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Archive for the ‘Privatization’ Category

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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Did the Jindal administration get the cart ahead of the horse when it announced the layoff of more than 100 state employees at a state hospital in central Louisiana?

As if Gov. Bobby Jindal did not have enough on his plate with his attempts to gain approval form the Center for Medicare & Medicaid Services (CMS) for his hospital privatization plan, now the battle over the closure of one hospital has moved into the courts.

Brad Ott of New Orleans and Ed Parker of East Feliciana Parish have named the Louisiana State Senate, the State of Louisiana and the LSU Board of Supervisors in their lawsuit filed in 19th Judicial Court in Baton Rouge.

Their petition claims that the Senate Committee on Health and Welfare violated the state’s open meetings law in approving the closure of Huey P. Long Medical Center in Pineville.

Moreover, the petition says that while more than 100 classified employees are due to receive layoff notices effective June 30, the State Civil Service Commission is not scheduled to consider the LSU layoff plan until early July.

Wait. What?

Did the LSU Board of Stuporvisors really notify 100-plus employees that they no longer had jobs—before getting formal approval of the layoff plan from Civil Service?

Surely not.

The Rules of Order of the Senate, Rule 13.73, entitled “Notice of committee meetings during session,” provides in part: “Such notices shall be posted for each meeting as soon as practicable, but not later than 1 p.m. of the day preceding the meeting day.”

Rule 13.75, entitled “Meetings prohibited without notice,” provides in part: “No meeting of a committee, regularly scheduled or otherwise, shall be held unless there is full compliance with the requirements of Louisiana Senate Rule 13.73…”

The lawsuit says the notice for the April 2, 2014, meeting of the Senate Committee on Health and Welfare was revised on April 1 at 4:04 p.m. to add the consideration of SCR 48 by Sen. Gerald Long (R-Natchitoches).

SCR 48 was the Senate Concurrent Resolution that called for the closure of Huey P. Long. The resolution passed in the House Health and Welfare Committee by a 10-8 vote after nearly three hours of debate. By contrast, the Senate Health and Welfare Committee took only 10 minutes for unanimous passage.

Both petitioners say they had planned to testify in opposition to the resolution before the committee but that they were not notified that the committee would be taking up SCR 48 on April 2 because of the last minute revision to the notice of the meeting. “Consequently, both of the petitioners were effectively prevented from observing the deliberations…and expressing their concerns,” the petition said.

Wait. What?

Would a Louisiana Senate committee really do an end run around opponents to a controversial resolution in violation of the open meetings law in order to slip the resolution through?

Surely not.

But with the administration desperate to ram its hospital privatization through despite questionable funding methods, anything is possible. Jindal, in fact, has clearly demonstrated that he will go to any length to move his agenda along.

Plaintiffs’ attorneys J. Arthur Smith and Adrienne Rachel are seeking a declaratory judgment and injunctive relief subject to the state’s open meetings law, an injunction prohibiting the state from implementing provision of SCR 48, monetary damages for violations of the state’s open meetings law, and attorney’s fees.

Smith is a relative newcomer in litigation against the state but he has sent out notice that the old ways of doing business may be changing. He has already won one battle with the Department of Education over the department’s reluctance to comply with the state’s public records laws and currently has other suits pending against the Department of Agriculture and the Office of Alcohol and Tobacco Control.

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“…My purpose is to dismantle the dismantlers. As such, my words are not kind. My words expose, and that exposure is harsh. The individuals and organizations profiled in this book have declared war on my profession, and I take that personally.”

 

—Mercedes Schneider, writing in the introduction to her book A Chronicle of Echoes: Who’s Who in the Implosion of American Public Education.

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A Chronicle of Echoes: Who’s Who in the Implosion of America’s Public Education (Information Age Publishing, 404 pages) is a new book by St. Tammany Parish high school English teacher Mercedes Schneider that should be required reading by both proponents and opponents of the current drift in education from public to private, from non-profit availability to all students to for-profit institutions available to the select few.

