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Archive for the ‘State Agencies’ Category

The state continues to face a severe budgetary crisis, the Center for Medicare & Medicaid Services has yet to approve the controversial state hospital privatization plan submitted by Gov. Bobby Jindal (R-Iowa, R-New Hampshire, R-Everywhere but Louisiana) and the proposed changes to plans offered by the Office of Group Benefits have state employees and retirees understandably concerned, afraid and boiling mad.

But you have to hand it to Commissioner of Administration Kristy Kreme Nichols: she has her priorities. She knows what’s important and she’s not about to deviate from the course she has set.

Kristy is nothing if not competitive and she is determined to be a winner—even to the point of strong arming agency directors.

The Louisiana Marathon is scheduled for Jan. 16-18, 2015, and Kristy has a bet with Department of Health and Hospitals Secretary Kathy Kliebert (who also is facing the same problem with fed approval of the infamous hospital deal) and Kristy is determined to win.

On Sept. 12, as the OGB open enrollment controversy was brewing, she sent out an email blast to “Team DOA-OTS (Division of Administration-Office of Technology Services) in which she said:

“Wondering how Team DOA compares to Team DHH? Well we’ve got a website for that! Indeed she does: http://www.thelouisianamarathon.com/doa/

(No word what the cost was of setting up the web page in terms of time and salaries to IT personnel.)

“The figures will be updated daily,” she continued. “As of now, we’re beating DHH at nearly a five to one ratio of runners!”

“Let’s keep up the momentum and reach our goal of 200! So recruit! Recruit! Recruit! And beat DHH!

“Remember! Our next big challenge is being worked up now and the reward will be well worth the wait, a BBQ with a surprise location! All participants who are registered by Oct. 15 will be eligible to attend.”

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The day before that motivational message went out to all DOA employees, another email blast went out informing anxious DOA employees that the DOA team recruited “upwards of 70 DOA employees” for the first Marathon Health and Wellness Luncheon and Competition. “We also set a goal of recruiting 200 people to represent the Division for the big race,” she said.

“Today’s winners were based on percentage and total recruits,” she continued. “First, I think it should be made known that my office (emphasis Kristy’s) won both categories with a 55 percent participation rate and a total of 18 recruits. However, we will concede our casual dress days to Human Resources and OTS. HR reached a participation rate of 23 percent and OTS wins the overall recruitment with 11 runners.”

While she complimented OTS on one hand, she also said, “It should be mentioned that while OTS wins with 11 runners, there are 780 employees in the section. Come on OTS!”

Our sources on the seventh floor of the Claiborne Building tell us that Kristy Kreme has taken steps to ensure her legacy as DOA Commissioner by ratcheting up the pressure on agency directors. That pressure, which borders on a mandate, requires directors to “encourage” employees to participate in this critical competition that is all but certain to eclipse the Saints’ 2010 Super Bowl championship or LSU’s national championships of 2003 and 2007.

That would certainly offset the lack of pay increases over the past five years and improve employee morale.

And to think, all this time we believed Kristy Kreme was devoid of compassion.

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A directive to craft a request for proposals (RFP) in such a way as to favor a specific vendor during a meeting of top administrative officials in 2010 may have violated the state’s bid laws and opened the door to charges of bid-rigging, according to a former State Senator who spoke with LouisianaVoice on Wednesday.

That meeting may also have been instrumental in the decision by then-Commissioner of Administration Angéle Davis to resign her position in early August of 2010.

Former State Sen. Butch Gautreaux (D-Morgan City), who was the State Senate’s representative on the Office of Group Benefits (OGB) Board of Directors, told LouisianaVoice that the meeting was held to discuss an RFP from vendors to provide health care coverage to state workers in northeast Louisiana.

Gautreaux said he was told by then-OGB Executive Director Tommy Teague that he (Teague) was directed by Timmy Teepell to “write a tightly-written RFP” so that only one company could meet the bidding criteria.

Teepell was Gov. Bobby Jindal’s Chief of Staff at the time of that meeting. Besides Teague and Teepell, also in attendance at that meeting were Jindal’s Executive Counsel Steve Waguespack who would succeed Teepell as Chief of Staff, and Davis.

Teague, contacted Wednesday by LouisianaVoice, confirmed the substance of Gautreaux’s story, though he said he was by now somewhat vague as to who was in attendance. “That happened so long ago,” he said, “but the gist of what he says is correct.”

Davis announced her resignation on June 24, 2010, though she stayed on until Aug. 8 when she was succeeded by Paul Rainwater. Teepell resigned in October of 2011.

The vendor that Teepell was most likely referring to was Vantage Health Plan of Monroe which currently holds two separate contracts with OGM worth a combined $53 million.

One of those contracts, for $45 million, is a one-year contract to provide a health maintenance organization (HMO) and hospitalization provider network plan and runs from Jan. 1, 2013 through Dec. 31 of this year. The second, for the same time period, is for $8 million to provide a Medicare Advantage plan for eligible OGB retirees. That plan, similar to ones offered by Peoples Health and Humana in South Louisiana, would be available only to those retirees eligible for Medicare. Retirees hired prior to 1986 and who have never worked in the private sector long enough to qualify for Social Security would not be eligible for the latter plan.

Vantage Health Plan has held 11 state contracts in all, totaling nearly $325 million at least as far back as former Gov. Mike Foster’s second term. The first, for $6.7 million, was for three years, from July 1, 2000, to June 30, 2003, to provide medical services for active and retired plan members.

