allowed.

Isn’t it nice to know your agency director knows the procedures?

Employees were told that letters would go out between July 1 and July 15 to those who were being laid off. On July 7, they were told the letters would be delivered by hand on Friday, July 11. None came. On the following Monday (July 14) confusion of the order of the day as Deputy Commissioner of Administration Ruth Johnson sent emails to those affected and instructed them to attend a noon meeting in the OGB board room. Upon entering the board room, each person was handed a packet that informed them that Civil Service had not approved the layoffs.

During the meeting, according to one who was there, West kept repeating, “I get this. I’ve been where you are. I get this. However, there are worse things. It’s not like losing a child. I get this.”

Way to soften the blow, Susan. You might have reminded them that the fighting between Israel and Palestine isn’t so bad because there’s also an Ebola outbreak in Africa or that while you’re losing your home to a hurricane storm surge, some people are having to endure heavy wind damage. Or better yet, take them all to a showing of The Fault in Our Stars. That’ll cheer them up.

“It was the ‘I get this’ and comparison of losing a job to losing a child that infuriated the OGB state employees,” the employee said. “This is the worst thing in their lives right  now, some are battling cancer and working; some have children and grandchildren to feed; some live paycheck to paycheck; some are taking care of the elderly and family; all have bills, rents/mortgages, school tuition, etc.”

But you really can’t blame Susan. She previously worked for ORM and was among those present when ORM Director Bud Thompson broke the privatization news to his employees by standing before them, grinning, as he said, “I still have my job.”

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To probably no one’s surprise except a clueless Gov. Bobby Jindal, the takeover of the Louisiana Office of Group Benefits (OGB) by Blue Cross Blue Shield of Louisiana 18 months ago has failed to produce the $20 million per year in savings to the state.

Quite the contrary, in fact. The OGB fund balance, which was a robust $500 million when BCBS took over as third party administrators (TPA) of the Preferred Provider Organization (PPO) in January of 2013, only 18 months later stands at slightly less than half that amount and could plummet as low as an anemic $5 million a year from now, according to figures provided by the Legislative Fiscal Office.

OGB is one of the main topics to be taken up at today’s meeting of the Joint Legislative Committee on the Budget (JLCB) when it convenes at 9 a.m. at the State Capitol.

OGB is currently spending about $16 million per month more than it is collecting in revenue, said Legislative Fiscal Officer John Carpenter.

The drastic turnaround is predicated on two factors which LouisianaVoice warned about two years ago when the privatization plan was being considered by the administration:

  • Jindal lowered premiums for state employees and retirees. That move was nothing more than a smokescreen, we said at the time, to ease the state’s share of the premium burden as a method to help Jindal balance the state budget. Because the state pays a percentage of the employee/retiree premiums, a rate reduction would also reduce the amount owed by the state, thus freeing up the savings to patch gaping holes in the budget.
  • Because BCBS is a private company, it must return a profit whereas when OGB claims were processed by state employees, profits were not a factor. To realize that profit, premiums must increase or benefits decrease. Since Jindal had already decreased premiums, BCBS necessarily found it necessary to reduce benefits.

That, however, still was not enough and the negative income eroded the fund balance to its present level and now legislators are facing a severe fiscal crisis at OGB.

And make no mistake: this is a man-made crisis and the man is Bobby Jindal.

In a span of only 18 months we have watched his grandiose plans for OGB and the agency’s fund balance dissolve into a sea of red ink like those $250 million sand berms washing away in the Gulf of Mexico in the wake of the disastrous BP spill.

There is no tactful way to say it. This Jindal’s baby; he’s married to it. He was hell bent on privatizing OGB and putting 144 employees on the street for the sake of some hair-brained scheme that managed to go south before he could leave town for whatever future he has planned for himself that almost surely does not, thank goodness, include Louisiana.

So ill-advised and so uninformed was Jindal that he rushed into his privatization plan and now has found it necessary to have the consulting firm Alvarez and Marcel, as part of their $5 million contract to find state savings, to poke around OGB to try and pull the governor’s hand out of the fiscal fire. We can only speculate as to why that was necessary; Jindal, after all, had assured us up front that the privatization would save $20 million a year but now cannot make good on that promise.

In the real world, the elected officials are supposed to be the pros who know that they’re talking about while those of us on the sidelines are mere amateurs who can only complain and criticize. Well, we may be the political novices here, but the results at OGB pretty much speak for themselves and we can rightfully say, “We told you so.”

Are we happy or smug? Hell, no. We have to continue to live here and raise our children here while Jindal will be taking a job with some conservative think tank somewhere inside the D.C. Beltway (he certainly will not be the Republican candidate for president; he isn’t even a blip on the radar and one former state official now residing in Colorado recently said, “No one out here has ever even heard of him.”)

In a five-page letter to JLCB Chairman Rep. Jim Fannin (R-Jonesboro), Carpenter illustrated the rate history of OGB going back to Fiscal Year 2008 when premiums were increased by 6 percent. The increase the following year was 3.7 percent and the remained flat in FY-10. In FY-11, premiums increased 5.6 percent, then 8.1 percent in FY-12 when the system switched from a fiscal year to calendar year. but in FY-13, the year BCBS assumed administrative duties, premiums dropped 7 percent as Jindal attempted to save money from the state’s contributions to plug budget holes. For the current year, premiums decreased 1.8 percent and in FY-15 are scheduled to increase by 5 percent.

OGB Report_July 2014 FOR JLCB

Carpenter said that since FY 13, when BCBS took over the administration of OGB PPO claims, OGB’s administrative costs began to shift to more third party administrator (TPA) costs as the state began paying BCBS $23.50 per OGB member per month. That rate today is $24.50 and will increase to $25.50 in January of 2015, the last year of the BCBS contract.

That computes to more than $60 million per year that the state is paying BCBS to run the agency more efficiently than state employees who were largely responsible for the half-billion-dollar fund balance.

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The $500 million savings report by Alvarez & Marsal (A&M) was finally released on Monday only minutes before adjournment of the 2014 legislative session—and, conveniently for the administration, too late for critical feedback from lawmakers.

http://doa.louisiana.gov/doa/PressReleases/LA_GEMS_FINAL_REPORT.pdf

So, what makes this one any different than the others, given the fact that the A&M report acknowledges that Louisiana “has a long history of performance reviews, dating back to one performed by the Treen administration in the early 1980s?” Well, for one, the punctuation, spelling and grammatical errors contained in the report indicate that it was thrown together rather hastily to satisfy a state-imposed deadline for completion.

Of course the report was cranked out by “experts,” and as an old friend so accurately reminded us, an expert is someone with a briefcase from out of town.

The 425-page report, produced under a $5 million contract, while projecting a savings of $2.7 billion over five years (an average of $540 million a year), the substance of the report was sufficiently ambiguous to render the document as just so much:

(a)    Useless trendy jargon and snappy catch phrases like synergy, stakeholders, and core analytics to give the report the appearance of a pseudo-academic tome;

(b)   Eyewash;

(c)    Window dressing;

(d)   Regurgitation of previous studies by previous administrations that are now gathering dust on a shelf somewhere;

(e)    All of the above.