Before we get too far into our review of this book, there are two things you should know about Mercedes Schneider:

  • The emphasis is on the first syllable of Mer’ Ce-deez; she’s not a car, nor was she named for one.
  • Don’t ever make the mistake of trying to schmooze her with B.S., especially when it comes to issues involving public education. She will call you out the same way she called out an ill-prepared Board of Elementary and Secondary Education President (BESE) Chas Roemer following his debate with Diane Ravitch in March of 2013. Ravitch had already run circles around Roemer in their debate and he was simply no match for Schneider in the question-and-answer session that followed. It would have been comical had it not been for the position of such serious responsibility conferred upon Roemer by voters in his BESE district.

And when she does call you out, that caustic and at the same time, delightful St. Bernard Parish accent comes shining through like a lighthouse beacon slicing through a foggy night.

The publisher of an education online blog called At the Chalk Fence, She has moved her debate from her ongoing fight with Gov. Bobby Jindal and Superintendent of Education John White to a national forum and is now calling out such self-proclaimed education experts as former New York City School Chancellor Joel Klein, whom she calls “the viral host of the corporate reform agenda,” Teach for America (TFA) founder Wendy Kopp, disgraced Washington, D.C. school chancellor and later founder of StudentsFirst Michelle Rhee, vagabond school reformer and former Superintendent of Louisiana’s Recovery School District (RSD) Paul Vallas, the American Legislative Exchange Council (ALEC) and the “Big Three Foundations: Gates, Walton and Broad.”

A thorn in the side of Jindal, White, and Roemer of long-standing, she turns her attention to the national educational debate in Chronicle. With an appropriate nod to Ravitch as her mentor and the one who was always available when needed for advice, Schneider peppers her targets with a barrage of statistics that refute the unrealistic theories advanced by the Waltons, Bill Gates, Eli Broad, and TFA who insist meaningful education reform can be accomplished with inexperienced teachers and administrators, for-profit charters, vouchers, and the idea that throwing money at a problem is not the answer (despite their propensity to pour billions of dollars into their own idealistic agendas—at best, a philosophical oxymoron).

A product of the St. Bernard Parish public schools (P.G.T. Beauregard High School), Schneider’s attempt to drop out of school at age 15 somehow morphed into a B.S. in secondary education (English and German), a master’s degree in guidance and counseling from the State University of West Georgia, and a Ph.D. from the University of Northern Colorado.

She taught graduate-level statistics and research courses at Ball State University. It was at Ball State that she first took on the task of challenging the issues related to No Child Left Behind, teaching students “how bad an idea it was to attempt to measure teacher performance using student standardized test scores.”

In July 2007, only months before the election of Jindal as governor, she returned home and began a new job teaching high school English in St. Tammany parish.

Her introduction contains a brilliant metaphor for the corporate destruction of public education: she describes what she calls a “detailed image” of an abandoned building being imploded and collapsing upon itself. She envisions the building (public education), “not ornate, not without need for repairs, but sturdy,” as men in yellow hard hats (corporate reformers, we are told) watch, knowing what is about to transpire “because they have orchestrated it from the inside.” She describes the men as “responsible for the impending structural failure” and “who have planned the failure but are removed from its consequences.”

In her blog, she recently launched a withering attack on White’s embargo of the LEAP summary public report, saying the state superintendent had “apparently found himself in an unfamiliar fix regarding his characteristic ‘water muddying.’” She accused White of “collapsing” categories within the LEAP grading system in order to conceal variation through report “groupings” that she said concealed the precision of the standard five levels of LEAP achievement (unsatisfactory, approaching basic, basic, mastery, and advanced).

“Collapsing ‘basic,’ ‘mastery,’ and ‘advanced’ into a single, generic ‘passed’ serves to conceal achievement nuances that might make Louisiana Miracle RSD appear to be ‘less than’ locally-run districts—the ones operated by those pesky, traditional local school boards,” she said.

“After all, a test-score-deficient ‘miracle’ is harder to sell,” she said. “If the data reflect poorly on privatization, then the troubled corporate reformer could alter the data, or alter the reporting, or alter access to the reporting, or employ some combination of the three. Gotta love corporate reform ‘transparency.’”

Jindal, White and Roemer may heave a collective sigh of relief that they have been spared the glare of the spotlight in Chronicle as she concentrates her argument on the glaring weaknesses of the major education reform movers and shakers at the national level.

But perhaps they should not be too comfortable at being spared just yet.

