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Archive for the ‘Privatization’ Category

Notable Quotables (in their own words)

Posted in Contract, Contracts, Governor's Office, Health Care, Privatization on June 12, 2013| Leave a Comment »

“Claims for federal matching funds cannot be based upon estimates or projects. Please add language that describes the actual historical utilization and trend factors utilized in the calculation.”

“Are the (private) hospitals required to provide a specific amount of health care service to low income and needy patients?”

—Questions posed to the state in a Jan. 30 letter to the Louisiana Department of Health and Hospitals by Bill Brooks, Associate Regional Administrator, Division of Medicaid and Children’s Health Operations in Dallas.

“If we were to deny these contracts, we will not be able to provide these services to the citizens. I believe the hospitals would close.”

—Louisiana Civil Service Commission member Scott Hughes of Shreveport, commenting on his switching his vote from opposed to the privatization contracts for hospitals in New Orleans Houma, Lake Charles, and Lafayette to a vote in favor. At the same time, Hughes said he still had concerns over whether federal officials (CMS) would approve Medicaid financing necessary to bring the Jindal budget into balance. His concerns centered around questions about some of the financial data provided by the administration.

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CMS wants more answers to Louisiana hospital privatization plan; millions of dollars in Medicaid funding hang in balance

Posted in Commissions, Governor's Office, Health Care, Layoffs, Privatization on June 12, 2013| 17 Comments »

The Louisiana Civil Service Commission notwithstanding, the state may not yet be out of the woods with its plan to privatize nine of 10 LSU hospitals and clinics that provide medical care for the state’s poor and uninsured and which provide training sites for many of the state’s medical students.

A spokesman for the Center for Medicare and Medicaid Services (CMS) in Dallas said on Wednesday that it still has not received answers to all its questions put to the state in a Jan. 30 letter and the continued flow of hundreds of millions of dollars in federal Medicaid funds could hinge on satisfactory responses by the state to those questions.

The Civil Service Commission on Monday reversed an earlier vote and approved the contracts for the takeover of four hospitals in Houma, Lafayette, New Orleans and Lake Charles.

That approval, however, was based on criteria that did not appear to fall within the purview of the commission. Commission member Scott Hughes of Shreveport said since the commission’s previous vote of last week, the legislature approved a budget for next year that assumed the privatization of the hospitals. That action, he said, would leave no money available to operate the hospitals through LSU if the deals had been rejected.

A lawsuit against the City of New Orleans by the New Orleans Civil Service Commission—not unilateral administration or legislative actions—has traditionally been the precedent the commission considers when presented with layoff plans from state agencies. That decision said that administrations “do not have the unfettered discretion to potentially decimate the civil service system by eliminating all civil service positions to privatization.”

That ruling also said the city must turn over “all documents and other evidence which (might) enable the commission to determine (1) whether any civil service employees will be involuntarily displaced from civil service and if so, (2) whether the contract was entered into for reasons of efficiency and economy and not for politically motivated reasons.”

The question of whether the contracts will produce greater efficiency and economy remain unanswered because the contracts for the privatization of the four hospitals contained insufficient financial details.

Hughes changed his vote of opposition last week to one of approval on Monday after Michael Kaiser, chief executive officer of the LSU Health Care Services Division described the financial arrangements in a general overview with few specifics.

Kaiser said a reduction in federal Medicaid financing to the state would force the closure of facilities. He even listed a number of closures that were under consideration before the lease deals—all of which apparently helped Hughes see the light and to become a convert. “If we were to deny these contracts, we will not be able to provide these services to the citizens,” he said. “I believe these hospitals would close.”

So apparently the procedure is to delete funding from the state budget, thereby creating a crisis by throwing the continued operation of the hospitals into doubt and forcing the Civil Service Commission to do the governor’s bidding by accepting the contracts and in the process, throwing some 4,000 employees out of work.

The CMS spokesperson on Wednesday said, “CMS does not play any role in the actual privatization of the hospitals. “However, as part of the privatization, the State of Louisiana is modifying the Medicaid reimbursement to those hospitals. The change in reimbursement requires the submission of State Plan Amendments (SPA). CMS currently has received some of the necessary SPA and they are under review.”

