True to form, Gov. Piyush Jindal waited until a Friday, considered one of the slower news days of the week, to make the long-anticipated announcement that Blue Cross/Blue Shield (BCBS) had been selected to administer the Preferred Provider Organization (PPO) for the Office of Group Benefits, a move that will eliminate 177 positions in the office.
Jindal was considerate enough to release the announcement through his favorite publication, the Baton Rouge Business Report, which ran the story on its web page. The OGB web page also carried the announcement.
The administration likewise waited until Friday to make the announcement that the 348-bed Southeast Louisiana Hospital in Mandeville will begin closing down operations, effective, Oct. 1, costing another 300 employees their jobs.
St. Tammany Parish has the highest suicide rate in the state and the move leaves up to a quarter-million people with no facility for treatment of depression or suicide prevention.
The move with Southeast Louisiana Hospital came as a major surprise considering some of Jindal’s strongest support has historically come from legislators in St. Tammany.
Both events might be considered as part of what Capitol Bureau reporter Marsha Shuler described in Friday’s Baton Rouge Advocate as Jindal’s health care “train wreck.”
The administration on Friday sent separate letters to BCBS, Humana and United Healthcare. The letters to Humana and United Healthcare informed them that their proposals were not accepted while the one to BCBS announced it had won the contract to be OGB’s third party administrator (TPA) for both the state’s HBO and PPO, which the administration said will save the state $20 million per year.
BCBS has already been serving as the TPA for the HMO and effective Jan. 1, will be assuming administration of both.
The privatization of OGB’s PPO has been controversial since first being proposed by Jindal more than a year ago. The root of that controversy lies in the fact that the OGB employees paid claims with a turnaround time of less than three days, much to the satisfaction of the 62,000 state employees, retirees and their dependents.
Moreover, the PPO had gone from a $60 million deficit to a $500 million surplus in the five years during which it was run by former director Tommy Teague. Teague was fired on April 15, 2011, when he didn’t sign on to the privatization plan quickly enough to please Jindal.
His successor, Scott Kipper, lasted only six weeks after testifying before a legislative committee that were it left up to him to decide, he would not lay off any of the OGB employees. That remark, made in response to a direct question from a committee member, appeared to irritate his boss, Commissioner of Administration Paul Rainwater who, only moments before, had indicated a need to downsize the agency by 149 positions.
The quick turnaround of claim payments combined with the agency’s $500 million surplus seems to be in stark contrast to Rainwater’s statement on Friday: “The selection of a third-party administrator is an important step toward providing quality care and service to plan members in the most cost-effective way.”
Former State Sen. D.A. “Butch” Gautreaux (D-Morgan City), who served as chairman of the Senate Retirement Committee and as a member of the OGB board of directors before being term-limited last year, fought the governor’s privatization efforts every step of the way.
Contacted Friday, Gautreaux was typically critical of the move. “Sometimes it just isn’t satisfying to be right,” he said.
“It was told to me confidentially well over a year ago and re-stated by in a Senate Retirement Committee hearing that the PPO was going to Blue Cross/Blue Shield.
“I hope Bobby Jindal leaves soon but I feel sorry for his successor. The cost of employee and retiree health insurance will be rising once we get over the one-year hump.” He was referring to a one-year moratorium on premium increases promised by the administration. Gautreaux said the information about premium increases was shared with him by the same source.
Because the state paid no taxes on premium income and because there is no requirement for a profit as long as the PPO was administered by the state, skeptics fear the need for profit and the requirement to pay taxes on profits will necessitate a rate hike by a TPA.
“It really is a shame that we, the taxpayers of Louisiana, will have to face the real cost of Bobby’s ambition for a very long time,” he said.
St. Tammany has had 124 suicides since 2009 and many more reported attempted suicides during that same period.
“The department (Department of Health and Hospitals) is very aware and concerned about the suicide rate,” said DHH press secretary and director of the Bureau of Media and Communications. “Our commitment and ability to respond to patients who will need beds and treatment remains the same,” he said.
State Sen. Jack Donahue (R-Mandeville) said the announcement caught him off guard. “It was not discussed during this legislative session to my knowledge. I was told 15 minutes before the announcement was made.
Rep. Scott Simon (R-Abita Springs), chairman of the House Committee on Health and Welfare, was equally unaware and expressed his “shock” that Jindal would take such action.
