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Archive for the ‘DHH’ Category

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

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

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

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

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

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

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

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

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

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

Capture

 (TO ENLARGE TEXT, LEFT CLICK ON IMAGE)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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The seventh floor of the Bienville Building on North 4th Street in Baton Rouge became a beehive of activity recently when employees of a temporary personnel service moved in to begin shredding “tons of documents,” according to an employee of the Louisiana Department of Health and Hospitals (DHH).

DHH is headquartered in the Bienville Building and the source told LouisianaVoice that the shredding, undertaken “under the guise of being efficient and cleaning,” involves documents that date back as far as the 1980s.

“The significance of this is that this is occurring in the midst of a lawsuit (that) DHH is filing against Molina in relation to activities that go back to the ‘80s,” the employee said. “Everyone is questioning the timing. Westaff temporary people have been in the copy room of the seventh floor for approximately two weeks now, all day, every day, shredding documents.”

https://www.westaff.com/westaff/main.cfm?nlvl1=1

The employee said so many documents were being shredded “that the floor is full of dust and employees have been ordered to clean on designated cleaning days” and that locked garbage cans filled with shredded documents “are being hauled from the building daily.”

LouisianaVoice submitted an inquiry to DHH that requested an explanation “in light of the current litigation involving DHH, Molina and CNSI”—two companies the agency contracted with to process Medicaid claims.

CNSI (Client Network Services, Inc.), which replaced Molina as the contractor for those services in 2011, had its $200 million contract cancelled by the Jindal administration after allegations of contact between then-DHH Secretary Bruce Greenstein and CNSI, his former employer, during the contract selection process. Investigations by the Louisiana Attorney General’s and the U.S. Attorney’s offices ensued but little has been heard since those investigations were initiated. Meanwhile, CNSI filed suit against the state in Baton Rouge state district court in May of 2013, alleging “bad faith breach of contract.” http://theadvocate.com/home/5906243-125/cnsi-files-lawsuit-against-state

Molina, meanwhile, was reinstated as the contractor to process the state’s Medicaid reimbursements but last month the state filed suit against Molina Healthcare and its subsidiary Molina Information Systems, alleging that the state paid Molina “grossly excessive amounts” for prescription drugs for more than two decades because the firm engaged in negligent and deceptive practices in processing Medicaid reimbursements for prescription drugs.

Prescription drugs account for about 17 percent of the state’s annual Medicaid budget, the lawsuit says.

The state’s lawsuit says that Molina has processed the state’s Medicaid pharmacy reimbursement claims for the past 30 years but from 1989 to 2012, Molina neglected to adhere to the state formula for payments and thereby committed fraud and negligence, violated the state’s consumer protection and Medical Assistance Programs Integrity laws. http://theadvocate.com/news/business/9579038-123/la-sues-medicaid-drug-payment

Olivia Watkins, director of communications for DHH, told LouisianaVoice by email on Wednesday that the Division of Administration maintains a contract with Westaff for temporary workers which can be used by different state departments. “DHH requested temporary workers through the existing contract to assist with various projects, including shredding,” she said.

A search of LaTrac, the state’s online directory of state contracts, failed to find either Westaff or Molina listed as contractors among either its active or expired contracts.

“With regard to the shredding,” Watkins said, “those documents that were shredded were old cost reports, statements and facility documents that were outside of their document retention period (anywhere from 5-10 years). The files being shredded were in no way related to the department’s previous contract with CNSI.”

Watkins, while denying any connection to the CNSI contract, failed to mention whether or not the shredded documents involved Molina’s contract or the state’s litigation against the company even though the LouisianaVoice inquiry specifically mentioned both companies.

In June of 2002, the nation’s largest accounting firm, Arthur Andersen, was found guilty of unlawfully destroying documents relating to the firm’s work for its biggest client, the failed energy giant, Enron.

And while that conviction was eventually overturned, the damage from its actions doomed the company and it ultimately shut its doors for good.

In the weeks leading up to the Enron collapse, Andersen’s Houston practice director Michael Odom presented a videotaped talk—that was played many times for Andersen employees—on the delicate subject of file destruction.

In that video, Odom said that under Andersen’s document retention policy, everything that was not an essential part of the audit file—drafts, notes, emails and internal memos—should be destroyed immediately. But, he added, once a lawsuit was filed, nothing could be destroyed. Anything could be lawfully destroyed, he advised Andersen employees, up to the point when legal proceedings were filed (emphasis ours). http://www.mybestdocs.com/hurley-c-rk-des-law-0309.htm

“If it’s destroyed in the course of the normal policy and litigation is filed the next day, that’s great,” he said, “because we’ve followed our own policy, and whatever there was that might have been of interest to somebody is gone and irretrievable.”

