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CMS rejects hospital privatization plan leaving $300M hole in 2015 budget and immediate $70M shortfall for higher ed

Posted in Budget, Contract, Contracts, DHH, Finances, Governor's Office, Health Care, Higher Education, House, Senate, Legislature, Legislators, Privatization on May 2, 2014| 26 Comments »

Not that we told you so, but…..we told you so. Several times.

LouisianaVoice has questioned the wisdom—and legality—of the shaky LSU hospital privatization deals since day one and on Friday, the U.S. Centers for Medicare and Medicaid Services (CMS) notified the state that it had refused to sign off on the administration’s plans to privatize LSU hospitals in New Orleans, Shreveport, Monroe, Houma, Lake Charles and Lafayette.

The decision deals a devastating blow to the administration and the state budget for next fiscal year which begins on July 1.

Even more important, the decision throws into serious doubt the operating budget for higher education for the remaining two months of the current fiscal year.

Only last week, Jindal asked State Treasurer John Kennedy to transfer $40 million from other areas to continue funding higher education because an anticipated $70 million in hospital lease payments had not been made.

Kennedy said Friday he was assured that the money would be repaid as soon as the lease payments were received. “Now, I just don’t know,” Kennedy said. “If that $70 million isn’t forthcoming, we have a problem right now, not next year. I don’t believe the legislators realize this yet. I don’t think they realize they will have to cut another $70 million from somewhere to keep higher education afloat. We have to support higher ed.

“Wow. This catches me flat-footed,” he said. “I didn’t expect a decision this soon.”

Commissioner of Administration Kristy Nichols said last week that she was confident that the lease payments would be made but the CMA decision casts a huge shadow over those prospects.

Kennedy added that he believes the legislature will now have to consider his proposal calling for an across the board 10 percent cut in consulting contracts. “That would generate $500 million,” he said.

State Rep. Rogers Pope (R-Denham Springs) said the decision raises the question of “where the state will make up $300 million-plus. You have to wonder how many cans we can keep kicking down the road.

“This is a discouraging development. The budget is scheduled to come to the House floor next Thursday, so there’s no time to find additional money. I just don’t know how to react or how many services we can cut.

“Just last week (Department of Health and Hospitals Secretary Kathy) Kliebert assured the Senate there was nothing to worry about and now this…”

Another legislator was even more outspoken in his criticism of the governor.

“Governor Bobby Jindal’s reckless pursuit of using federal Medicaid funds in an ill-conceived scheme to privatize state-run hospitals has backfired and now the people of Louisiana will pay a dear price,” said State Rep. Robert Johnson (D-Marksville) in a prepared statement. “Governor Jindal has written a blank check to sell our charity hospital system, which is ultimately used by Louisiana’s working poor, and today it has bounced.

“People could die. The sick will get sicker. Our precious hospitals are in turmoil. The state budget is in tatters. Governor Bobby Jindal sits in the midst of this fiscal and healthcare debacle clutching his dreams of the presidency at the taxpayers’ expense.

“I, along with many others, predicted this outcome and now the people of Louisiana have been left with the tab.

“The Jindal administration’s announcement of an appeal is a typical, timid, tepid response that will bear no more fruit than the barren tree Jindal planted last year.

“It will take all of us. Now is not the time to fall back on partisan bickering or to cling to ideology in the face of a fiscal and healthcare disaster,” he said.

Part of the problem was most likely the manner in which the administration was attempting to use federal dollars to attract more federal matching dollars to finance Jindal’s privatization plan; the feds just weren’t buying it.

Here is the scheme:  The private hospital pays LSU money to lease the LSU hospital.  That money does not stay with LSU; it ends up (directly or indirectly) being used as match in the Medicaid program.  After matching those lease payments with federal funds, the total, larger amount is paid back to the private partner in the form of a Medicaid payment.   The lease payments supplant the state funds.  However, the legislative fiscal office has already raised concerns about the leases being $39 million short which is  why the Division of Administration has already begun planning on “double” lease payments this year.

