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Archive for the ‘Contract, Contracts’ Category

The more we look at that contract between the Louisiana Department of Economic Development (DED) and LR3 Consulting, the more unanswered questions arise.

LR3, you may remember from our Feb. 5 post, is run by Lionel Rainey, III, who also happens to be the PR spokesperson retained by those who wish to form their own city of the St. George area of East Baton Rouge Parish, separate and apart from the city of Baton Rouge.

If one didn’t know better (and we truly did not initially), Rainey could easily be taken as the leader of the movement since local television news reports on the pullout efforts invariably feature him reciting the proponents’ talking points. Turns out he’s just a hired gun.

(Proponents, by the way, don’t like the term pullout because, they say, the St. George area is not within the Baton Rouge city corporate limits in the first place, so technically, it is not a pullout or secession; it’s simply a movement to incorporate the currently unincorporated area as a city of its very own.)

Before LR3, there was 3 Lions Consulting which was awarded a three-year contract (July 1, 2012, through June 30, 2015) by DED to “establish a database of potential trainees for continued pre-hire training using a customized assessment instrument to determine skills proficiencies based on individual company requirements” for DED’s Louisiana FastStart program (LFS) at a contract cost of $699,999.

In other words, Contract No. 713974 called for 3 Lions to compile a data base of potential employees for Louisiana plants and businesses—the same thing that the Louisiana Workforce Commission had been doing and which it still does.

But barely three months into the contract and after being paid just under $31,000, Jeff Lynn, LFS executive director, sent a one-paragraph letter of termination to 3 Lions partner Stanley Levy, III. “In accordance with the terms of our contract…Louisiana FastStart hereby provides you with the required five (5) day written notice to terminate our agreement, effective Oct. 19, 2012…”

The reason given for the termination was a two-word message scribbled on DED’s performance evaluation: “Ownership change.”

Levy apparently had parted company with his partner, precipitating the contract cancellation. His 3 Lions partner? Lionel Rainey, III, who had incorporated his new business, LR3, only a month before. LR3 was subsequently awarded an even bigger three-year contract ($717,204) on Oct. 20, 2012, just one day following the termination date of the 3 Lions contract.

The LR3 contract, to run from Oct. 20, 2012 through Sept. 30, 2015, again calls for the “development, establishment and/or delivery of a database of potential trainees for continued pre-hire training using a customized assessment instrument to determine skills proficiencies based on individual company requirements.”

Through January 13 of this year, DED had paid LR3 $186,880.

But the LR3 contract, like that of 3 Lions before it, is broken into three yearly maximums of $217,204 the first year and $249,999 in each of the second and third years.

For 3 Lions, the payment maximums were $169,999 the first year and $249,999 in each of the second and third years.

This was done, according to DED Communications Director Gary Perilloux, so as to avoid the necessity of issuing a request for proposals (RFP) and thus avoid “competitive bidding or competitive negotiation.”

The issuing of service contracts is permissible so long as the “total contract amount is less than $250,000 per twelve-month period,” according to Title 39, Section 1494.1 of the Louisiana Revised Statutes which then goes on to say, “Service requirements shall not be artificially divided so as to exempt contracts from the request for proposal process.”

Section 1499 of the same title says, “The head of the using agency or the agency procurement officer shall negotiate with the highest qualified persons for all contracts for professional, personal, or those consulting services for less than fifty thousand dollars, or those social services qualifying under R.S. 39:1494.1(A) at compensation which the head of the using agency determines in writing to be fair and reasonable to the state (emphasis DED’s). In making this determination, the head of the using agency shall take into account, in the following order of importance, the professional or technical competence of offerers, the technical merits of offers, and the compensation for which the services are to be rendered, including fee. Negotiation of consulting services for $50,000 or more or social services not qualifying under R.S. 39:1494.1(A) shall be conducted in accordance with Part II, Subpart B hereof. [RFP]

To justify the contract, an undated letter was sent to Sandra Gillen, since retired as the Director of the Office of Contractual Review, by DED contracts reviewer Chris Stewart which certified that “The services (being contracted for) are not available as a product or a prior or existing professional, personal, consulting, or social services contract.”

But wait. Not so fast.

LouisianaVoice has found yet a third contract with Covalent, LLC, for an even larger amount–$749,997—awarded more than a month after the LR3 contract.

That contract, divided into three equal maximum payments of, wait for it… $249,999, calls for the “development, establishment, and/or delivery of a database of potential trainees for continued pre-hire training using a customized assessment instrument to determine skills proficiencies based on individual company requirements.”

In other words, Covalent’s contract calls for it to perform services which are identical to those of first 3 Lions and then of LR3.

And yes, there is that same letter from Chris Steward to Gillen’s successor, Pamela Rice which certifies that “The services (being contracted for) are not available as a product or a prior or existing professional, personal, consulting, or social services contract.”