When asked to be more specific as to the number of SPA responses, he replied, “We’ve received two or three but we don’t have a firm number on how many the state would need to submit.”

Last Jan. 30, Bill Brooks, associate regional administrator for the CMS Division of Medicaid and Children’s Health Operations in Dallas, sent a six-page letter to Ruth Kennedy, director of the Bureau of Health Services Financing for the Department of Health and Hospitals (DHH) in which he requested additional clarifying information which he cautioned had the effect of “stopping the 90-day clock” for CMS to take action on the proposed State plan amendment (SPA) which “proposed to revise the reimbursement methodology for inpatient hospital services to establish supplemental Medicaid payments to non-state owned hospitals in order to encourage them to take over the operation and management of state-owned and operated hospitals that have terminated or reduced services.”

Brooks said a new 90-day clock would not begin until his office had received satisfactory responses to his requests.

A CMS spokesperson on Wednesday clarified that stipulation. “By regulation, we have 90 days from initial submission to review, disapprove or request additional information,” he said. “When we request additional information and the state formally responds, we have an additional 90 days to review and approve or disapprove.”

He said CMS has no control on how long it may take the state to respond. “These are complex state plan amendments, so you can assume that requests for additional information will occur.”

One of the requirements that Brooks cited was one which said CMS “must have copies of all signed standard Cooperative Endeavor Agreements.” He also asked the state to provide all Intergovernmental Transfer (IGT) management agreements and “any other agreements that would present the possibility of a transfer of value between the two entities.”

He said, “CMS has concerns that such financial arrangements meet the definition of non-bona fide provider donations as described in federal statute and regulations.

“Detailed information needs to be provided to determine whether the dollar value of the contracts between private and public entities had any fair market valuation. There can be no transfer of value or a return or reduction of payments reflected in these agreements,” he said.

“Additionally, whether the State is a party to the financial arrangement or not, the State is ultimately responsible to ensure that the funding is appropriate.”

Brooks asked, “How many entities does the State anticipate will participate in this arrangement? Please submit a list of all participating hospitals, all transferring entities doing the IGT, and the dollar amount that the transferring entities will IGT. Please describe how the hospitals are related/affiliated to the transferring entity and provide the names of all owners of the participating hospitals.”

In the case of the Leonard Chabert Medical Center in Houma, the lessee is listed as Terrebonne Medical Center of Houma but in reality, Ochsner Medical Center of New Orleans will be taking over operations of Leonard Chabert.

“What is the source of all funds that will be transferred?” Brooks asked. “Are they from tax assessments, special appropriations from the State to the county (parish)/city or some other source?

“The State plan methodology must be comprehensive enough to determine the required level of payment and the Federal Financial Participation (FFP) to allow interested parties to understand the rate setting process and the items and services that are paid through these rates,” Brooks said. “Claims for federal matching funds cannot be based upon estimates or projections. Please add language that describes the actual historical utilization and trend factors utilized in the calculation,” he said.

Brooks also asked if the private hospitals destined to take over operations of the state facilities are required to provide a specific amount of health care service to low income and needy patients. “Is this health care limited to hospital only or will health care be provided to the general public? What type of health care covered services will be provided?” he asked.

The CMS spokesperson on Wednesday said if CMS disapproved an amendment, “there would be no federal dollars provided for the changes proposed in the State Plan Amendment.”

“No federal dollars” could translate to hundreds of millions of dollars for a state already wrestling with suffocating budgetary constraints.

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Civil Service Commission reversal okays hospital contracts but really unforgivable sin is the absence of two members

Posted in Boards, Civil Service, Contract, Contracts, Health Care, Layoffs, Privatization on June 10, 2013| 31 Comments »

That one State Civil Service Commission member, D. Scott Hughes of Shreveport, changed his vote that allows the privatization of four state hospitals should come as no surprise. Many of you who logged comments on last week’s post even predicted it.

But for two members to skip a meeting of such importance is simply unforgivable.

For that reason alone, commission member Dr. Sidney Tobias of LaPlace and commission Chairman David Duplantier of Mandeville should resign immediately.