For years states have devised schemes to receive additional federal funds while reducing the state contribution for Medicaid.  There is a problem with these schemes, however.  Consider this from a 2009 report by the Congressional Research Office:

“In 1991, Congress passed the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments (P.L. 102-234). This bill grappled with several Medicaid funding mechanisms that were sometimes used to circumvent the state/federal shared responsibility for funding the cost of the Medicaid program. Under these funding methods, states collect funds (through taxes or other means) from providers and pay the money back to those providers as Medicaid payments, while claiming the federal matching share of those payments. States were essentially “borrowing” their required state matching amounts from the providers. Once the state share was netted out, the federal matching funds claimed could be used to raise provider payment rates, to fund other portions of the Medicaid program, or for other non-Medicaid purposes.”

DHH’s scheme included a “borrowing” component that looked similar to the practices this legislation was aimed at preventing.  Medicaid rules do not allow a Medicaid provider (read “hospital” here) to voluntarily donate money to the state when they know they will get this money back plus more (the federal share) as part of an increase in their Medicaid payments.  The federal oversight agency, CMS, had previously expressed concerns to state officials that these lease payments could qualify as non bona fide provider donations.

If CMS determined these are conventional fair market value leases, they would have allowed the payments.  Beyond the basic annual lease payments, the deals included “double lease payments” and other large up front lease payments designed to fix the state’s budget problem raising the specter of non bona fide provider donations.  If these payments were deemed to be non-allowable, the federal government will recoup any federal funds that were paid as match for these state funds.

The privatization deals were done at a cost of $1.1 billion to the state this budget year, much of that ($882 million) expected to come from federal funds under the scenario alluded to above.

But a terse message from CMS brought all those plans crashing down: “To maintain the fiscal integrity of the Medicaid program, CMS is unable to approve the state plan amendment request made by Louisiana.”

Predictably, Jindal, who refused to wait for federal approval before plunging ahead full bore with his sweeping privatization of the LSU hospital system, said, “CMS has no legal basis for this decision.” (At least he didn’t call the decision “wrong-headed,” as he did in 2012 when a state district court ruled his school voucher program unconstitutional.)

Jindal said he will appeal the decision but for the time being, the six hospitals will be operating under financing plans that have been shot down, which should come as no surprise to observers of this administration. Friday’s decision prompted one of the governor’s critics to comment, “Jindal deserves every misfortune that this may bring him. The people of this state, however, don’t deserve this. He used them for his selfish political purposes.” Another said, “It would be karma if this fiasco totally destroyed Jindal’s national dreams.”

The one question still left unanswered is whether attorney Jimmy Faircloth will once again be called on to defend yet another dog of a legal case on behalf of this blundering administration, thus adding to his legal fees which already exceed $1 million.

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Jindal health plan shows he wants to be POTUS in worst way—apparently the same way he has been LA. governor

Posted in ATC, Boards, Civil Service, Contract, Contracts, Courts, DHH, Education, Elections, Ethics, Governor's Office, Higher Education, Jobs on April 3, 2014| 28 Comments »

Here’s the political shocker of the year: Gov. Bobby Jindal says that the Republican Party would be better off selecting a governor as its 2016 presidential nominee.

Wow. Who saw that coming?

Jindal might wish to ask former Massachusetts governor Mitt Romney how that scenario worked out for him.

Wonder how Sens. Ted Cruz of Texas, Rand Paul of Kentucky and Marco Rubio of Florida feel about that little snub?

Better yet, wonder who he had in mind? Gosh, there are so many: Chris Christie of New Jersey, Wisconsin’s Scott Walker, Ohio’s John Kasich and Rick Perry of Texas whom Jindal was quick to endorse a couple of years ago before Perry’s political machine sputtered and died on some lonely back road. Then there are those former governors Jeb Bush of Florida, Mike Huckabee of neighboring Arkansas, and Sarah what’s-her-name up there in Alaska.

Oh, right. We almost forgot because well…he’s just so forgettable, but there’s also Jindal who recently placed about 12th in a 10-person straw poll at that wild-eyed, frothing-at-the-mouth Conservative Political Action Conference (CPAC).

But he’s running. You betcha (sorry, Palin, we couldn’t resist). He is so intent in his as yet unannounced candidacy that he has already drafted his own plan to replace the Affordable Care Act, aka Obamacare.

Presidential candidates are usually expected to exhibit voter empathy and to be spellbinding orators who are capable of mesmerizing of voters en masse. John Kennedy comes immediately to mind. So do Ronald Reagan and Bill Clinton. I mean, after Clinton took two steps toward that audience member in his debate against President Bush the First in 1992 and said, “I feel your pain,” Bush never had a chance. Clinton looked that voter dead in the eye and spoke one-on-one as Bush was checking his watch.