But…but…what about the LR3 contract?

Good question. It looks as though someone misrepresented the facts with that certification. DED now has two firms performing services that appear to be duplications of work being done by LWC—and neither of the contracts which combine for almost $1.5 million, was awarded on a competitive bid basis.

Apparently, Covalent is performing some work, though not nearly as much as LR3. From Jan. 3, 2013 through May 30, 2013, Covalent has been paid a grand sum of $35,465—and nothing since May 30. That’s a far cry from the $249,999 allowed under its contract.

All of which raises the obvious question: Why do these firms require such massive contracts and why did DED find it necessary to break them up in apparent violation of state statutes just so it could make the contract awards to whom it wanted?

And why did DED desire the services of Rainey over Levy to the point of cancelling the 3 Lions contract so it could award a second no-bid contract to Rainey’s new company? And why, only six weeks after awarding Rainey a $717,000 contract did DED contract with Covalent for $749,997 to perform the same services as Rainey?

What were the backgrounds of Levy and Rainey? And why did they terminate their partnership, especially when it cost Levy a nice, fat state contract?

For openers, LouisianaVoice found records that show LR3 was on the payroll of State Rep. John Schroder (R-Covington) since November of 2012 and has received $16,250 in 11 monthly payments of $1,250, one payment of $1,875 and another of $625. All payments were made at least a year after the 2011 elections.

3 Lions, before the dissolution, also appears have spread its services around. The firm received $5,600 from John Conroy in 2012 before Conroy dropped out of the Baton Rouge mayor’s race; $8,000 from State Treasurer John Kennedy, $34,000 from Board of Elementary and Secondary Education President Chas Roemer during Roemer’s campaign for re-election in 2011, and $52,600 from Secretary of State Tom Schedler during his 2011 campaign for re-election.

While Rainey and LR3 got the $717,000 contract with DED and a $20,000 contract with the Secretary of State’s office, Levy, with his new company, Fuse Media, has only managed a modest $49,825 post-LR3 contract to “develop a strategic communications plan, video series and animated PowerPoint slides for the Governor’s Office of Coastal Restoration.”

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

And now there is this:

AIDS patients in Obamacare limbo as insurers reject checks.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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It will be interesting to see if Alvarez and Marsal (A&M), with its $5 million contract, will find any significant savings in its whirlwind four-month tour of the labyrinth that is Louisiana state government.

We’ve been poking around the Louisiana Department of Economic Development (LED) and we’ve come up with a number of contracts—83 to be precise—which look as though they could be a duplication of some services provided by the Louisiana Workforce Commission. The 83 contracts, ranging from $8,000 to $717,000, were issued to 63 individuals and 20 companies and totaled more than $8.5 million. Before you go searching for your calculators, we’ll save you the trouble: it works out to about $102,600 per contract.

Of the 83 contracts, 63 at a combined cost of $6.3 million were issued to “provide assistance as requested in connection with LED’s FastStart program, including but not limited to the development and/or delivery of materials for training classes for the LA. FastStart Program.” The others were for writing, editing, graphic design, art work, video production, development of a PowerPoint production and “to establish a database of potential trainees for continued pre-hire training using a customized assessment instrument to determine skills proficiencies based on individual company requirements…for the Louisiana FastStart (LFS) Program as may be requested by LED.” (Emphasis ours.)

It is one contract in particular that got our attention. But first, a little background:

Louisiana FastStart is a single-source workforce solutions provider that works at no cost with businesses to anticipate and address workforce needs in the startup or expansion process.

http://wwwprd.doa.louisiana.gov/laservices/publicpages/ServiceDetail.cfm?service_id=3467

The FastStart process includes project evaluation, workforce solutions, material development, pre-employment identification, course (classes) delivery, evaluation and feedback, customized training, core skills training, warehouse and distribution, research and development.

The thing that makes us believe A&M could obliterate many, if not all, of these contracts is the fact that the Louisiana Workforce Commission (LWC) appears to provide many of these very same services. http://www.laworks.net/Downloads/employment/employerhandbook.pdf

LWC aids employers in finding any type of employee by registering professional, semi-professional, skilled and unskilled applicants and even provides access to its Business and Career Solutions Center for businesses to conduct job interviews. The center employs the latest computer technology to select qualified applicants for job screening and referral.

LWC also offers several Business and Career Solutions centers throughout the state which provide online job listings, education, skills and interest assessments, job counseling and placement assistance, computer access, basic skills upgrades.

http://www.laworks.net/WorkforceDev/WFD_MainMenu.asp

LWC, in fact, has more than $130 million in contracts with individuals, companies, community action agencies and local governments for the purpose of training applicants and finding them jobs.

But LED’s $717,000 contract no. 718453 with a company called LR3 would appear to warrant closer examination.