Under Foster and into former Gov. Kathleen Blanco’s term, Vantage held two contracts: one for $46 million that ran three years, from July 1, 2003, to June 30, 2006 to provide an HMO program, physician and hospital provider network, and a one-year contract, from July 1, 2006 to June 30, 2007, was for $30 million to provide HMO services for state employees.

In Jindal’s first year in office, 2008, OGB issued a $9.925 million contract that ran for 30 months, from July 1, 2008, through Dec. 31, 2010, for Vantage to provide a Medicare Advantage plan for eligible retirees.

The following year, a $20 million contract for only 10 months—from Sept. 1, 2009, to June 30, 2010—was awarded to Vantage to provide an HMO plan to OGB members.

In 2010, Vantage received its biggest contract for $70 million for only 22 months, to run from July 1, 2010 to Aug. 31, 2012 for an HMO plan. That contract was one of four contracts with Vantage totaling $161 million that overlapped between July 1, 2010 and June 30, 2013.

Other contracts included:

  • One running from Jan. 1, 2011 to Dec. 31, 2012 for $14 million for Medicare Advantage plan for eligible retirees;
  • One for $10 million for only three months, from Sept. 1, 2012 to Dec. 31, 2012 for a medical home HMO plan for members;
  • One for $65 million for two years, from July 1, 2011 to June 30, 2013 for an HMO plan.

The obvious question is: Why Vantage?

For openers, Vantage and its officers have been active in writing checks for state politicians.

Gary Jones, president of Vantage, has personally contributed at least $20,000 to state politicians since 2003, including $10,000 to Jindal and $5,000 to former Gov. Blanco.

Michael Ferguson, a director of Vantage Holdings, Vantage Health Plan’s predecessor, gave $4,000 to state office holders, including $1,500 to Rep. Frank Hoffman (R-West Monroe) who serves as vice chairman of the House Health and Welfare Committee; Matthew Debnam, also a director of Vantage Holdings, $1,000 to Hoffman, and Terri Odom, also a Vantage Holdings director, $500 to Hoffman.

But it is Vantage Health Plan itself that is the biggest player in lining the pockets of state politicians.

Vantage, since Jan. 1, 2003, has kicked in no less than $61,900 to candidates. These include $1,000 to Jindal, $2,000 to former legislator Troy Hebert who now serves as director of the Office of Alcohol and Tobacco Control (AGC), $1,500 to House Speaker Chuck Kleckley (R-Lake Charles), $16,000 to Insurance Commissioner Jim Donelon and $5,000 to Sen. Mike Walsworth (R-West Monroe), among others.

While these contributions are all legal, they do raise the recurring issue of influence buying at all levels of government. And it is the $70 million contract in 2010 that raises the issue of possible bid-rigging. And while there may well have been no such attempt, if Teepell did indeed issue instructions to Teague to craft the RFP in such a way that only Vantage would meet the bid criteria, then the administration crossed a serious legal line for which it must be held accountable.

It was subsequent to that 2010 meeting and only weeks before the contract was awarded that Davis submitted her resignation and Teague was gone the following year on April 15, 2011.

This claim should spark investigations by the Inspector General’s office, the Attorney General, the East Baton Rouge District Attorney’s office and the U.S. Attorney’s office—the latter because federal Medicare funds were involved in several other Vantage contracts.

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Former Department of Health and Hospitals (DHH) Secretary Bruce Greenstein has been indicted by the Louisiana Attorney General’s Office on nine counts of perjury stemming from a lengthy investigation of his involvement in the awarding of a $183 million contract to a company for which he once worked.

Greenstein is accused in four counts of lying under oath to the Senate and Governmental Affairs Committee during his confirmation hearings of June 8 and June 17, 2011 and five counts of lying to an East Baton Rouge Parish Grand Jury on June 3 of this year.

Greenstein was appointed head of DHH in September of 2010 and was terminated by the governor’s office on May 1, 2013 when it was learned that the FBI had begun an investigation of the state’s contract with Client Network Services, Inc. (CNSI) as far back as January, 2013 when records of the state’s contract with the company were subpoenaed.

When the FBI probe became known in late March, Jindal immediately cancelled the CNSI contract and Greenstein announced his “resignation” a short time later, though he was allowed to remain on the job until May 1.

The indictment that came down on Tuesday (Sept. 23) is the first time that it was revealed that Greenstein did not resign, but was terminated and apparently allowed to announced that he had resigned.

There was no immediate word of the status of the federal investigation of CNSI and Greenstein but legal observers said Tuesday that pressure will most likely be applied to Greenstein to cooperate with the investigation.

Assistant Attorney General David Caldwell said that while the indictment is for perjury, “it really stems from the entirety of the activity in the awarding of this contract” and the grand jury will remain empaneled to do additional work on the case.

At his confirmation hearings, Greenstein first refused to tell legislators who had won the contract to provide Medicaid billing services for the state but under unrelenting pressure and scolding from legislators, as well as threats of his not being confirmed, he finally admitted that CNSI, his old employer from Washington State, was awarded the contract.

Greenstein, however, insisted that he had built a “firewall” between himself and the selection process and had not intervened in the deliberations, nor had he had any contact with CNSI officials.

It was subsequently learned from emails and text messages subpoenaed by the committee that he had had thousands of text messages and hundreds of phone calls from CNSI officials during the bidding and selection processes.

It was also learned that Greenstein had learned that CNSI was initially not qualified to bid on the contract and that he had added addendums to the bid requirements that made the company eligible.

