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LouisianaVoice IDs four Goldman Sachs reps, offers to share information with DOA, which apparently misplaced its notes

Posted in Governor's Office, Health Care, OGB, Office of Group Benefits, Transparency on June 8, 2011| 1 Comment »

LouisianaVoice has learned the names of the four Goldman Sachs representatives who met with Deputy Commissioner of Administration Mark Brady and then-CEO of the Office of Group Benefits (OGB) Tommy Teague last fall.

Those are the names spokesmen for the Division of Administration denied knowing anything about.

That meeting put into motion a chain of events that eventually resulted in the firing of Teague on April 15 and the resignation of his successor, Scott Kipper, last week. Kipper’s resignation takes effect on June 24.

In the interim, Goldman Sachs reportedly helped draft the first of two requests for proposals calling for the hiring of a financial analyst who would conduct a financial assessment of OGB and then market the agency to potential buyers.

In what quickly developed into a Keystone Kops-like comedy of errors, LouisianaVoice revealed that the Goldman Sachs was the only entity to submit a proposal on the RFP which it helped to write. The Wall Street banking firm subsequently pulled out of negotiations when it could not get the state to agree to indemnify the company in the event of litigation over the award.

Commissioner of Administration Paul Rainwater, under withering questioning from the Senate Retirement Committee, later flip-flopped between saying OGB and its $500 million surplus would be sold and that the state was merely seeking a third party administrator (TPA) for its Preferred Provider Operations (PPO), and admitting that the administration might be open to allowed a TPA for his HMO services as well.

The HMO is presently administered by Blue Shield/Blue Cross but that contract is currently in the throes of litigation between the state and the previous provider, Humana.

The state’s PPO is fully-insured and administered wholly by the state and Rainwater said the operation is too cumbersome and that at least 149 personnel should be cut and the operations turned over to the private sector.

In the meantime, the House Appropriations Committee restored the 149 positions cut by Gov. Bobby Jindal in the executive budget and amended out language that would have given Jindal authority to seize part of the $500 million surplus amassed under Teague, who took over the agency five years ago when it was $60 million in the red.

Jindal even retained the services of a New Orleans firm, Chaffe & Associates, to perform a quickie assessment of OGB in time for the March 19 deadline so that the proposed sale could be included in the executive budget. But that report was not contained in the budget and has never been released by the Division of Administration.

Rainwater claims the report is confidential but promised last week to provide the report to members of the Senate and Governmental Affairs Committee which was meeting to confirm Rainwater, Brady and Kipper. Kipper’s name has since been withdrawn, Rainwater welshed on his promise to make the report available and on Wednesday, the committee, at the insistence of Sen. Ed Murray (D-New Orleans), voted unanimously to subpoena the report.

Reports indicate the Chaffe report says the only advantage to privatizing OGB would be if the purchaser retained the $500 million surplus, leading in turn to speculation that that is the reason the report has not been released.

Rainwater’s office has denied knowing the identities of the Goldman Sachs representatives, even though they met with his top assistant and such meetings generally are documented as to times, dates, and names as well as outlines or notes on subjects of discussion.

On Wednesday, it was learned that the four Goldman Sachs representatives were David Levy, managing director of Public Sector and Infrastructure; Justin Goldstein, vice president, Public Sector and Infrastructure; Navtej Bhullar, vice president of Global Healthcare Group, and Ritu Kalra, vice president, Public Sector and Infrastructure.

Bhullar, a graduate of the Indian Institute of Management in 1999, joined Goldman Sachs as an associate in 2005, after having worked at Citigroup from 2002 to 2004. He is credited with having completed a number of mergers, initial public offerings and financing in the healthcare banking industry. Among those were the sale by Universal American of its Medicare PPD business, the sale of HealthDialog to BUPA, the sale of Athena Diagnostics to Quest Diagnostics, the sale of MedImmune to Astra Zeneca, and others.

Kalra, began her public finance career in 1996 and has been instrumental in the privatization of military housing units for the U.S. Navy and the U.S. Army. She also specializes on governmental finance and has covered the State of Louisiana since 2009. She participated in the financing of the state’s $400 million Transportation Infrastructure Model for Economic Development (TIMED) program. She holds an MA in journalism from New York University.

Goldstein has been with Goldman Sachs since 2000 and has covered Louisiana for the company since 2005. He is credited with a wide range of projects, though none were listed for Louisiana.

Levy is a graduate of Tulane University and received an M.S. in Industrial Administration. He oversees public sector relationships in the southern region for Goldman Sachs and is credited with executing financing assignments for the states of Florida, Georgia, South Carolina, and Louisiana.