After all, certain matter, they say, flows downhill.

A Chronicle of Echoes is a must read for anyone who is or ever claimed to be concerned about the perpetual political tampering with public education in America—by those least qualified to do so.

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That citation of Dual Trucking Co. by the Montana Department of Environmental Equality for dumping oilfield radioactive waste from the nearby Bakken Oilfield, it turns out, is not the only problem State Rep. Gordon Dove (R-Houma) has experienced with environmental authorities, LouisianaVoice has learned.

Vacco Marine, Inc., a company owned by Dove, who chairs the House Committee on Natural Resources and Environment, has been the subject of several investigations, negative reports, citations, and compliance orders by and from the Louisiana Department of Environmental Quality (DEQ) over a period of several years, records show.

Last week, while presiding over a meeting of the Natural Resources Committee, he joined 12 other members in passing an amendment to SB 469 that made the prohibition against suing oil companies for damages to the state’s wetlands and marshes retroactive. The amended version of the bill has since been approved by both the full House and Senate and awaits the signature of Gov. Bobby Jindal.

Dove also serves as a member of the Louisiana Coastal Protection and Restoration Authority.

Following are a few of the issues in which Dove and his company, Vacco Marine, have been involved:

  • May 12, 1989: DEQ, Office of Water Resources, Water Pollution Control Division inspection found evidence that various substances, including diesel and sludge, were being buried and that the practice had been ongoing “for a while.”

 

  • April 28, 1994: Same office found “several areas of limestone and ground contaminated with oil” and that a ditch which drained into Bayou Grand Caillou was “contaminated with hydrocarbons.” Dove was ordered to remove contaminated sediment, remove all contaminated ground in proximity of spills and to prevent future spillage.

 

  • Sept. 12, 1996: Vacco Marine was issued a compliance order by DEQ’s Hazardous Waste Division after an inspection in December of 1995 resulted in three separate violations relating to solid waste.

 

  • Oct. 6, 2004: U.S. Environmental Protection Agency (EPA) issued a complaint and consent agreement pursuant to the EPA’s compliance evaluation inspection of Sept. 23, 2003. Vacco Marine paid $6,593 in civil penalties to EPA on Jan. 14, 2005, for unspecified violations. The agreement also noted that Vacco would be subject to further enforcement action and additional penalties of up to $32,500 per day for continued noncompliance. The agreement also stipulated that Vacco could be enjoined from further generation, transportation, storage of disposal of hazardous waste if violations persisted.

 

  • Feb. 24, 2010: A DEQ inspection found 10 separate violations including incorrect logging of mercury, cut electrical and air lines, failure to log wastes received at the facility, and a lack of a Stormwater Water Pollution Prevention plan, among others. The 177-page inspection report included numerous photographs of conditions at Vacco Marine. Those included photos of open ditches that contained effluent and which drained into the Houma Navigational Canal.

 

  • April 11, 2012: DEQ compliance order and notice of potential penalty issued on the basis of DEQ finding that Vacco Marine had failed to develop and implement a Storm Water Pollution Prevention Plan as ordered in 2010. The DEQ order further noted that Vacco Marine had neglected to comply with other requirements, including the filing of required reports and permit applications. Vacco Marine also was found in violation of the requirement to record flow from its facility and, in fact, the flow meter was inoperable. Even when in service, the flow meter was found to have been installed incorrectly so that it could not accurate record flow rates. Other violations noted included failure to submit a noncompliance report, exceeding effluent limitations, incorrect reporting of Butyl Benzyl Phthalate outfall.

 

Even though Dove’s company was ordered to come into compliance with DEQ regulations, no penalties were imposed on Vacco Marine.

Could this have been because of his powerful position as chairman of the House Natural Resources and Environment?

Could it be that he received special consideration because of his position as a legislator?

That, of course, is difficult to say. But it certainly should not be hard to see the potential danger of placing an individual as chairman of a legislative committee that oversees the very agency that regulates his business—especially when that individual has such a spotted record of compliance as Rep. Gordon Dove.

That makes about as much sense as allowing him to chair that same committee and allowing him to vote on SB 469 after he received nearly $29,000 in campaign contributions from the oil and gas industry.