Counts 1and 2 of the indictment cited his testimony under oath in a response to a question from Sen. Rob Marionneaux that he did not know if CNSI was unqualified under the original request for proposals and became eligible only after the addendum was added to the bid specifications.

Counts 3 and 4 involved his responses to Sen. Karen Carter Peterson about his emails to and from CNSI founder Adnan Ahmed relative to the addendum that made CNSI bid eligible.

The remaining five counts, all for lying to the grand jury, involved charges that he lied about email communications with CNSI, about a directive to DHH personnel forbidding contact with bidders and whether or not the directive applied to Greenstein himself, about his false testimony regarding legal advice he said he received from DHH staff attorney Stephen Russo, and his false testimony regarding his confrontation with DHH and administration officials prior to his June 17 Senate testimony and their efforts to learn the truth about his contacts with CNSI.

Interestingly, none of the counts was for bid-rigging or public corruption, leaving observers to speculate while waiting to see what other charges might be forthcoming as the grand jury continues its investigation.

For the full text of the indictment, go here: INDICTMENT

Of course, he has not been convicted of any of the charges as yet but if prosecutors are able to flip Greenstein, things are going to get pretty interesting around the State Capitol and in Washington State in the coming weeks and months.

And it’s not very likely that he will take the full brunt of the charges if he has committed any wrongdoing. That is, if he can implicate others further up the line.

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Two audit reports released this week by Legislative Auditor Daryl Pupera’s office focus on documentation of expenses related to hurricane recovery and costs incurred by the state for vacant office space in downtown New Orleans as part of a costly incentive package to induce Saints owner Tom Benson to keep the NFL team in New Orleans

The first indicates that the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) has invoices for more than $49 million in exceptions, or undocumented expenses by disaster recovery specialists in the perpetual recovery efforts of hurricanes Katrina, Rita, Gustav and Ike.

The other, which we first wrote about in February of 2013, smacks of the kind of political back scratching for which Louisiana has become famous: the state’s capitulation to New Orleans Saints owner Tom Benson as part of a costly incentive package to induce him to keep his team in New Orleans. Part of that package included the state’s leasing of office space in his Benson Towers office building at inflated rental rates, a deal that appears to border on financial irresponsibility.

The report says that auditors evaluated 4,476 expense reimbursements totaling $711 million submitted by disaster recovery “specialists,” and found 665 “exceptions” totaling nearly $49.6 million.

Pupera explained that the questioned expenses do not necessarily indicate fraud or mismanagement but rather a need for more thorough documentation and justification for the invoices. “The money has been allocated but because it’s federal money, we want to be sure that all invoices are adequately justified before they are paid so we won’t have the feds coming back later and asking for their money back,” he said.

He said the exceptions fall into five different categories: contract work ($42.56 million), force account labor ($3.8 million), force account equipment ($1.3 million), materials ($1.8 million) and rented equipment ($88,000).

Other questionable costs included:

Expense reimbursements of $6.6 million which exceeded cost estimates;

Expense reimbursements of $22.7 million not supported by invoices, receipts, lease agreements, contracts, time records, equipment logs, inventory records of other documentation;

Purchases and contracts totaling $11.6 million which did not comply with federal and state procurement requirements;

Expense reimbursements of $11.6 million which did not comply with federal and state procurement requirements;

Expenses of $2.1 million in work which did not comply with FEMA regulations and guidelines;

Duplicate, omitted and/or miscategorized expenses of $5.7 million.

Pupera said once issues raised by auditors are addressed by GOHSEP, most of the expenses will be properly documented for payment. “There may still be some exceptions at the end, but a large majority are expected to be justified,” he said.

Benson purchased the 26-story Dominion Tower in September of 2009 and re-named it Benson Tower. He made the purchase after entering into a generous—to Benson—agreement whereby the state gave away the store to keep the Saints from moving to San Antonio.

One of the stipulations, which expired a couple of years ago, called for visiting teams’ players, coaches, and support staff to pay state income taxes on one-sixteenth on their annual salaries (because they played one of their 16 regular season games in New Orleans, thus earning a 16th of their income in the state). Once that money was received by the Louisiana Department of Revenue, the department immediately issued a check for an identical amount payable to Benson.

Another obligates the state to pay Benson a cool $1 million whenever the NFL awards a Super Bowl to New Orleans.

Benson Tower is located across the street from the Mercedes-Benz Superdome. As part of the deal struck between Benson and the state, the Jindal administration agreed to a 20-year lease of some 325,000 square feet of office space at $24 a square foot for various state agencies, some of whom were paying as little as $12 a square foot before being forced to move to Benson Tower in 2011.

At the outset, the state’s obligation was about $7 million a year, $2.4 million more than the $4.6 million the state was paying before the move.

Included in the Benson Tower purchase was a 60,000-square-foot plot encompassing a one-block section of LaSalle Street and part of what once was the New Orleans Centre shopping mall. That facility is now known as Champions Square where Saints tailgate parties are held. Anheuser Busch, makers of Budweiser Beer, has exclusive rights for beer concessions at Champions Square after striking a deal with the Louisiana Stadium and Exposition District (LSED), also known as the Superdome Commission.

Benson, the seven LSED members (each of whom is appointed by the governor) and their families, businesses and business associates, the Mercedes-Benz Superdome management firm, and Anheuser-Busch distributor Southern Eagle Sales & Service combined to contribute more than $203,000 to Jindal campaigns between 2003 and 2012.

