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Administration said in secret negotiations for Southeast Louisiana Hospital takeover by Magellan Health Services

Posted in Governor's Office, Health Care, Layoffs, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, RFP, Request for Proposals, Transparency on July 25, 2012| 13 Comments »

LouisianaVoice has learned that the recent $651 million cut to the state’s healthcare system may have had nothing to do with the decision by Gov. Bobby Jindal to close down Southeast Louisiana Hospital in Mandeville and in fact the move may have been in the works for months.

In fact, secret negotiations have apparently been ongoing for some time between the state and Magellan Health Services of Avon, Connecticut, to take over the hospital after the hospital is closed and subsequently privatized.

Department of Health and Hospitals Secretary Bruce Greenstein announced late last Friday that the 348-bed hospital would be closed down beginning Oct. 1, putting about 300 employees out of work.

Southeast Louisiana Hospital is one of three state hospitals offering treatment for mental illness, including depression and attempted suicide. Early word is Southeast Louisiana Hospital’s patients will be transferred to the remaining two facilities—Central Louisiana State Hospital in Pineville and East Louisiana State Hospital in Jackson.

Only last month, the state sold 1,442 acres of hospital property to St. Tammany Parish for $6.45 million, far below the $14.7 million the property (including $200,000 in timber assessed valuation) was appraised for in February 2011.

The total 1,900-acre tract, including the remaining area of approximately 500 acres on which the hospital is situated and a park area leased to St. Tammany Parish, was appraised at $67.865 million only last week, according to the web page of the Office of State Lands.

LouisianaVoice has also learned from DHH sources that Greenstein is prepared to sign forms to officially declare the hospital as surplus property preparatory to its being put up for auction.

Early speculation had the hospital property being sold for the development of a high-end residential subdivision.

But LouisianaVoice learned that Greenstein had recently confided in Reps. Paul Hollis (R-Covington) and Tim Burns (R-Mandeville) that he had been in negotiations with Magellan about taking over the operation of the hospital once it is privatized.

Moreover, a New Orleans doctor reportedly was approached several weeks ago—before news of the loss of the $651 million in Medicaid funds by the state—about becoming the chief of staff of the Mandeville facility.

The unidentified doctor initially thought he was being recruited for an existing private hospital or for a private hospital’s expansion into the Northshore area because nothing had been said at that point about Southeast Louisiana’s closure. “It all makes sense now,” he told a colleague after learning of the impending closure of East Louisiana Hospital.

Once the hospital is declared surplus property and the facility closed, a request for proposals would have to be issued by DHH and private companies would be required to bid on contracting for either purchasing the hospital or running it as a contractor.

Magellan already has a connection with the state and Jindal, including three lucrative contracts.

The company, in addition to contributing $5,000 to Jindal’s campaign in 2008 and another $5,000 to the Louisiana Republican Party last September, currently has separate multi-million dollar contracts with three separate state agencies totaling more than $392 million. All three contracts run for two years, from March 1, 2012 through Feb. 28, 2014, records show.

The first contract, for $357.6 million, is with DHH through the Office of Behavioral Health. That contract calls for the firm to run a statewide management organization for a prepaid inpatient health plan for behavioral health services.

A $22.4 million contract with the Department of children and Family Services calls for Magellan to provide an array of coordinated community based services and support for children and youth with behavioral health disorders.

The third contract, for $12 million, is with the Department of Public Safety and Corrections and calls for Magellan to provide coordinated community-based services and supports for incarcerated youths with serious behavioral health disorders.

The larger, $357.6 million contract was approved in January but the two smaller ones were each approved in April, retroactive to March 1.

The recent appearance at the Capitol of former DHH Secretary Alan Levine only serves to fuel speculation swirling around the Mandeville hospital.

Levine, who came to DHH from Florida in January 2008, resigned in August 2010 to return to Florida where he currently serves as the Division 3 President of Health Management Associates where he is responsible for the administration of for-profit hospitals in Florida, Georgia, Oklahoma, Kentucky and West Virginia.

Greenstein to a legislative committee last week that Levine was in town to discuss Florida’s setup. He said Florida is one of several models for ways in which to increase revenues for state hospitals.