Proposals on a second RFP were received by OGB on Monday of this week with the winning proposal to be announced on June 15.

If DOA desires additional data on the four Goldman Sachs reps, LouisianaVoice will be happy to share our information in the interest of transparency since Brady and Rainwater apparently lost their notes.

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Jindal consistent on transparency: reveals little, redacts contract amount. Is ACS the secret DHH contractor?

Posted in Governor's Office, Health Care, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Public Records, Transparency on June 8, 2011| 2 Comments »

When attorneys for the Louisiana Department of Health and Hospitals last week refused to disclose the name of the firm awarded a multi-million-dollar contract, it wasn’t the first time the Jindal administration has withheld key information normally considered to be public record.

There is, of course, the infamous Chaffe Report prepared by Chaffe and Associates of New Orleans in March under a $49,999.99 contract to conduct a quickie financial assessment of the Office of Group Benefits so that Gov. Bobby Jindal could factor the information into his executive budget submitted on March 19.

Contents of that report, however, were not included in the executive budget, leading many to believe the report did not provide data that the administration wanted to hear. Refusal by Commissioner of Administration Paul Rainwater to release the report to legislators after first promising he would do so also fueled speculation that the administration was not satisfied with the report’s recommendations.

But even before that, the administration which touts itself at every opportunity as the “most transparent” and “most ethical, most accountable” administration in Louisiana history, has shrouded its contractual and financial machinations in a cloak of secrecy.

In 2009, DHH entered into a contract with ACS State Healthcare, a subsidiary of Xerox. That contract was to have run from July 1, 2009 through Dec. 31, 2009. It called for ACS to provide information and eligibility screening to individuals seeking services through the DHH Office of Aging and Adult Services (OAAS). The contract also called for ACS to provide assessment and care planning to individuals seeking and receiving long term care and personal care services, and to operate a telephone hotline for the office.

A copy of the contract is contained on the DHH web page but the amount of the contract and monthly payment terms are redacted, or blacked out. No reason was provided for censoring the contract amount in the document. There certainly no legal basis for the action.

An online search turned up the same contract information in another document, however, and while the contract number (679532) was the same on each document, the dates of the contract were not.

What began as a six-month contract turned into two years (July 1, 2009 through June 30, 2011) and the contract amount is $20 million. It has since been renewed at a higher contract amount.

ACS is one of four firms that submitted proposals for the most recent (but anonymous) DHH contract, expected to go for something in the neighborhood of at least $34 million. That’s what it now costs the state to operate its Medicaid Management Information System. It’s one of the nicest neighborhoods in the state, contractually speaking.

Other firms submitting proposals were HP Enterprise Services, Molina Medicaid Solutions, and CNSI.

DHH Secretary Bruce Greenstein served as vice president of Health Care for CNSI from June 2005 to September 2006, leading some to believe that CNSI will be named as the contractor. Greenstein said he took himself out of the selection process because of his past connection to the company.

LouisianaVoice, however, isn’t buying into conventional wisdom. To choose CNSI would simply be too obvious. We’re going with ACS—for eight reasons. That’s eight as in six contracts totaling $148.3 million and two contributions of $5,000 each to Jindal from ACS.

Besides that $20 million contract already alluded to, there is another contract with OAAS (July 1, 2011through June 30, 2014), which is simply a renewal of the present contract, for $26.6 million.

Other contracts include:

• $74.5 million with the Division of Administration (DOA), Office of Community Development that runs from Mar. 27, 2009 through Mar. 26, 2012 to assist hurricane damaged parishes recover rental units;

• $14 million with the Department of Children and Family Services from July 1, 2010 through June 30, 2016 to prepare ad-hoc reports;

• $7.2 million to provide management services to several DHH programs, including Community CARE, KidMed, and long term personal care;

• $6 million with the Office for Coastal Restoration for environmental science consulting services.

The latter two contracts each ran from July 1, 2009 through June 30, 2010.

The decision by DHH to withhold the identity of the contractor who, in all probability, will be handling claims processing and information systems for the state’s $6.6 billion Medicaid health insurance program for the indigent, remains unclear.

Former DHH Secretary David Hood said the decision sounded like an administrative one to him. “I’m not aware of any provision in the law that prevents release of a name,” he said.

Likewise, Sen. Willie Mount, chairperson of the Senate Health Committee, calling the DHH interpretation “weird,” said the law cited by DHH attorneys does not indicate to her that the selection, once made, cannot be announced. “If you have already made the decision, why can’t you disclose it?” she asked.