Three things were immediately evident with only a cursory review of the report:

  • Two offices that have been privatized by the administration as a means of savings and efficiency—the Office of Risk Management and the Office of Group Benefits—were subjected to rather close scrutiny by A&M which identified a host of ideas to make both offices more cost efficient. And we thought all along the administration had assured us of great cost savings and efficiency as its reasons for privatization in the first place. Yet A&M, in its report, claims its recommendations can save OGB another $1.05 billion while ORM can save an additional $128 million through implementation of recommendations contained in the report.
  • While A&M met extensively with and took suggestions from state employees who were tasked by the administration with coming up with savings ideas as far back as last September, not one word of acknowledgement is given to those employees in the report, prompting one employee to wonder, “Why the hell can these New Yorkers take my ideas and work and resell them to the state?” Of course the report did give a tip of the hat to Commissioner of Administration Kristy Nichols for her assistance in overseeing “all aspects of the state’s participation.” We suppose that will have to suffice.
  • Though virtually every office operating under the auspices of the Division of Administration came under the watchful eye of the A&M suits, not a single recommendation for increased efficiency and/or cost savings was offered up for the Governor’s Office itself. The closest A&M got to the governor’s office was the Office of General Counsel, the legal office of the Division of Administration. The obvious conclusion to be drawn from that is that the Governor’s Office is already operating at peak efficiency and minimum waste.

Most of the projected cost savings were based on assumptions for which A&M offered little or no supporting data other than arbitrary estimates and suppositions that could have been produced at a fraction of the report’s $11,760 per-page cost.

The report acknowledged that Louisiana already has the highest Medicaid recovery rate in the nation with $124 million in improper payments recovered but nevertheless listed as one of its recommendations that the Department of Health and Hospitals (DHH) “reduce improper payment in the Medicaid program.”

Seriously? Who would’ve thought that might be a way to save money?

Other suggestions included in the study by agency and projected savings (in parentheses):

DHH ($234.1 million)

  • Establish more cost-effective pediatric day health care programs and services;
  • Maximize intermediate care facility (ICF) bed occupancy rates;
  • Shift the administrative management of uninsured population from state management organization to local governing entities (Municipal and parish governments better take a long, hard look at that recommendation);
  • Improve the process and rate of transition of individuals with age-related and developmental disabilities from nursing facilities and hospitals. (So just where are those age-related and those with developmental disabled individuals being transitioned to? Are they to be removed from state facilities as a cost-saving move? And they accused Obama of creating death panels with the Affordable Care Act?)

Department of Transportation and Development (DOTD) ($99 million)

  • Expand advertising revenue for roads, bridges and rest stops;
  • Reduce the construction equipment fleet;
  • Convert some of vehicle fleet to natural gas (for this we needed a consultant?)
  • Reduce cost overruns with quality assurance/quality control engineering firm (another consulting contract);
  • Utilize one-inch thin asphalt overlay (and after reducing the construction equipment fleet we can change the names of our state routes from highways to obstacle courses).

Department of Corrections: ($105.3 million)

  • Expand certified treatment and rehabilitation program;
  • Expand re-entry program;
  • Increase use of self-reporting.

Department of Revenue and Taxation ($333.4 million)

  • Re-build audit staff positions depleted because of retirements and hiring freezes;
  • Increase compliance efficiency and reduce backlog of litigated cases

Department of Public Safety ($45.4 million)

  • Centralize state police patrol communications
  • Consolidate state police patrol command position;
  • Optimize state police patrol shifts
  • Expand Department of Public Safety span of control.

Office of Juvenile Justice ($44.2 million)

  • Increase probation and parole officers’ caseloads (Seriously? Do these clowns have even a remote idea of what these officers’ job is like? The caseloads have increased steadily and there have been no pay raises for what, five years now? For even suggesting that, those A&M suits should be horse whipped with a horse.);
  • Relocate youth from Jetson Center to other Office of Juvenile Justice (OJJ) facilities (so, just how out of touch was A&M to have not known the Jetson Center was closed in January?);
  • Increase OJJ span of control.

Department of Children and Family Services ($2 million)

  • Continue to implement innovative strategies intended to reduce;
  • Safely decrease the time children spend in state custody.

Louisiana Economic Development ($142.9 million);

  • Adjust fees for inflation;
  • Enhance review process for Motion Picture Tax Credits;
  • Enterprise Zone benefits and audit review process;
  • Consolidate Louisiana Economic Development (LED) offices into one government-owned facility (What? No privatization?).

Human Capital Management ($65.9 million)

  • Creation of agency workforce and succession plans;
  • Redesign of job families through creation of a competency model;
  • Improve the administration of Family and Medical Leave (FMLA) across agencies;
  • Review overtime policies;
  • Increase span of control for agency supervisors.

Office of General Counsel ($3.825 million)

A&M noted that the Office of the General Counsel (that would be the in-house legal counsel—they hate being called that—for the Division of Administration) “is responsible for ensuring that the commissioner’s statutory duty to respond to public record requests in a timely and legal manner is carried out.”

This was a favorite part of the entire report for us. The DOA Office of the General Counsel has historically delayed responding to public record requests of LouisianaVoice far beyond any reasonable—or legal—time limits. Louisiana’s public records statutes require an immediate access to public records unless they are unavailable in which case the custodian of the record must, according to law, respond in writing as to when they will be available within three working days. It is not at all unusual for the Office of the General Counsel to drag his feet for weeks on end before producing requested records.

But A&M has solved that knotty little problem by pointing out that as the custodian of the DOA’s public records, “it is the commissioner’s (Kristy Nichols) responsibility to receive and process public records.”

A&M’s recommendation that the Office of the General Counsel can generate its five-year cost savings simply by:

Increasing the organization efficiency of the office, ($1.975 million) and

Increasing the efficiency of document review process and reducing internal and external attorney costs ($1.85 million).

That, of course, raises the burning question of what will happen to Jimmy Faircloth?

Other suggested savings came under:

  • Procurement ($234.8 million);
  • Facilities Management and Real Estate ($70.9 million), and
  • Provider Management ($2.2 million).

“I am so proud of this report,” gushed Nichols. “These are real, common sense solutions that will not only save money for the people of Louisiana, but will improve the way we operate.”

Question, Kristy: If they are such “real, common sense solutions,” why has this administration in six-plus years experienced this epiphany before now?

Another question: If these suggestions, which you say were “thoroughly vetted,” are going to save money for us and make our lives better through better operations, where has Jindal, his cabinet secretaries, undersecretaries, deputy secretaries department heads, managers and great legal minds been all this time? Wasn’t it their job to give us the biggest bang for the buck? (Oops, that’s three questions.)

