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A trend of arrogance permeates Jindal administration

Posted in Civil Service, Governor's Office, OGB, Office of Group Benefits, ORM, Office of Risk Management, Teague, Transparency on May 6, 2011| 13 Comments »

Perhaps it’s only coincidence, but a trend seems to be developing in Baton Rouge and it’s not a very pretty one.

There is a condescending attitude of arrogance that permeates the Jindal administration from top to bottom and the day to day civil servants who work in the trenches are the ones who are feeling the brunt of the administration’s haughtiness.

The attack has been subtle but steady with no letup in sight.

Forget about Jindal’s campaign flyer four years ago in which he pretended to hold state employees in such high esteem (LouisianaVoice post of April 22). That was just political rhetoric that morphed into bitter irony.

State Employee Recognition Day? That was last Wednesday and for the third consecutive year, Jindal signed a proclamation in which he fawned over “dedicated state employees” even as he maneuvered behind the scenes to have legislation introduced last year to abolish Civil Service, to freeze merit pay increases for classified employees but not for unclassified employees (read: political appointees), and even as he moved to privatize everything in sight at the cost of putting mid-career employees on the streets who are not qualified for social security or Medicare. Some of those employees have life-threatening illnesses and will have no medical insurance.

One state employee, Melody Teague, was fired one day after she criticized Jindal during a forum held by the Commission for Streamlining Government. She won her job back but her husband recently evoked memories of the infamous “Saturday Night Massacre” of Oct. 20, 1973, when Richard Nixon fired Archibald Cox and abolished the office of Special Prosecutor.

Tommy Teague, by all accounts, had been doing a superb job as CEO of the Office of Group Benefits. OGB went from a $100 million deficit when he took over to a $500 million surplus and the agency was paying claims within 48 hours.

But on April 15, Jindal decided that Teague was somehow standing in his way of privatizing that agency and Deputy Commissioner of Administration Mark Brady was called on to fire Teague. Unlike Attorney General Elliot Richardson, who resigned rather than carry out Nixon’s orders to fire Cox, Brady was more than up to the task and Teague was shown the door.

All that’s old news. Last week a couple more events, though minor in the overall scheme of things, nevertheless strip away that veneer of piety behind which Jindal prefers to hide. Neither event directly involved Jindal but as was said earlier, it’s the arrogance from top to bottom that makes the latest occurrences seem so typical of this administration.

Let’s take the Office of Risk Management first. This agency was privatized last year at a cost of $68 million to the state with a promise of savings of $20 million per year. The first section to go was Worker’s Comp. That was last July. Less than nine months later, the company that took over ORM, F.A. Richard & Associates (FARA) requested and got approval for a $7 million amendment, bringing the cost to $75 million.

Rep. Jim Fannin (D-Jonesboro) apparently wasn’t too pleased that FARA was seeking more money or that the Division of Administration approved the amended contract. He has placed ORM on the agenda for Tuesday’s meeting of the House Appropriations Committee which he chairs.

But that’s not the story. ORM Director J.S. “Bud” Thompson sent out word to his troops on Thursday that no one from ORM was to attend the meeting.

That is in direct violation of Civil Service rules. In fact, a very recent memorandum just went out to all Civil Services employees from the Department of Civil Service that addresses that very issue.

General Circular No. 2011-009 reminds state employees that the 2011 Regular Session of the Legislature will be taken up mostly with budget issues. “As classified state employees, some of these issues may have a direct impact on you (and) about which you may wish to speak,” the circular said. “Classified employees are prohibited from engaging in efforts to support a candidate, party, or political faction in an election.

“These restrictions do not prohibit classified employees from expressing themselves either privately or publicly on issues that may be pending before the legislature.”

The circular also said state employees who attend legislative hearings must be on approved leave.

Thompson did not respond to an email inquiry from CNS about his new policy—new, because a year ago, ORM employees were allowed to attend Joint Budget Committee hearings on the privatization—but on Friday he did amend his policy to allow one employee from the agency to attend Tuesday’s hearing.

