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Archive for the ‘Contract, Contracts’ Category

Notable Quotables (in their own words)

Posted in Contract, Contracts, Ethics, Governor's Office, House, Senate, Legislature, Legislators, Notable Quotables, Politicians, Public Records, State Agencies, Transparency on July 10, 2013| 2 Comments »

“I believe that all elected officials should—as I have always endeavored to do—act with the interests of our citizens in mind.”

—State Rep. Chris Broadwater (R-Hammond), vice chairman of the House Labor and Industrial Relations Committee and former director of the Office of Workers’ Compensation, defending his work as attorney for insurance companies seeking to deny or reduce workers’ compensation claims and his admitted practice of routinely consulting with his successor OWC Director Wes Hataway on pending matters before OWC that directly affect his clients.

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Jindal’s veto of developmentally disabled funds is part of multi-state trend to slash benefits for Medicaid recipients

Posted in ALEC, American Legislative Exchange Council, Contract, Contracts, Governor's Office, Health Care, Layoffs, Privatization, RFP, Request for Proposals, State Agencies, Transparency on July 1, 2013| 29 Comments »

If you think Gov. Bobby Jindal’s veto of $4 million to provide in-home services to the developmentally disabled was merely an aberration, an inadvertent blip on the budgetary radar, you may wish to reassess your decision to give the governor a pass on this issue.

Jindal, of course, offered his own spin in his pushback against criticism he has received from proponents of the measure but he simply can’t get around the fact that cutbacks of services to the poor appear to be the norm in several states these days. Surely he has not forgotten his closure of Southeast Louisiana Hospital in Mandeville less than a year ago that put mental health treatment by state facilities out of reach for many in southeast Louisiana.

No one denies the current budgetary shortfalls—brought about in large part by Jindal’s stubborn refusal to seek new means of tax revenue except through the New Orleans hotel fee increase (which is not a “tax,” in the land of Jindal-speak, but an “enforceable obligation,”) and college tuition increases (“fees,” not taxes). But were it not for the more-than-generous tax incentives doled out in the form of corporate welfare, er, industrial incentives the state’s coffers would be $5 billion richer each year.

It’s not like he couldn’t have trimmed a couple of million or so from the $1.285 billion appropriation for his Office of Homeland Security and Emergency Preparedness. Of course, to suggest there might be the remote possibility of waste in a budget of nearly $1.3 billion for a pet agency would be blasphemy.

The Louisiana State Racing Commission got its full share of funding—$12.2 million. Surely, there’s no waste there. Likewise, the $82.7 million appropriation for the Louisiana Stadium and Exposition District administered by a commission made up 100 percent of generous Jindal campaign donors.

Then there’s the Department of Economic Development and the Office of Business Development which combine to receive the full complement of their $36.6 million appropriation in order to ensure the uninterrupted flow of those $5 billion in tax incentives, rebates and exemptions to attract all those new jobs that are supposed to retain current residents and bring in new ones—even though the state’s population has shrunk to the extent that we now have only six congressmen instead of the eight we had a few years ago.

And we’re not even going to go into detail about all those washed up ex-legislators hired by the various agencies at six-figure salaries—or the glut of administrative personnel with limited experience with which John White has loaded down his Department of Education, also at six-figure salaries. Or White’s slipshod management of the disastrous voucher program that allowed New Living Word School in Ruston to rip off DOE to the tune of nearly $400,000—money that will never be recovered, by the way.

Sorry, folks, the money’s not there for the developmentally disabled. You just should have had the good sense to be born developmentally abled or better yet, rich.

And as we said in the first paragraph, that veto was no accident. It was planned from the get-go as will future cuts of medical benefits to the poor.

Why do you think Carol Steckel was brought here in the first place?

Steckel was Alabama’s Medicaid Commissioner from 1988-1992 and again from December 2003 until her move to Louisiana in November of 2010.

While at Alabama she issued a ruling that poor amputees in that state didn’t really need artificial limbs. In January of 2008, she submitted the state’s Medicaid budget that cut programs that pay for prosthetics and orthotics (used to provide support and alignment to prevent or correct deformities) because, in her words, the programs were optional, not mandatory.

