Cue Queen and crank up Another One Bites the Dust.
Charles Calvi and Patrick Powers are leaving the Office of Group Benefits (OGB) and Susan West, late of the Office of Risk Management has been named Interim CEO—the fourth person to head OGB in less than three years.
Meanwhile, that $540 million reserve fund balance OGB had on hand to pay benefits at the time of Gov. Bobby Jindal’s infamous raping of the agency now sit at $240 million and is dwindling at a rate of $20 million per month, no doubt the result of Jindal’s 7 percent premium reduction six months before the January 2013 takeover of OGB by Blue Cross Blue Shield (BCBS) of Louisiana.
But not to worry. In one of the administration’s now routine Friday press releases (so that the impact of the story is lost over the weekend when newspaper readership is down), Commissioner of Administration Kristy Nichols announced that (drum roll, please) Alvarez and Marsal (A&M) will be working with West in efforts to “continue the transformation and redesign of OGB.”
Bear in mind that OGB was one of those state agencies that was doing quite well in paying health care benefits to some 250,000 state employees, retirees and dependents. That included building up that half-billion dollar reserve fund while paying claims in a timely manner (average turnaround of three days) that kept both claimants and providers happy. But somehow, the administration deemed it in need of “transformation and redesign” and now health care providers are being asked to wait longer for payment of claims and BCBS is asking the state to waive the service level agreements and performance guarantees in place for Claims Timeliness and to not impose financial penalties for payments made later than 30 days during January and February.
http://theadvocate.com/home/8151593-125/state-insurance-claims-payments-delayed
But back to Alvarez and Marsal. That’s the company Jindal recently hired for $4.2 million to find presumed savings of $500 million in state expenditures by April—except it turns out there was nothing in the contract alluding to any $500 million savings; it was in the cover letter but not the contract. After being caught with her knickers down, Nichols, who initially assured legislators that the contract did indeed call for the $500 million savings, has said the contract will be amended to contain the language. Good for her. Oh, wait. It turns out that amendment also added another $800,000 to the contract, boosting it to $5 million. Yipee.
Alvarez and Marsal, you may remember from a previous LouisianaVoice post, was the firm that advised the state to fire 7,500 public school teachers in New Orleans following Hurricane Katrina in 2005. https://louisianavoice.com/2014/01/17/firms-advice-to-fire-orleans-teachers-after-katrina-may-cost-taxpayers-1-5b-hired-for-4m-by-jindal-to-save-state-money/
When those teachers were not called back and instead were replaced by new teachers, they sued and won and now the state is on the hook for about $1.5 billion, give or take a couple of dollars.
So now this firm is awarded a $4.2 million contract to do what the brilliant minds of all those Jindal appointees apparently could not do. Alvarez and Marsal is going to send its suits to Baton Rouge to figure out what the Legislative Fiscal Office cannot. If the fiasco in New Orleans is indicative of its work, will the last one out of Baton Rouge please turn out the lights? On second thought, never mind; Entergy will have already disconnected the meter.
On April 15, 2011, Tommy Teague, the man responsible for OGB’s accumulating that $500 million reserve fund and who, by all accounts, ran a highly efficient agency known for its rapid turnaround on claims payments and satisfied claimants, was summarily fired when he did not jump on board the Jindal privatization train. Within six weeks, his replacement, Scott Kipper resigned in frustration or disgust—or both—and was replaced with Calvi. So now OGB CEO Charles Calvi and his $170,000 salary and Chief Operating Officer Patrick Powers ($107,000) are leaving voluntarily, headed to Metairie to work for Teague and the Louisiana Health Care Exchange.
West, the fourth person to head OGB in three years, previously as ORM’s administrator for loss prevention, underwriting and statistics where she was responsible for policy development, risk financing and premium development and allocation. Before that, she served as a claims manager for multiple lines of insurance provided by ORM, the agency that insures all state agencies.
Oddly enough, in her announcement of West as the Interim CEO, Nichols never once alluded to the departure of Calvi or Powers. LouisianaVoice learned of their leaving through other sources. Calvi’s leaving, whether voluntary or involuntary, was not difficult to figure out after West was announced as his replacement, albeit without benefit of an accompanying announcement of his exodus. http://www.doa.louisiana.gov/doa/PressReleases/New_OGB_Interim_CEO_Susan_West.htm
It was certainly a ham-handed way of announcing West’s appointment with no explanation of Calvi or Power’s leaving. Nothing would surprise us though, given the manner in which this administration tends to handle such matters with all the subtlety of Larry, Moe and Curly trying to administer a cold buttermilk enema to a feral cat.