Oh, well, let’s go for broke here. Fourth question: Who “vetted” these wonderful ideas? If the vetting was done by those already on the state payroll, why didn’t those employees perform the task in the first place instead of blowing $5 million on this report that a second year economic major at LSU could have written?

Fifth question: Does the administration—and by extension, A&M—hold employee morale in such low regard that it was not considered as a factor in facilitating more efficient job performance across the board? Improved employee morale would seem to be conducive to cost savings, yet it was never addressed even once in the entire 425-page document. That omission speaks volumes.

And finally, if you are “so proud of this report,” why was it that you reportedly tossed an A&M representative out of your office with the admonishment that he’d better find something after he initially reported to you that his consulting firm was having trouble coming up the $500 million savings?

Could this explain why some of the “savings” appear to have been plucked out of thin air?

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Alvarez & Marsal, Gov. Bobby Jindal’s favorite consulting firm, has submitted invoices totaling more than $2.1 million thus far, accounting for a tad more than the firm’s $5 million contract to ferret out $500 million in savings to the state, according to documents provided by the Division of Administration.

And so far, all taxpayers have to show for that is a 2 ½ page preliminary report provided to legislators earlier this month recommended $74 million in spending cuts, some of which have already been rejected by the administration.

A&M’s invoices included an $80,000 charge for an assessment of the Office of Group Benefits (OGB) conducted in December at the specific request of Commissioner of Administration Kristy Nichols.

But…but…but didn’t the administration conduct a full blown assessment of OGB before it made that decision to privatize the agency a couple of years ago? Is this administration determined to study and consult this state into financial oblivion?

And speaking of OGB, that $500 million reserve fund it had when Jindal came up with the bright idea of privatization—an economy move, he said; it would save the state gazillions—has shrunk like hemorrhoids in a Preparation H commercial and both the Legislative Fiscal office and the Legislative Auditor’s office are projecting an end of year balance of only $55 million or so.

And Jindal’s ploy of reducing premiums—the by-product of that action being that it would also reduce the state’s portion of premiums by 9 percent, freeing up money Jindal would use to patch yet another state budget—has now done a 180 with the word going out this week that premiums for state employees and retirees and their dependents will be increased by 5 percent, effective July 1.

Talk about your voodoo economics…

So why blow $80,000 to conduct the OGB “assessment when the Legislative Fiscal office and/or the Legislative Auditor’s office would probably have performed the same service for free.

Wait…they did already.

Yep, both conducted their own separate assessment and came up with remarkably similar numbers for the anticipated reserve fund reduction by the end of 2014. The picture isn’t pretty and no consultant’s study is going to change that.

Legislative Auditor Daryl Purpera said the reserve fund is currently being reduced by about $17 million a month and even with the 5 percent premium increased announced by the administration, the drawdown will be reduced by less than half—$7 million, leaving the monthly deficit at $10 million a month.

Nichols, in typical fashion, continues to spout the party line, assuring us that everything is peachy and the fund is in no danger of going broke. So now with this prediction coupled with previous pronouncements, we now know her to be a legal authority, an economist, an actuary and a wellness expert. Given her track record, we should be worried, very worried.

But we digress. Back to those A&M invoices and the firm’s recommendations.

In case there may be those whose memories are short, A&M is the same firm that Jindal hired last year to come up with his brainstorm of eliminating state income taxes, a plan that crashed and burned before ever lifting off.

It’s also the same firm that advised the Orleans Parish School Board to fire 7,500 teachers after Hurricane Katrina, an action that prompted a class action lawsuit which in return produced a judgment in favor of the teachers that could end up costing the state $1.5 billion.

So, what did that 2 ½ page preliminary report contain? Oh, great things, like requiring women on Medicaid to use midwives or doulas for delivery (these would be women who often go without prenatal care), finding jobs for prison inmates, cutting the thickness of asphalt in future highway overlays, and cutting back hours of operation for the Cameron Parish ferry.

It didn’t take Jindal long to cave to pressure to keep the ferry open.

Scratch that big savings.

Then Jindal decided against a plan not part of the A&M recommendations, that of closing 18 motor vehicle offices throughout Louisiana.

Out with that savings plan.

Now, having already been paid 40 percent of its contract amount, A&M still has not submitted the overall plan for saving $500 million—a plan originally given the deadline of April 30 but extended to the end of May.

That gives A&M three days to come up with an additional $426 million in savings.

Could it be that the one-month extension was timed to have A&M submit its savings plan only hours before the legislature adjourns on Monday, thus giving lawmakers no opportunity to review the plan or to offer any input of their own?

With this governor, stranger things have happened.

 

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“In no event will coverage be provided to any subscribers, as of March 1, 2014, unless the premiums are paid by the subscriber (or a relative) unless otherwise required by law.”

—Blue Cross Blue Shield of Louisiana spokesman John Maginnis, explaining why BCBS of Louisiana will no longer comply with terms of the federal Ryan White Program.

Ryan White grantees “may use funds to pay for premiums on behalf of eligible enrollees in Marketplace plans, when it is cost-effective for the Ryan White program. The third-party payer guidance CMS released (in November) does not apply to” Ryan White programs.

—CMS spokesperson Tasha Bradley, refuting BCBS’s interpretation of a CMS anti-fraud directive issued in November.

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First Gov. Bobby Jindal refused to expand the state’s Medicaid program and then he vetoed a $4 million appropriation aimed at shortening a waiting list for home-based services for the developmentally disabled.

And now there is this:

AIDS patients in Obamacare limbo as insurers reject checks.”

That was the headline on the Reuters story that moved on the Internet at 9:23 a.m. on Saturday. The upshot of the story was that hundreds of HIV/AIDS patients in Louisiana attempting to obtain coverage under the Affordable Care Act are in danger of being rejected by the insurance plan they selected.

Just as significant is the roar of stony silence emanating from the State Capitol’s fourth floor office of Bobby Jindal who, six years ago first swore an oath to uphold the rights of all the citizens of Louisiana—even those several hundred adversely affected by the latest BCBS decision. Some would even speculate that Jindal may have leaned on BCBS, which holds two contracts worth $1.1 billion with the state through the Office of Group Benefits.

Others might even raise the question that if Jindal did influence the decision, did he do so at the behest of the Louisiana Family Forum?

The issue revolves around a dispute over federal subsidies and the interpretation of federal rules about preventing Obamacare fraud

BCBS, the state’s largest carrier, is rejecting checks from a federal program that is specifically designed to assist HIV/AIDS patients in paying for AIDS drugs and for insurance premiums under the Ryan White CARE (Comprehensive AIDS Resources Emergency) Act.

Ryan White, a hemophiliac from Kokomo, Indiana, was diagnosed with AIDS at age 13 from a contaminated blood transfusion. He and his mother Jeanne White Ginder fought for his right to attend school. He died in 1990 at age 18, a month before his high school graduation and only months before Congress passed the act that bears his name.

The Ryan White Program is the single largest federal program designed specifically for people with HIV and benefits more than half a million patients each year. It provides care and support services to individuals and families affected by the disease, serving as the “payer of last resort” by filling the gaps for those who have no other source of coverage or who face coverage limits.

