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LouisianaVoice learns of Jindal plan to force state retirees out of OGB by raising members’ premiums, cutting benefits

Posted in Contract, Contracts, Governor's Office, Health Care, Layoffs, OGB, Office of Group Benefits, Privatization on August 25, 2014| 61 Comments »

Remember less than two weeks ago (Aug. 14, to be precise) we wrote that members of the Louisiana Office of Group Benefits (OGB) should prepare themselves for health insurance premium sticker shock? https://louisianavoice.com/2014/08/14/nichols-pens-op-ed-on-soundness-of-ogb-even-as-legislative-fiscal-office-prepares-members-for-premium-sticker-shock/

Well, LouisianaVoice has obtained new information that indicates we weren’t entirely accurate in our portrayal of what’s in store for some 230,000 state employees, retirees and their dependents.

The reality is much worse.

Much worse indeed, particularly for state retirees.

To recap briefly, we told you in that Aug. 14 posting about the report of the Legislative Fiscal Office on pending major changes in medical coverage for state employees and retirees. Some of those anticipated changes provided in the Legislative Fiscal Officer Report, authored by Legislative Fiscal Officer John Carpenter and Legislative Fiscal Office Section Director J. Travis McIlwain, include:

  • An increase in premiums state employees and retirees pay for health coverage;
  • Significantly increase the out-of-pocket maximum for all health plan options;
  • Increasing deductibles for all health plan options;
  • Increasing co-pays 100 percent for those proposed health plans with co-pays;
  • Increasing the out-of-pocket maximum for the prescription drug benefit by $300 from $1,200 to $1,500 per year, a 20 percent increase;
  • Requiring prior authorizations for certain medical procedures;
  • Eliminating the out-of-network benefit for some health plan options;
  • Removing all vision coverage from the health plan options.

OGB Report_July 2014 FOR JLCB

The latest premium increase of 6 percent will go into effect on Jan. 1 is on top of a 5 percent increase implemented on July 1 of this year.

State Treasurer John Kennedy, on the heels of the Legislative Fiscal Office Report, penned an op-piece in the Baton Rouge Advocate in which he advised state employees to be careful to not break a leg as the increased premiums and co-payments “could cost you a month’s pay. http://theadvocate.com/home/10028534-123/gues-column-changes-mean-problems

The changes mentioned thus far are, of course, mostly the result of that $7.2 million—and growing—consulting contract awarded to Alvarez & Marsal which was charged with sniffing out $500 million in state savings over the next five years—something Gov. Bobby Jindal apparently felt his highly-paid cabinet appointees were incapable of accomplishing.

Of course Jindal’s plan for saving $20 million a year through the privatization of OGB has been less than a smashing success as the agency has hemorrhaged red ink to the tune of $16 million more per month than it receives in premiums since the Blue Cross Blue Shield of Louisiana takeover on Jan. 1, 2013.

BCBS is paid by the state on the basis of enrollees. The initial rate beginning in January of 2013 was $23.50 per OGB member per month. Today, that rate is $24.50 and in January, it will go to $25.50 per member per month.

But now LouisianaVoice has obtained information from deep within the inner sanctum of BCBS that OGB is planning even more drastic changes. So, in effect, OGB members are about to be hit with a double whammy, or in more chic vernacular, the perform storm, designed to force retirees out of OGB coverage and into Medicare.

And OGB is completely complicit in this portentous plan.

The sweeping changes are scheduled to be mailed to employees and retirees on Sept. 15 but we have the gist of the plan now.

First of all, all current plans are going to disappear, especially the one that are geared toward retirees. The PPO, or Preferred Provider Organization plan, currently has four levels: Active, Retiree No Medicare, Retiree with Medicare and Retiree 100 (a supplemental program designed for retirees with high medical costs. This program requires a separate premium and currently is only available through the PPO plan).

Now, though, there will be only four plans and none will have levels geared toward retirees, meaning that retirees will be paying more out of pocket. This is the method by which Jindal, through OGB, plans to push retirees to drop their OGB coverage and switch to only having Medicare.