Jindal has all the empathy of Don Rickles, but without the charisma.

As for oratory skills, to borrow a line from a recent Dilbert comic strip, he should be called the plant killer: when he speaks, every plant in the room dies from sheer boredom.

So much for his strong points: let’s discuss his shortcomings.

Jindal believes—is convinced—he is presidential timber. The truth is he has been a dismal failure at running a state for the past six years and he’s already written off the final two as he ramps up his campaign for POTUS.

Yes, we’ve been beset by hurricanes Katrina, Rita, Ike and Gustav. Yes, we had the BP spill. All of those provided Jindal valuable face time on national TV and still he trails the pack and when you’re not the lead dog in the race, the view never changes.

Because of those catastrophes, the state has been the recipient of billions of federal dollars for recovery. Nine years later, Jindal cronies still hold multi-million contracts (funded by FEMA) to oversee “recovery” that is painfully slow. The state received hundreds of millions of dollars to rebuild schools in New Orleans. Construction on many of those schools has yet to commence. The money is there but there are no schools. (Correction: Largely white Catholic schools have received state funding and those facilities are up and running.)

Jindal tried to restructure the state’s retirement system—and failed. Yes, the retirement systems have huge unfunded liabilities but Jindal’s solution was to pull the rug from under hard-working civil servants (who by and large, do make less than their counterparts in the private sector: you can look it up, in the words of Casey Stengel). As an example, one person whom we know was planning to retire after 30 years. At her present salary, if she never gets another raise over the final eight years she plans to work, her retirement would be $39,000 per year.

Under Jindal’s proposed plan, if she retired after 30 years, her retirement would have been $6,000—a $33,000-a-year hit. And state employees do not receive social security.

Never mind that state employees have what in essence is a contract: he was going to ram it down their throats anyway—until the courts told him he was going to do no such thing.

He has gutted higher education and his support of the repeal of the Stelly Plan immediately after taking office has cost the state a minimum of $300 million a year—$1.8 billion during his first six years in office.

He even vetoed a renewal of a 5-cent per pack cigarette tax because he opposed any new taxes (try following that logic). The legislature, after failing to override his veto, was forced to pass a bill calling for a constitutional amendment to make the tax permanent. Voters easily approved the amendment.

Then there was the matter of the Minimum Foundation Program, the funding formula for public schools. Funds were going to be taken from the MFP to fund school vouchers until the courts said uh-uh, you ain’t doing that either.

Jindal’s puppets, the LSU Board of Stuporvisors, fired the school’s president and two outstanding and widely admired doctors—all because they didn’t jump on board Jindal’s and the board’s LSU hospital privatization plan. Then the stuporvisors voted to turn two LSU medical facilities in Shreveport and Monroe over to a foundation run by a member of the stuporvisors—and the member cast a vote on the decision. No conflict of interest there.

Six months after the transition, the Center for Medicare Medicaid Services (CMS) has yet to approve the transition and if it ultimately does not approve it, there will be gnashing of hands and wringing of teeth in Baton Rouge (That’s right: the administration won’t be able to do that correctly, either) because of the millions of dollars in federal Medicaid funding that the state will not get or will have to repay. Jindal will, of course, label such decision as “wrong-headed,” which is an intellectual term he learned as a Rhodes Scholar.

And from what we hear, his little experiment at privatizing Southeast Louisiana Hospital (SELH) in Mandeville by bringing in Magellan to run the facility isn’t fairing too well, either.

By the way, has anyone seen Jindal at even one of those north Louisiana Protestant churches since his re-election? Didn’t think so.

For some reason, the word repulsive keeps coming to mind as this is being written.

Jindal’s firings and demotions are too many to rehash here but if you want to refresh your memory, go to this link: https://louisianavoice.com/category/teague/

The LSU Board of Stuporvisors, by the way, even attempted to prevent a release of a list of potential candidates for the LSU presidency. One might expect that member Rolf McCollister, a publisher (Baton Rouge Business Report), would stand up for freedom of the press, for freedom of information and for transparency. One would be wrong. He joined the rest of the board to unanimously try to block release. Again, led as usual by legal counsel Jimmy Faircloth who has been paid more than $1 million to defend these dogs (dogs being the name given to terrible, indefensible legal cases), Jindal was shot down in flames by the courts and the Board of Stuporvisors is currently on the hook for some $50,000 in legally mandated penalties for failing to comply with the state’s public records laws.