But now, inexplicably, BCBS says it will no longer accept third-party payments such as those provided by the Ryan White Program.

“In no event will coverage be provided to any subscribers, as of March 1, 2014, unless the premiums are paid by the subscriber (or a relative) unless otherwise required by law,” said BCBS spokesman John Maginnis (no, not the journalist).

The decision stems from a series of communications from the Centers for Medicare and Medicaid Services (CMS), the lead Obamacare agency. In September, CMS informed insurers that Ryan White funds “may be used to cover the cost of private health insurance premiums, deductibles and co-payments” for Obamacare plans.

But in November, CMS warned care providers and “other commercial entities” that because of the risk of fraud, it had “significant concerns” about their supporting premium payments and assistant Obamacare consumers pay deductibles and other costs.

BCBS seized on that to say it had implemented a policy, “across our individual health insurance market, of not accepting premium payments from any third parties who are not related” to the subscriber, according to Maginnis.

Not so fast, says CMS. “The third-party payer guidance CMS released (in November) does not apply” to the Ryan White programs, it said.

Hundreds of HIV/AIDS patients who are not eligible for Medicaid depend on Ryan White payments for Obamacare. That is because Gov. Bobby Jindal chose not to expand the low-income Medicaid program and Obamacare federal subsidies do not kick in until people are at 100 percent of the federal poverty level.

The only other carrier currently refusing to accept such payments is BCBS of North Dakota, according to a CMS spokesperson but that policy is currently under review.

Jessica Stone, a member of U.S. Sen. Mary Landrieu’s staff, in an email to health care advocates, wrote, “BCBS LA told me their decision was not due to the CMS guidance or any confusion (as we thought before) but was in fact due to adverse selection concerns” in an effort by insurers to keep AIDS patients from enrolling in their plans.

Adverse selection refers to the situation where an insurer attracts patients with chronic conditions and expensive care. John Peller, vice president for policy at the AIDS Foundation in Chicago, said the action “sure looks to us like discrimination against sick people.”

BCBS LA denied that. “We welcome all Louisiana residents who chose Blue Cross and Blue Shield of Louisiana,” Maginnis said.

One observer said it shouldn’t matter who pays the premiums. “All the insurer should care about is whether the premiums are paid or not. I once loaned money to a friend and had problems getting him to pay me back. His girlfriend finally paid me some of the money. If I had been like BCBS, I would have refused her money, preferring to get it from him—and I would have gotten nothing. This makes no sense whatsoever.”

Perhaps Jindal intends to ignore the 13,400 HIV/AIDS victims served by the program in Louisiana and use the $50.7 million in Ryan White funds the state receives to help plug next year’s all but certain budget deficit.

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The latter part of January 2014 should probably be remembered when the policies of Gov. Bobby Jindal began to unravel in rapid succession and as a time when he was finally exposed as far more goobernatoral than gubernatorial.

If that seems harsh and disrespectful of the man and the office, then so be it; it’s only because he has earned it—in spades.

He has submitted executive budget after executive budget crafted around one-time funding for recurring expenditures—something he vowed never to do when he was running for office. He has sold off state property and entire agencies to finance those budgets. He has gone on a privatization rampage that is now coming home to bite him in the posterior, to the surprise of few observers. He has stacked board after commission with campaign lackeys who possess few, if any, qualifications for their positions of responsibility for running such things as the state’s flagship university. He has embarked on an ambitious quest for the Republic presidential nomination that is doomed to failure and disappointment.

That said, let’s examine the developments of the past few days that have converged to upset the house of cards upon which his administration has been built over the past six years:

  • The Office of Group Benefits (OGB) was privatized only a year ago. In that time, some 100 state employees lost their jobs, a $500 million reserve fund has dwindled to half that because of an ill-advised decision by Jindal to reduce premiums to some 250,000 state employees, dependents and retirees by 7 percent to make the privatization more palatable—and to reduce the state’s share of premium payments thereby helping Jindal balance his budget. Meanwhile, Blue Cross Blue Shield of Louisiana, the third party administrator who assumed management of OGB as a “cost savings plan” was forced to draw down that cash reserve to pay claims.

The folly of that ploy, of course, manifested itself this week when it was learned that double digit (some say as much as 25 percent) premium increases are imminent in order to keep what was once arguably the best-run agency in state government afloat. Meanwhile, yet another CEO has departed and the fourth in less than three years has been ushered in.

  • The crash and burn disaster of the administration’s privatization of the LSU hospital system is even more dramatic. The Biomedical Research Foundation of Northwest Louisiana (BRF) took over the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Shreveport last October because Jindal assured us that it would save taxpayer dollars. Yet, less than four months after BRF assumed operation of the two facilities, it is asking the state to bankroll more than $120 million in hospital improvements and expansions.

And don’t forget this privatization deal was approved by the LSU Board of Stuporvisors. One of the board members who voted for the deal which at the time, included a contract with more than 50 blank pages, just also happens to be the CEO of BRF but Jindal pooh-poohed the very idea that there could be a conflict of interests.

  • Another hospital privatization, that of the Interim Louisiana Hospital which replaced the old Big Charity that was heavily damaged by Hurricane Katrina, is also proving to be a tad more costly than we had been told by Jindal, thanks to the scrapping of a $46.5 million medical records system that is less than two years old.

On Friday, Jan. 24, ILH CEO Cindy Nuesslein notified employees of the one-time LSU Medical Center now jointly run by Children’s Hospital of New Orleans and Touro Infirmary that the electronic health record system installed by Epic Systems Corp. was being scrapped in favor of something called the Soarian Clinicals Siemens platform. No cost estimate was provided for the changeover, but it’s a good bet that the cost will be borne by the state.

The Epic system only went live in July of 2012 and the Epic contract, which began on May 18, 2010, expired on May 17, 2013.

  • When Jindal privatized the University Medical Center in Lafayette, he also closed the medical center’s First Step Detox, a “first step” treatment center for those suffering from chemical dependency—typically chronic alcoholics, IV heroin and/or other opiate abusers, including polysubstance abusers. When First Step Detox reopened, it sublet the center to Compass, a private entity that accepts only private pay and insured patients.

The news release announcing the reopening of First Step made no mention of the new admission policy, nor did it mention the ever-shrinking number of options for treatment for indigent patients. Now former patients are referred to the overburdened Baton Rouge Detox where they are instructed to fax their paperwork in order that they may be placed on a long waiting list.

  • Another private contractor with four contracts worth more than $385.5 million has been the subject of two critical audits by the Legislative Auditor’s Office. Moreover, a north Louisiana doctor claims that physicians are refusing to accept patients with Magellan insurance.

The first state audit, released in mid-December, says that the Department of Health and Hospitals provided no external evaluation of the performance of Magellan under its $361.4 million contract to handle paperwork and connect Medicaid 151,000 patients with mental health care providers.