His Friday email, sent to all ORM employees, attempted to justify his decision to limit attendance. “Because of the need to continue our preparations for the July 1st transfer of handling of General Liability claims to FARA and the concern that rising river levels next week might cause us problems in accessing our office, we will allow only one employee to attend that meeting,” he said.

Other lines, or units, will not be involved in preparations for transferring the General Liability line to FARA any more than other lines were involved in last July’s transfer of Worker’s Comp to FARA. In that case, claims adjusters came to work one day and the Worker’s Comp adjusters simply were gone. No pomp, no fanfare, just gone and no one else’s work was disrupted in the least, so the General Liability excuse is a smoke screen easily recognized as such by ORM workers.

Again, though, he is in violation of Civil Service regulations; there is nothing in the regulations that allow him to restrict the number of employees who may attend.

But not to worry: streaming video of the hearing can be accessed by logging onto http://www.legis.louisiana.gov/ and navigating to the proper committee room (5). Thompson’s Friday email also instructed employees they watch the video playback at home but to refrain from viewing it at work. Of course, an enterprising employee could simply plug in his or her headphones and minimize the video and continue working on claims while listening to Thompson’s testimony.

The other event is totally void of any semblance of subtlety.

CNS received an anonymous letter on Friday that contained an email sent from the iPhone of Nick Gautreaux, erstwhile state senator from Abbeville, not to be confused with current Sen. Butch Gautreaux of Morgan City. Nick Gautreaux is the current Commissioner of the State Office of Motor Vehicles.

Dated March 17, the email was addressed to all OMV employees and consisted of only five sentences but it was the third sentence that appeared to hold true to the philosophy of superciliousness that has become the hallmark of the Jindal tenure.

“I am proud of our teams (sic) hard work this past week,” the email began. “All of you have shown a willingness to progress to a higher level of production and customer service.”

Then came that third sentence: “I must say that the individuals who continue to defy change will suffer the wrath of my management team.”

He closed by saying, “I want everyone to know that I have an open door policy. Thanks for the hard work.”

It’s pretty evident that Gautreaux didn’t go to the Zig Ziglar School of Employee Relations. If he did, he was absent on Motivation Day.

Defy Change? Management wrath? Could OMV be next? Holy Privatization, Batman!

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Don’t do as I do; do as I say do

Posted in Auditor, Governor's Office, Politics, Public Records, Transparency on May 5, 2011| 7 Comments »

When a state audit of the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) turned up a number of deficiencies, GOHSEP Director Mark Cooper, judging from his response, must not have gotten the message from Gov. Bobby Jindal.

Among the shortcomings found by the audit were;

Inadequate preparation of the annual fiscal report—for the fourth consecutive year, no less;

Understating the amount reported for the Public Assistance Program by $120 million;

Inaccurate Federal Financial Reports, including a $25 million understatement of the federal authorized amount on the Public Assistance Report for Hurricane Katrina;

Untimely draws and inaccurate reporting of draws to Office of State Reporting and Accounting Policy resulting in delays in state reimbursements and potential lost interest revenue;

The audit report made numerous recommendations to remedy the shortcomings and Cooper responded in classic fashion:

“I have reviewed the finding(s) in (the audit report) which covers activities of the Governor’s Office of Homeland Security and Emergency Preparedness for Fiscal Year 2010,” Cooper wrote.

“Additional staff has been hired and additional training is planned to ensure that multiple layers of review are implemented,” he said.
Wait. What?

“Additional staff?”

What was it that Jindal said a few months back about doing more with less?

Perhaps that doesn’t apply to certain agencies.

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Second week of hearings brings more confusion on OGB sale

Posted in Auditor, Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Politics, Transparency on May 2, 2011| 7 Comments »

Some would call it bureau-speak but to those sitting through Monday’s Senate Retirement Committee hearings on the privatization of the Office of Group Benefits, it was more like gooney-babble.

Commissioner of Administration Paul Rainwater, just as he did last week, tried to convince legislators of the wisdom of privatizing the agency that has amassed a $500 million surplus and which has an administrative cost of only 3.5 percent.