Such a move, of course, would drastically reduce the amount the state would be required to pay BCBS, thus reducing the monthly deficit currently being experienced by OGB. The premium increase next January, along with the reduced benefits would cut that deficit more as the administration grapples with the can of worms it opened by turning over the third party administrative duties to BCBS.

But even worse, state employees who never worked in the private sector prior to April 1, 1986, do not qualify for Medicare. State employees hired after that date began paying into Medicare. Moreover, state employees who never worked in the private sector do not qualify for Social Security benefits. http://www.treasury.louisiana.gov/Lists/SiteArticlesByCat/DispForm_Single.aspx?List=c023d63e%2Dac65%2D439d%2Daf97%2Dda71d8688dff&ID=101

Commissioner of Administration Kristy Nichols, try as she might, was unable to put much positive spin on OGB’s status in her recent op-ed column. http://lapolitics.com/2014/08/nichols-ogb-prepared-for-changing-world-of-health-care/

Nor was the self-serving op-ed piece by OGB board member Scott McKnight in Tuesday’s Advocate particularly reassuring. http://theadvocate.com/home/10088672-123/guest-commentary-ogb-changes-helping

(Is it just us, or do the administration and BCBS suddenly seem terribly eager to launch a media blitz to convince us against overwhelming evidence to the contrary that what they’re planning to roll out at the approaching  open enrollment is in the best interest of state employees and retirees? An even better question is do they really believe we’re stupid enough to buy into their empty promises?)

Second, and probably the most inane change is the renaming of all the plans from HMO (Health Maintenance Organization), PPO and CDHP (Consumer Directed Health Plan, formerly High Deductible Plan, changed to CDHP to make it sound more appealing) to confusing names like Magnolia Local, Pelican HRA, etc.

That tactic would appear to simply create confusion for elderly members.

But even more duplicitous is the provision that all OGB members must choose a new plan for the 2015 year during the upcoming open enrollment. If not, then they will automatically be placed in the HRA plan which is the worst of the four plans OGB will offer next year. It is a high deductible plan with have no coordination of benefits with any other coverage.

The big concern here is for members who have moved but never updated their addresses with their Human Resources departments or with OGB. If they don’t get the notices mailed out on Sept. 15 and fail to choose a plan or if they are incapacitated in nursing homes and have no family watching out for them, they will automatically be dispatched to the HRA plan.

HR officers will become responsible for retiree maintenance. Accordingly, retiree records definitely need to be updated in employees’ and retirees’ respective HR offices. But with all the closures and privatizations, many retirees and/or HR offices do not know who will have the retiree maintenance. Several other changes include dependent verification and late applications. All these changes will have to be made with an antiquated electronic enrollment system designed and maintained by the same OGB IT staff that was recently consolidated under DOA and which no longer belongs to OGB.

Further complicating matters is Jindal’s gutting of OGB staff to the point that the office now has only a handful of employees taking phone calls from members. So the administration has suggested that BCBS get its employees to handle the spillover calls.

But while OGB representatives are authorized to offer advice to members on what plans they should choose, BCBS employees are not. So, BCBS is hiring about 20 temps to take phone calls from members regarding the plan changes for 2015. These temps will, in all probability, simply refer callers back to OGB, which would appear to be a poor way to communicate with members about such important changes.

How bad is the HRA plan? Well, for openers, and deductibles will increase from modest amounts to thousands of dollars, the economic effect of which could be devastating to employees and retirees alike.

Lest anyone forget, it was Jindal who pushed the privatization of OGB, even jettisoning Tommy Teague as executive director of the agency when he didn’t jump on board the privatization train. It wasn’t enough that Teague had taken OGB from a $60 million deficit to a $520 million surplus, Jindal insisted the move, which included putting more than 150 OGB employees out of work, would save the state $20 million per year. The plan thus far has proved a complete fiscal disaster.

State Rep. John Bel Edwards (D-Amite), who is an announced candidate for governor in the 2015 election, agrees.