To abruptly close down one of the largest employers in St. Tammany in a parish where Jindal has enjoyed some of this strongest support is bad enough. But to do so without even extending the courtesy of giving his legislative allies a heads-up to prepare them only compounds his insensitivity and boorish contempt for the citizens of St. Tammany in particular and citizens of the state in general.
While Jindal and GOP presumed presidential nominee have been accusing Pres. Barrack Obama of being “out of touch,” Shuler was quick to point out the governor’s own inconsistencies and what might appear to some as his deliberate moves to dismantle the state charity hospital system.
The Advocate reporter said Jindal, who is rarely in the state anymore, choosing instead to stump for Romney while auditioning for the vice presidential nomination, seems almost aloof to the financial straits Louisiana’s Medicaid health care program suddenly finds itself in.
A new federal law gutted more than $859 million from the state’s Medicaid funding but Jindal, Rainwater and DHH Secretary Bruce Greenstein say the state can overcome the cut by sacrificing services offered by the LSU hospital system’s care for the uninsured and physician training programs. Further cuts would come through reducing payments for uninsured care by rural hospitals.
As recently as late May, Greenstein and Jindal were united in predicting a doomsday scenario if a proposed $51 million cut was imposed on the LSU Med School. They predicted that some of LSU’s 10 public hospitals, which provide healthcare to the state’s indigent and which also train physicians, might have to shut down.
Now, however, since Jindal has rebuked Obama’s health care plan, the $859.2 million cut to the state’s Medicaid program is “doable,” they say, again in unison. Greenstein even called the cuts “an opportunity to reform and modernize.”
Greenstein and Rainwater, who foresaw widespread closures with a $51 million proposed cut, now say LSU can cut $300 million and still maintain health care for the poor and uninsured.
Now who’s out of touch?
Louisiana Voice 
I hope every legislator who thought that their position in state government was safe by licking Bobby’s boots during this last legislative session now sees what fools they were and probably continue to be. Haven’t they ever heard the idiom that there is no honor among thieves? Bobby is the worst of the worst when it comes to ethics, compassion, and trust. We can’t get rid of him soon enough and begin to unwind his dastardly deeds so that our once so-so (certainly not great) state can get back to trying to dig itself out of last place in virtually every measure of achievement in America.
it’s hard to believe that the voters of this state truly think jindal knows what he’s doing… all of his moves are driven by ideology and not by what is the most efficient, effective way to do things… unless civil service has been completely neutered, something may yet be done about this idiocy
I thought BCBS started working on OGB back in 2009. At least they were establishing and internal department and creating new positions with “OGB this” and “OGB that” in the titles. Seems like someone knew the contract(s) were going to BCBS-LA years ago. How much “administrative overhead” was all that work if they weren’t too sure about it? Who paid for that?
BCBS has been administering the HMO plan for OGB for a number of years now since it won the contract from Humana in a decision that ended up in the courts after Humana’s challenge. Now BCBS will be the TPA for both the HMO and PPO.
And don’t be at all suprised if this decision also ends up in the courts.
I am not disputing you, Tom, I understand. But I remember hearing “PPO” back then. It wasn’t one or the other of the plans but both. But again, that was just hallway chat, not decision-maker announcements or anything. Just lowly serfs discussing crops being planted. Perhaps my ears deceived me. Maybe they were lacking some efficiencies (in their own understanding.) Maybe those capabilities (understanding and hearing) have improved since then.
You’re probably correct. After all, it’s been a foregone conclusion for some time now that BCBS was going to get the contract. There apparently irregularities in the way the initial HMO contract was awarded to them because the district court judge ordered the state to re-bid the HMO after Humana took the state and BCBS to court.
Basilisk, don’t count on anything from civil service. They are totally useless and rubber stamps whatever they are told to do. Someone needs to investigate them and all of the constitutional rules they violate.
Who investigates those kinds of things and who determines if Louisiana’s constitution has been violated?
No one. It’s open season on employees from every angle. Civil Service will help an agency violate CS Rules to steal and fire employees. They have the majority of attorneys in BR under contract so employees can’t hire the attorneys. It makes you wonder why CS needs to tie up these attorneys under contract. The CS Commission is a joke, appointed by the governor….
Looking forward to the sequel… The Nuremberg Trials II ….after all of this.
During Governor Foster’s first term, DHH Secretary Jindal so destroyed state hospitals and lives that he was sent to work for Bush. Otherwise Foster had no chance of reelection. Fast forward only 8 years and GOP fascists have so propagandized the masses the “small government” mantra is accepted unthinkingly.