She also awarded a $3.7 million contract to Affiliated Computer Services (ACS) in 2007 even though that company’s bid was $500,000 more than the next bid. ACS had hired Alabama Gov. Bob Riley’s former chief of staff Toby Roth, which probably greased the skids somewhat.

Sound familiar? ACS, which is now part of Xerox, was awarded four state contracts totaling $45.55 million and ACS contributed $10,000 to Jindal political campaigns. Jan Cassidy, sister-in-law to Congressman (U.S. Senator wannabe) Bill Cassidy, previously worked for ACS and then for Xerox as Vice President, State of Louisiana Client Executive. Where is Ms. Cassidy today? She heads the State of Louisiana Division of Administration’s Procurement and Technology Section at a salary of $150,000. Toby Roth in reverse?

Steckel was imported from Alabama and given the title of Chief of the Department of Health and Hospital’s (DHH) Center for Health Care Innovation and Technology. She created quite a stir when she failed at first but eventually succeeded at terminating 69 information technology positions at DHH and giving the contract to the University of New Orleans to run. The 69 employees moved over to UNO’s payroll, saving the state zero, and UNO began collecting an administrative fee of 15 percent to run the IT operations for DHH. Thus, instead of a savings, the state is now paying an additional 15 percent for privatization.

Steckel has moved on again, this time to work her magic as Medicaid Director for North Carolina.

Now let’s move about 400 miles to the west—to Austin—and examine what occurred when similar legislation was passed in Texas a decade ago.

Dave Mann (not to be confused with the premier political analyst of our era, Bob Mann), then a reporter for the Texas Observer, covered the story in June of 2003 and predicted a train wreck would result from the legislation pushed through by Republican Rep. Arlene Wohlgemuth. Mann, it turns out, was dead-on in his predictions, which could explain in part why he is that publication’s editor today.

HB 2292 amounted to a “massive rewrite of the state’s social services safety net,” Mann wrote by squeezing 11 existing state agencies into four, all under the control of a powerful governor-appointed commissioner. It also cut many relatively inexpensive healthcare services for the poor, wiping out 1,000 state jobs in the process by privatizing several core state functions (again, sound familiar?)

The bill cut services under the Children’s Health Insurance Program and threw up bureaucratic barriers that purged an estimated 160,000 kids from its rolls. It abolished an entire section of Medicaid that offered temporary aid to families who were unable to pay high medical bills because of illness or accident—knocking an additional 10,000 people month out of medical coverage. It also put the squeeze on nursing home patients by reducing their “personal needs” allowances by 25 percent—from $60 per month to $45 (money nursing home residents spent on such things as toothpaste, shampoo, and shoes).

Proponents of the bill crowed that it would eliminate more than 3,000 state employees and hand over several core functions to large corporations, many of whom were major campaign contributors to key Texas politicians.

Among those outsourced functions were four privately run call centers with operators charged with making the determination of which families would be eligible for state programs like Medicaid, CHIP, Supplemental Security Income, welfare and food stamps.

Would anyone care to guess which company tried desperate to jockey itself into position of grabbing a call center contract? None other than our old friend, ACS, which was already running Medicaid programs in 13 states, including Texas.

ACS ended up not getting the call center contract, but if it had, it would have created the mother of conflicts of interest because by virtue of running the Texas Medicaid program, it was charged with keeping administrative costs down. Thus, the fewer Medicaid cases on the books, the lower the costs and the more money ACS would have stood to make. Thus, had it run the call center in the dual role as guardian of the program, it would have had a financial incentive to approve as few people as possible for Medicaid benefits.

Mann, contacted Monday, said though ACS did not get the call center contract, the operation nonetheless “fell apart within months.”

He said the error rates skyrocketed “because experienced state employees who knew the system were gone” and the contractors knew precious little about the system. “The enrollment process was messed up from the start,” he said, and the state was handed a substantial fine by the federal government.

He said Texas had to try and rehire all the former state employees who had been doing the job before. “They had to bring them back in and have them salvage the system,” he said.

