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Archive for the ‘OGB, Office of Group Benefits’ Category

Gautreaux calls for federal probe of OGB, DHH ‘and other’ contracts approved by Jindal during his term as governor

Posted in Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, ORM, Office of Risk Management, Transparency on June 10, 2011| 19 Comments »

Copyright LouisianaVoice (2011)

State Sen. D.A. “Butch” Gautreaux (D-Morgan City) has asked the U.S. Justice Department to conduct an investigation into contracts issued during the administration of Gov. Bobby Jindal.

Specifically, Gautreaux, chairman of the Senate Retirement Committee, is targeting the so-called Chaffe report but also wants investigators to take a look at the proposed 10-year, $34 million-per-year contract between the Department of Health and Hospitals (DHH) and CNSI of Gaithersburg, MD.

The Chaffe report was prepared as part of the administration’s efforts to privatize the Office of Group Benefits (OGB). Chaffe & Associates of New Orleans was retained in March to perform a preliminary assessment of OGB so that Jindal could have the information to plug into his executive budget by the March 19 deadline.

That information was not contained in the budget, however, leading to speculation that the report, or at least preliminary data, did not support privatization of the agency.

At the same time, the Division of Administration issued a request for proposals (RFP) from financial analysts experienced in the sale of multi-million dollar insurance entities to conduct an in-depth financial analysis of OGB and then to take an active role in marketing the agency to buyers. Wall Street banker Goldman Sachs was the only bidder to submit a proposal for the $6 million contract to perform the analysis and promote the sale.

When it was revealed by LouisianaVoice that Goldman Sachs met with Deputy Commissioner of Administration Mark Brady and OGB CEO Tommy Teague in Brady’s downtown office last fall to discuss the sale of the agency and then helped in the drafting of the RFP on which it subsequently submitted a proposal, Teague was summarily fired. Goldman Sachs then pulled out when the state balked at the banking firm’s demand that it be indemnified from any litigation stemming from the privatization of ORM.

The Division of Administration (DOA) on several occasions denied any knowledge of the identities of the Goldman Sachs representatives but LouisianaVoice earlier this week obtained their names and even offered to provide the information to Brady and his boss, Commissioner of Administration Paul Rainwater. There has been no response from either of them.

A second RFP was issued and proposals received on Monday. Goldman Sachs again was one of three firms submitting proposals.

Meanwhile, Rainwater resisted repeated efforts from legislators and LouisianaVoice to obtain copies of the Chaffe report. “Deliberative process” was the reason given most often in denying requests to make the report available.

Rainwater, however, under pressure from members of the Senate and Governmental Affairs Committee during his confirmation hearing on May 31, promised to make a copy of the report available to Sen. Karen Peterson (D-New Orleans). He subsequently changed his mind and instructed Teague’s successor, Scott Kipper, not to make the report available to anyone, including legislators. Kipper then resigned, effective June 24, over Rainwater’s decision to go back on his promise, becoming the second OGB CEO to leave within six weeks.

Gautreaux and members of the Senate and Government Affairs Committee were given copies of the Chaffe report on Thursday but only after signing confidentiality agreements, ostensibly because the Legislative Auditor’s office is conducting its own investigation of the events surrounding OGB and its $500 million surplus.

It is uncertain from whom senators received copies of the report. Gautreaux said he went directly to Rainwater but was refused a copy saying confidentially prohibited its release. Gautreaux then pushed through a unanimous Senate concurrent resolution calling for release of the report but Rainwater persisted in withholding the document.

Gautreaux even had a subpoena ordered to require the release of the study but with the same results. Sen. Ed Murray, a member of the Senate and Governmental Affairs Committee, got unanimous approval of his motion on Wednesday to subpoena the report.

Gautreaux appeared to validate speculation that the report said the only advantage to privatizing OGB would be if the purchaser retained the agency’s $500 million surplus.

Saying that he could not go into detail on the report’s contents, he did concede somewhat cryptically that after reviewing the Chaffe report, “I can say that I know why the administration didn’t want it released.”

That the administration persists in pursuing privatization of OGB despite the Chaffe report which apparently advises against privatization has become a sticking point with Gautreaux who also is a member of the OGB board of directors.

Gautreaux has indicated that he intends to add an item or items to the agenda for next Wednesday’s OGB board meeting. The Chaffe report and the current RFP are expected to take center stage at that meeting.

DOA, which has been evaluating responses to the latest RFP, is also scheduled to announce the name of the contractor for the fiscal analysis of OGB on Wednesday, June 15.

The attempt by DHH to conceal the identity of the contractor for the installation and operation of an extensive Medicaid Management Information System did nothing to ease tensions between senators and DOA.