It makes about as much sense as Gov. Jindal’s apparent belief that the state ethics laws are meant to apply to some but not others as he signed into law a bill to allow former State Sen. Francis Heitmeier to lobby the Legislature despite the fact that his brother, David Heitmeier, is currently a state senator—in open violation of the state ethics law that prohibits members of lawmakers’ families from lobbying the legislature.

It makes about as much sense as allowing the LSU Board of Stuporvisors to enter into a contract with a company run by an LSU Board member to operate two LSU hospitals in north Louisiana.

It makes about as much sense as allowing Board of Elementary and Secondary Education (BESE) President Chas Roemer to vote on charter school issues despite the fact that his sister is executive director of the Louisiana Association of Public Charter Schools.

It makes about as much sense as allowing BESE and the Louisiana Department of Education to enter into multi-million contracts with Teach For America (TFA) even as Kira Orange Jones sits as a member of BESE and serves as executive director of TFA Greater New Orleans-Louisiana Delta.

Where I grew up in north Louisiana, we called that letting the fox guard the henhouse.

In Baton Rouge, apparently it’s just called Jindaltics.

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Bobby Jindal the Petulant Paranoid has teagued yet another high-ranking state official, LouisianaVoice has learned.

This time the victim is said to have been only a few months from retirement.

The governor who publicly advocates openness, accountability and transparency everywhere in the U.S. except Louisiana, has shown on repeated occasions that he cannot stomach any difference of opinion among state employees at any level, classified or unclassified—or even from legislators.

His paranoia rose (or sank, depending upon one’s preferred descriptive verb) to a new level on Thursday, however, when he fired Gary Crockett, former administrator at Huey P. Long Medical Center in Pineville just two days after the House Health and Welfare Committee voted 10-8 to close the facility.

Crockett last year tried to keep administration-ordered layoffs at the hospital to a minimum but was forced to make deep cuts in personnel.

The irony of Jindal’s ongoing purge, aka dissident cleansing is that Crockett had already left his $144,650-a-year position at Huey P. Long because of his differences with the administration. He took a position at another state medical facility where he thought—incorrectly, it turns out—he could ride out the rest of his career..

Word out of the State Capitol is that Jindal felt that Crockett may have been providing information to legislators opposed to the closure of the hospital as part of Jindal’s flawed state hospital privatization plan that less than a week ago was shot down by the Centers for Medicare and Medicaid Services because of the creative but prohibited method of financing the privatization plans.

The federal action threw the state budget into chaos literally only days before the budget was to go to the House for debate on Thursday (today, May 8) because of a $400 million hole it blew in the state spending document.

Without going into specific names, suffice it to say that heads roll whenever a discouraging word is heard in Jindal’s presence and now the latest is what is becoming a very long line of teagueites, so named in honor of former Office of Group Benefits Director Tommy Teague, fired on April 15, 2011, and his wife Melody, fired about six months earlier as a grants reviewer but later reinstated.

One recent Teagueite, a friend of Crockett who must remain nameless, said of Jindal’s latest action, “There’s no other way to say it except to say the man is evil.”

Attempts by LouisianaVoice to reach Crockett Thursday for comment were unsuccessful.

 

 

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Looking back on the LSU Hospital privatization fiasco, it becomes easy to point the finger of blame in several directions.

And to a lesser extent, though by no means blameless, is the Louisiana Legislature.

The legislature has been complicit in many of Gov. Bobby Jindal’s other misadventures, most notably the unorthodox—and, it turned out, unconstitutional—method of funding the governor’s school voucher program. Lawmakers fell all over themselves in 2012 in approving that little scheme that eventually blew up in everyone’s faces when the courts rejected the manner in which Act 2 diverted money from local school districts to cover the cost of private or parochial school tuition.

In fact, Jindal’s entire education reform package, passed in such haste in 2012, quickly grew to more resemble a train wreck than legitimate reform.

But the legislature, even though it never drew a line in the dust even as it capitulated to Jindal at every turn, in the final analysis, had little say-so about nor any recourse in preventing the wholesale giveaway—disguised as privatization—of the six hospitals, a maneuver that imploded Friday with the decision by the Centers for Medicare and Medicaid Services to reject the deals that would have turned over to private operators the LSU medical centers in Shreveport, Monroe, Lafayette, Houma, Lake Charles and New Orleans.