“The OGB fiasco is proof positive that privatization for the sake of privatization is foolish,” he said. “A reserve balance that recently exceeded $500 million is half that now and bleeding $16 million per month due to mismanagement and budget chicanery, and the ultimate price will be paid by state retirees and employees through higher premiums, higher co-pays, higher deductibles, and higher co-insurance in exchange for fewer benefits, more forced generic drugs, and more preclearance of needed treatments and other changes that make crystal clear that the OGB beneficiaries will pay more for less.”

In an effort to prevent unwanted surprises in health care coverage following the upcoming enrollment period, it is important to remember three important things:

  • All members should immediately update their addresses with their HR departments or with OGB;
  • Make certain that elderly retirees, retirees in nursing homes, etc., have updated addresses;
  • Make certain that all retirees on Medicare have sent an updated copy of their Medicare cards into OGB.

These are three things that are critical to state employees and retirees as the 2015 plans changes approach.

 

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Nichols pens op-ed on soundness of OGB even as Legislative Fiscal Office prepares members for premium sticker shock

Posted in Civil Service, DOA, Governor's Office, Guest Columnist, Health Care, Layoffs, OGB, Office of Group Benefits, Privatization, Revenue on August 14, 2014| 19 Comments »

Tomorrow (Aug. 15) is the last day for 24 employees of the Office of Group Benefits (OGB) but the bad news doesn’t end there, LouisianaVoice has learned.

Commissioner of Administration Kristy Nichols’ glowing guest column about the condition of OGB in Jeremy Alford’s Louisiana Politics notwithstanding, some 230,000 state employees, retirees and their dependents are in for some serious sticker shock.

http://lapolitics.com/2014/08/nichols-ogb-prepared-for-changing-world-of-health-care/

Even as Nichols babbled on about providing “better service and care to its members” while at the same time employing the by now tired and time-worn Jindal tactic of blaming everyone but Jindal for rising health care costs, the Legislative Fiscal Office was dropping a bombshell in announcing dramatic increases in health care insurance premiums for state employees coupled with benefits that will be undergoing deep cuts.

OGB Report_July 2014 FOR JLCB

Blaming the Affordable Care Act (Obamacare) and an aging population for rising health care costs, Nichols said “financially responsible practices” are necessary to continue providing benefits. She conveniently neglected to mention that it was the Jindal administration’s decision a year ago to lower premiums as a means of lowering the state’s 75 percent match, thereby freeing up money to plug gaping holes in Jindal’s makeshift budget.

That move, of course, help decimate OGB’s reserve fund. What started out as a $540 million surplus a year ago now stands at less than half that.

“At first glance it may seem like having a fund that large is a great thing,” she wrote. “But in reality, keeping hundreds of millions unnecessarily locked up in a reserve fund was not the best use of taxpayer money.

“Considering that the state funds 75 percent of member premiums through taxpayer dollars, letting that large of a balance sit unused meant that those funds weren’t being used for other important projects,” she said.

Nichols, of course, overlooks the fact that successful insurance companies keep health reserve funds in cases of a natural disaster or major epidemic. Companies who only manage to pay claims out of premiums on the other hand, traditionally don’t survive.

Her entire 800-word piece never once mentioned that state employees and retirees would soon be asked to pay significantly higher premiums for equally significantly reduced benefits. Instead, she parsed words, saying, “Plan changes for fiscal year 2015 are estimated to lower expected claims costs by $131.8 million…”

That sounds pretty good until you read the first page of the nine-page report released Monday by Legislative Fiscal Officer John Carpenter and Legislative Fiscal Office Section Director J. Travis McIlwain.

State employee health plan changes, according to the report, include, among other things:

  • An increase in premiums state employees and retirees pay for health coverage;
  • Significantly increase the out-of-pocket maximum for all health plan options;
  • Increasing deductibles for all health plan options;
  • Increasing co-pays 100 percent for those proposed health plans with co-pays;
  • Increasing the out-of-pocket maximum for the prescription drug benefit by $300 from $1,200 to $1,500 per year, a 20 percent increase;
  • Requiring prior authorizations for certain medical procedures;
  • Eliminating the out-of-network benefit for some health plan options;
  • Removing all vision coverage from the health plan options.