The board, sans Tobias and Duplantier, met Monday to reconsider the proposed contract between the state and Biomedical Research Foundation of Northwest Louisiana for operation of the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Monroe, between the state and Southern Regional Medical Center and Terrebonne General Medical Center to take over Leonard J. Chabert Medical Center in Houma and between the state and Lake Charles Memorial Hospital to take over in-patient care and medical education from W.O. Moss Medical Center in Lake Charles.

The result was predictable: Last week the vote was 4-3 against acceptance of the contracts but on Monday it was 3-2 in favor.

All the vote did was seal the fate of nearly 4,000 employees who can now anticipate being laid off from their jobs effective June 23.

Keep in mind the decision hinged on a contract approved by the LSU Board of Stuporvisors which contained some 50 blank pages and which contained no financial provisions or termination clause.

Last week’s decision to reject the contract was because commission members said they need more details about financing arrangements. Are we now to believe that over the course of a weekend, sufficient financial information was filled in on those blank pages to satisfy the commission?

We understand that Dr. Tobias is a dentist and as such, has a busy schedule. But if his schedule is such that it is impossible to attend meetings at which the future of 4,000 state employees hang in the balance, then he has no business serving on the board and should resign immediately.

The same goes for attorney Duplantier. You either are in a position to serve or you are not. There can be no gray area in matters of this magnitude.

We bet if a meeting held the potential of costing either Duplantier or Tobias a major share of their clients or patients (read: income), there would be no way to keep them out.

Ego carries you only so far. If you like to boast to your friends that you’re on the Civil Service Commission but you do not have the time to attend a meeting at which 4,000 people lost their jobs, then you’ve lost something even greater; you’ve lost sight of your purpose.

At that point, Tobias and Duplantier become just two more egocentric narcissists with no real concern for others.

How can you face yourselves in the mirror?

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LSU Board of Stuporvisors gives away store with improbable blank contract for private operation of four state hospitals

Posted in Campaign Contributions, Contract, Contracts, Governor's Office, Health Care, LSU, Privatization, Public Records on June 4, 2013| 25 Comments »

Depending upon which source you consult, there are from four to six essential components of a contract that make the document legally binding.

The LSU Board of Stuporvisors apparently is unaware of any of them.

• There first must be an offer.

Okay, this one’s a little broad. There was an offer…of sorts. The Biomedical Research Foundation of Northwest Louisiana offered to assume administrative and operational control of the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Monroe.

Likewise, Southern Regional Medical Center and Terrebonne General Medical Center offered to manage the Leonard J. Chabert Medical Center in Houma and Lake Charles Memorial Hospital offered to take over in-patient care and medical education from W.O. Moss Medical Center which will cease operating as a hospital.

But after that, it gets a little sticky:

• There must be an acceptance.

Acceptance is defined as an “unconditional agreement to the precise terms and conditions of an offer.”

To that end, the Board of Stuporvisors came off looking like Larry, Moe and Curly trying to match business acumen with Warren Buffett.

Or Jethro Bodine in negotiations with Donald Trump. You get the picture

The Board of Stuporvisors’ approach to this major enterprise was more akin to the manner in which car dealers attempt to sell a major consumer product with the cheesiest, most offensive television ads possible.

Simply put, there were no specifics in the contract—only 50 or so blank pages to be filled in later.

• Consideration: the payment exchanged for the promise(s) contained in the contract.

Without a specific offer, there can be no financial terms (consideration) and accordingly, no acceptance.

• Termination Clause: allow a contract to be ended without cause, though some courts have held that the clause cannot be invoked without cause.

So thus far, we have no specific offer, no financial terms (consideration) and no termination clause—only an acceptance of a vague offer—all of which brings up the fifth component of a legal contract:

• A contract must be recognized as valid by the courts and subject to the court’s ability to compel compliance.

It’s hard to imagine a contract being recognized as valid by any court anywhere (except possibly in Louisiana) where there is no specific offer, no acceptance of a specific offer, no financial terms and no termination clause.

Finally, we have the strongest, most binding qualifier of all for a legal contract:

• Competent Parties: parties to a contract must be competent and authorized to enter into a contract.