Now, if you happen to wonder how four states—Alabama, Louisiana, Texas, and with Carol Steckel now on the scene, most probably North Carolina—could each stumble into the same scenario with Medicaid reforms and privatization of support staff, rest assured it was not a coincidence.

Efforts in Texas, Louisiana and Alabama (and presumably North Carolina) to slash health care benefits under the states’ Medicaid programs come to us courtesy of our old friend, the American Legislative Exchange Council (ALEC).

Though we have not visited ALEC for some time, the organization of some 2000 state legislators and scores of corporate underwriter-sponsors has never been very far from the action.

Among the major targets of ALEC are state health, pharmaceutical and safety net programs, including:

• Opposing health insurance reforms with state constitutional amendments;

• Opposing of efforts to advance public health care;

• Eliminating mandated benefits intended to ensure minimal care for American workers;

• Supporting Medicare privatization;

• Creating barriers to requiring important health benefits;

• Privatizing child support enforcement services.

ALEC’s number-one priority has been to encourage its members (legislators) to introduce bills that would undercut health care reform by prohibiting the Affordable Health Care Act’s insurance mandate.

Led by PhRMA, Johnson & Johnson, Bayer and GlaxoSmithKlein, ALEC’s model bill, the “Freedom of Choice in Health Care Act,” has been introduced in 44 states. Utilizing ideas and information from such groups as the Heritage Foundation, the National Center for Policy Analysis, the Cato Institute, the Goldwater Institute, the James Madison Institute, and the National Federation of Independent Business, ALEC even released a “State Legislators Guild to Repealing ObamaCare” in which a variety of model legislation, including bills to partially privatize Medicaid and SCHIP, is discussed.

Pardon our skepticism, but after the disasters of the Office of Risk Management privatization and the Department of Education voucher fiasco, we can’t help being a bit leery of these quick-fix schemes. The sweetheart CNSI contract with DHH has already proved to be a major $200 million scandal—and that may well be only the beginning.

Up next is an ambitious program to privatize the IT operations of 20 agencies under the Executive Branch. That privatization could mean the loss of some 1100 more state jobs and their duties turned over to a private firm with no grasp of how things are done. That sad scenario has already played out in other states and invariably resulted in cost overruns and repeated failure. There is no reason to expect a better outcome this time.

It was Albert Einstein, after all, who defined insanity as doing the same thing over and over and expecting different results.

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Cart ahead of the horse? CMS letter to Sen. Ben Nevers continues to leave Jindal hospital plan approval up in air

Posted in Contract, Contracts, Governor's Office, Health Care, House, Senate, Layoffs, Legislature, Legislators, Politicians, Privatization, Revenue, Transparency on June 26, 2013| 6 Comments »

A week after the Dallas office of the Center for Medicare and Medicaid Services (CMS) confirmed to LouisianaVoice that the state still had not answered questions about the proposed privatization of state hospitals, the Washington, D.C. office has weighed in with similar concerns in a letter to two state senators.

On Monday it was announced that Health facilities in Houma, Lafayette, Lake Charles and New Orleans had been turned over to private operators as part of Gov. Bobby Jindal’s drive to privatize the university-run hospitals and clinics.

A three-page letter from Cindy Mann, Director of the Center for Medicaid and CHIP Services (CMCS), to State Sen. Ben Nevers (D-Bogalusa) addressed seven questions posed by Nevers and State Sen. Karen Carter Peterson (D-New Orleans) and the answers were no more encouraging to the Jindal administration than those of the Dallas office on June 12.

“In your letter, you raise questions concerning plans by the state to enter into public-private partnerships with Louisiana State University (LSU) and University Medical Center in Lafayette and LSU and Louisiana Children’s Medical Center, and questions related to the Affordable Care Act,” Mann wrote in her June 19 letter to Nevers.

The entire privatization deal would appear to revolve around the first question posed by Nevers: “Will CMS approve the large up-front lease payment arrangements as proposed in the attached public-private partnership lease agreements in Louisiana?”

“The Centers for (CMS) has concerns over the large up-front lease payments described in the Louisiana public-private partnership agreements,” Mann wrote.