It would be bad enough if the administration’s legal woes were limited to the cases already mentioned. But there is another that while less costly, is far more embarrassing to Jindal if indeed, he is even capable of embarrassment at this point (which he probably is not because it’s so hard to be humble when you’re right all the time).

In a story we broke more than a year ago, former state Alcohol and Tobacco Control commissioner Murphy Painter refused to knuckle under to Tom Benson and Jindal when Benson’s application for a liquor license for Champions Square was incomplete both times it was submitted. Budweiser even offered an enticement for gaining approval of a large tent and signage it wanted to erect in Champions Square for Saints tailgate parties: a $300,000 “contribution” to the Louisiana Stadium and Exposition District (Superdome), whose board is heavily stacked with Jindal campaign contributors.

https://louisianavoice.com/2012/09/04/new-lsu-teaguing-by-%CF%80-yush-may-be-imminent-raymond-lamonica-rumored-on-way-out-as-system-general-counsel/

And:

https://louisianavoice.com/2013/02/page/3/

Jindal fired Painter. Because firing him for doing his job might be bad press, more solid grounds were sought and Painter was subsequently arrested for sexual harassment of a female employee and of using a state computer database to look up personal information on people not tied to any criminal investigation (something his successor Troy Hebert ordered done on LouisianaVoice Publisher Tom Aswell).

The female employee recanted but Painter nevertheless was put on trial and once more the Jindalites were embarrassed when Painter was acquitted on all 29 counts. Unanimously.

But wait. When a public official is tried—and acquitted—for offenses allegedly committed during the scope of his duties (the Latin phrase is “in copum official actuum”) then Louisiana law permits that official to be reimbursed for legal expenses.

In this case, Jindal’s attempt to throw a state official under the bus for the benefit of a major campaign donor (Benson and various family members), will wind up costing the state $474,000 for Painter’s legal fees and expenses, plus any outstanding bills for which he has yet to be invoiced.

So, after all is said and done, Jindal still believes he is qualified for the highest office in the land. He is convinced he should be elevated to the most powerful position in the world. If he has his way, it won’t be an inauguration; it’ll be a coronation.

So intoxicated by the very thought of occupying the White House is he that he has presumed to author a 26-page white paper that not only critiques Obamacare but apparently details his plan to replace the Affordable Care Act. Could that qualify as another exorcism on his part?

His epiphany, however, appears to be more akin to the Goldfinch that regurgitates food for its young nestlings than anything really new; it’s just a rehash of old ideas, it turns out.

During his entire administration—and even when he served as Gov. Mike Foster’s Secretary of the Department of Health and Hospitals—he devoted every waking moment to cutting Medicaid and depriving Louisiana’s poor citizens of health care. Even as head of DHH, according to campaign ads aired on the eve of the 2003 gubernatorial election, he made a decision which proved fatal to a Medicaid patient. That one campaign ad was aired so close to the election date that he was unable to respond and it no doubt contributed to his losing the election to then-Lt. Gov. Kathleen Blanco but he won four years later.

Nevertheless, his sudden interest in national health care prompts the obvious question: where the hell has he been for six years?

Not that we would for a moment believe that his newfound concern for healthcare is for political expedience but he apparently isn’t stopping there as he sets out to save the nation.

“This (health care plan) is the first in a series of policies I will offer through America Next (his newly established web page he expects to catapult him into the White House) over the course of this year,” he said.

We can hardly wait.

 

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Notable Quotables (in their own words)

Posted in Boards, DHH, Health Care, Notable Quotables on March 11, 2014| 8 Comments »

“This isn’t my face. I used to be real pretty.”

—Roblyn Ruggles, quoted in the Aug. 31, 1993 Wall Street Journal after eight oral-surgery procedures left her disfigured, without jaw joints, mouth permanently agape, and unable to bite into a sandwich or purse her lips for a kiss—a victim of jaw implants marketed by Drs. John Kent of the LSU School of Dentistry and his partner Charles Homsy of Houston.

“Dr. (Conrad) McVea stated both to me and to the Board that I could not be expected to comply with professional standards because I had not accepted Jesus Christ as my personal Savior.”