The president of LR3 is one Lionel Rainey, III, who people in Baton Rouge will recognize as the public face of a concerted effort to break away from Baton Rouge and to create a separate city of St. George in East Baton Rouge Parish.

That effort has sharply divided the residents of unincorporated South Baton Rouge with opponents wanting to remain part of the greater community of Baton Rouge. For the proponents, the motivation would seem to be education or more specifically, charter schools.

State Rep. Bodi White (R-Central) is a major supporter of the pullout even though Central is on the northern edge of East Baton Rouge Parish.

More than a year ago and before the St. George pullout movement was formalized, White called on businesses in South Baton Rouge in an effort to drum up financial support for a charter school in that part of the parish.

Lately, as momentum on both sides has picked up, local television has begun covering the issue on almost a daily basis. Each time a TV news story airs, Rainey invariably is the spokesperson for the proponents.

But what about that contract with LED?

Well, first of all, it was awarded on a no-bid basis. In other words, LED never issued a request for proposals (RFP) nor did LR3 ever submit a proposal despite having no obvious qualifications for creating an Internet database system.

When asked about the no-bid contract, LED responded by pointing out that contracts for social services may be awarded “without the necessity of competitive bidding or competitive negotiation,” provided the director of the Office of Contractual Review determines that certain conditions apply, one of which is that the total contract amount is less than $250,000 per 12-month period.

At the same time, LED’s response acknowledged that service requirements “shall not be artificially divided so as to exempt contracts from the (RFP) process.”

And that’s where things get a bit dicey.

LATRAC, the state database for contracts, lists the amount of Contract no. 718453 as $717,202 over three years (Oct. 20, 2012 through Sept. 30, 2015) while the LED contract document breaks the contract into three amounts: $217,204 the first year and $249,999 in the second and third years.

Contract Number 718453
Contract Title LR3 CONSULTING, LLC
Contract Description DEVELOPMENT, ESTABLISHMENT AND/OR DELIV- ERY OF A DATABASE   OF POTENTIAL TRAINEES FOR CONTINUED PRE-HIRE TRAINING USING A CUSTOMIZED   ASSESSMENT INSTRUMENT TO DE- TERMINE SKILLS PROFICIENCIES BASED ON INDIVIDUAL   COMPANY REQUIREMENTS (ED6); 100% STATUTORY DEDICATION – LED FUNDS
Agency DED – OFFICE OF THE SECRETARY
Amount $717,202.00
Begin Date 10/20/2012
End Date 9/30/2015
Approval Date 12/3/2012
Document Type OTHER CONTRACT – CFMS
Status ENCUMBRANCE SUCCESSFUL
Contractor LR3 CONSULTING LLC
Contractor City and State BATON ROUGE , LA

Not only did LED appear to be circumventing the RFP procedure by breaking the contract into three sections, but there appear to also be questions about another state regulation that says agency heads shall take into account, in the following order, “the professional or technical competence of offers, the technical merits of offers, and the compensation for which services are to be rendered, including fee.”

First, there appears to have been no “offer” from LR3, which only incorporated as a business on Sept. 19, 2012—barely a month before its $717,000 contract with LED took effect on Oct. 20, 2012.

PTDC1281

So, to recap, we have a company that is barely a month old landing a $717,000 contract with a state agency without benefit of competitive bidding, or without a formal proposal from a contracting firm that provided no evidence of its qualifications to perform work that appears to be already available through another state agency, LWC.

PTDC1248

And then there’s LR3’s billing address.

Invoices submitted to LED by LR3 give its billing address as 2133 Silverside Drive, Suite A, in Baton Rouge.

PTDC1291

Rainey is also listed as president of Vote Guards Dot Org., of the same address.

But there also are three other businesses of 2133 Silverside Drive, Suite A, Baton Rouge, according to the Louisiana Secretary of State’s corporate web page: Phoenix Consulting Group, BP Oil Claim Solutions, LLC, and EFL Angels Foundation.

All three list Meredith Eicher as a corporate officer.

Meredith Eicher, along with her sister Ashley, was sentenced to five months in prison in 1990 after pleading guilty to two counts of aiding and abetting mail fraud in connection with the collapse of Champion Insurance Co.

She also was ordered to serve two years’ probation after her release and fined $10,000.

Champion, the third largest insurer in the state, collapsed in June of 1989, leaving $150 million in unpaid claims. Her father, John Eicher, was sentenced to 46 months in prison in connection with the collapse which also implicated then State Insurance Commissioner Doug Green, who received $2.7 million in bribes from the Eichers. He received a 25-year federal sentence.

All in all, when one takes the St. George pullout effort that is supported by a political figure at the opposite end of East Baton Rouge Parish and led by an individual whose newly founded company, housed in the same office as four other companies—three of which have as a corporate officer someone who participated in the defrauding of $150 million in insurance claims 25 years ago—lands a $717,000 no-bid contract with the state, one has to ask….