As if that were not enough, Legislative Auditor Daryl G. Purpera testified that Rainwater has refused to provide documents that his office is constitutionally entitled to have in order to conduct proper assessments. “We requested certain documents, particularly those pertaining to the Chaffe contract we were told by Mr. Rainwater that those documents would not be provided,” Purpera said.

“We also tried to get specifics of the proposal but I received a letter from Mr. Rainwater saying those would not be provided under exceptions. My office cannot do its job if we have scope limitations,” he said.

The proposal to which he alluded was the proposal submitted by Goldman Sachs to conduct a financial assessment of OGB and to market the agency for a buyer, according to the RFP. The Chaff contract was a $49,999.99 contract with Chaffe and Associates of New Orleans to conduct an interim assessment. The contract amount was one cent less than the amount that would have required concurrence by the Office of Contractual Review.

Rainwater started his testimony by comparing Louisiana to other states, zeroing in on the staff sizes of the other states as compared to OGB’s 300 employees.

At times appearing to talk down to committee members and once even admonishing committee Chairman Sen. D.A. “Butch” Gautreaux (D-Morgan City) to not interrupt while he was speaking, Rainwater said the $500 million surplus “is not for sale. It will not be diverted for any other use other than to pay claims.”

What he did not say on Monday but did say a week ago was that while the surplus would indeed be used to pay claims, it would no longer be OGB surplus funds paying the claims because the surplus would go over to the buyer who would use the fund to pay claims.

It was only a couple of weeks ago that Rainwater said the OGB $500 million reserves are an attractive selling point because the private company that ultimately purchases the agency would not have to dip into its own capital to pay claims. His own office’s press release of April 26 describing his appearance before the Retirement Committee repeatedly alluded to his testimony on the “potential sale and privatization of the state’s Office of Group Benefits” and of the procurement of a financial advisor “to help the state evaluate a potential sale of OGB….”

On Monday, however, a casual observer would have had difficulty in believing Rainwater was talking about the same proposal. Suddenly, it turns out that OGB is not for sale after all, that the RFP will instead be for a third party administrator of the state’s PPO (Preferred Provider Organization).

“At the end of the day,” he told the committee, “we will still have the Office of Group Benefits with 149 employees.”

“I’m not getting answers to my questions here,” Gautreaux said.

“You are getting answers,” Rainwater shot back.

Gautreaux said if the agency is privatized, “There will have to be rate increases and/or benefit reductions. There’s no way to avoid that with a private company trying to turn a profit.”

Division of Administration (DOA) Chief of Staff Dirk Thibodeaux, who had earlier promised the committee that a new RFP would be completed by week’s end, said Gautreaux was incorrect. “The legislature will have to approve any contract” for a third party administrator, he said, so lawmakers would have the opportunity to examine the rate structure.

Rainwater said there would be a five-year contract with a third party administrator. “At the end of the five years, we’ll take a look at it.”

“What’s going on here?” Gautreaux demanded. “Last week we were talking about selling OGB and now we’re talking about a contract with a third party administrator. You three (Rainwater, Thibodeaux, and OGB newly-appointed CEO Scott Kipper) may know what you’re talking about but the rest of us surely don’t.”

Rep. Hollis Downs (R-Ruston), sitting in as a guest for the second week in a row, said, “The state’s HMO is self-insured but administered by a third party, in this case, Blue Cross/Blue Shield, am I correct?”

“That’s correct,” Rainwater said.

“The state’s PPO is now self-insured and self-administered with the state paying all claims but you’re proposing that it become self-insured but administered by a third party?”

“Yes, sir.”

“And my understanding is you may combine both the HMO and PPO into one, am I correct again?”

“Yes, we could conceivably bundle the two for greater efficiency.”

“So, you’re just selling a block of business and the state would continue to have oversight?” Downs asked.

“That’s correct,” Rainwater said.

Following Rainwater’s departure from the committee room, Travis McIlwain, director of the General Government Section of the Legislative Fiscal Office spoke briefly on efforts by his office to analyze the administration’s proposal.