Prior to the Benson Tower deal, the average cost per square foot for state agencies leasing office space in New Orleans was $17.66. In 2012, the first full lease year in Benson Tower, the cost per square foot was $23.78. Rent at the building is tied to the consumer price index and today the cost per square foot is $25.10.

The Louisiana Attorney General’s offices were never relocated to Benson Tower because of a lack of 24-hour access to parking facilities.

The $7.4 million now being paid does not include $625,000 being paid by the state for 24,900 square feet of vacant office space in the building. That amount bumps the state’s annual rent up to $8 million per year.

The audit report said a survey of current listing information on available office space in New Orleans, the range for lease rates is $16 to $22 per square foot, including parking, or an average of $19 per square foot.

Accordingly, for the 347,849 square feet of Benson Tower, including the 24,872 of vacant office space, the state is paying an average of almost $2.1 million per year in excess rent to Benson.

And the state is locked in until 2025—an additional payment in excessive rent of at least $23 million during the remaining life of the agreement, although the lease agreement could be extended beyond 2025, according to Mark Moses, director of the State Office of Facility Planning and Control.

In his response to the audit, Moses said the Saints were “an import part of Louisiana’s culture as well as an economic driver for New Orleans and the rest of the state.”

He said the incentive package delivered to Benson with appropriate wrapping and bows “saved the state more than $280 million in addition to adding nearly $400 million in revenue expected to be generated over the life of the agreement.”

Moses also said the number of parking spaces included in the lease rate should be included with comparing Benson Tower rental rates with market rates in New Orleans.

“Commercial Class A buildings typically include one to two parking spaces per 1,000 square feet under lease,” he said. “Based on the approximate 323,000 square feet of space under lease (the auditor’s office gives the area as 348,000), the standard commercial lease rate would include between 323 and 646 parking spaces. The rental rate for Benson Tower, however, includes 900 parking spaces in the Superdome garages.”

He added that additional parking is also available for $50 per month in the state-owned Health Education Authority of Louisiana (HEAL) garage a block from Benson Tower.

Moses also pointed out that the audit report’s comparisons of market rates failed to mention that most commercial leases of Class A buildings including “pass through language,” which requires tenants to pay a proportionate share of operations and maintenance expenses that exceed base year expenses established in the lease. Pass through rates, he said, can vary depending on operating and maintenance expenses for individual buildings and according to occupancy rates. Benson Tower, he said , does not include pass through language in its lease with the state.

 

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My grandfather had a favorite expression he was fond of saying: “The stuck pig squeals the loudest.”

That may well explain the sudden onslaught of reassurances emanating from the Jindal administration in the form of press releases and op-eds, all telling us that our benevolent governor, expert that he is on health care, is taking care of and we shouldn’t worry about all those looming increased costs and reduced benefits.

But as it turns out, we may be about to see a new development to the controversy swirling around the proposed premium increases and benefit cuts for members of the Office of Group Benefits.

And just in case you might be wondering why your friendly legislator hasn’t been up in arms over the radical changes in health coverage being proposed for some 230,000 state employees, retirees and their dependents through the Office of Group Benefits (OGB) before now, there’s a reason.

If some similar action were taken to adversely affect their per diem, travel, and other perks, it would be quite another story. They’d have been squealing long before now.

But you see, 261 House members and staff and 151 senators and staff are not members of OGB and therefore, don’t have any skin in the game (my grandfather would have said they don’t have a dog in the hunt) being played by the administration and Blue Cross/Blue Shield of Louisiana.

So where do those 412 people get their health coverage?

LSU First.

And now two of those legislators who earlier fell out of favor with Gov. Bobby Jindal when they questioned the wisdom of privatizing OGB at the outset, Reps. Joe Harrison (R-Gray) and Cameron Henry (R-Metairie) are back and the governor can’t be happy about it.

And Henry is even putting out feelers about moving all 230,000 members of OGB to LSU First, saying it is something “we should explore for employees to get into since the Office of Group Benefits is fiscally unsound.”

Meanwhile, House Speaker Chuck Kleckley (R-Lake Charles), normally a wad of putty in Jindal’s hands, has suddenly grown something akin to a spine and called for a special hearing on Sept. 24 to take up the OGB changes. Other legislators also beginning make demands of the administration to have someone present to answer questions about the radical changes.

State Rep. John Bel Edwards (D-Amite), a candidate for governor, said he wanted administration representatives questioned under oath.

It was Edwards who originally requested that Kleckley call a meeting of legislators to discuss OGB. “The OGB fiasco is proof positive that privatization for the sake of privatization is foolish,” he said. “A reserve balance that recently exceeded $500 million is half that now and bleeding $16M per month due to mismanagement and budget chicanery, and the ultimate price will be paid by state retirees and employees through higher premiums, higher co-pays, higher deductibles, and higher co-insurance in exchange for fewer benefits, more forced generic drugs, and more preclearance of needed treatments and other changes that make crystal clear that the OGB beneficiaries will pay more for less.”

“I feel vindicated,” Harrison was quoted as saying by the New Orleans Times Picayune in reference to the depletion of the OGB trust fund which has shrunk from $540 million to less than half that since Jindal’s privatization plan went into effect. http://www.nola.com/politics/index.ssf/2014/09/louisiana_legislators_have_a_h.html#incart_river “Exactly what I said was going to happen is now happening,” Harrison said.