The latest premium increase of 6 percent will go into effect on Jan. 1 is on top of a 5 percent increase implemented on July 1 of this year.

Of course, the revamp of OGB premiums and benefits was the result of the infamous Alvarez & Marsal (A&M) study.

The really amazing thing about that is Jindal rushed into the OGB privatization convinced he could do no wrong and that his was the only way and that the state was going to save millions. Yet, when things started going south, he calls in the big A&M guns.

Not only that, he forked over $199,752 to A&M to learn the best way to screw state employees.

Speaking of A&M, the contract with the firm was originally for a little more than $4.2 million but was promptly amended by $794,678, bumping the amount up to a cool $5 million. The problem with that is state law allows only a one-time contract amendment of no more than 10 percent without legislative concurrence. The amendment was for 18.9 percent.

As if that were not egregious enough, the Division of Administration subsequently amended the contract by yet another $2.4 million in May—again without bothering to obtain the legally mandated concurrence from the legislature.

Nothing, it seems, is beneath this administration.

Well, don’t say you weren’t warned. LouisianaVoice said before the OGB privatization ever took place that it would be necessary to raise premiums or lower benefits.

But Jindal, wunderkind that he is, insisted his privatization plan, ripped straight from the pages of the handbook of his only private sector employer, McKinsey & Co., would be more cost efficient than having those lazy state workers process claims and that the state would save money.

And lest you forget, McKinsey advised AT&T in 1980 there was no future in cell phones.

And of course, McKinsey developed the flawless business plan for Enron.

To a degree Jindal is correct; the state will now save money—on the backs of state employees.

State Rep. John Bel Edwards (D-Amite), who is an announced candidate for governor in the 2015 election agrees.

“The OGB fiasco is proof positive that privatization for the sake of privatization is foolish,” he said. “A reserve balance that recently exceeded $500 million is half that now and  bleeding $16M per month due to mismanagement and budget chicanery, and the ultimate price will be paid by state retirees and employees through higher premiums, higher co-pays, higher deductibles, and higher co-insurance in exchange for fewer benefits, more forced generic drugs, and more preclearance of needed treatments and other changes that make crystal clear that the OGB beneficiaries will pay more for less.”

Bingo! And right on cue, Carpenter’s report echoed Edwards:

“The health plan and prescription drug plan policy changes…will shift more of the costs from the state to the OGB plan member,” it said.

That shift will save the state a minimum of $44.7 million for health plan changes and at least $69 million for prescription drug plan changes in fiscal year 2015, the report said.

“Along with premiums, the major costs incurred for medical services by an OGB plan member will be deductibles, co-payments and coinsurance,” it said. “The new health plan offerings will significantly reduce the cost to OGB, while the OGB members pay more for their medical services.”

Of the total OGB population, 75 percent are currently enrolled in the HMO plan which presently has no deductible for the employee but those members will, effective January 1, be subject to both a deductible and coinsurance whereas most are currently subject only to fixed co-pays.

 

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Flurry of document shredding raises dust at DHH on heels of lawsuit filed against Medicaid claims processing contractor

Posted in Contract, Contracts, Courts, DHH, Health Care, Lawsuits, Public Records, State Agencies on August 6, 2014| 16 Comments »

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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DHH hospital privatization financial report misleading, but attracts media supporters as the Gospel according to Bobby

Posted in DHH, Governor's Office, Health Care, Media, Privatization, Revenue, Transparency on August 5, 2014| 5 Comments »

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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OGB laying off 24 more; blow softened when CEO assures affected employees losing their jobs ‘not like losing a child’

Posted in Governor's Office, Health Care, Layoffs, OGB, Office of Group Benefits, ORM, Office of Risk Management, Privatization, State Agencies on July 26, 2014| 23 Comments »

The Jindal administration has announced plans to jettison 24 more positions at the Office of Group Benefits (OGB) as a cost cutting measure for the cash-strapped agency but is retaining the top two positions and an administrator hired only a month ago.