What the masses miss is that “small government” is GOP-speak for corporate take-over. Why pay public servants to provide government services when Jindal can divert tax revenue to corporate coffers instead? Better yet, why provide government services at all?
In true fascist fashion, corporations, through ALEC and anonymous super PACs, have purchased the right to run LA from Jindal and his minions. Like all good fascists Jindal touts the “business model” while flouting Louisiana’s 275 year history of caring for poor and indigent people.
From the Charity system, established while LA was still just a colony, to an array of present-day clinics and teaching hospitals, Louisiana’s history had been to care for our own. Jindal’s history is of a third world caste system with a ruling class, without public services. He’s making Louisiana home.
His destruction of government institutions in a quest for higher office is the most careless in our state’s history. Compared often to ruthless and vindictive Huey Long, Piyush doesn’t begin to compare.
His only “chicken in every pot” is the $50 million gift to California’s Foster Farms, to refurbish a chicken processing plant in Union Parish. Wonder how much Jindal-lingam netted in that deal?
Wake up and smell the Piyush! Recall: http://www.recallbobbyjindal.com.
When you think about it Jindal is the perfect running mate for Romney. They both like to fire people. If it were not for a good person of conscious within the Jindal administration we would have been caught unaware. It’s disappointing that after publicly making the case that this is a fiscally foolish decision the legislature was frozen in fear of Jindal and his commitment to the private sector at any cost.
Why are they “frozen in fear”? He can’t kill them and eat them, now can he? So, our legislators are afraid of losing power, status, benefits for their constituents, their reputations, family members’ jobs, LSU football tickets, etc? So they hunker down until it’s over. Live to fight another day and all that? To the few who have risked their necks to speak out against the tyranny of this administration, thank you for having a moral compass and a heart for humanity. Government should be for all of us, not just a means to manipulate the system for the power brokers. We have real problems here in Louisiana and they are getting worse unless you believe Bobby’s blarney. More people need to speak up, especially the ones we elected for that specific purpose. Any fool can be a YES man (or woman). Who wants to be remembered as a Jindal enabler? Not me.
“Hunkering down” would require character. Apparently, power, status, and benefits have neutered many legislators.
It would be EXTREMELY refreshing for our legislators to ban together and stand up to this out of control, hides-behind-his-desk, egomaniac, fiscally-reckless, exorcist-in-chief Governor we have.
And, does anyone else find it odd that the USDOJ just discovered $452 million in Medicare fraud, $250 million of which occurred right here in Baton Rouge? After all, Jindal is supposedly an expert in this stuff.
No offense, but I find it odd that the USDOJ discovered any medicare fraud at all.
I see it now. My mistake
There was a previous bid that was issued to privatize the PPO several years ago. It was at the same time the BCBS was awarded the HMO contract. There were problems with awarding the PPO bid to BCBS because of problems processing the LaCHIP portion of the PPO plan. The LaCHIP program provides health care to certain low income children in the State of Louisiana.
At the present time, the OGB provides all administrative functions (including individual premium billiing) and claim processing for this expanded LaCHIP program. The LaCHIP program is different from the regular PPO plan of benefits as it includes different coverages and copayments. When BCBS was awarded the HMO contract and they discovered there were problems with the LaCHIP program, they withdrew their bid.
It will be interesting to see if BCBS has solved this problem.
PS. I was the Fiscal Officer for OGB for 20 years priors to my retirement, so I know the facts and what you read in the newspaper as reported by the Jindal adminitration is a bunch of BS.
Looks like from job posts they may be, or were, looking for an Enterprise Architect – OGB (BCBS), which would imply there are enough problems to warrant a good salary.
It really interesting that Sen. Jack Donahue would feign ignorance when in fact he knew full well that the fix was in. He is of the same cloth as Bobby Jindal, looking out for his own ambitions and counting on his constituents being ignorant of his actions.
Do the new MLR requirements and rules have any bearing on controling a TPA’s fees? Do those rules and regs do anything to govern or control cost of administration of OGB plans being passed to consumer/employee?
The problem SE, is that devil is in the details, and anytime you ask for details you get “in progress, can’t reveal the deliberative process.” Once services get privatized, you get “that information is now in the domain of a private company and is proprietary.” Government decision making and expenditures now lose transparency and accountability.