Even as Jindal’s rubber stamp LSU Board of Stuporvisers was rubber-stamping a contract containing 50 blank pages in the infamous conflict-of-interest deal handing over University Medical Center of Shreveport and E.A. Conway Medical Center of Monroe to the Biomedical Research Foundation of Northwest Louisiana (BRF), legislators were voicing concerns over the warp speed at which the administration was moving to ram the agreement down the throats of an unsuspecting public.

In fact, a resolution passed unanimously in the Louisiana Senate at the urging of Sen. Ed Murray (D-New Orleans) called for the Joint Legislative Committee on the Budget to agree on the privatization plans before any details were to be finalized. A similar resolution was also passed in the House.

Resolutions are just that: resolutions, with no power of law. Jindal said—and an attorney general’s opinion supported the position—that legislative approval was not required in order for the LSU Board to agree to lease the hospitals. An attorney general’s opinion, like a legislative resolution, does not carry the weight of law, but does give the governor stronger footing.

Jindal, for his part, made it abundantly clear that he would move the privatization plan forward with or without legislative support. He said the legislature did not have the authority to vote down the proposals—in effect, saying his administration was ready to ram through the proposals without regard for even a pretense of democratic procedure.

Of course he did say that he would agree to take any advice from the legislative committees into consideration. “If they propose changes to the law, we’ll look at that legislation,” he said.

But we all know what happens to those who have the temerity to disagree with Jindal, don’t we? They’re summarily teagued, as in Tommy Teague, erstwhile Director of the Office of Group Benefits (OGB), who was shown the door on April 15, 2011, when he didn’t jump on board the OGB Privatization Express quickly enough. Six months before that, it was his wife Melody was fired from her state job after she testified before the Commission for Streamlining Government. More than a dozen met the same fate, including LSU President John Lombardi and at least four legislators who found themselves suddenly removed from their committee assignments for “wrong-headed” voting.

But easily the most significant, most ill-advised, most flagrant, most unwarranted demotions were those of two respected doctors who didn’t bite when Jindal dropped his privatization bait into the water—doctors any organization would be proud to have on staff (and now, two such organizations indeed have them after in sheer frustration, they finally left Louisiana).

LSU Health Care System head Dr. Fred Cerise and Interim Louisiana Public Hospital CEO Dr. Roxanne Townsend were demoted just days apart in 2012—Cerise in late August and Townsend in early September—following a July 17 meeting at which former Secretary of health and Hospitals (DHH) Alan Levine first pitched a plan to privatize the state’s system of LSU medical centers.

Levine was at the meeting on behalf of his firm, Health Management Associates (HMA).

Also present, besides Cerise, Townsend and Levine were then-LSU President William Jenkins, DHH then-Secretary Bruce Greenstein, LSU Medical Center Shreveport Director Dr. Robert Barish, HMA CFO Kerry Curry, LSU Health Science Center Shreveport Vice Chancellor Hugh Mighty and LSU Board of Supervisors members Rolfe McCollister, Bobby Yarborough, John George (remember that name) and Scott Ballard. LSU Health Science Center New Orleans Chancellor Larry Hollier and Vice Chancellor for Clinical Affairs at LSU Health Sciences Center New Orleans Frank Opelka participated by teleconference.

The meeting was held in the LSU president’s conference room.

Both Cerise and Townsend expressed reservations about Levine’s proposal but several members of the LSU Board of Supervisors who were present at the meeting “indicated they want LSU’s management to pursue this strategy,” according to a summary of the meeting prepared for Jenkins by Cerise.

Along with his two-page summation of the meeting, Cerise also submitted a third page containing a list of five concerns he had with the privatization plan pitched by Levine. It was that list of concerns which most likely got Cerise teagued as head of the LSU Health System via an email from Jenkins.

Levine, according to Cerise’s notes, recommended as an initial step that LSU sell its hospital in Shreveport (LSU Medical Center) and use the proceeds to “offset budget cuts for the rest of the LSU system.”

He suggested that the buyers would form a joint venture with LSU, invest capital into the facility and develop a strategy for LSU “to more aggressively compete in the hospital market.”