“Frankly, we have nothing in hand that would allow us to analyze this proposal,” he said. “Until today, we have heard only that the administration wants to sell OGB and now, Mr. Rainwater says it’s not for sale but is for lease to a third party administrator. I’m as confused as you, Mr. Chairman,” he said to Gautreaux.

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Did Rainwater simply forget to mention those “other” states with fully-funded health insurance programs?

Posted in Governor's Office, Health Care, House, Senate, Jobs, Legislature, Legislators, OGB, Office of Group Benefits, Retirement on May 2, 2011| 5 Comments »

Commissioner of Administration Paul Rainwater told the Senate Retirement Committee at least half-a-dozen times last week that Louisiana was “one of only two states” to run a completely self-funded Preferred Provider Organization (PPO) that pays claims exclusively from premiums paid in by members who are state employees or retirees.

Rainwater also said the elimination of 149 jobs that would occur if the Office of Group Benefits (OGB) is privatized would mean a savings of about $10 million to the state.

Both comments bear closer scrutiny.

Yes, Louisiana is indeed “one of only two states” to have a fully-funded PPO. Utah is the other.

But what Rainwater failed to say was that virtually all states self-fund at least one employee health care plan. So says the National Association of State Personnel Executives (NASPE) in its July 2010 white paper on the “Challenges and Current Practices in State Employee Healthcare.”

Researched and written by Katie Meyer, Colleen Schlect, and Betta Sherman of the University of Chicago, the publication also directly contradicted claims by Rainwater (and Jindal), that privatization would be more cost efficient than the PPO plan presently being run by OGB.

Quoting “Combined Public Employee Health Benefit Programs,” a March 2010 health care containment and efficiencies brief for the National Conference of State Legislators, the NASPE publication said self-funded plans “can typically save between five and six percent in administrative costs relative to fully-insured plans.”

Rainwater has insisted that the state’s PPO which now operates at a 3.5 percent administrative cost—not paid by the state’s General Fund, but out of premiums collected from members—could be improved upon by a private company even though he admitted in last Tuesday’s committee hearing that private companies generally experience administrative costs of 10 to 15 percent and some even as high as 20 percent.

Several members of the Retirement Committee, including Chairman D.A. “Butch” Gautreaux (D-Morgan City) had some difficulty with the math in Rainwater’s claim.

The “other” of the two states that presently have fully-funded PPOs is Utah and that state’s program has administrative costs of about 4 percent, according to agency Director Jeff Jensen.

Rainwater also did not mention that other states are moving in the direction of self-funded PPOs—a contra-flow, as it were, to the direction Jindal and Rainwater are attempting to force the state health benefits program.

So, what is it that Jindal and Rainwater know that other states do not? Or, rather, what is it the other states know that this administration refuses to acknowledge?

Here’s what some state administrators have to say about self-funded programs—programs like Louisiana’s that Jindal is trying so desperately to sell:

“In return for assuming risk, we get rewarded from favorable experienced, said Frank Johnson, Executive Director of Employee Health & Benefits for the State of Main. “Being self-funded allows us greater flexibility in terms of benefit design and collaborating with providers in partnerships.”

Debbie Cragun, Human Resource Administrative Director for the State of Utah, says, “You are potentially looking at hundreds of thousands, if not millions saved by going self-funded from fully insured.

Anne Timmons, Director, Employee Benefit Division for the State of Maryland, said cost trends have been below the national average and self-funding has been a major benefit. “If we were fully insured, our costs would be significantly higher,” she said.

Paula Fankhauser, Employee Benefits Administrator for the State of Nebraska, said her state’s plan is sufficient self-funded now that that was not always the case. When it first transitioned to self-funding, it did so with sufficient financial resources. “The state was literally waiting for employees to pay their premiums so we could pay their claims,” she said. A major legislative overhaul of the program rectified those problems and Nebraska now boasts a positive account balance that can cover all claims under virtually any circumstance, she said.