What could possibly go wrong?

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What do Louisiana and New Jersey have in common besides having governors who yearn to be president and who share the character traits of a bully who will seek vengeance against perceived opponents and throw subordinates under the bus?

No, it’s not that the governors are the back-to-back chairmen of the Republican Governors Association or that neither one looks very good in a suit, though those would be good guesses.

Try what the Wall Street Journal calls cronyism and contract abuse.

Accounts of Gov. Bobby Jindal’s questionable contracts and nefarious deals are fast approaching the status of legendary, from the giveaway of LSU hospitals, to the CNSI debacle; from Magellan to Alvarez and Marsal; from the SAS Institute contract by the director of the Office of Workers Compensation three weeks before his resignation and the subsequent hiring of that same director by SAS to several contracts with IT firms that have experienced major problems in other states and in some cases, had those contracts cancelled after repeated delays and cost overruns. There are others but the list quickly becomes tedious.

And now both MSNBC and the Wall Street Journal have begun focusing attention on a Louisiana firm with more than $200 million in contracts with both the Chris Christie and Jindal administrations for federally-funded relief to hurricane victims.

Hammerman & Gainer, Inc., or HGI, of Lutcher, was awarded a $68 million contract in May of 2013 to oversee two programs distributing $780 million in federal money to Sandy victims. That contract was cancelled only six months later, on Dec. 6, 2013, because of mounting complaints about delays in processing claims. http://www.state.nj.us/treasury/purchase/noa/contracts/g8043_13-r-23132.shtml

New Jersey homeowners say they have been unable to get answers, paperwork has been misplaced and HGI employees, most of whom are temporary employees, could not be reached by phone and that the company’s recovery centers change rules midstream and that no reconstruction program grants to thousands of applicants already approved have yet been awarded.  http://www.njdems.org/cronyism_exposed_in_christie_contracts

HGI also just happens to hold a $60 million contract with the Louisiana Office of Community Development’s Disaster Recovery Unit to administer the state’s Road Home Program. That contract began on March 20, 2012, and ends on March 19, 2015. Prior to that contract, HGI had a similar contract for $83.3 million which ran from March 20, 2009 to March 19, 2012. The $83.3 million contract replaced a $912 million contract with ICF Emergency Management Services of Baton Rouge.

One must wonder just how long that Road Home is, how long will it take to disperse federal funds to begin recovery from a hurricane that occurred more than eight years ago, in 2005. Or will the program continue to languish so that firms contracted to oversee the federal grant money can extract as much money for themselves as possible?

In New Jersey, HGI hired Glenn Paulsen, former chief of the Burlington County Republicans, as its legal counsel when it submitted its bid to run the two Sandy relief programs. Paulsen’s law firm Capehart Scatchard, made a $25,000 contribution to the Republican Governors Association which Christie now heads.

In Louisiana HGI eschewed the middle man and contributed $15,000 to Jindal in three equal contributions in 2007, 2008 and 2009. The company also gave $7,500 to Robert Wooley ($2,500 in 2003 and $5,000 in 2002), $5,000 to the Republican Party of Louisiana, $5,000 in 2011, to New Orleans mayor Ray Nagin in March of 2006, only months after Hurricane Katrina, and $7,500 to his successor Mitch Landrieu in equal contributions of $2,500 in 2010, 2011 and 2012. In addition, HGI President Larry Oney gave $5,000 to Jindal’s campaign in 2008.

Two New Jersey Democratic congressmen on Wednesday called upon the U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan to investigate New Jersey’s dealing with HGI. In a Jan. 29 letter to Donovan, Reps. Bill Pascrell, Jr. and Frank Pallone said, “We respectfully request that your department investigate the circumstances surrounding the termination of this contract and appoint an official within the Department of Housing and Urban Development to independently monitor New Jersey’s usage of (Community Development Block Grant Disaster Recovery) funds.”

Their letter said there had been a “lack of transparency” with the selection criteria and distribution process of CDBG-DR funded programs administered by HGI.

http://www.ahherald.com/newsbrief/monmouth-news/16943-pascrell,-pallone-call-for-federal-investigation-into-handling-of-sandy-recovery-funds

In Louisiana, no one has requested a federal investigation…yet, but the Legislative Auditor’s review of 24 loans to property owners through the state’s Small Rental Property Program has indicated that the state could be on the hook for at least $116 million and possibly as much as $600 million in improperly received or misspent disaster aid following Katrina and Rita. http://app1.lla.state.la.us/PublicReports.nsf/830C07388A1CA59886257B49006AE5FE/$FILE/00031C15.pdf

So perhaps John McCain was correct in hyping a ticket of Christie-Jindal to head the GOP presidential ticket in 2016. The way each has managed federal hurricane recovery funds makes them perfect for the Republican Party.

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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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