The effective date of the layoffs is Aug. 15.

The latest cuts will leave only 47 employees when the agency is relocated to the Claiborne Building basement to share office space with the Office of Risk Management. The Claiborne Building also houses the Civil Service Department, the Board of Regents, the Department of Education, the State Land Office and the Division of Administration.

The layoff plan submitted to the Department of Civil Service on June 14, said there was insufficient work to justify all 71 positions.

Affected by layoffs are eight Benefits Analyst positions, three Group Benefits Supervisory spots, one Group Benefits Administrator, seven Administrative Coordinators, an Administrative Assist, two Administrative Supervisors, one IT Application Programmer/Analyst and one Training Development Specialist.

OBG Chief Executive Officer Susan West, one of those being retained, will be making a physical move back into her old offices. She previously worked for ORM before that agency was gutted by Jindal’s grand privatization scheme and she moved over to OGB.

West, who makes $170,000, and Interim Chief Operating Officer Charles Guerra ($107,000) are not affected by the layoff nor is Elis Williams Cazes ($106,000)) was appointed as Group Benefits Administrator on June 23.

Cazes was previously employed by Blue Cross/Blue Shield of Louisiana which serves as the third party administrator of the OGB Preferred Provider Operation at a cost to the state of $5.50 per month per enrollee, which computes to an amount a little north of $70 million per year.

Her position was created—and the requirements reportedly written especially to her qualifications—as the Medical/Pharmacy Administrator responsible for benefit plan management and vendor performance with the primary responsibility to “continuously monitor medical and pharmacy benefit plans to seek out modification of plans or implementation of new plans that reduce claims costs and provide efficiencies for the state and plan participants,” according to the justification given for retaining her position.

Well, we can certainly see where her position is as indispensable as West’s and Guerra’s.

All this takes place at a time whe OGB’s reserve fund has dwindled from $500 million at the time of the agency’s privatization in January 2013 to about half that amount today. Even more significant, the reserve fund is expected to dip as low as $5 million by 2016, just about the time Jindal leaves town for good.

Completing the trifecta of good news, we also have learned that health benefits for some 200,000 state employees, retirees and dependents will be slashed this year even as premiums increase.

In June, West broke the news to the OGB employees. She erroneously said the 47 remaining employees would be reassigned other duties and some might see pay reductions and that those with seniority could bump junior employees in desired positions. The Civil Service Department, however, said salaries could not be cut and bumping is no longer allowed.

Isn’t it nice to know your agency director knows the procedures?

Employees were told that letters would go out between July 1 and July 15 to those who were being laid off. On July 7, they were told the letters would be delivered by hand on Friday, July 11. None came. On the following Monday (July 14) confusion of the order of the day as Deputy Commissioner of Administration Ruth Johnson sent emails to those affected and instructed them to attend a noon meeting in the OGB board room. Upon entering the board room, each person was handed a packet that informed them that Civil Service had not approved the layoffs.

During the meeting, according to one who was there, West kept repeating, “I get this. I’ve been where you are. I get this. However, there are worse things. It’s not like losing a child. I get this.”

Way to soften the blow, Susan. You might have reminded them that the fighting between Israel and Palestine isn’t so bad because there’s also an Ebola outbreak in Africa or that while you’re losing your home to a hurricane storm surge, some people are having to endure heavy wind damage. Or better yet, take them all to a showing of The Fault in Our Stars. That’ll cheer them up.

“It was the ‘I get this’ and comparison of losing a job to losing a child that infuriated the OGB state employees,” the employee said. “This is the worst thing in their lives right  now, some are battling cancer and working; some have children and grandchildren to feed; some live paycheck to paycheck; some are taking care of the elderly and family; all have bills, rents/mortgages, school tuition, etc.”

But you really can’t blame Susan. She previously worked for ORM and was among those present when ORM Director Bud Thompson broke the privatization news to his employees by standing before them, grinning, as he said, “I still have my job.”

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