“The LSU board members present indicated they want LSU’s management to pursue this strategy,” Cerise’s notes said. “Greenstein stated that LSU should look to generate two years of funding to address the state funds shortfall in the system through the sale of Shreveport’s hospital.”

It was at that point that Cerise indicated his concern that such a strategy would take time to develop and that LSU would likely need to go through a competitive public procurement process and “likely legislative approvals.”

It was subsequently determined that legislative approval was not legally required; all that was required was for the legislature to be informed of the administration’s actions.

“There appeared to be agreement that LSU develop a plan that would not result in closure of hospitals,” Cerise’s notes said. “When the question was posed to the group, ‘Will LSU close hospitals,” George responded, ‘We hope not.’ The clear message was that the board members did not want LSU to proceed with any hospital closures at this point.”

Since that meeting, Earl K. Long Medical Center in Baton Rouge and W.O. Moss Medical Center in Lake Charles have each closed.

“I am asking that you share this memo or at least the substance of it with the full board to ensure they are informed and that their direction to us that we delay definitive budgetary action until the end of August to better assess the likelihood of a Shreveport sale with a statewide distribution of the proceeds is clear and unambiguous,” Cerise said in his memorandum to Jenkins.

At the conclusion of the meeting, Jenkins called for the creation of a task force to include then-Commissioner of Administration Paul Rainwater, Greenstein, George, Yarborough, McCollister, Ballard, Mighty, Barish, Hollier, Cerise and Townsend.

But in a matter of weeks, Cerise and Townsend were removed from their respective positions and reassigned and Opelka was promoted to Cerise’s position.

Last May, only months before he resigned to take a position in Texas, Cerise was invited by Sen. Murray to testify at a meeting of the Senate and Governmental Affairs Committee. What ensued speaks volumes about the administration’s penchant for secrecy and its intolerance for dissenting viewpoints and is illustrative of Jindal’s general arrogance and disdain for the legislative process.

The committee wanted more information about the proposed privatization of the LSU system’s hospitals and the obvious choice as the most knowledgeable witness was Dr. Fred Cerise, whose integrity is the very antithesis of Jindal’s.

So, naturally, Cerise was barred from testifying. Dissenting opinions—even intelligent, reasoned ones—are not welcomed by this governor who simply cannot bring himself to listen to the advice of others. Murray said he was told that Cerise’s request for a personal leave day to testify was denied. Murray was joined by several other senators in complaining that the denial of an information request from a lawmaker was inappropriate.

Board members, Dr. John George and Ann Duplessis, apparently with straight faces, disavowed any knowledge about Cerise’s not being able to attend the meeting and promised to look into the matter and report back to the committee.

Amazingly, lawmakers appeared to ignore that conflict of interest we alluded to earlier even as the LSU Board of Stuporvisors unanimously approved that contract. No one uttered a peep as that same Dr. John George of Shreveport, sitting as a voting member of the LSU Board, cast his vote.

The CEO of BRF, which awarded the contract for the Shreveport and Monroe medical facilities, is (trumpet fanfare) that same Dr. John George but not to worry: Jindal assured us there was no conflict of interest there.

Almost lost in all of this is the fact that more than 5,000 employees were laid off as a result of the privatizations which now have been disallowed. And for that, we look to the Louisiana Civil Service Commission as the third culprit behind Jindal and the LSU Board of Stuporvisors.

After all, you can’t put the genie back in the bottle.

The Civil Service Commission, which must approve any layoff plan, first rejected the administration’s privatization by a 4-3 vote but agreed to reconsider the proposal when the administration said it would provide additional information.

The next week, the board met again and commission member D. Scott Hughes of Shreveport apparently saw the light and inexplicably switched his vote from no to yes. More importantly, two other members, Dr. Sidney Tobias of LaPlace and commission Chairman David Duplantier of Mandeville, took the easy way out: they simply did not attend the meeting and the final vote that put 5,000 employees on the street was 3-2 in favor of Jindal.

Granted, commission members don’t receive a salary for their service but if Hughes could drive in from some 250 miles away—even with his yes vote—then surely commission Chairman Duplantier and Tobias could have, should have, found a way to drive in from about 75 and 50 miles out, respectively.