All the latest developments—Greenstein’s meeting with the legislators, the informal recruitment of the New Orleans doctor, last month’s sale of 1900 acres of adjoining hospital property and the impending declaration of the remainder of the property, including the hospital itself, as surplus, and the administrations reported secret negotiations with Magellan—all point to a covert plan by Jindal and Greenstein to close the hospital that dates back well beyond the news of the loss of the Medicaid funds.

All of which leaves unanswered the question of how indigent patients needing mental health treatment will be able to afford that treatment when the state hospital in Mandeville becomes a private, for-profit facility.

Besides the question of continued treatment for patients, employees of the hospital, like the 177 employees of the Office of Group Benefits, will lose retirement and medical benefits when the hospital makes the transition from public to private provider.

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Notable Quotables (in their own words)

Posted in Governor's Office, Health Care, Notable Quotables, Privatization, Transparency on July 23, 2012| Leave a Comment »

“So if you just think about the sort of pipeline that’s out there, certainly Louisiana, Kentucky, Washington, Kansas–all those are states that are looking at how did they do it and, in particular, how they do managed long-term care.”

–John Littel, Vice President of External Relations of Amerigroup Corp., during a conference on “Medicaid’s evolving role with the private sector” as administered by the State of Texas, where 6.1 million (28 percent of the population) are uninsured–most in the nation. The Texas program was considered by the conference as a model to be emulated.

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Residential development? Try Southeast Louisiana Hospital’s closure, conversion to private, for-profit facility on for size

Posted in ALEC, American Legislative Exchange Council, Contract, Contracts, Governor's Office, Health Care, Legislature, Legislators, Privatization, Transparency on July 23, 2012| 1 Comment »

Those worried about the future of Southeast Louisiana Hospital in Mandeville might be less concerned about the possible residential development of the remaining 300 acres of the 1900-acre tract than its becoming yet another step in Gov. Piyush Jindal’s methodical march toward privatization.

The administration released a quiet announcement late last Friday that it would begin phasing out the 348-bed facility in October, in the process eliminating some 300 positions while terminating treatment for mental illness and depression in an area serving about a quarter-million residents.

In all, about 500 acres of the original tract still are owned by the state. The hospital facilities occupy about half of that area with the remainder currently under lease to the parish as a park.

An indication of the direction the administration plans to take with the facility might be determined by observing the comings and goings of one Alan Levine around the State Capitol and the Department of Health and Hospitals, according to a Tulane University psychiatrist.

Levine, of Tallahassee, Florida, was appointed secretary of the Department of Health and Human Services (DHH) in January of 2008 by then Gov.-elect Jindal only days before he took the oath of office for his first term. He resigned in August of 2010 and was immediately replaced by current DHH secretary Bruce Greenstein.

Levine, upon his resignation two years ago, returned to Florida where he serves as the Division 3 President of Health Management Associates. His responsibilities include the administration of for-profit hospitals in Florida, Georgia, Oklahoma, Kentucky and West Virginia.

Though he has no official responsibility for Louisiana hospitals, there have been reports that he has been frequenting the Louisiana Capitol and DHH recently.

Campaign finance reports show that he also made two contributions of $1,000 each to Jindal’s re-election campaign fund in February and July of last year.

Tulane psychiatrist Mordecai Potash believes that is no coincidence. And he does not believe the $651 million cut over two years in the state’s federal matching share of Medicaid (FMAP) funds was really the result of “some financial typo made by the federal government (in hurricane recovery fund allocations) that put Louisiana in a sudden pickle.”

The $651 million expands to $860 million when the state match is included.

Potash emphasized that his views were his own and do not represent either the Tulane Psychiatry Department or Tulane University. “My views are mine alone,” he said. “Tulane represents a diverse group of interests and opinions and I am not part of the structure of the university authorized to make statements about the official views of any organization within the university.”

He nevertheless said he believes the sudden fiscal crisis “is part of a sustained campaign by specific politicians and for-profit healthcare companies to close down state hospitals and re-open some of them as privately-run, for-profit hospitals.”