Last August, the legislative auditor’s office said claims payments have been problematic for four state agencies and blamed Magellan for failing to meet significant technical requirements.

DHH Secretary Kathy Kliebert disputed that claim, saying that the privatization is working. She said the number of health care providers has expanded from 800 to 1,700—a claim hotly disputed by Scott Zentner, a Monroe neuropsychiatric doctor.

“I wish I could get to the bottom of Kliebert’s phony numbers regarding the supposed increase in providers since the Magellan takeover because the evidence is clearly to the contrary,” Zentner said. “I would bet my medical license that people are being counted now (that) weren’t before.”

Zentner said Magellan’s contract extends to private and public providers in a number of treatment settings. “Previously, they (providers) were reimbursed by fee for contracted services through DHH and some were not billing Medicaid at all, such as employees with the Office of Family Support.” Now, though, providers who were already delivering services before Magellan are now being included in the count who were not before, he said.

“I find it despicable that the head of DHH is twisting the numbers to cover up for a dramatic decline in services,” he said.

Zentner retired in 2012 after 20 years that included work as a medical director and staff psychiatrist for DHH and as a clinical associate professor of psychiatry at LSU. He said he returned to private practice after being “unable to further tolerate Jindal’s dismantling of our mental health system.”

He said he accepts all private insurances now except Magellan after “having been burned by them in the past for unpaid claims. They are the ultimate master in the use of passive-aggressive stall tactics in denying payments to providers, typically for silly technicalities; eg, misspellings resulting from typos.”

“In the northeast region of the state, with Monroe as the center of a 12-parish district, 75 percent of the physician/psychiatrist coverage has abandoned the community mental health system since Jindal took office,” he said. “Several Medicaid rehab agencies have shuttered their doors, one mental health clinic has closed in Rayville and others, including those in Winnsboro and Jonesboro, have been reduced to part-time outreach clinics operated by skeleton crews. Other outreach clinics, providing the most basic of mental health services, have closed in Tensas and East Carroll parishes,” he said.

“Other regions in the state have experienced even greater cuts than ours, but I doubt any of the regional administrators who are still employed would admit this publicly lest they be fired by Jindal.

“I’m highly skeptical of their (DHH) claims that provider rolls have increased, as (their figures) grossly contrast with reality,” he said.

The second audit was of the Office of Juvenile Justice (OJJ) and cited the office for its failure to develop a plan to monitor OJJ contracts managed by Magellan.

Magellan has a $22.4 million two-year contract with the Department of Children and Family Services also scheduled to expire on Feb. 28.

That contract calls on Magellan to provide an array of coordinated community-based services “for children and youth with behavioral health disorders and their families that risk out of home placement.”

Magellan’s contract calls for it to take over management beginning Jan. 1, 2013, at Harmony Center-Camellia Group Home in Baton Rouge, Boys and Girls Villages in Lake Charles, Boys Town of Louisiana (two facilities, in New Orleans and Baton Rouge), Harmony Center-Harmony III Group Home in Baton Rouge, and Allen’s Consultation, Inc., in Baton Rouge.

The contract requires that Magellan submit a written report detailing its progress to OJJ every six months but as of December 2013, OJJ had not received any such report documenting use of contract funds or of meeting specific goals of the contract.

  • Finally, in what is probably the most heartless, most ungrateful act yet by this administration, Jindal last week ordered the Louisiana National Guard (LNG) not to process any benefits for gay veterans on state property—in open defiance of the U.S. Supreme Court’s ruling that the 1996 Defense of Marriage Act (DOMA) is unconstitutional. Apparently Jindal based his position on some state’s rights legal opinion which he feels gave him the leverage needed to deny benefits on state property. It looks to us like more work for Jimmy Faircloth to try and defend another administration policy of questionable legal merit.

What makes this order so egregious is the blatant flag waving hypocrisy in which Jindal envelopes himself.

This is the same governor who, in a great show of his patriotism for the benefit of newspaper photographers and television cameras, traveled all over this state to hand out those appreciation medals to military veterans. The bill to award the medals was passed in the belief that legislators would benefit from the goodwill but Jindal stole that opportunity from under their collective noses with his shameless traveling awards show, denying lawmakers the chance to get in on the act. (Just for the record, as a matter of principle, I chose not to stand in line to have him present my medal nor did I apply for it to be mailed to me even though I served.)

Moreover, as thousands of Louisiana guardsmen were deployed to Iraq and Afghanistan over the past decade or so, never once do I remember anyone in this administration inquiring if anyone being placed in harm’s way for his or her country was gay. Apparently it’s perfectly okay to get shot or blown up by a roadside IED if you’re gay but if you’re lucky enough to survive, don’t bother coming home and applying for benefits.

Never, in my 70 years, have I witnessed an act so gutless, so callused. To hide behind the flag and to call oneself a Christian and a patriot while at the same time issuing such a cowardly order is beneath contempt.

It is the act of a petulant little ingrate who would defend the senseless and insensitive comments of a Phil Robertson while pretending to support the men and women who wear the uniform that he never had the courage to wear.

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Cue Queen and crank up Another One Bites the Dust.

Charles Calvi and Patrick Powers are leaving the Office of Group Benefits (OGB) and Susan West, late of the Office of Risk Management has been named Interim CEO—the fourth person to head OGB in less than three years.

Meanwhile, that $540 million reserve fund balance OGB had on hand to pay benefits at the time of Gov. Bobby Jindal’s infamous raping of the agency now sit at $240 million and is dwindling at a rate of $20 million per month, no doubt the result of Jindal’s 7 percent premium reduction six months before the January 2013 takeover of OGB by Blue Cross Blue Shield (BCBS) of Louisiana.

But not to worry. In one of the administration’s now routine Friday press releases (so that the impact of the story is lost over the weekend when newspaper readership is down), Commissioner of Administration Kristy Nichols announced that (drum roll, please) Alvarez and Marsal (A&M) will be working with West in efforts to “continue the transformation and redesign of OGB.”

Bear in mind that OGB was one of those state agencies that was doing quite well in paying health care benefits to some 250,000 state employees, retirees and dependents. That included building up that half-billion dollar reserve fund while paying claims in a timely manner (average turnaround of three days) that kept both claimants and providers happy. But somehow, the administration deemed it in need of “transformation and redesign” and now health care providers are being asked to wait longer for payment of claims and BCBS is asking the state to waive the service level agreements and performance guarantees in place for Claims Timeliness and to not impose financial penalties for payments made later than 30 days during January and February.

http://theadvocate.com/home/8151593-125/state-insurance-claims-payments-delayed

But back to Alvarez and Marsal. That’s the company Jindal recently hired for $4.2 million to find presumed savings of $500 million in state expenditures by April—except it turns out there was nothing in the contract alluding to any $500 million savings; it was in the cover letter but not the contract. After being caught with her knickers down, Nichols, who initially assured legislators that the contract did indeed call for the $500 million savings, has said the contract will be amended to contain the language. Good for her. Oh, wait. It turns out that amendment also added another $800,000 to the contract, boosting it to $5 million. Yipee.