On a matter of such import, their no-show was nothing less than gutless and both should resign from the commission. They agreed to serve and their votes on this issue were of extreme importance—to the administration of course, but especially to those 5,000 employees whose livelihoods depended on the whims of seven five people they’d never met.

And then there’s that almost overlooked matter that’s lost in all the frenzy—one of utmost urgency: where will the state’s poor now seek medical care?

And the fingers of blame point directly at Jindal, the LSU Board of Stuporvisors, and the Civil Service Commission.

So now, after the approval of a contract with its 50 blank pages, after the termination of all those employees, after Jindal’s flimflamming his way around the legislative process, after the demotion and eventual loss of two valuable members of the medical profession, after DHH Kathy Kliebert’s assurances (as late as last week) that everything was just peachy, another wing of Jindal’s house of cards has come tumbling down.

If this is indicative of the way he runs a state—and all the evidence says it most assuredly is—imagine how, as president, he would fare in a faceoff with Vladimir Putin—even with the help of Jimmy Faircloth.

 

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“CMS has no legal basis for this decision.”

—Gov. Bobby Jindal, commenting on the decision by the U.S. Centers for Medicare and Medicaid Services Friday to refuse to sign off on the administration’s privatization plan for six LSU System hospitals.

 

“How fitting that Jindal’s plan to be gone before his many bombs, some supposedly planted with delayed fuses, may well blow early.”

—A political observer, commenting on the sudden collapse of Jindal’s hospital privatization plan which may have blown a $300 million hole in the state budget scheduled for debate on the House floor next Thursday.

 

“People could die. The sick will get sicker. Our precious hospitals are in turmoil. The state budget is in tatters. Governor Bobby Jindal sits in the midst of this fiscal and healthcare debacle clutching his dreams of the presidency at the taxpayers’ expense.”

—State Rep. Robert Johnson (D-Marksville), commenting in a prepared statement on the CMS decision to scuttle Jindal’s hospital privatization plan.

 

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Not that we told you so, but…..we told you so. Several times.

LouisianaVoice has questioned the wisdom—and legality—of the shaky LSU hospital privatization deals since day one and on Friday, the U.S. Centers for Medicare and Medicaid Services (CMS) notified the state that it had refused to sign off on the administration’s plans to privatize LSU hospitals in New Orleans, Shreveport, Monroe, Houma, Lake Charles and Lafayette.

The decision deals a devastating blow to the administration and the state budget for next fiscal year which begins on July 1.

Even more important, the decision throws into serious doubt the operating budget for higher education for the remaining two months of the current fiscal year.

Only last week, Jindal asked State Treasurer John Kennedy to transfer $40 million from other areas to continue funding higher education because an anticipated $70 million in hospital lease payments had not been made.

Kennedy said Friday he was assured that the money would be repaid as soon as the lease payments were received. “Now, I just don’t know,” Kennedy said. “If that $70 million isn’t forthcoming, we have a problem right now, not next year. I don’t believe the legislators realize this yet. I don’t think they realize they will have to cut another $70 million from somewhere to keep higher education afloat. We have to support higher ed.

“Wow. This catches me flat-footed,” he said. “I didn’t expect a decision this soon.”

Commissioner of Administration Kristy Nichols said last week that she was confident that the lease payments would be made but the CMA decision casts a huge shadow over those prospects.

Kennedy added that he believes the legislature will now have to consider his proposal calling for an across the board 10 percent cut in consulting contracts. “That would generate $500 million,” he said.

State Rep. Rogers Pope (R-Denham Springs) said the decision raises the question of “where the state will make up $300 million-plus. You have to wonder how many cans we can keep kicking down the road.

“This is a discouraging development. The budget is scheduled to come to the House floor next Thursday, so there’s no time to find additional money. I just don’t know how to react or how many services we can cut.

“Just last week (Department of Health and Hospitals Secretary Kathy) Kliebert assured the Senate there was nothing to worry about and now this…”

Another legislator was even more outspoken in his criticism of the governor.