In a matter of days, Andersen’s Houston office began working overtime shredding documents, according to authors Bethany McLean and Peter Elkin in their book The Smartest Guys in the Room (The Amazing Rise and Scandalous Fall of Enron).

Perhaps the DHH shredding had nothing to do with the CNSI contract with DHH or with the litigation filed by CNSI over cancellation of its contract.

And it may be that the shredding was in no way connected to the Molina contract, even though Watkins failed to address that specific question by LouisianaVoice.

It could well be, as Watkins said, the document destruction was purely a matter of routine housekeeping.

But the timing of the shredding flurry, coming as it did only days following the July 10 filing of DHH’s lawsuit against Molina, and DHH’s murky and adversarial relationship with the two claims processing contractors do raise certain questions.

And Watkins’ assertion that the shredded records consisted of “old cost reports, statements and facility documents,” the dates of which fall within the time frame of the allegations against Molina, would seem to make those questions take on even greater relevance.

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When the Department of Health and Hospitals released its “Public-Private Partnership” financial report on nine state hospitals last month, it was pretty much assumed that the state media would accept the glowing report at face value and trumpet the Jindal administration’s brilliance in the privatization plan.

To no one’s surprise, Jindal cheerleader Scott McKay, curiously writing under the pseudonym “MacAoidh,” which he explained was the Gaelic spelling of his name, jumped out in front of the parade. Close behind were Lauren Guillot of the LSU Reveille and Chris LeBlanc of the Thibodaux Daily Comet.

http://www.lsureveille.com/news/hospital-privatization-cost-million-less-than-budget/article_aba78c98-12c6-11e4-9da3-0017a43b2370.html

http://www.dailycomet.com/article/20140724/ARTICLES/140729784

The latest to chime in is Quin Hillyer, an unsuccessful Alabama-congressional-candidate (he finished fourth in the Republican primary)-turned-columnist for the Baton Rouge Advocate who somehow purports to be an expert on Louisiana politics but who continues to live in Mobile.

The DHH report attempted to show that Jindal’s privatization plan—a plan, by the way, that has yet to be approved by the Center for Medicare and Medicaid Services(CMS)—has cost the state $51.8 million less than expected during the fiscal year ended June 30.

STATE HOSPITAL FINANCIAL REPORT

But those numbers are disingenuous at best.

The first column of the DHH spreadsheet contains the amounts budgeted for each of the nine hospitals for the fiscal year that ended on June 30.

That’s simple enough to comprehend but the second column is the key. That column lists the amounts actually spent as of June 30 while the third column reports the difference between the amounts appropriated and the amounts spent. That’s where DHH came up with the aggregate savings of $51.8 million.

But what the report neglects to say is that the books on those fiscal year 2013-2014 expenditures will not be closed until later this month, so any reported costs (Column 2) will necessarily increase, thereby negatively impacting Column 3. (Column 4 simply gives the appropriations for each hospital for the current (2014-2015) fiscal year.)

By way of explanation, “Public Claims” is the traditional Medicaid payments the state made to the public hospitals. “Public UCC” is the uncompensated care, or DSH payments the state made to the LSU hospitals. “Private Claims” are the Medicaid payments made to the new private hospital partners. These are the same payments as the “Public UCC” payments, only larger and fueled by the lease payments used by the state for match, thereby cutting state funds and giving the illusion of shrinking government.

“Private UPL” stands for “upper payment limit,” which is a supplemental Medicaid payment which the state must match—which is now done from the lease payments that CMS has yet to approve. “Private UCC” is DSH payments the state is also allowed to make to private hospitals.

It is not unusual for individual hospitals to vary from their original budgets because they have the flexibility to move money around, using savings in one area to cover expenditures in others. The bottom line is what is significant.

Even with that Enron-esque method of bookkeeping, several hospitals have already overspent their budgets even before the final numbers are in, the report shows. Those include Earl K. Long Medical Center in Baton Rouge ($12.2 million over budget), Interim LSU Hospital in New Orleans ($5.9 million), University Medical Center in Lafayette ($8.8 million) and W.O. Moss in Lake Charles ($1.2 million).

Others that were close to spending all of their appropriations included Chabert Medical Center in Houma and E.A. Conway in Monroe.