A spokesperson for Mann’s office said nothing had changed since the June 19 letter.

“However, at this time, the state has not submitted state plan amendments (SPA) proposing to fund Medicaid payments through the agreements and CMS cannot offer formal determination as to whether the arrangements would conflict with the requirements described in (the Social Security Act,” Mann said. “Once the state submits the SPAs, CMS will request necessary supporting documentation and explanations from the state to demonstrate compliance with these provisions of the statute and regulations.”

Nearly 4,000 state employees were laid off because of the privatization of the facilities that care for the uninsured and which provide training for the state’s medical students.

Nevers, contacted in California where he was attending a conference, said he had never seen a situation where policies needing federal approval were undertaken and finalized before that approval was forthcoming. “It’s premature, to say the least, to do this without written approval in hand,” he said. “The private partners won’t stay in this deal if there are no payments and if CMS doesn’t approve the state’s plan, the whole thing falls apart.”

Nevers said his primary concern was continued health care delivery for the state’s poor. “In any business venture, you would not jeopardize services based on ‘maybes.’”

He said Jindal may well have more information than he has, “but the people who make the decisions do not have the information. Moving forward is something we should not be doing at this time.

“Neither should the LSU Board of Supervisors have agreed to a major contract for the transfer of the hospitals that contained 50 blank pages,” he said.

Mann, in her letter said that while the lease agreements themselves would not be subject to CMS approval, “to the extent that the lease agreements contain financing arrangements that are involved in the state’s funding of its Medicaid program, CMS will review the lease arrangements to insure compliance with federal Medicaid laws and regulations.”

She said any SPA request by the state to modify its Medicaid service payments will be reviewed by CMS to insure compliance with federal Medicaid laws and regulations. “This includes the source of non-federal funds used to fund the service payments,” she said.

Nevers, in his letter to Mann, asked if Louisiana were to expand its Medicaid program under the Affordable Care Act (Obamacare) “are there any federal provisions that would prohibit Louisiana from withdrawing from such an expanded Medicaid program at any time, including after participating in the 100 percent federal funding available in 2014, 2015 and 2016?”

Mann responded in the affirmative: “A state may choose whether and when to expand, and if a state covers the expansion group, it may later decide to drop the coverage, without any federal penalty.”

The Louisiana Civil Service Commission approved the contracts for the takeover of four hospitals in Houma, Lafayette, New Orleans and Lake Charles on June 10 despite the lack of CMS approval of the state’s privatization plan.

Commission member Scott Hughes of Shreveport said the approval was based on the state budget approved by the legislature which he said assumed the privatization of the hospital. That action, he said, would leave no money available to operate the hospitals through LSU if the deals had been rejected.

While that is not among the criteria that the Civil Service Commission is supposed to consider when layoff plans are submitted by state agencies, it left unanswered the question of what will happen if CMS does not ultimately approve the state’s plan.

A CMS spokesperson in Dallas said on June 12 that CMS does not play any role in the actual privatization of the hospitals. “However, as part of the privatization, the State of Louisiana is modifying the Medicaid reimbursement to those hospitals. The change in reimbursement requires the submission of State Plan Amendments (SPA). CMS currently has received some of the necessary SPA and they are under review.”

Last Jan. 30, Bill Brooks, associate regional administrator for the CMS Division of Medicaid and Children’s Health Operations in Dallas, sent a six-page letter to Ruth Kennedy, director of the Bureau of Health Services Financing for the Department of Health and Hospitals (DHH) in which he requested additional clarifying information which he cautioned had the effect of “stopping the 90-day clock” for CMS to take action on the proposed SPA which “proposed to revise the reimbursement methodology for inpatient hospital services to establish supplemental Medicaid payments to non-state-owned hospitals in order to encourage them to take over the operation and management of state-owned and operated hospitals that have terminated or reduced services.”

He said a new 90-day clock would not begin until his office had received satisfactory responses to his requests.

One of the requirements that Brooks cited was one which said CMS “must have copies of all signed standard Cooperative Endeavor Agreements.” He also asked the state to provide all Intergovernmental Transfer (IGT) management agreements and “any other agreements that would present the possibility of a transfer of value between the two entities.”