And Henry is even putting out feelers about moving all 230,000 members of OGB to LSU First, saying it is something “we should explore for employees to get into since the Office of Group Benefits is fiscally unsound.”

Jindal had Henry and Harrison removed from their respective committee assignments when the two refused to go along with Jindal’s legislative agenda during the 2013 legislative session.

Administration officials, in an attempt to discourage a mass exodus from OGB said state employees now in OGB may not find the LSU First plans to be a better option, invoking such terms as “better service,” “strike a balance,” “right sizing of benefits,” “wider range of options,” and “it’s all the fault of Obamacare.”

So, just what is LSU first, anyway?

LSU First is the health coverage offered employees throughout the LSU system and back near the end of the Mike Foster administration, a memorandum of understanding (MOU) was approved that allowed legislators and legislative staff members to opt out of OGB in favor of LSU First.

Senate 2003

House of Representatives 2003

The plan presently is not available to employees of Louisiana’s other institutions of higher learning or civil service employees other than those working for the Legislature.

So, why would anyone make the switch?

The answer to that is simple: Even before the pending revamp of OGB which will prove far more costly to members, LSU First was vastly superior in the benefits it offers. And now, with the increased premiums, higher deductibles and co-pays for OGB members (an overall cost increase of 47 percent), the contrast between the two plans is even more stark. http://www.lsufirst.org/wp-content/uploads/2012/01/2014_LSU_First_SPD.pdf

http://www.lsufirst.org/wp-content/uploads/2013/12/2014-SBC-Opt1.pdf

LSU established the plan for the fiscal year July 1, 2002 through June 30, 2003, adopting the “Definity Health Model Health Coverage Plan,” and the House and Senate climbed on board a year later, on July 1, 2003. The original MOU was signed in May of 2003 by then-LSU President William Jenkins, House Speaker Charles DeWitt, Jr. (D-Alexandria), and Senate President John Hainkel, Jr. (R-New Orleans).

No sooner said than done. The ink wasn’t even dry on the signatures on the MOU when legislators and staff members started a mass migration to the LSU plan. Additionally, civil service workers scattered throughout state government who were fortunate enough to have spouses working for LSU also switched.

The language in the MOU was such that any legislator who left the House or Senate and moved on to another state office or appointment was allowed to retain his or her coverage under LSU First. That would include, for example, people like former Gov. Mike Foster, Commissioner of Alcohol and Tobacco Control Troy Hebert, Lt. Gov. Jay Dardenne, and former House Speaker Jim Tucker.

LouisianaVoice made an inquiry of the LSU administrative types as to who pays the employer portion of the premiums and whether or not the governor, the commissioner of administration, and cabinet members were eligible for member in LSU First.

What we got back was less than satisfactory but entirely typical of the mindset of this administration. “We have fulfilled your public record request and any further questions can be directed to our University Relations office,” wrote Stephanie Tomlinson, coordinator, LSU Finance and Administration.

In other words, if one asks a simple question and does not specifically request documents or records, he is out of luck. This administration has no intention of helping someone seeking information and would prefer to toss obstacles in the path of transparency.

But we can play this game, too. We replied with the following email:

Okay, we’ll try it this way:

Please provide any and all documents and/or public records that identify all eligible members of LSU First medical coverage, including the governor’s office, Division of Administration and the various cabinet positions.

Please provide documentation and/or any and all public records that provides a breakdown of premium payments for LSU First, including employer/employee contributions and including which employer, i.e. the state, the House or Senate or LSU, pays the employer contributions.

Now that we have requested actual documents/records, we’ll see how they respond.

We did glean from the MOU, however, that the Legislature most likely is responsible for paying 70 percent of the premiums for legislators, legislative retirees, and staff members.

Meanwhile, Jindal communications officer Mike Reed, a native of Boston (Jindal apparently cannot find qualified Louisiana residents for these jobs), churned out a fact sheet that Commissioner of Administration Kristy Kreme Nichols proudly published verbatim as her own work as via an op-ed piece in today’s (Thursday’s) Baton Rouge Advocate under the heading Changes Good for Insurance Users, Taxpayers. (A hint, Kristy: U.S. Democratic Sen. John Walsh of Montana recently dropped out of his race for re-election after allegations of plagiarism.)

As for Reed, we can only hope that if he returns to Boston he doesn’t offer his services to the Red Sox. Mired in last place in the American League East, the Sox have enough problems without taking on another pitch man who can’t seem to find the strike zone.

Reed’s press release was directed at a recent well-researched column by political writer Jeremy Alford: For Health Care Woes, Jindal Prescribes Confusion. http://lapolitics.com/2014/09/for-health-care-woes-jindal-prescribes-confusion/

Reed sent the “fact sheet,” entitled Setting the Record Straight: LaPolitics Column on Healthcare reform in Louisiana, to state legislators on Wednesday. The four page letter was peppered with what Reed smugly, if inaccurately, described as “myth” followed by “Facts.”

Of course, being from Boston, it goes without saying that Reed is intimately familiar with all the nuances of Louisiana politics, including the sordid history of the administration’s recent health care issues. These include Jindal’s sticking his nose into the OGB operations and firing Director Tommy Teague who had taken the agency from a $60 million deficit to a $500 million fund balance, closing down or giving away state hospitals, the governor’s refusal of Medicaid expansion which led directly to problems at Baton Rouge General which last week announced it was closing its emergency room, forcing the administration to pump $18 million into the private hospital to keep its ER open to indigent patients forced to travel to the mid-city facility after closure of state-run Earl K. Long Hospital.