The total appropriations for all nine hospitals for the 2013-2014 fiscal year is $1.111 billion against $1.058 billion spent, a difference of $51.8 million, according to the report which again, does not reflect the final numbers.

The 2014-2015 appropriation for the nine facilities is $1.15 billion which means if nothing changes in expenditures for the current budget (a highly unlikely, almost impossible scenario), the state will still spend $91.5 million more on the hospitals in 2014-2015 than in the previous fiscal year.

And should the final numbers for 2013-2014 show that the hospitals spent the entire $1.111 billion appropriated, the state still will spend $39.7 million more this year than last.

Somehow, that just doesn’t support the $51.8 million “savings.”

Moreover, the report conveniently does not provide us with the means of finance so we have no concept of how much is state funding and how much is federal. No matter; the cold hard facts are that the partnerships between the state and private hospitals were supposed to save money and they clearly have not.

The 2013-2014 fiscal year was a hybrid between the old public model and the new private model in which the private hospitals lease the state hospitals and use those lease payments for matching funds that the state puts up to receive federal dollars to make “private” payments.

It is that arrangement that CMS has yet to approve because they involve largely inflated lease payments. While the arrangement may be counterintuitive, the private hospitals are more than happy to agree to the inflated lease payments because the state plans to use those payments as match and promptly draw down big federal matching dollars to then pay back to the private hospitals—if, that is, CMS approval is forthcoming.

None of this matters to Hillyer and McKay, though. Eager to thumb their noses at the skeptics and while taking a deliberate shot at “liberal” gubernatorial candidate State Rep. John Bel Edwards, Hillyer called the hospital privatization plan “good medicine,” adding that early critics “should be pulling out the salt and pepper” in preparation to “eat their earlier words.”

http://theadvocate.com/news/opinion/9878018-123/quin-hillyer-jindals-privatization-was

But even more egregious on Hillyer’s part, he claims (erroneously, it should be noted) that CMS “has not sent an official ‘disallowance’ notice” on the advance lease payments when in fact those have already been disallowed outright as being illegal. That, says Edwards, will likely result in future clawbacks of $507 million that the state will owe Medicaid.

He also quoted DHH Secretary Kathy Kliebert as saying negotiations with CMS have put the feds “in a position where, fairly shortly, they can approve our State Plan Amendments.”

Perhaps so, but we’ve heard that song and dance before so we’re going to withhold judgment on that optimistic report.

At least McKay (or MacAoidh if you will) had the good sense not to accept the DHH spreadsheet as the final numbers and at acknowledged a “fuller accounting” would be forthcoming. “And we’ll know next year, after the first full year of the implementation of Jindal’s idea to privatize the charity hospitals, exactly how much money is saved,” he added, making an apparent assumption there would be a savings despite the increased budget for the current fiscal year. http://thehayride.com/2014/07/surprise-the-privatized-charity-hospitals-come-in-52-million-under-budget/

But then McKay, as is his wont, became a bit melodramatic by pointing out observers “might be at a loss to summon up memories of dead bodies due to neglect as a result of the privatization. If there are oodles of corpses littering the roadsides outside of hospitals throughout Louisiana for lack of admittance, they’ve gone strangely unreported.”

We honestly don’t know where he came up with that wild scenario that he somehow implies was the claim of privatization opponents. “Nobody suffered from the leases of those hospitals,” he continued. “And the state is going to save a lot of money as a result, while likely delivering better services to the public.”

That, of course, remains to be seen. If he is right, he’s right. But it’s difficult to arrive at that conclusion when you look at the numbers on the DHH spreadsheet.

If, that is, you bothered to study the numbers closely which some obviously did not—just as the administration counted on.

(With appreciation to two regular readers who helped us interpret the numbers and their meaning.)

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Holy New Living Word, Bat Man!

John White’s Department of Education just can’t seem to keep tabs on all these pop-up private for-profit education facilities that have proliferated under his and Gov. Bobby Jindal’s sweeping educational reform programs.

Questionable expenditures by an organization under contract to the Louisiana Department of Education (DOE) have been flying under the radar, overshadowed as it were, by corruption charges against internal auditors with the Louisiana Department of Children and Family Services.

Remember New Living Word up in Ruston? That’s the school that was approved for some 300 vouchers even though there were no instructors, no computers, and no facilities—and obviously, no vetting. Just an application from the school was all that was needed, and BAM! Instant approval.

Not that New Living Word was the only one; there were others, including one in which the director had a long of history of legal problems and another in which the director referred to himself as a “prophet.” And there was the charter school that decided it could conduct random pregnancy tests on female students after one girl was expelled when it was learned she was pregnant, though no punishment was meted out for the dad, a member of the school’s football team. Only threatened legal action by the ACLU reversed the ill-considered policy.