He said, “CMS has concerns that such financial arrangements meet the definition of non-bona fide provider donations as described in federal statute and regulations.

“Detailed information needs to be provided to determine whether the dollar value of the contracts between private and public entities had any fair market valuation. There can be no transfer of value or a return or reduction of payments reflected in these agreements,” he said.

“Additionally, whether the State is a party to the financial arrangement or not, the State is ultimately responsible to ensure that the funding is appropriate.”

Brooks asked, “How many entities does the State anticipate will participate in this arrangement? Please submit a list of all participating hospitals, all transferring entities doing the IGT, and the dollar amount that the transferring entities will IGT. Please describe how the hospitals are related/affiliated to the transferring entity and provide the names of all owners of the participating hospitals.”

In the case of the Leonard Chabert Medical Center in Houma, the lessee is listed as Terrebonne Medical Center of Houma but in reality, Ochsner Medical Center of New Orleans will be taking over operations of Leonard Chabert.

“What is the source of all funds that will be transferred?” Brooks asked. “Are they from tax assessments, special appropriations from the State to the county (parish)/city or some other source?

“The State plan methodology must be comprehensive enough to determine the required level of payment and the Federal Financial Participation (FFP) to allow interested parties to understand the rate setting process and the items and services that are paid through these rates,” Brooks said. “Claims for federal matching funds cannot be based upon estimates or projections. Please add language that describes the actual historical utilization and trend factors utilized in the calculation,” he said.

Brooks also asked if the private hospitals destined to take over operations of the state facilities are required to provide a specific amount of health care service to low income and needy patients. “Is this health care limited to hospital only or will health care be provided to the general public? What type of health care covered services will be provided?” he asked.

The CMS spokesperson on Wednesday said if CMS disapproved an amendment, “there would be no federal dollars provided for the changes proposed in the State Plan Amendment.”

“No federal dollars” could translate to hundreds of millions of dollars for a state already wrestling with suffocating budgetary constraints.

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Notable Quotables (in their own words)

Posted in BESE, Contract, Contracts, Education, Notable Quotables, Public Records, Transparency on June 24, 2013| 2 Comments »

“…the Department is not in possession of any public record(s) responsive to the above-written request.”

—May 9 Reply from the Department of Education’s legal department in response to LouisianaVoice public records request of April 22 in which we asked for “the official letter or email that you (Superintendent of Education John White) sent to inBloom to cancel the data storage agreement” as quoted in the Monroe News-Star report.

“White said he’ll send the certified letter to inBloom, but he said he’s sent several letters already notifying the organization that Louisiana’s data-sharing had ended.”

—Excerpt from Melinda Deslatte’s Associated Press story of June 20 in which White told the Board of Elementary and Secondary Education (BESE) that he had terminated the Jan. 13 contract with inBloom.

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John White could take lessons from Mark Twain on telling the truth vs. trying to remember what lie was told to whom

Posted in BESE, Contract, Contracts, Education, Public Records, Transparency on June 24, 2013| 13 Comments »

Mark Twain is generally credited with saying, “If you tell the truth, you don’t have to remember anything.”

State Superintendent of Education John White could take a lesson from that great writer because he appears to have trouble remembering what he said to whom these days.

Take, for instance, the AP story by reporter Melinda Deslatte that ran last Thursday (June 20).

The story was an account of a meeting of the Board of Elementary and Secondary Education (BESE) which focused on the controversial attempt by White to enter into a contract to provide sensitive student information to a non-profit data-storage company called inBloom.

inBloom, the brainchild of News Corp. CEO Rupert Murdoch and controversial New York education executive Joel Klein, is funded primarily by a grant from the Bill and Melinda Gates Foundation and seeks to create a national database of student information.

The Department of Education (DOE) entered into a memorandum of understand (MOU) on Jan. 15 for the state to provide personal student data ranging from addresses and test scores to medical history and information about learning disabilities. White has assured BESE that the information was protected in secure servers and behind computer firewalls.

inBloom, however, said that while it would do its best to protect the data there was no guarantee that the information would not be compromised by hackers.