Alvarez and Marsal, you may remember from a previous LouisianaVoice post, was the firm that advised the state to fire 7,500 public school teachers in New Orleans following Hurricane Katrina in 2005. http://louisianavoice.com/2014/01/17/firms-advice-to-fire-orleans-teachers-after-katrina-may-cost-taxpayers-1-5b-hired-for-4m-by-jindal-to-save-state-money/

When those teachers were not called back and instead were replaced by new teachers, they sued and won and now the state is on the hook for about $1.5 billion, give or take a couple of dollars.

So now this firm is awarded a $4.2 million contract to do what the brilliant minds of all those Jindal appointees apparently could not do. Alvarez and Marsal is going to send its suits to Baton Rouge to figure out what the Legislative Fiscal Office cannot. If the fiasco in New Orleans is indicative of its work, will the last one out of Baton Rouge please turn out the lights? On second thought, never mind; Entergy will have already disconnected the meter.

On April 15, 2011, Tommy Teague, the man responsible for OGB’s accumulating that $500 million reserve fund and who, by all accounts, ran a highly efficient agency known for its rapid turnaround on claims payments and satisfied claimants, was summarily fired when he did not jump on board the Jindal privatization train. Within six weeks, his replacement, Scott Kipper resigned in frustration or disgust—or both—and was replaced with Calvi. So now OGB CEO Charles Calvi and his $170,000 salary and Chief Operating Officer Patrick Powers ($107,000) are leaving voluntarily, headed to Metairie to work for Teague and the Louisiana Health Care Exchange.

West, the fourth person to head OGB in three years, previously as ORM’s administrator for loss prevention, underwriting and statistics where she was responsible for policy development, risk financing and premium development and allocation. Before that, she served as a claims manager for multiple lines of insurance provided by ORM, the agency that insures all state agencies.

Oddly enough, in her announcement of West as the Interim CEO, Nichols never once alluded to the departure of Calvi or Powers. LouisianaVoice learned of their leaving through other sources. Calvi’s leaving, whether voluntary or involuntary, was not difficult to figure out after West was announced as his replacement, albeit without benefit of an accompanying announcement of his exodus. http://www.doa.louisiana.gov/doa/PressReleases/New_OGB_Interim_CEO_Susan_West.htm

It was certainly a ham-handed way of announcing West’s appointment with no explanation of Calvi or Power’s leaving. Nothing would surprise us though, given the manner in which this administration tends to handle such matters with all the subtlety of Larry, Moe and Curly trying to administer a cold buttermilk enema to a feral cat.

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A company holding two state contracts worth $32.8 million was the lead IT contractor of the ill-fated Affordable Health Care enrollment web page rollout late last year, LouisianaVoice has learned.

CGI Technologies and Solutions, headquartered in Quebec Province, has experienced problems with other contracts in Canada and the U.S. even before the Obamacare debacle.

The largest tech firm in Canada, CGI also has offices in the Washington, D.C. area—Fairfax and Manassas, VA., Washington and Baltimore, and is part of the CGI Group which has 72,000 employees in 400 offices worldwide—many of those in India.

CGI Technologies and Solutions was awarded a $32.5 million contract with the Office of Community Development’s (OCD) Disaster Recovery Unit (DRU) on March 2, 2012 to provide computer software hosting, support and training for OCD’s Hazard Mitigation Grant Program (HMGP), small rental programs.

That contract is scheduled to run out on March 1, 2015.

CGI also has a $300,000 contract with the Office of Information Services to provide technical support for the Division of Administration’s (DOA) advanced financial system (AFS). That contract is set to expire on June 30.

The state also has a $20 million contract with Hunt Guillot & Associates of Ruston through OCD and DRU for grant management activities for infrastructure and other projects undertaken as a result of damages resulting from hurricanes Katrina, Rita in 2005 and Gustav and Ike in 2008.

The Hunt, Guillot contract was first issued for $18.2 million on Oct. 31, 2007—just 10 months after Gov. Bobby Jindal took office, and called for the firm to work in program design, the pre-application and application process, pre-construction and construction of projects related to hurricane recovery. That contract expired on Oct. 30, 2010, but the company was awarded a subsequent contract of $1 million on Dec. 1, 2009 which called for it to review applications for grant funds pursuant to the hazard mitigation grant.

It was not immediately clear how much, if any, overlap there might be between the CGI and Hunt, Guillot contracts, if one was intended to augment the other, or if the two are completely separate, unrelated contracts.

What is clear is that in April of 2013, less than a year ago, the Legislative Auditor issued a report which indicated the state could be on the hook for a minimum of $116 million and possibly as much as $600 million in improperly received or misspent disaster aid following Katrina and Rita.

http://www.nola.com/politics/index.ssf/2013/04/louisiana_on_for_misspent_road.html.

State auditors reviewed 24 loans to property owners through the state’s Small Rental Property Program. The state had allocated $663 million to the program and of the 24 cases reviewed, none had been flagged as problematic by OCD. Though only 24 cases were reviewed, more than 8,000 properties benefitted from the assistance program—increasing the likelihood that the total number and amount of improper payments could go significantly higher.

OCD Executive Director Patrick Forbes said rather than attempt to chase down homeowners to retrieve the misspent funds, he intends to change OCD regulations to provide more assistance to homeowners before “triggering the recapture of funds.”

Despite that statement of intent, a month after that audit report, on May 21, the administration issued a $600,000 contract to the Baton Rouge law firm of Shows, Cali & Walsh to “review and analyze Road Home files for overpayments, ineligible grantees, etc., (and to) negotiate and collect funds due to the state.”

Shows, Cali & Wash, meanwhile, has its own problems stemming from a federal judge’s findings that it manipulated evidence in a federal lawsuit by three death row inmates at the Louisiana State Penitentiary at Angola. http://louisianavoice.com/2014/01/03/baton-rouge-law-firm-with-3-million-in-state-contracts-faces-legal-sanctions-over-evidence-manipulation-in-angola-lawsuit/.

Meanwhile, the ObamaCare project—healthcare.com—disaster appears to have had caused a negative impact on employee morale at CGI, according to a staff worker who asked not to be identified. “There’s a lot of frustration,” he said. “People are getting sick, fainting in conference calls.”

Employee turnover is said to be high at CGI, making matters more complicated when trying to assemble a web page for the health-care exchange. Despite that, the upper management mentality at CGI appears to work toward establishing relations “so intimate with the client that decoupling becomes almost impossible,” according to one company profile. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/10/16/meet-cgi-federal-the-company-behind-the-botched-launch-of-healthcare-gov/.

CGI was hired by the Hawaii Health Connector, that state’s new health exchange for providing insurance options under ObamaCare, to build its website and the state portal, like HealthCare.gov, had immediate problems when it launched on Oct. 1, 2013. http://www.foxnews.com/politics/2013/10/23/red-flags-company-behind-obamacare-site-has-checkered-past/.