Doug Farmer, Deputy Director of the Kansas Health Policy Authority said that state re-evaluates its program on an annual basis. “Every time we re-examine it, we come to the same conclusion,” he said. “When you have the resources to manage your own pool the size of a state, it is a benefit to be self-insured.”

The NASPE study also said that among self-funded states, there is generally a higher level of satisfaction with current funding practices and claims payment. And most state officials seem to agree that self-funding health plans affords greater flexibility in terms of design and administrative cost-savings.

For example, self-funding has helped states implement wellness programs. “Being self-funded provides an incentive to implement wellness programs, since we pay the bills while someone else does the implementation and day-to-day management of the program,” said Daniel Hackler, Director of the Indiana State Personnel Department.

As for the elimination of those 149 jobs creating a $10 million savings to the state, Rainwater also forgot, or neglected to mention that those 149 salaries do not come out of the state’s General Fund. They are paid from the premiums paid by state employees and is part of the agency’s 3.5 percent administrative costs.

And any OGB surplus, by law, “shall not be used, loaned, or borrowed by the state for cash flow purposes or any other purpose inconsistent with the purposes of or the proper administration of the Office of Group Benefits.”

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Jindal finds way to motivate workers: State Employee Recognition Day is Wednesday, May 4 (2010?)

Posted in Governor's Office, Health Care, ORM, Office of Risk Management, Politics, Transparency on May 1, 2011| 6 Comments »

You have to give it to Gov. Bobby Jindal: he never runs short of ways to insult state employees.

Time and again, he has shown his disdain, his utter contempt for state employees. His mantra of privatization of everything that moves in state government gives little or no consideration as to how it adversely affects state workers.

When he privatized the Office of Risk Management, there were employees with 20 or more years of service who are too young to qualify for retirement benefits and with the current job market so depressed, their prospects of finding meaningful employment are slim. Others who have worked only for the state and are of retirement age, do not qualify for social security or Medicare and are now faced with no medical coverage. Some of those have life-threatening illnesses.

Accordingly, when they lose their jobs, they not only lose their salaries, but their medical coverage as well. Of course they qualify to keep coverage under COBRA but the responsibility for 100 percent of the premiums falls to them and with no job, it’s rather difficult to keep the coverage.

But not to worry: Jindal has found yet one more way to display the extent of his hostility for Civil Service employees and the low esteem in which he holds state workers. It comes in the form of cruel irony that were the circumstances not so dire, it might be laughable.

Apparently it wasn’t enough to publish that nauseating campaign pamphlet four years ago in which he gushed on and on about his love for the state civil service workers. He was so kind as to remind us then that he had worked for the state and that his mother still did (and still does).

Now comes General Circular No. 2011-008 in which he designates May 4, 2011, as “State Employee Recognition Day.” The circular was actually issued by the Department of Civil Service, apparently because Jindal was too busy attending out of state fundraisers.

Turns out he couldn’t even do that right: While the heading correctly says May 4, 2011, the text of the edict proclaims May 4, 2010, as “State Employee Recognition Day in Louisiana.”

The circular is addressed to Heads of State Agencies and Human Resources Directors and reads thusly:

As a part of the nationwide celebration of Public Service Recognition Week (May 2-6), Governor Bobby Jindal has proclaimed Wednesday, May 4, 2010, as State Employee Recognition Day in Louisiana.

We encourage you to use this opportunity to recognize your employees and educate the public about the work state employees are doing to keep our citizens safe, protect our drinking water, provide medical care to the indigent, help abused children, maintain our roads and bridges, and so much more.

Don’t forget to ask your Human Resources Directors and Communications Directors to partner to effectively educate the public on the many quality services your employees deliver to our citizens. Tell the story of how they are making a difference in our communities.

For ideas on activities and community and media outreach projects, there are helpful resources for your review, such as NASPE’s “2010 NASPE (National Association of State Personnel Executives) Guide to State Employee Recognition Day” found at http://www.naspe.net.

One would think they would at least update last year’s circular to reference the 2011 NASPE guide.

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