He laid the blame for the loss of the $651 million at the feet of Jindal and Commissioner of Administration Paul Rainwater.

“All that needed to happen was for the Jindal administration to contact the Speaker of the House (John Boehner (R-Ohio) and confirm that they wanted the funding restored,” he said. “All that was required to restore the lost $651 million was minimal participation—simple tacit approval—from the Jindal administration. If that had happened, the cutbacks in LSU’s budget, the closure of Southeast Louisiana Hospital, and other cuts would not (have) happened.

“Their silence on this issue, despite implorations from Louisiana’s Democratic and Republican politicians alike, (was) deafening,” he said.

U.S. Sen. Mary Landrieu appeared to confirm Potash’s contention in a July 16 story in the Baton Rouge Advocate. In that story, she said her office pressed Jindal, through Rainwater and Louisiana’s Republican delegation in Congress, to intervene with the Republican House leadership.

Landrieu said she had 15 conversations with Rainwater—all to no avail.

Jindal, as has been his practice as governor, refused requests for interviews or to respond to questions about whether he ever attempted to contact Boehner or House Majority Leader Eric Cantor (R-VA.). Instead of a simple yes or no answer to that query, Jindal trotted out spokesman Kyle Plotkin to say that the administration was in contact with the Louisiana congressional delegation.

“Why wouldn’t the Jindal administration want money restored?” Potash asked. “Why not have more federal dollars sent to the state? Isn’t that what politicians are lauded for, bringing home the bacon from Washington?

“Well, if your priority project is the outsourcing of state healthcare resources from the public sector to private, for-profit, healthcare companies, then bringing home federal bacon would be the last thing you would want to do.

“Instead, you would want to promote or manufacture every healthcare funding crisis you could possibly find, whether it is a mid-year crisis, end-of-the-year crisis or Ides-of-March crisis. [A] crisis would give you license to close state facilities and outsource contracts to for-profit healthcare companies—especially those that you already have ties to and (which) already contribute money and resources to your political campaigns.”

Levine’s two contributions were not the only healthcare-related contributions to Jindal.

Blue Cross/Blue Shield (BCBS) last Friday was named the winner of the contract to take over the administration of the Office of Group Benefit’s Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) at a cost of $37 million.

BCBS contributed $2,500 to Jindal’s 2007 gubernatorial campaign and BCBS parent company Louisiana Health Service & Indemnity Co., contributed $5,000 in 2003.

Additionally, BCBS was listed as a “Gold Member” of the Supriya Jindal Foundation on the foundation’s website. A “Gold Member” was described as one that contributed a minimum of $50,000 to the foundation. Some sources put the BCBS contribution at $100,000.

Potash, however, said he expects Southeast Louisiana Hospital to be sold for residential development while Central Louisiana State Hospital in Pineville and East Louisiana State Hospital in Jackson might be targeted for privatization just prior to the next round of “unfortunate and unforeseen” DHH cutbacks.

“A final motivating reason to privatize is that it shrinks the number of state workers, weakening the power of civil service advocates. The importance of this cannot be overstated,” he said. “Any opportunity to reduce the state rolls of civil service employees…enhances some politicians’ abilities to push legislation through.”

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Notable Quotables (in their own words)

Posted in ALEC, American Legislative Exchange Council, Governor's Office, Health Care, Notable Quotables, Privatization, Transparency on July 22, 2012| 6 Comments »

“The most important point to be made is this: during my years here at SELH, the families of these clients have consistently told me that even though their loved ones have been treated at other fancier (private) places, they firmly believe that their mother, sister, brother got the best care here. As plain and stripped down as we are, the staff is the best and the care offered is unsurpassed. This staff is a big part of the outlying community. With the loss of (these) jobs, the community comprising of local merchants and businesses will suffer along with those who are laid off.”

–Social worker at Southeast Louisiana Hospital, commenting on the impact the hospital’s closure will have on Mandeville and surrounding area.

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Is it us, or does announcement of Southeast Louisiana State Hospital closure carry certain familiar smell of incredulity?