Undaunted, Reed waded into the fray, dutifully blaming everything on Obamacare just as his absentee boss would have him do. And Kristy Kreme eagerly published the tome under her byline.

https://webmail.east.cox.net/do/mail/message/view?msgId=INBOXDELIM16848

The whole thing evokes images to go with one of our favorite Sinatra songs: http://www.youtube.com/watch?v=K1fVQGESUTo

Bobby Jindal (Gov. R-L)

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Remember the angst over the temporary shutdown of the Louisiana Department of Education’s (LDOE) web page a little over a week ago because the Division of Administration (D)A) had neglected to pay the $280 bill for the domain subscription?

It was a “technical glitch,” we were assured by DOA Director of Communications Meghan Parrish. “This was not purposeful,” she said, and not part of the ongoing Common Core catfight between those two behemoths of machoism, Gov. Bobby Jindal and Superintendent of Education—“Dude, you are my recharger”—John White.

Well, we were prepared to give the administration the benefit of the doubt that it was simply an oversight and not, as White claimed, because of the state’s refusal to make payments. We are, after all, reasonable and we understand that sometimes things slip through the cracks—even as Jindal was careful to take the necessary steps to strip LDOE and the Board of Elementary and Secondary Education from employing legal counsel to sue the governor.

Never mind that the governor has now moved forward with his own lawsuit against the federal government over Common Core. Apparently, while he doesn’t want to be a defendant over Common Core, he has no problem being a plaintiff and thereby further enriching his own legal counsel Jimmy Faircloth with at least $300,000 more of your taxpayer dollars in addition to more than a $1 million he has already been paid in other lost causes as, in the words of Bob Mann on last Friday’s Jim Engster Show, “the most successful loser” in Louisiana legal circles. http://wrkf.org/post/friday-bob-mann-carley-mccord (move your curser to the 19:40 minute of the show for the quote.)

But now LouisianaVoice has learned of a much more serious situation involving non-payment of electric and natural gas utilities at the Bridge City Youth Center a couple of months back.

Also surfacing are reports that despite assurances of Commissioner of Administration Kristy Kreme Nichols to the contrary, the administration and its $7.5 million hired gun Alvarez & Marsal (A&M) aren’t nearly as concerned about the welfare of 230,000 enrollees in the state’s Group Benefits program as they would have you believe.

A&M was initially hired for $4.2 million but the contract has been illegally amended—does this administration give a damn about the State Constitution?—at least twice in violation of the 10 percent maximum over which legislative concurrence is required (though neither Senate President John Alario, R-Westwego, nor House Speaker Chuck Kleckley, R-Lake Charles, seems to possess sufficient spinal makeup to hold the governor accountable on that little technicality).

A&M, probably best described as McKinsey Lite, is charged with trying to find $500 million—an updated number by the Baton Rouge Advocate puts the amount at $1 billion—in savings over five years. Its consultants have swooped into state agencies with their iPads and Smartphones and their instant expertise.

The problem is that neither A&M nor its army of consultants has ever run a business; they have never run a state agency; they have never interacted with the very people whose lives they are consulting to impact in a very adverse way. Yet incredibly, with all that proficiency and foolproof know-how gleaned from literally days and even a week or two of studying theoretical scenarios for each agency visited, the most consistent solution to cost cutting is: “Lay off personnel, reduce your workforce.”

A&M does have one thing that is critical to its mission: the full blessings of Bobby Jindal and that apparently is all that matters. The human element is not a factor in this pathetic exercise. That’s because Jindal himself is not human; he’s a droid, devoid of compassion or feelings and programmed to spew statistics and factoids at such a rapid pace as to trick the listener into mistaking rote recitation for intelligence.

And if he believes he can fool the national media the way he has the Louisiana media, we can assure him that task will keep him busier than a one-legged tap dancer. He will have greater success shoveling water with a pitchfork.

But we digress. Because A&M is banking on motion being interpreted as progress, it has come in and created a lot of dust, wind and noise, but little substance. Conflicts were inevitable and shouting matches have erupted in various agencies between professionals who know their jobs and pseudo-professionals who are deep on theory but short on practicality. Or who, in the words of former Texas Gov. Ann Richards in her characterization of George W. Bush, are “all hat and no cattle.”

Faced with protests by agency heads over the impossibility of meeting payroll after A&M imposed cuts, the A&M suits invariably offered the same adolescent solution of firing workers.

And for that we’re paying $7.5 million?

And now those 230,000 state employees, retirees and dependents covered by the Office of Group Benefits (OGB) are facing what Kristy Kreme Nichols calls the “right-sizing of benefits to costs.” http://theadvocate.com/home/10132562-171/state-employee-insurance-changing Translated, that simply means an average 47 percent increase, including higher premiums and out-of-pocket expenses, including 100 percent higher co-pays and new and higher deductibles. Let’s not forget, most state employees will get their first pay increase in 5-6 years – 4 percent – just in time to meet those higher insurance expenses. Interesting timing.

One of our readers correctly pointed out that Naomi Kline, in her book The Shock Doctrine, lays out the game plan now being followed to the letter by Jindal and his $7.5 million consulting firm. It should come as no surprise that the A&M suits are smugly referring to the upcoming Oct. 1-Oct. 31 open enrollment as “War Games.”

War Games? Yes, War Games. To them, it’s just a way of keeping score with the fate of state employees, retirees and dependents as only an asterisk, an afterthought.