“The morning I heard CGI was behind (the Obamacare web page development), I said, ‘My God, no wonder that thing doesn’t work,’” said James Bagnola, a Texas corporate consultant who was hired by the Hawaii Department of Taxation in 2008. “The system is broken all the time.” Bagnola said CGI was able to continue work on the Hawaii project despite repeated managerial complaints and a “corrosive environment” in which state employees felt pitted against CGI staff.

CGI’s contract to design and execute a new $46.2 million diabetes registry for eHealth Ontario, part of the Canadian government health care system, was canceled in September of 2012 after a series of delays that rendered the system obsolete.

The state of Vermont as recently as last October, meanwhile, was considering whether or not to penalize CGI for not meeting deadlines for designing and producing that state’s health care exchange as per an $84 million contract with the company.

It may be too early to say that there is an “ominous pattern” of inferior work product from CGI as claimed by some http://www.examiner.com/article/is-cgi-and-white-house-liable-for-obamacare-massive-site-failure and http://www.renewamerica.com/columns/fobbs/131028 but there can be no denial that the failed debut of the ObamaCare web page has cost taxpayers hundreds of millions of dollars.

Which raises the obvious question: What quality of work Louisiana is receiving from the firm? Considering last April’s findings of the Legislative Auditor in its examination of the Road Home program, that’s a fair question.

Contractors are being paid tens of millions of dollars to provide oversight of the grant programs in the hurricane recovery efforts. But what oversight is being provided of the contractors themselves? And if the contractors need oversight, why are they even in the equation to begin with?

How do we know they are doing the jobs they are being paid to do?

If we are to believe the auditor’s report, they well may not be giving the state a return on its dollar.

Are contracts simply being doled out by the Jindal administration with little or no vetting? When one looks at some of the other contracts awarded since 2008, there seems to be ample cause for concern.

All one has to do is study the administration’s smarmy record of questionable contracts, beginning with the hiring of Goldman Sachs to help write the request for proposals (RFP) for the privatization of the Office of Group Benefits (OGB). Who was the sole bidder on that project at the outset before the project was re-bid? Goldman Sachs. http://louisianavoice.com/2013/12/01/jindal-and-rainwater-preoccupied-with-ogb-privatization-missed-or-chose-to-ignore-obvious-cnsi-contract-red-flags/

And then there was the infamous contract with CNSI http://www.frontpagemag.com/2013/volpe/billionaire-swindlers-line-up-for-obamacare/

and the ensuing investigation by the FBI  http://tomaswell.files.wordpress.com/2013/12/fbireportscnsi3.pdf

http://tomaswell.files.wordpress.com/2013/12/dt-common-streams-streamserver1.pdf and the Louisiana Attorney General’s office http://tomaswell.files.wordpress.com/2013/12/ldoj-interview-report-on-cnsi-from-0514121.pdf

There also is a series of contracts with Affiliated Computer Services (ACS), since absorbed by Xerox. ACS, once represented by U.S. Rep. Bill Cassidy’s sister-in-law Jan Cassidy who now works for the Division of Administration (DOA) as Assistant Commissioner in Procurement and Technology at an annual salary of $150,000). http://www.linkedin.com/pub/jan-cassidy/6/4aa/703

ACS also has its own string of problems as evidenced by stories from other states http://louisianavoice.com/2013/03/15/doa-hires-jan-cassidy-sister-in-law-of-cong-bill-cassidy-at-150000-previous-employers-records-are-less-than-stellar/ and with the Securities Exchange Commission http://www.sec.gov/litigation/litreleases/2010/lr21643.htm

Not to be outdone, Deloitte Consulting which helped the state in planning for a comprehensive consolidation of information technology (IT) services for DOA, was named winner of the state contract for “Information Technology Planning and Management Support Services,” according to an email announcement that went out to IT employees last September.

Never mind the fact that Deloitte Consulting has experienced a multitude of problems in North Carolina, California, Tennessee, and Virginia because of delays, false starts and cost overruns. http://louisianavoice.com/2013/09/05/surprise-surprise-gomer-deloitte-wins-it-contract-after-spending-year-consulting-with-state-on-consolidation-plan/

And yet this governor is so unyielding in his misguided belief that the private sector can perform any and every governmental function better than public employees that now, six years into his eight-year term, he has decided pay yet another contractor, the international consulting firm Alvarez & Marsal, $4 million to conduct an efficiency study to determine possible savings in state government.

Clueless, thy name is Jindal.

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One probably can understand former Commissioner of Administration Paul Rainwater for not putting the kibosh on that ill-fated $194 million contract with CNSI in mid-2011. Rainwater was, after all, preoccupied at the time with Gov. Bobby Jindal’s priority project, that of privatizing the Office of Group Benefits (OGB).

You may remember the controversy surrounding the OGB privatization push. First, the state brought in Goldman Sachs to help write the specifications of the request for proposals (RFP) for the privatization scheme and then (drum roll please) Goldman Sachs was the only bidder at $6 million.

After Goldman Sachs subsequently withdrew in a dispute over the issue of indemnification, Blue Cross Blue Shield of Louisiana finally got the bid but in between all that, there was that $49,999.99 contract to Chaffe and Associates for a study that failed to produce the results sought by the administration—not to mention questions about the possibility of the existence of two Chaffe reports. http://louisianavoice.com/2011/06/20/was-leaked-chaffe-report-real-or-a-doa-misdirecton-ploy/

Then there was the little matter of Rainwater’s own confirmation hearings and that of a new OGB director before the Senate and Governmental Affairs Committee that almost certainly demanded much of Rainwater’s attention.

But the confirmation hearing for Bruce Greenstein as Secretary of Health and Hospitals by the same committee a week later should have served as a red flag and should have set off all sorts of alarms within the Jindal administration—beginning with Rainwater.

http://louisianavoice.com/2011/06/09/jindals-appointees-arrogant-bureaucrats-or-simply-a-multitude-of-misunderstood-misbehavin-miscreants/

The warnings were clear and the track record of CNSI was readily available. Apparently no one in this administration ever heard of vetting a company before awarding it the largest single contract in the state’s history.

That, it turned out, was a mistake of monumental proportions.

The details of the awarding of the contract to Greenstein’s former employer now reads like some kind of Tom Clancy espionage novel—complete with secret communications, bid-rigging, lavish entertainment of state officials, death threats, creative accounting principles, money laundering, ghost employees, payments of non-existent loans, posh homes of questionable ownership, possible tax evasion, and claims of an ancestral link between Gov. Jindal’s Indian heritage and CNSI’s Indian ownership. dt.common.streams.StreamServer

Throw in the fact that CNSI is one of the subcontractors working on the Obamacare website, and you’ve got all the makings of a real suspense story.

To say the CNSI story is complex would be to belabor the obvious which is all the more reason that Jindal and Rainwater should have taken a closer look at the qualifications of CNSI before committing to such a contract.