Still, New Living Word became the instant poster child for DOE’s bureaucratic ineptitude.

Until now.

Now we have Open World Family Services, Inc. a New Orleans education “nonprofit” established ostensibly to “strengthen the family through education and training,” and paid through grants under the 21st Century Community Learning Center, a federally-financed program funded through a $1.4 million contract with DOE that ran from May 1, 2009 through April 30, 2012.

Or perhaps we should have said had Open World Family Services, Inc. It closed its doors on May 31, 2012, a month after its contract with DOE ran out.

But not before its administrator managed to misappropriate, misspend, mishandle, mismanage, fold, staple and mutilate more than $300,000, according to Legislative Auditor Daryl Purpera’s office.

To read entire audit report, click here: 000011D0

Included in that amount were $116,323 in expenses which Open World did not incur, $148,596 in unapproved purchases and expenses that included debit card withdrawals ($16,758) airfare to Monrovia, Liberia ($7,204) and payments to the immediate family of Executive Director Kim Cassell ($18,414).

Cassell’s attorney assures us it was all just your basic “lack of knowledge of grant management” that led to a number of “errors in funds management.”

That would be the usual errors, like requests for reimbursements listing 129 specific checks (all payable to vendors) totaling $221,624 when only 74 of those checks totaling $105,301 actually cleared Open World’s bank accounts. But what of the remaining 55 checks? Well, Cassell’s former administrative assistant told state auditors that Cassell instructed her to pull blank checks and use or record the blank check numbers on reimbursement requests for “projected” vendor expenses.

“By submitting reimbursement requests that included false information, Open World improperly received $129,402 in reimbursements from DOE and may have violated state and federal laws,” the audit report said.

Just an error in funds management.

Kinda makes you wonder about those seven contracts worth a combined $430,000 that the Department of Health and Hospitals (DHH) has awarded to Open World Family Services since 2008 to combat asthma and tobacco use. Did that money go up in smoke as well?

Open World, the audit says, submitted requests and received reimbursements for employee benefits totaling $13,079 for which no expense was incurred.

Another simple error in funds management.

From May 2009 to October 2011, Cassell improperly used public funds totaling $11,108 for veterinary bills and pet supplies, a homeowner’s insurance payment, personal travel and college tuition payments, according to the audit report.

Ditto on the error in funds management.

Cassell’s time sheets from Sept. 18, 2010, to Oct. 19, 2010, indicate that she was on vacation and traveling. But during that same time period, the audit says, she made debit card withdrawals in Monrovia, Liberia, totaling $4,576 and that she incurred airfare charges totaling $200 on Oct. 17, 2010.

She explained to auditors that she traveled to Liberia for the purpose of registering Open World as a Non-Government Organization (NGO) in West Africa.

She also incurred charges on the organization’s debit card totaling $1,099 in Brooklyn Center, Minnesota, while on travel to that state in November of 2010.

In all, the audit says that from May 2009 to February 2012, only a couple of months before her grant contract with DOE ran out, she used $148,596 in grant funds for puchases and expenses not included in approved grant budgets. That amount included $97,961 for rent, utilities and building improvements; $16,758 in undocumented debit card withdrawals; $7,204 in undocumented airfare charges; $15,340 for insurance policies, and $11,333 for vehicle expenses. “By using grant funds for unauthorized purposes, Open World appears to have violated its grant agreements and may be required to reimburse funds improperly spent,” the report says.

New Orleans attorney Jauna Crear wrote a five-page letter of response to the audit’s findings but basically defended her client’s actions in a single sentence:

“An overall review of the allegations, along with Ms. Cassell’s explanations, clearly shows a lack of understanding of the non-profit governance rules as opposed to a willful disobedience thereof.”

All of which raises several questions:

  • Does DOE customarily hand out multi-million dollar contracts to non-profits with inadequate experience in handling public funding?
  • What safeguards does John White have in place to prevent abuse, theft, and misapplication of public funds by other organizations under contract to DOE?
  • Does John White believe it might be worthwhile to conduct a review of other such contracts/grants?
  • Is it possible that DOE, like DHH, may have eliminated the position(s) of internal auditor as a cost-cutting measure?
  • Will DHH review the seven current and past contracts it has awarded to Open World Family Services totaling $430,000?

Sometimes you just gotta scratch your head and wonder…

Other times you look at who is running this state and then you know…

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