She and Hood agreed that springing the name of the successful bidder on legislators at a public hearing would give committees no time for vetting the selection.

When F.A. Richard was chosen as the successful bidder to take over the state’s Office of Risk Management (ORM) in March 2010, not only was the announcement made before legislative approval, the announcement was actually made before (ORM) employees were told.

The refusal to divulge the identity of the contractor, the contents of the Chaffe report, and the amount of the ACS $20 million contract with DHH are consistent with the refusals by the Louisiana Office of Economic Development and DOA to provide information required by state statute to the Legislative Auditor.

If nothing else during his first term of office, the Jindal administration has shown beyond any doubt that it is unwavering in its resolve to flaunt its peculiar brand of transparency.

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Letter to LouisianaVoice provides interesting data

Posted in Governor's Office, Health Care, OGB, Office of Group Benefits, Privatization on May 24, 2011| 3 Comments »

The following is a letter to LouisianaVoice by Ms. Patricia Labarde of Luling:

Louisiana Voice:

Subj: Potential consequences Privatizing OGB’s PPO.

1. Deteriorating health and bankruptcy for a vast amount of people.

2. 2010, $15 Billion Profits for Five largest insurance companies.

3. 2011, 7.3%, Insurance increase for people insured through their job.

4. 60% of bankruptcy due to medical expense.

Louisiana Voice,

I am requesting consideration for this letter to be used on your Louisiana Voice internet site.

Potential consequences from Mr. Jindal privatizing OGB’s PPO include, but not limited to: bankruptcy and deteriorating health due to less medical care caused by higher cost of insurance, less benefits or total loss of insurance for the vast amount of people insured with the PPO plan and OGB’s 149 terminated employees.

Last year, OGB was forced to bid on the PPO plan and, by far, was the lowest bidder, proving OGB provides the best insurance coverage at the lowest cost.

The enclosed researched information on insurance companies’ profits, (an unimaginably amount), what they spend their money on and cost increase, prove OGB is the best choice to manage the PPO plan. Insurance companies are in the business to make money! Due to time constraints, only five examples of research are listed in the sub-bullets as follows:

· Insurance companies spend on medical care, (their ‘medical loss ratio‘) is about 80 percent of total revenue and profits consume 20 cents out of every dollar. By contrast, the federally run Medicare…spends 97 cents of every dollar on patient care. The insurance companies are wasting 17 cents out of every dollar. There are 47 million (U.S.) people uninsured. [1]

· Five largest insurers: WellPoint, Cigna, UnitedHealth Group, Aetna and Humana; a 250% return over the past decade earned over $15 billion in 2010. That’s 22% growth over their combined $12.2 billion earnings in 2009. [2]

· Health care costs for a family of four have doubled in less than a decade from $9,235 in 2002 to over $19,000 in 2011. American families who are insured through their jobs average health care costs of $19,393 this year, up 7.3%, or $1,319 from last year. [3]

· 82.5% of Americans in families that spend more than 10% of income on health care have health insurance. [4]

· More than 60% of people who go bankrupt are actually capsized by medical expense. [5]

Thank you for your time. I would like a response at your earliest convenience.

Respectively submitted,

Ms Patricia Lagarde

RESOURCES:

[1] By: Eric Breit-Nicholson, Single Payer Health Care, Mary O’Brien and Martha Livingston, Consumer Reports, [5] by: Woolhandler Campbell, and Himmelstein.

http://www.richardboettner.com/a/health/SinglePayerHealthCare.pdf.

[2] By: MellyAlazraki, Posted 10:25AM 02/04/11, Health Insurers Post Healthy Profits.

http://www.dailyfinance.com/2011/02/04/health-insurers-post-healthy-quarterly-profits-cautious-2011-outlook/.

[3] By: Parja Kavilanz, May 11, 2011: 3:45 PM ET, Milliman Inc, CNN Money, money.cnn.com/2011/05/11/news/economy/healthcare_costs_family/index.htm

[4] By: Dr.David Himmelstein, Medical Bankruptcy on the Rise, Stand Up for Health Care, Posted June 12, 2009 at 2:35pm.

http://www.standupforhealthcare.org/blog/medical-bankruptcy-on-the-rise.

[5] By: Theresa Tamkins, Health Insurance, CNN Health, June 5, 2009.

http://www.articles.cnn.com/…/health/bankruptcy.medical.bills_1_medical-bills-bankruptcies-health-insurance?_…HEALTH.

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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, Transparency, Uncategorized 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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