But buried deep in Deslatte’s story, White apparently becomes confused about what he has told various people.

In response to former DOE employee Jason France who said the contract was still in force, White said he would send a certified letter to inBloom. But then he added that he had already sent several letters notifying the organization that Louisiana’s data-sharing agreement was terminated.

But wait.

On April 22, LouisianaVoice sent the following public records request to White and DOE legal counsel Joan Hunt:

• “Please provide me with the opportunity to review the official letter or email that you sent to inBloom to cancel the data storage agreement as per the lead paragraph from the Monroe News-Star.”

A copy of the News-Star story was attached to our request.

On May 9, we received a response in the form of a letter from DOE attorney Troy Humphrey which said:

• “Our public information office has requested that I inform you that the Department is not in possession of any public record(s) responsive to the above-written request.”

Wait. What?

Is White really trying to make us believe that between May 10 and June 20, he sent “several letters” of cancellation to inBloom but as of May 9, there was no such letter?

Quite frankly, we have a lot of trouble accepting that scenario.

You may remember we were forced to sue White and DOE a couple of months ago over his refusal to provide public records in a timely manner. We settled for $100 per day per request that DOE was late providing. The final tab was $3,500, plus court costs and attorney fees.

Well, as of today (Monday, June 24), it’s been 45 working days since our request for the letter(s) of cancellation.

The state public records law says that any request for public records must be honored immediately unless the record is in use and unavailable. In such case, the custodian of the record(s) must immediately respond in writing to the requestor as to when the record(s) will be ready for inspection within the next three working days.

At $100 per day, White has already run up a $4,500 tab on just that one request—and the meter’s running.

But there are others that also are pending.

For example, on May 20, we made a follow-up request:

• “…In the public records you provided my attorney, J. Arthur Smith, you included photocopies of several checks to the Louisiana Department of Education from David Lefkowith but you neglected to provide photocopies of the backs of the checks that would indicate whether or not the checks were actually negotiated or deposited. Please provide copies of the backs of those checks.”

Call us jaded or skeptical, but we believe the checks may have been written and never deposited—a clever ruse to satisfy public records requests and hope there was no follow up as to the checks’ final disposition.

Sorry, but like Elvis, we have suspicious minds.

On May 22, Humphrey wrote us that “the Department will identify and locate any public records in its possession that are responsive to the above written request. After any responsive items have been identified, the Department will segregate and set aside those public records that are available for your inspection.”

To date, we have heard nothing further even though DOE had already located the checks and photocopied the fronts of the checks.

Let’s see, that request was made on May 20. Discounting weekends and Memorial Day, that is 25 days—and counting: $2,500.

And then there’s that other May 20 letter in which we made six separate requests:

• Any communications in any form or contracts relative to the “shared Learning Collaborative” or SLC, a project of the Gates Foundation;

• Information regarding Louisiana’s participating in Phase I of the above project;

• Any communications with or information relevant to Wireless Generation, a subsidiary of News Corporation;

• Any communications with or information relevant to Louisiana’s association or business conduct with any corporation or entity owned, led or associated with Iwan Streichenberger;

• Any communication or discussion relevant to the sharing of confidential student information for the purpose of developing and marketing “learning products” or for any other purpose;

• All communication and/or contracts relevant to current or future association with Gates Foundation or its subsidiaries.

To date, DOE has responded only to the first request on this list. That leaves five requests that have been outstanding now for 25 days. Five outstanding requests times 25 days times $100 per day comes to $12,500.

That brings the total for all outstanding requests to $19,500 as of today. Add attorney fees and costs of court and suddenly DOE is knocking on the door of $25,000.

We have already instructed attorney Smith to file suit—again—but that this time he seek sanctions against White and monetary damages over and above the $100 per day for his making it impossible for our sister company, Capitol News Service, to file stories to our client newspapers (about a dozen publications) in a timely manner.

These are unnecessary expenditures—all because White either doesn’t care about the public’s right to know or, as with the case of the letter(s) of cancellation to inBloom, he’s simply a liar.

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