“Governor Bobby Jindal’s reckless pursuit of using federal Medicaid funds in an ill-conceived scheme to privatize state-run hospitals has backfired and now the people of Louisiana will pay a dear price,” said State Rep. Robert Johnson (D-Marksville) in a prepared statement. “Governor Jindal has written a blank check to sell our charity hospital system, which is ultimately used by Louisiana’s working poor, and today it has bounced.

“People could die. The sick will get sicker. Our precious hospitals are in turmoil. The state budget is in tatters. Governor Bobby Jindal sits in the midst of this fiscal and healthcare debacle clutching his dreams of the presidency at the taxpayers’ expense.

“I, along with many others, predicted this outcome and now the people of Louisiana have been left with the tab.

“The Jindal administration’s announcement of an appeal is a typical, timid, tepid response that will bear no more fruit than the barren tree Jindal planted last year.

“It will take all of us. Now is not the time to fall back on partisan bickering or to cling to ideology in the face of a fiscal and healthcare disaster,” he said.

Part of the problem was most likely the manner in which the administration was attempting to use federal dollars to attract more federal matching dollars to finance Jindal’s privatization plan; the feds just weren’t buying it.

Here is the scheme:  The private hospital pays LSU money to lease the LSU hospital.  That money does not stay with LSU; it ends up (directly or indirectly) being used as match in the Medicaid program.  After matching those lease payments with federal funds, the total, larger amount is paid back to the private partner in the form of a Medicaid payment.   The lease payments supplant the state funds.  However, the legislative fiscal office has already raised concerns about the leases being $39 million short which is  why the Division of Administration has already begun planning on “double” lease payments this year.

For years states have devised schemes to receive additional federal funds while reducing the state contribution for Medicaid.  There is a problem with these schemes, however.  Consider this from a 2009 report by the Congressional Research Office:

“In 1991, Congress passed the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments (P.L. 102-234). This bill grappled with several Medicaid funding mechanisms that were sometimes used to circumvent the state/federal shared responsibility for funding the cost of the Medicaid program. Under these funding methods, states collect funds (through taxes or other means) from providers and pay the money back to those providers as Medicaid payments, while claiming the federal matching share of those payments. States were essentially “borrowing” their required state matching amounts from the providers. Once the state share was netted out, the federal matching funds claimed could be used to raise provider payment rates, to fund other portions of the Medicaid program, or for other non-Medicaid purposes.”

DHH’s scheme included a “borrowing” component that looked similar to the practices this legislation was aimed at preventing.  Medicaid rules do not allow a Medicaid provider (read “hospital” here) to voluntarily donate money to the state when they know they will get this money back plus more (the federal share) as part of an increase in their Medicaid payments.  The federal oversight agency, CMS, had previously expressed concerns to state officials that these lease payments could qualify as non bona fide provider donations.

If CMS determined these are conventional fair market value leases, they would have allowed the payments.  Beyond the basic annual lease payments, the deals included “double lease payments” and other large up front lease payments designed to fix the state’s budget problem raising the specter of non bona fide provider donations.  If these payments were deemed to be non-allowable, the federal government will recoup any federal funds that were paid as match for these state funds.

The privatization deals were done at a cost of $1.1 billion to the state this budget year, much of that ($882 million) expected to come from federal funds under the scenario alluded to above.

But a terse message from CMS brought all those plans crashing down: “To maintain the fiscal integrity of the Medicaid program, CMS is unable to approve the state plan amendment request made by Louisiana.”

Predictably, Jindal, who refused to wait for federal approval before plunging ahead full bore with his sweeping privatization of the LSU hospital system, said, “CMS has no legal basis for this decision.” (At least he didn’t call the decision “wrong-headed,” as he did in 2012 when a state district court ruled his school voucher program unconstitutional.)

Jindal said he will appeal the decision but for the time being, the six hospitals will be operating under financing plans that have been shot down, which should come as no surprise to observers of this administration. Friday’s decision prompted one of the governor’s critics to comment, “Jindal deserves every misfortune that this may bring him. The people of this state, however, don’t deserve this. He used them for his selfish political purposes.” Another said, “It would be karma if this fiasco totally destroyed Jindal’s national dreams.”

The one question still left unanswered is whether attorney Jimmy Faircloth will once again be called on to defend yet another dog of a legal case on behalf of this blundering administration, thus adding to his legal fees which already exceed $1 million.

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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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