When it was finally learned after more than 90 minutes of sparring between Senate and Governmental Affairs Committee members and DHH Secretary Bruce Greenstein Wednesday that the contractor was the former employer of Greenstein, those feelings only intensified.

“Not unlike the DHH Coordinated Care contract, the Jindal administration continues to operate under a shroud of secrecy,” Gautreaux said. “In all my years of legislative service, I have never seen such blatant acts of disregard for the legislative process and now, obviously, the law.

“I have requested the Justice Department to look into these two contracts and others signed by the Jindal administration since the governor has taken office,” he said by email on Thursday morning.

Gautreaux, asked to confirm the contents of that email, replied, “Yes, I’ve made a request that all contracts….during this administration be looked at.”

He said he had not received a reply as of this writing.

“To paraphrase the words of Commissioner of Administration Paul Rainwater, ‘Releasing the Chaffe report will be detrimental to getting the best possible price in the sale.’” Gautreaux said.

“I agree completely,” he added.

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Senators receive Chaffe report, but can’t release contents; looks like Déjà vu all over again for LouisianaVoice efforts

Posted in Health Care, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Privatization, Transparency on June 9, 2011| 1 Comment »

Members of the Senate and Governmental Affairs Committee received copies of the report of Chaffe & Associates of New Orleans that the Division of Administration, through Commissioner of Administration Paul Rainwater, has attempted to withhold from release.

It was only a partial victory for the committee, particularly Sen. Ed Murray who had moved successfully on Wednesday for the committee to subpoena the report on the financial assets of the Office of Group Benefits (OGB).

Conflicting reports said Rainwater reportedly was served with the subpoena late Wednesday but still refused to turn the report over to the committee, maintaining that the subpoena was not signed by a judge. Another source said Rainwater gave the report to senators before actually being served with the subpoena.

One report said the report was provided by the Legislative Auditor’s office which had, after several attempts of its own, been provided with a copy of the report but that could not be confirmed. That same report said that because the report came from the auditor’s office which is conducting an investigation, senators were required to sign a confidentiality agreement not to divulge the contents of the report.

Rainwater, when turning over the report, reportedly asked that senators not to divulge the contents because of sensitive information contained in the report.

Another source said the report was released to the members of the committee for investigative purposes relative to committee confirmation hearings only.

Confirmation hearings for Rainwater and Deputy Commissioner of Administration Mark Brady were held by the committee last week.

Apparently, the only thing know for certain is that senators have the report in hand but won’t release it themselves.

LouisianaVoice has tried unsuccessfully on five separate occasions to get DOA to release the report but DOA first said the report had not been received, then said the report was not final but on May 29, said it had received the report on the 25th but because it was part of the “deliberative process,” was not public record.

DOA attorney Paul Holmes further cited two court cases in which the Public Service Commission and the Louisiana Department of Insurance each prevailed in efforts to keep records from being made public. Those cases, however, in no way pertained to LouisianaVoice’s request for the report.

Chaffe had been retained to produce the report by the March 19 deadline for Gov. Bobby Jindal to submit his executive budget but nothing from such report was included in the budget. That led to speculation—and actual reports—that Chaffe reported that the only advantage to privatizing OGB would be for the purchaser to retain the agency’s $500 million surplus.

The Senate and Governmental Affairs Committee elicited a promise from Rainwater during last week’s confirmation hearing that he would make the report available to Sen. Karen Peterson (D-New Orleans) vice-chairperson of the committee.

When Rainwater backed out on that promise and instructed OGB CEO Scott Kipper not to produce the report, Kipper tendered his resignation, effective June 24. It was the second time within six weeks that OGB had lost a CEO.

Last week’s confirmation hearing also included Kipper, who was named to replace former CEO Tommy Teague on April 15, the same day Teague was fired just six months short of his qualifying for retirement.

The committee peppered Kipper with a withering barrage of questions about his disavowal of any knowledge of the contents of the Chaffe report. That led to Murray’s motion on Wednesday to subpoena the report.

Brady received and read the latest request by LouisianaVoice for the public record on Thursday but did not respond.

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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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Notable Quotables (in their own words)

Posted in Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Transparency on June 6, 2011| Leave a Comment »

“I’ll talk to my staff and she can have it. I have no problem with that.”

—Commissioner of Administration Paul Rainwater to Sen. Jack Donahue (R-Mandeville) during confirmation hearing testimony before the Senate & Governmental Affairs Committee on May 31 on making a report by Chaffe & Associates of New Orleans available to Sen. Karen Carter Peterson (D-New Orleans). Two days later he had a change of heart and ordered the report withheld.

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