That is, after all, what this administration is all about: Jindal and his boot lickers against state workers; Republicans against the middle class. And if you don’t believe it is true class warfare, we invite you to read another book by Hedrick Smith, Who Stole the American Dream?

Smith includes in the appendix of his book the August 1971 Lewis Powell memo to the chairman of the U.S. Chamber of Commerce that set in motion the creation of the American Legislative Exchange Council (ALEC), the Cato Institute, and Americans for Prosperity and the eventual steamrolling of the American middle class by Corporate America. Barely three months after writing that blueprint for the consolidation of corporate America’s power over our government, Richard Nixon appointed Powell to the U.S. Supreme Court. http://reclaimdemocracy.org/powell_memo_lewis/

Meanwhile, there’s the matter of that unpaid utility bill at the Bridge City Youth Center.

The Bridge City Youth Center houses about 150 troubled youth, down from about 300 in 2002.

Since 2008 when Jindal took office, the Office of Juvenile Justice (OJJ) has had its budget slashed by over 50 percent, and a couple of months ago, representatives from electric and natural gas utility companies showed up at the door of the Bridge City Youth Center with an order to cut services because of unpaid bills.

The amount owed? $50,000. A small partial payment was made to prevent the utilities cutoff—for now.

Granted, these 150 kids may not be up for their Merit Badges but the state in its wisdom has taken over responsibility for their housing, feeding, clothing, education and hopefully, some degree of rehabilitation.

So if the state is going to accept those responsibilities, it’s only fair to ask that the state meet those same responsibilities and pay the bills.

OJJ’s business functions were “consolidated” with DPS some time ago, and now those responsibilities have been transferred to DOA, DOA is responsible for those non-payments.

That’s the same DOA that forgot to pay LDOE’s web page subscription.

And that’s the same DOA that is an extension of the governor’s office. That’s why it’s called the Division of Administration.

Why did DOA not pay the bill? For that answer, we would have to go back to that huge budget cut imposed by one Bobby Jindal. The money simply is not there.

And it almost wasn’t there for OJJ and other agencies to meet payroll recently but A&M had a ready answer for that knotty little problem: impose layoffs.

And thrown into the mix, doesn’t is somehow seem a bit curious how this administration, which can’t lay its hands on sufficient cash to pay a $50,000 utility bill, can somehow find $18 million for a private hospital in Baton Rouge to keep its emergency room open to handle the indigent patients coming over from the state-run Earl K. Long Hospital after it was closed by the governor? Is it even legal for the state to fund a private business at all, much less without legislation? In a cash-strapped administration, where did $18 million magically and immediately appear from? http://theadvocate.com/news/10108601-123/br-general-jindal-administration-reach We’re just sayin’…

And keep in mind, the state has already had to borrow $24 million from this fiscal year’s (2014-15) budget to balance last year’s budget, meaning we’ve already started the new fiscal year, which began on July 1, $24 million in the hole.

And yet he found $18 million for a private hospital to keep its ER open for one year.

The question now must be asked: What happens next year when it threatens to close again?

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Back in the spring of 2011, LouisianaVoice predicted that higher premiums and reduced benefits would by the immediate by-product of privatization of the Office of Group Benefits Preferred Provider Organization (PPO).

The administration initially—but only temporarily—proved us wrong by reducing premiums as the lead-in to contract with Blue Cross/Blue Shield of Louisiana as the third party administrator for the PPO.

If we wished to be vain about that move, we could have said that Gov. Bobby Jindal made that move just to prove us wrong. But it wasn’t nearly as simple as that; there was, in fact, a far more sinister reason for the premium reduction.

Because the state pays 75 percent of state employees’ premiums, cutting those premiums reduced the financial obligation to the state, thus allowing Jindal to divert money that normally would have gone to health care for some 230,000 state employees, retirees and dependents to instead be used to plug gaping holes in what has become an annual budget shortfall, thanks to slipshod management of state finances by the governor.

The recent developments pertaining to impending radical changes that will force eligible retirees onto Medicare and out of Group Benefits are not about who is right and who is wrong; it’s about people. It’s about people like you and me (yes, I’m a state retiree who is one of the lucky ones who is eligible for Medicare by virtue of my hire date after April 1, 1986 and by virtue of some 25 years of newspaper reporting work in the private sector).

In all the rhetoric coming out of the office of Kristy Nichols, the people she and her boss serve appear to be the forgotten element as Jindal has become a 100 percent absentee governor while he chases the impossible dream of becoming POTUS.

FAQs

Tragically, retirees with no private sector experience and who began with the state prior to April 1, 1986, are ineligible for Medicare and the steep premium increases looming on the near horizon—open enrollment is Oct. 1 through Oct. 31—can mean only one thing for them: financial devastation. A new premium increase to go with the one that took place on July 1 is scheduled to go into effect Jan. 1, placing an additional financial burden on enrollees.

Of course, if you look back, you will see how the administration fed us a string of outright lies in 2011. Thanks to loyal reader Kay Prince of Ruston, we have a copy of a letter written by then-Commissioner of Administration and who later served as Jindal’s Chief of Staff until his unexpected resignation last March which can only be described as a laundry list of lies to state employees and retirees.

Read the text of Rainwater’s letter here: https://www.groupbenefits.org/portal/pls/portal30/ogbweb.get_latest_news_file?p_doc_name=4F444D324D5441344C6C4245526A51344E7A413D

If one has to wonder where this latest political assault on state employees originates, one has only to Google “ALEC Health Care Agenda” for the answer.