It turns out that every state might want to take a long, hard look at CNSI’s credentials now that the company is in position to bid on billions in new contracts with individual states that, in order to receive new grants for expanded Medicaid rolls, will be required to update outdated IT systems in order to more readily share data. Michael Volpe recently had a story that dealt with that very issue in Frontpage Mag. http://www.frontpagemag.com/2013/volpe/billionaire-swindlers-line-up-for-obamacare/

In examining CNSI, these states might wish to begin with Maryland where CNSI’s problems began as far back as 2001. In was that year that Maryland hired CNSI to develop its new web-based Main Medicaid Claims System for the processing of $1.5 billion per year in Medicaid Claims. CNSI has submitted the lower of two bids for the project. The company’s $15 million bid was exactly half the $30 million bid by the other company. Experts say the state should have known right then that the low number of bidders and the disparity between bids were red flags.

CNSI, it turned out, had zero experience in developing Medicaid claims systems. It was given 12 months to develop the system, which was finally put online in January of 2005, three years late.

Problems occurred almost immediately. The company’s costs quickly grew to $25 million but even worse for the state, there were an unusually high number of rejected claims from the outset and the number of suspended claims quickly reached 300,000—a rejection rate of about 50 percent—and by June the number had grown to 647,000, representing about $310 million in back payments to medical providers. Some facilities had to close their doors because of non-payments while others had to take out loans to keep their doors open and others simply stopped seeing Medicaid patients altogether.

In 2008, South Dakota awarded CNSI a $62.7 million contract for a new Medicaid processing system. By 2010—nearly a year before Louisiana hired CNSI—work was halted on the project after costs had grown to $80 million and the system was still two to three years from completion.

A year ago, the Southeast Michigan Health Information Exchange (SEMHIE) filed suit against CNSI over a $1.8 million contract to develop a Social Security e-Disability project for SEMHIE. One of the stipulations of that contract was that any software developed for the project would become the property of SEMHIE. The lawsuit says that SEMHIE “repeatedly, both orally and in writing,” demanded delivery of the software but that CNSI has refused to turn over the software or even to communicate with SEMHIE.

SEMHIE says it had been negotiating to provide the Michigan Health Information Network (MHIN) with the software but that CNSI’s refusal to turn it over resulted in MHIN’s termination of the agreement, thereby costing SEMHIE “substantial” revenue.

The latest twist in the CNSI saga is that the State of Arkansas has, on the basis of the FBI investigation of CNSI’s contract with Louisiana, disqualified CNSI from doing business with that state.

But the really interesting details of the CNSI contract and the company’s links to former employee Greenstein, who was DHH Secretary at the time the contract was awarded, can be found in a series of interviews conducted by the FBI in Maryland FBIReportsCNSI in which two former employees, Vice President and Corporate Counsel Matthew Hoffman and Vice President of Accounting and Finance Jeffrey Weisenborne, reported bookkeeping irregularities, falsification of asset statements to bankers, the purchase of secret homes in Maine, Michigan and Washington State which were not carried on the CNSI books, non-existent loans for which the four CNSI partners received monthly payments, the hiring of CNSI partners’ family members who did no work, bid-rigging, and threats to Hoffman that he would be killed if he disclosed company misconduct. dt.common.streams.StreamServer

The Louisiana Attorney General’s office also conducted an interview with a CNSI employ who originally was a contract employee but who was subsequently hired full time by the company. The employee, identified only as Kunego, which was said to be a pseudonym, was conducted on May 10—11, 2012.

He testified that CNSI’s bid was structured so that it could “shave off” about $40 million from its bid, thus allowing the company to win the contract after which it could get the terms of the contract changed. “In many states this alone would lead to disqualification of the CNSI proposal,” he said. Additionally, he said DHH “front-loaded” the contract, meaning CNSI got money up front because “CNSI was close to being insolvent and needed this change to keep them afloat.”

Kunego said in January of 2011 he and CNSI officials were in North Dakota to prepare their pricing for the Louisiana proposal when they were told by CNSI cofounder and CEO Bishwajeet Chatterjee that the number they had to beat was under $199 million. “This indicated that CNSI officers knew ahead of time the dollar amount that they had to propose to win the contract,” he said.

“After the contract was awarded and during the protest period, Greenstein went to DC (Washington) and was picked up by CNSI officers and entertained to dinner,” the witness said.

He said that during the Greenstein confirmation hearings, CNSI Vice President of Government Affairs Creighton Carroll “was very concerned that the Senate committee would subpoena their phone records.” Carroll told Kunego that they deleted many text messages between CNSI officers and Greenstein “to avoid them being subpoenaed.” Moreover, he said Carroll used his wife’s cell phone for most of the “off channel communications” with Greenstein.

Also during the Greenstein confirmation hearings, CNSI’s lobbyist Alton Ashy was texting Greenstein in an effort to help him with his answers to questions being asked by committee members.

Kunego said that when Greenstein worked for CNSI he lived in a CNSI-owned townhome and that he “got the impression from Chatterjee that Greenstein had ownership in CNSI.” He said 80 percent of CNSI is owned by the four founders—Chatterjee, Chief Strategic Officer Adnan Ahmed, Chief Financial Officer Jaytee Kanwal, and Chief Administrative Officer Reet Singh—while the remaining 20 percent is owned by 23 different people.

The Attorney General report quoted Kunego as saying Jindal has “an India to India ancestor-driven background and network of connectors that brought CNSI and Jindal together” (a characterization the governor’s office labeled as “insulting”) and that “Jindal’s public persona does not jive (sic) with what is going on at DHH.” LDOJ Interview Report on CNSI from 051412

Finally, we have to raise a couple of other questions here about the sequence of events that don’t exactly shine the best light on the Jindal administration.

Was the timing of the personnel change in the Division of Administration (DOA) coincidental or was it somehow tied to the pending investigation?

Rainwater was brought over to the governor’s office on Oct. 15, 2012, to serve as Jindal’s Chief of Staff and has not been heard from since while Deputy Chief of Staff Kristy Nichols left the governor’s office to move across the street to the Claiborne Building to take over Rainwater’s former duties.

In January, the FBI served a subpoena on DOA for all records pertaining to the CNSI bid and contract, including the RFP. And while Jindal certainly knew of the subpoena (and if he did not know, Nichols should be run off by a mean, biting dog for not informing her boss), the subpoena did not become public knowledge until early March. Once the news broke, Jindal acted with all deliberate speed (and yes, that’s sarcasm) to announce the termination of the contract, saying his administration would “not tolerate corruption.”

A week after that, Greenstein announced his resignation, but incredibly, was allowed to remain on the job for another month.

So, did the administration initiate the personnel change at DOA in October in anticipation of the FBI and Attorney General investigations and the subpoena that would come down in three months?

Why did the administration try to keep a lid on the news of the subpoena for some two months and cancel the CNSI contract only when the subpoena’s existence became public knowledge?

And most important: why was Greenstein allowed to remain on the job for a full month after news of the subpoena and the cancellation of the CNSI contract?

Something here just doesn’t pass the smell test.

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