Posted in ALEC, American Legislative Exchange Council, Campaign Contributions, Civil Service, Governor's Office, Health Care, Legislature, Legislators, OGB, Office of Group Benefits, Politicians, Privatization, Transparency on July 22, 2012| 3 Comments »

State Sen. Jack Donahue’s expressions of shock and surprise notwithstanding, the handwriting was on the wall more than a year ago as to the fate of the 60-year-old Southeast Louisiana State Hospital in Mandeville—thanks in part to a bill he authored four years ago.

It was in May of 2011 that then-parish president Kevin Davis revealed that he was working with the state to have St. Tammany Parish purchase 1,442 acres adjacent to the hospital in an effort to prevent the low-lying land from being developed in the future.

That sale was consummated last month at a price of $6.45 million. The land was appraised for $14.7 million in February 2011, according to records of the Office of State Lands. Davis, however, said in 2011 he felt the correct value of the land was nearer $10 million. He added that the Division of Administration had verbally agreed to the $10 million figure.

There was no explanation as to why the ultimate selling price was more than 35 percent lower than the reported agreed upon price and less than half the original appraised value.

Six months after the negotiations for the land were announced, Davis, who was term-limited and not eligible to seek re-election as parish president, was appointed by Jindal as director of the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) at a salary of $165,000 per year.

He contributed $3,000 to Jindal election campaigns in 2003 and 2008 and Donahue gave $1,500 to the governor’s campaign in 2007 and 2011.

Jindal in turn, contributed $2,500 to Donahue’s campaign last year.

Both Donahue (R-Covington) and Rep. Scott Simon (R-Abita Springs) claimed that the announcement of the closure caught them off guard. Simon is chairman of the House Committee on Health and Welfare, making the decision not to inform him even more curious.

It was revealed during last year’s negotiations between the state and St. Tammany that the parish had been given first refusal on purchase of the 1,442 acres in a 2008 bill authored by Donahue.

Donahue’s bill also stipulated that proceeds from the sale of the land adjacent to the hospital must go toward the restoration, renovation, construction or maintenance of the hospital.

Davis said he had initially persuaded the state to construct a new hospital on parish-owned land north of I012 but those negotiations cratered when Bruce Greenstein was appointed secretary of the Department of Health and Hospitals (DHH).

He also said at that time that the state had decided not to close the hospital.

DHH issued an announcement late Friday, however, that the 348-bed hospital would be phased out of operation beginning in October despite those assurances of more than a year ago that it would remain open.

Patients at the facility will be transferred to East Louisiana State Hospital in Jackson with some possibly going to Central State Hospital in Pineville, placing a strain in terms of finances and logistics on families of patients who help care for the patients.

The move will also eliminate 300 positions at the hospital, one of the largest employers in St. Tammany Parish.

In addition to keeping the land free from development, Davis said he hoped to turn the property into a mitigation bank which would help pay the cost of acquiring the land.

St. Tammany is required to contribute matching funds for various state and federal road projects, Davis said. Some of the land used for those projects consists of wetlands and he said he wanted the parish’s financial contributions to go into the mitigation bank in exchange for credits that would allow wetlands construction.

The parish, he said, did not have available funds to purchase the land outright, so he had initiated negotiations with officials from the Trust for Public Land in and effort to get the trust to purchase the land on the parish’s behalf with the parish paying back the trust in a minimum of five years.

Now that the 1,442 acres adjacent to the hospital has been sold for less than half its appraised value and now that the official announcement of the hospital’s closure has been made, the question that remains is what now becomes of the remaining 500 acres and the hospital buildings?

Southeast Louisiana State Hospital, a psychiatric treatment facility, was established 60 years ago, in 1952, on 2,235 acres of land (later reduced to 1,900 acres). In 1959, it received international, if unwanted, attention as a brief stopping-off point for Gov. Earl K. Long in his odyssey across the southwestern U.S. during his celebrated mental breakdown.

Earl, still very much the state’s governor, fired state Hospital Board head Jesse H. Bankston and replaced him with Charles Rosenblum. Rosenblum subsequently persuaded the board to fire hospital head Dr. Charles Belcher and replace him with Dr. Jess McClendon. McClendon, a personal friend of Long, promptly ordered his release.

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