Louisiana Voice 
Representative Katrina R. Jackson tried to warn the Legislature, but they disregarded her counsel. Each and every one of the Legislators owe her an apology and to acknowledge that she was right in her prognosis as to Jindal & Co. total ineptness.
I wonder why Calvi and Powers were “Teagued?” Were they not squandering the State’s Assets fast enough?
Someone, sooner or later, is going to have to do a “tell-all” book on this train wreck of an administration. I hope it’s sooner rather than later.
Tom, when OGB was turned over to BCBS it was not very hard to figure out that the $509 million surplus would melt faster then a snow ball on a New Orleans July afternoon.
So as the wheels of Jindal keep spinning out of control, where this State will be once he is gone still remains to be known.
Then to add insult to injury if Mr. Vitter happens to get elected, I have to agree with Mary Landrieu:
It will be like Jindal on steroids.
Thanks Tom, for another great article .
This is just pitiful! OGB was the crown jewel of state government! I cannot believe the legislators are falling for Jindal’s antics!
There is an article in the Advocate this morning that lists some of the “ideas” for saving money by Alvarez and Marsal, however, there is no explanation of how each of these “ideas” will save money. For example, one idea was “Holding owners and operators of pediatric day care facilities accountable for management, $150,000”. You mean to tell me these owners and operators have not been held accountable for management for the past 6 years! The very fact the Jindal Administration and Alvarez and Marsal agreed to have that “idea” published in the media is proof enough alone of how inept these clowns really are! The other “ideas” listed are just as vague and simplistic. I hope our legislators are intelligent and courageous enough to call the Jindal Administration out on why the current DHH Leadership, however idiotic, hadn’t come up with these ideas, however idiotic, prior to the implementation of the Alvarez and Marsal Contract! I won’t be holding my breath.
Your last sentence has me speechless. Perfect!
At this point, there is nothing that this administration has done or will do in the future that will surprise me.
What does make me scratch my head is how the hell they are getting away with it.
Please, someone explain this to me!
I feel it is simply the fact that people are so caught up in their own distractions that they just don’t take the time to see what these people are doing to them. They would rather watch some mindless image on their flat screens like Dancing with the Stars than be bothered with having to think.
All we can do here is try and get their attention.
Otherwise, brace yourself for Mr. Vitter.
Tom I have lived here all my 58 years, and to be honest with you, I truly don’t know if I could learn to live anywhere else. I will admit that I voted for Jindal both times; I was completely blindsided. I would never have dreamed in a thousand years Jindal would do what he has done.
You can bet your bottom dollar Vitter won’t get my vote and I will talk to as many people that will lend an ear to think long and hard before casting a vote for Vitter.
If Vitter does become the next governor of Louisiana I just might have to learn how to live in another State.
Thanks for your hard work, Tom.
It’s also a facet of this pathetic administration that the so called press, especially up here in NW La doesn’t print ANYTHING about what is happening! I don’t even bother to read any of them any more and those that do read them think they really know what is happening. If I mention something I read here or on a couple of other great blogs, people argue with me because if they didn’t see it in the paper they think I must be making it up!
This state of the State is now a reflection of the weakness of those Legislators who have forgotten they were elected to protect the people and their resources from threats from without and withIN. The greed, weakness, and timidity of so many “conservatives” have certainly revealed their walk does not match their talk. Or maybe it does, maybe the talk was a lie.
How does Jindal get away with all of this? I’ll tell you. He sends minions up to Legislative Committee hearings to debate for days on end whether or not the free breakfasts at schools should give the children Cheerios or Shredded Wheat. Our bumbling Legislators fall for this tactic and while they are discussing this inane topic, Jindal is selling the entire State Health Care System.
In summary, our Legislators are just not very bright. At best they are not focused.
I’ve known Susan West for some 15-plus years and I hope she will be strong enough to fight for the right of the people, not the Jindalites or Kristy Nichols who is no more than a delivery person for the Governor. Nichols knows no right or wrong and she will answer one day to a higher power than Jindal. Neither she nor Jindal care for the people of Louisiana as they continue the insane rules/breaking of laws and this will be their legacy. I pray that Ms. West will continue in her faithful walk in life and be strong for she will need to be because she will see the good, the bad and the ugly and be a talking head for the OGB and the civil servants of this state. God’s Rules, Susan, you will need to always ask Him and not be afraid to follow the right path!!!
Tom, this is what happens when you take the most efficient state agency and make it more efficient! I SERVED on the Board of Trustees for 4 years until Gov. Foster made it an advisory board (served 6 years) and at its worst it never was this bad. I wish we could hold someone fiduciarily responsible.