HHS_2013_SNPS_35_Day

ALEC, of course, is the acronym for the American Legislative Exchange Council, the non-profit political arm of the Koch brothers and the Walton Family of Wal-Mart fame. ALEC, which drafts “model bills” for its member legislators to take back home for passage, includes sweeping changes to health care benefits for public employees as one of its primary objectives.

While we don’t normally advocate political boycotts, perhaps state employees should give serious consideration to a complete boycott of Wal-Mart and Sam’s Club as a response to the ALEC-inspired medical benefit cuts you are about to experience. A word or two to friends and relatives might not be a bad idea either.

For a comprehensive look at the ALEC agenda as it pertains to medical benefits, go here:

http://www.alecexposed.org/wiki/Health,_Pharmaceuticals,_and_Safety_Net_Programs

Here is a list of Louisiana legislators, both present and past, who are now or once were members of ALEC. http://www.sourcewatch.org/index.php/Louisiana_ALEC_Politicians

Girod Jackson (D-Marrero), who was charged with fraud and failure to file taxes, resigned and is no longer in the legislator and it is our understanding that Sen. Bob Kostelka (R-Monroe) is no longer a member of ALEC.

And certainly, let’s not forget that until recently, BCBS was a member in good standing of ALEC and BCBS was listed as a member of ALEC’s Health and Human Services Task Force and ponied up $10,000 for a “Director” level sponsorship of ALEC’s annual conference held in New Orleans at which Jindal received the organization’s Thomas Jefferson Award. BCBS of Louisiana paid an additional $5,000 and served as a “Trustee” level sponsor of that 2011 conference.

And ALEC continues to have its logo prominently displayed on the Louisiana Legislature’s web page. http://www.legis.la.gov/legis/OtherGovSites.aspx

Despite all the spin from Kristy Nichols, the Aug. 11 report to the Joint Legislative Committee on the Budget by the Legislative Fiscal Office paints a much truer picture of what’s in store for members.

Read the LFO report here: LFO_OGBReport_August_2014

Apparently, the working media also do not buy into the Kristy Kreme version of “it’s all good,” as the proposed changes are attracting the attention of Capitol reporters like Melinda Deslatte, a very capable reporter for Associated Press: http://www.shreveporttimes.com/story/news/local/louisiana/2014/08/26/health-benefit-changes-planned-state-workers/14651363/

As a barometer of just how serious the proposed changes are and the impact they will have on members, House Speaker Chuck Kleckley, apparently in response to the request of State Rep. John Bel Edwards (D-Amite) is apparently willing to buck Boss Jindal and call a special meeting of the House as a Committee of the Whole as reported here by the Baton Rouge Advocate’s Marsha Shuler: http://theadvocate.com/home/10100116-123/house-group-benefits-meeting-possible

Undaunted, Nichols trudges on like a good soldier. Today, state employees arrived at work to find emails, mass distributed via the state’s “Bulletin Board,” attempting to address the “incorrect” information “distributed over the last few weeks” regarding the anticipated health insurance changes.

Basically, she denied all negative information, threw up administration smoke screens, made lame excuses and (ho-hum, yawn) blaming the Affordable Care Act (Obamacare), which has absolutely nothing to do with the Office of Group Benefits.

While Kristy rants that premium increases will be negligible (if one can consider a 47 percent bump negligible), we would remind her it’s not about the premiums; it’s about the benefits. It’s about the co-pays. It’s about the deductibles. Kristy, you can’t ignore the elephant in the room indefinitely.

As state workers peruse Kristy’s latest missive, it is important to refer back to the aforementioned Paul Rainwater letter of April 29, 2011, to get a quick refresher as to just how capable the administration is of clouding an issue with misinformation and outright lies.

They lied then so what’s to keep them from lying now?

The fact is the Jindal administration, what’s left of it, does not nor has it ever cared about the welfare of state employees.

Jindal is joined at each hip by his former—and only—private sector employer McKinsey & Co. on one side and ALEC on the other and both have the same agenda: the destruction of working Americans in favor of ever increasing corporate profits. Together, they guide each and every step Jindal takes.

McKinsey & Co., it should be noted, is also a member of ALEC and is the same company that once consulted General Motors into bankruptcy, advised AT&T there was no future in the cell phone market and which structured the corporate plan for Enron.

These are the ones who are maneuvering to control the health care future of 230,000 state employees, retirees and dependents.

Only last November, the state flirted with McKinsey & Co. for the purposes of retaining the firm to put together a Business Reengineering/Efficiencies Planning and Management Support Services proposal.

Apparently Jindal opted to go with the less expensive Alvarez & Marcel (A&M) for that contract that has grown from $4.2 million to $7.5 million for A&M to find $500 million in savings over a 10-year period.

But McKinsey did submit a 406-page proposal and a two-page cover letter to Ruth Johnson of the Division of Administration (DOA) which LouisianaVoice has obtained.

Much of McKinsey & Co.’s proposal was redacted by DOA before its release to us—including every word in the proposal dealing with health benefits.

That’s correct. Not a single word about health benefits as proposed by McKinsey was readable. Skip down to page 37 for the redacted health benefits section to see what we mean.

Read the McKinsey report here: McKinsey – State of LA Cost Proposal – Final

In case you don’t have a lot of time, here is a shorter proposal from McKinsey: McKinsey – State of LA Cost Proposal – Final

Are you sufficiently comfortable with that to sit back and trust this administration to do what’s best for you?

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