–Dr. Randall Schaffer, who is Jewish, in his federal lawsuit against the Louisiana Board of Dentistry and its members, including Dr. McVea, its attorney and its private investigator after the board revoked his license when he turned whistleblower against Dr. Kent’s faulty jaw implant.

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From protecting their own to persecution of a whistleblower: it’s all part of the bureaucratic shuffle by State Dental Board

Posted in Boards, DHH, Ethics, Governor's Office, Health Care, Public Records on March 11, 2014| 14 Comments »

Suppose for a moment that you work as a technician for a large computer company and in the course of your duties, you discover the company is knowingly marketing computers with faulty hard drives destined to crash within a few months.

Imagine now that when you call the defect to the attention of your company CEO, you are fired, ostracized by your industry and unable to find employment because the word is on the street that you are disloyal and suddenly unreliable despite a stellar work record.

Taking this scenario a step further, you suddenly find yourself prosecuted—and persecuted—by your former company’s board of directors on vague charges of fraud and malfeasance. The board, you learn, will go to any length to defend its CEO—including the destruction of your career. Making matters worse, your accuser is also the prosecutor, the judge and the jury in your trial.

Even worse, when you walk into the courtroom, you are informed that you have already been convicted—without benefit of a trial—of unspecified crimes and that if you pay a fine of $25,000 and sign a consent decree, the matter will go away.

You are innocent of any wrongdoing, so of course you tell your accusers to take a long walk off a short pier.

They in turn inform you that there are other charges that haven’t even been mentioned yet and if you refuse to sign the consent decree and decide to stand and fight, your fine will increase to $100,000 or more—plus the fees of your own attorney and those of the prosecuting attorney—and the costs incurred by the “investigator” who discovered your crimes, costs which also could exceed $100,000.

Finally, you are told by one of the board members that you will never be allowed to work again in your field because of a difference in religious beliefs between you and the board.

Now give that company a name like say, the Louisiana State Board of Dentistry, change the product from a computer hard drive to a dental implant and you have a pretty good idea of the plight of Dr. Randall Schaffer.

Schaffer, a 1982 graduate of the University of Iowa College of Dentistry with a Doctor of Dental Surgery, went on to two residencies at Charity Hospital and Louisiana State University Dental and Medical Center in New Orleans. Certified in General Dentistry in 1984 and Oral and Maxillofacial Surgery in 1988, he entered into private practice in oral and maxillofacial surgery in 1988 in Marrero and in Corinth, Mississippi.

More than a decade earlier, Dr. John (Jack) Kent, head of the LSU School of Dentistry’s Oral and Maxillofacial Surgery Department, developed a joint replacement device for temporomandibular jaw (TMJ) sufferers. Kent subsequently entered into an agreement with a Houston company, Vitek, and the company’s principal shareholders, Drs. Charles and Ann Homsy, to manufacture and market the Proplast implant.

It proved to be a lucrative arrangement for Kent who was given stock in Vitek and earned royalties of 2 percent to 4 percent on the sale of Vitek products. He also received monetary compensation for giving written and verbal presentations to oral and maxillofacial surgeons throughout the world, according to a lawsuit filed by Schaffer against Kent, LSU, members of the Dental Board, attorney Brian Begue and board investigator Camp Morrison.

It did not take long for the implants to begin to fail, causing disfigurement, excruciating pain and at least eight suicides, according to a July 29, 2002, story in U.S. News & World Report.

As a resident at LSU, Dr. Schaffer became aware of the negative effects to patients receiving the implants, which Schaffer described as “defective (100 percent) in all patients implanted.”

Schaffer says in his lawsuit that he informed Dr. Kent of the “disastrous results” of the implant but Kent refused to stop placement of the devices and “threatened Dr. Schaffer with dismissal should this information regarding the research and adverse results be made public.”

By 1989, Schaffer was in private practice and was assisting implant victims by offering consultation and corrective procedures at no charge. “As hundreds of cases came forward, Dr. Schaffer began assistant plaintiff attorneys in the cases against Dr. Kent, his associates, and Louisiana State University,” the lawsuit says. “Eventually 675 patients were combined as a class for discovery purposes,” leaving the state exposed to about $1 billion in liability.

In 1992, the first case, that of Mary Elizabeth Leger of Jonesboro, Arkansas, was settled for $1 million.