This huge transfer of taxpayer money into corporate pockets will haunt Louisiana for decades, as these corporate entities will continue to enrich themselves by donating to politicians who will have a vested interest in maintaining status quo. It would take a strong governor and a committed group of legislators to unravel what Jindal has “accomplished,” and I’m not hopeful that these fantasy politicians exist. Barring a huge crisis affecting people other than the destitute and powerless, there is no incentive to rollback these changes, as the powerful are just becoming richer and more powerful.
Civil servants never really have a vested interest in who receives a particular service or contract. Privatization undermines the disinterested (objective) nature of government decision making as it moves from financially “un-beholdened” government employees into the realm of political appointees and legislators. Welcome to the birth of the dystopian reality formerly known as Louisiana. Or, I should say, welcome to the 1890’s.
What began with outraged public school teachers in Lake Charles who filed Jindal and Kleckley recalll petitions, is now a state-wide organization.To date we have 5 recalls in progress, Cromer & Pearson in St. Tammany, Garofalo in St. Bernard and the first 2 crooks. We are organizing to remove all who have been paid to destroy government services and enrich themselves and their corporate bosses.
We are grass roots at its best, run by a group of very dedicated volunteers. We have formed the Louisiana Political Action Committee to raise funds for recalling the crooks and to contribute to those who will run against the recalled. Our first fundraiser is in Alexandria on Friday 7/27 at the Best Western Conference Center, 7-10 PM. Tom Aswell is our speaker. Tickets are $35 in advance $50 at the door. Please join us.
You can help in recalling Jindalmen/ women across the state by volunteering. Link to http://www.recallbobbyjindal.com to help rid our state of these locusts. There you can also purchase (very affordable) tickets for Friday’s event.
When will the recall effort get to other parts of the state? Time is running out. Who will we replace him with? Don’t want us to be like Wisconsin……
Did anyone else hear last night at 10:00 on WBRZ news that the CS Commission did not have to give approval to layoff the employees from OGB? If this is true, why did the Commission have to grant approval to layoff other employees from other agencies that were taken over by the mafia of privateers?
Funny you should mention Mafia. That is one of the reasons OGB was pulled from the open market and put under the DOA and brought in house years ago. politicians could not stay away from the cash. bribes to get the contracts. they even went so far as to create a statute not to allow the proceeds into the general fund. Feds were satisfied and OGB grew a surplus over the years. Best Agency in State Government. Piyush broke the code found a way to steal the golden goose. Now the townspeople are alarmed. Tom has done a great job of telling the OGB story in his posts. I hope more people will read them.
Reading posts is one thing, but when will the mainstream media start reporting the real story so that the rest of the state will wake up and smell the sewerage that has become our state legislature? I am so tired of hearing ignorant comments from uninformed people who get their info from the local news and think they know what is going on. If an election were held today, Jindal would get elected again. Most people continue to vote against their best interest, and along party lines, without connecting the dots.
I wonder, does Greenstein’s wife still work for Blue Cross? Hmm. She got the job back in 2011. All kinds of layers to this onion.
Wow, the plot thickens. See that? I wasn’t even aware of that particular connection – just a slew of [potential] others.
At tomorrows OGB Board meeting there will be lots of questions of the Administration but I’m sure Jindal’s staff will have a more pressing engagement. This is a BIG DEAL and it will likely get a page 7 bottom of the page two or three paragraphs if they cover it at all.
I thought BCBS was a fee-for-service contractor (medicaid/medicare) in Louisiana. And that wasn’t deemed nepotism (Greenstein family connections) in 2011?
Watch how fast BCBS burns through the $500M in administrative fees. In 2013 we will have a huge rate hike and the reason will be that the service is much more than their internal actuaries determined. The taxpayers will just have to take it on the chin in the name of privatization. American as apple pie.
BCBS never was able to raise rates on HMO. They worked on an emergenccy contract because of all the court action. They could hold off to get the whole enchilada. but the first year is low bid at any costs. 2014 when ACA or OBAMA care forces their hand is perfect cover for that 30% rate hike. just saying.
I was guessing BCBS annual budget for Info Tech alone was $500M. But that was just a guess.
http://recallbobbyjindal.com/_index.php
I strongly urge everyone to check out this site. A petition is circulating to remove jindal from office. Find a place to sign it or print your own petition sheets and collect signatures. September 1st is the deadline and 1 million signatures are needed!!!!