Today, Schaffer lives in Iowa, Vitek is bankrupt, Dr. Charles Homsy is nowhere to be found (though he did surface long enough to write a scathing indictment of “predatory trial lawyers” for the Cato Institute in September of 2001), and DuPont, which manufactured the raw ingredients used in the implants was protected by the “bulk supplier doctrine,” which is a defense to failure-to-warn claims.

When Schaffer was named as a witness and consultant in the class action cases, the Board of Dentistry immediately launched its investigation of Schaffer who says that in 1995, the board “zealously embarked upon an investigation, prosecution and adjudication of a wide variety of claims.”

On Sept. 5, 2000, a board panel consisting of Drs. H.O. Blackwood, Conrad McVea and Dennis Donald revoked Schaffer’s license and imposed “excessive penalties,” Schaffer’s petition says. “The panel members and (then-board executive director) Barry Ogden, (investigator) Camp Morrison, (board attorney) Brian Begue and Arthur Hickham conspired to deprive me of my due process rights during my hearing.”

Begue openly violated a Louisiana Supreme Court order to cease participating in the proceedings by served as both prosecutor and board general counsel, Schaffer’s petition says. While another attorney was ostensibly brought into the matter by the board following the Supreme Court’s ruling barring Begue’s participation, Begue still participated in the proceedings

Even though his revocation was not permanent, Dr. Blackwood, who acted as chairman of Schaffer’s reconsideration hearings in 2004, 2007 and 2012, said on Dec. 7, 2012 that he had promised himself “from the beginning,” that Schaffer would never get his license reinstated.

As blatant as that comment was, it paled in comparison to Dr. McVea’s declaration that because Schaffer had not received his salvation because he had not accepted Jesus Christ as his personal savior he could not be expected to comply with professional standards.

Schaffer is Jewish.

Donald added that Schaffer was “a bad person who had hurt people.”

Even if Schaffer’s revocation had been reversed by the courts, in all likelihood, his case would have been remanded back to the same board and the same panel that originally pulled his license as occurred in another disciplinary matter involving a second dentist whom we shall write about in our next post. In effect, the court would have simply thrown Schaffer back to the same pack of wolves, thus making it futile to pursue his case any further before the same group of people.

He said Kent had about 2,500 malpractice lawsuits against him. “I had one, which I won, and yet the board came after me while doing nothing to Dr. Kent,” Schaffer said. “They went behind me to my patients and told them such things as I had killed a patient and that I was going to (the Louisiana State Penitentiary at) Angola. I have accounts receivable in the millions of dollars because I never turned a patient away because he could not pay,” he said.

Once the board had pulled his license, however, it still kept the pressure on Schaffer with no let up.

Schaffer, after being forced out of his practice, leased his office building to another dentist, David Gerard Millaud.

On Dec. 20, 2000, Ogden sent a two-page letter to Dr. Millaud, saying:

“It has come to our attention that you are practicing in the office of Dr. Randall Schaffer…”

Then, in perhaps an unintentional admission that investigator Morrison was continuing to conduct surveillance on Schaffer, whom the board had already broken, Ogden said, “We have also observed Dr. Schaffer’s spending a great deal of time on the office. As you know, his license has been revoked and he is prohibited from practicing dentistry in any form.

“I also wish to call your attention to (state statute) which states:

The board may refuse to issue or may suspend or revoke any license or permit, or impose probationary or other limits or restrictions on any dental license or permit issued under this chapter for any of the following reasons:

Division of fees or other remuneration or consideration with any person not licensed to practice dentistry in Louisiana or an agreement to divide and share fees received for dental services with any non-dentist in return for referral of patients to the licensed dentists, whether or not the patient or legal representative is aware of the arrangement…”

The letter prompted an immediate response from Schaffer’s attorney Michael Ellis of Metairie, who wrote board attorney Jimmy Faircloth (who substituted for Begue after Begue was forced by the Supreme Court to step aside).

“I find it incredulous that the board would write such a letter under the circumstances of this case,” Ellis said. “I know of no law which prohibits Dr. Schaffer from ‘spending a great deal of time in the office.’ The board has effectively put this man out of business and now wants to harass a young dentist to whom Dr. Schaffer is renting space.

“If the board has any evidence whatsoever that either Dr. Millaud or Dr. Schaffer was in violation of the law, I ask that you notify me immediately. If the board is not in possession of such evidence, (Ogden’s) letter must be considered nothing but a tactic of harassment calculated to prevent Dr. Schaffer from earning a living.”

Millaud, who said he was not sharing fees or paying other remuneration to Dr. Schaffer, nevertheless decided that his best interest would be served by terminating his lease arrangement with Schaffer, Ellis said.

Then-State Sen. Chris Ullo (D-Marrero), who died earlier this year, contacted Gov. Mike Foster to intervene with the board on Schaffer’s behalf but Foster declined to get involved with what some might describe as his rogue board.

Then, following Ogden’s letter to Dr. Millaud, Schaffer himself requested an audience with Foster. On Dec. 27, exactly a week following Ogden’s letter to Millaud, Chris Stelly, writing on behalf of Foster, said the board “is an independent body created and empowered” by state law and that the board had “sole jurisdiction over this matter. Therefore, this office does not have the authority to intervene.

“However, I have taken the liberty of forwarding your letter to Mr. C. Barry Ogden, executive director of the LA State Board of Dentistry, for his information.”

That, readers, is what is known as the classic bureaucratic shuffle.

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The Peter Principle is alive and well at DHH as evidenced by sequence of curious events—from CNSI to recent promotion

Posted in Contract, Contracts, Corruption, DHH, Health Care on March 3, 2014| 9 Comments »

Sometimes it’s just mind-boggling to try and fathom what goes through the minds of our political leaders.

The only possible explanation may be found in the 1969 book The Peter Principle by Dr. Laurence J. Peter and Raymond Hull. In their book, they introduced the “salutary science of hierarchiology” which theorized that in a hierarchy, employees tend to rise to their level of incompetence.

Take, for example, that news release from the Department of Health and Hospitals (DHH) just last Aug. 13. DHH trumpeted the recovery of more than $124 million in fraudulent payments in the Medicaid program, “the highest rate of recovery in any state in the nation at nearly 2 percent of all Medicaid dollars spent in Louisiana.

One must wonder just where the oversight was at the time that should have caught and prevented such overpayments.

Yet, only two months prior to that announcement, a red-faced DHH learned that one of its own had embezzled more than $1 million to finance her gambling addiction.

In that case, DHH accountant Deborah Loper was accused of diverting funds over a six-year period in a scheme that revealed glaring weaknesses in departmental policy.

Her arrest warrant said she intercepted more than 130 checks payable to DHH “meant for invaluable health care services for Louisiana’s Medicaid recipients,” Attorney General Buddy Caldwell said.

She had been entrusted to manage a bank account opened in 2006 on behalf of the National Association of State Human Services Financial Officers in order to underwrite the association’s 2009 conference.

Former DHH fiscal director Stan Mead volunteered to hold the conference and designated Loper and her immediate supervisor to organize the event. Loper was given responsibility for management of the account and had the authority to conduct financial transactions, the warrant said.

She was instructed to close the account following the conference but instead, fabricated documents so as to give the appearance she had complied but instead, merely changed the address on the account so that she could receive the monthly statements at her home.

The main source of the money was Medicaid reimbursements that were issued to DHH by licensed Medicaid providers and were intended to be returned to the state’s Medicaid program, Caldwell said.

Her embezzlement went unnoticed by her superiors until February of 2013 when she inadvertently deposited one of the checks for more than $40,000 into her own account and her bank subsequently froze her account.

Only three months before the revelation of that financial oversight by DHH officials, we learned of an ongoing FBI investigation into that infamous $300 million contract with CNSI which quickly resulted in cancellation of the contract by the Jindal administration and the resignation of DHH Secretary Bruce Greenstein.

Then in February of this year, Greenstein’s undersecretary Jerry Phillips announced his retirement after 25 years at DHH. Oddly, he announced he was retiring to “pursue other employment options with the state.”

DHH Secretary Kathy Kliebert said Jeff Reynolds would replace Phillips on March 10, the same day the legislative session convenes.

Reynolds started with DHH as an Accountant Administrator 5 in July of 2006 at $102,000 per year. Most recently, he served as Medicaid Deputy Director at $113,734 per year.

And the person who served as Loper’s immediate supervisor while she was skimming that $1 million from DHH?

Jeff Reynolds.

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