Wow, that’s a toughie.

Competent?

Hell, the LSU Board of Stuporvisors just gave away the store. How competent is that?

Competent?

Let’s ask a few simple questions of the board members, seven of whom own their own businesses, three are in government/public service, one is a banker, one is a publisher, one is a doctor and one is an attorney:

• Would you, as an executive, doctor, banker, attorney or business owner, allow your company, firm, practice, publication, or bank to enter into a contract with no stipulations, no conditions, no financial considerations—all to be filled in at a later date by someone other than yourself, after the contract has been signed by all parties?

We didn’t think so. So, why would you commit LSU and the State of Louisiana to such an ill-advised agreement?

Competent?

The LSU Board of Stuporvisors just named as the new president of the state’s flagship university a man whose highest academic achievement was that of assistant professor before he succeeded his father to the presidency of Murray State University in Kentucky as if he was the heir to some throne and then was named by his personal friend and benefactor, the chancellor of the University of California system, as president of California State at Long Beach. How competent is that?

Competent?

The Board of Stuporvisors put up a determined fight to keep secret the list of candidates for the LSU presidency.

It’s almost as if they were guarding a highly classified state secret.

Or hiding something.

What could they have been hiding?

Who knows? With the propensity for secrecy that has become the trademark of the Jindal administration, everything is concealed from view. Remember, it was Gov. Bobby Jindal who invented the term “deliberative process” as an all-encompassing term to protect his office from the public’s right to know what its government is up to.

It is Jindal’s Department of Education that has been sued at least three times in efforts to pry public information out of that shadowy department.

It was in Jindal’s Department of Health and Hospitals (DHH) that a controversial $184 million contract was awarded to the former employer of then-DHH Secretary Bruce Greenstein—a contract that is now under the microscope of federal investigators.

One has to wonder at this point how hard a legal battle the Board of Stuporvisors would wage against efforts to determine specifics of the hospital contracts.

Why are we so jaded, so cynical?

We’re not; we’re realistic, pragmatic. We connect the dots. Let’s review.

• Item: The Biomedical Research Foundation of Northwest Louisiana offered to assume administrative and operational control of the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Monroe.

• Item: The President and CEO of the Biomedical Research Foundation of Northwest Louisiana is John F. George, Jr., M.D.

• Item: John F. George, Jr., M.D., is a member of the LSU Board of Stuporvisors.

• Item: John F. George, Jr., M.D., made two contributions of $5,000 each to Jindal’s 2007 and 2008 campaigns.

• Item: The Jindal administration dismissed talk of a conflict of interest by pointing out that George will not receive a salary as president and CEO of the foundation, thereby allowing him to remain as a (voting) member of the LSU Board of Stuporvisors.

• Item: On Oct. 25, 1996, the Louisiana State Board of Ethics ruled that Natchitoches Times Publisher Lovan Thomas was prohibited from participating in a decision by the Board of Trustees for State Colleges and Universities to contract with the Times for printing services and that the participating question “cannot be cured by recusal since (state law) prohibits an appointed member of a board from curing a participating problem through disqualification.”

And lest we forget, there are always those pesky campaign contribution reports that members of many boards and commissions must wish we would forget.

We won’t. We can’t.

Let’s take a quick look at those who found it in their hearts to support Jindal financially and were subsequently rewarded with coveted seats on the LSU Board of Stuporvisors:

• Hank Danos: $18,500;

• Robert “Bobby” Yarborough (former Jindal Campaign Treasurer): $45,000;

• Scott Ballard: $5,000 from his company, WOW Café & Winery Franchising;

• James E. Moore: $21,000 from Moore and his company, the Marriott Courtyard of Monroe;

• Stanley Jacobs: $10,000 from Jacobs and his wife;

• Scott Angelle: $4,000;

• Ray Lasseigne: $17,232 from Lasseigne and his company, TMR Exploration;

• Blake Chatelain: $28,000 from Chatelain and his wife;

• Rolfe McCollister (former Jindal Campaign Manager): $18,000;

• Jack Lawton, Jr.: $61,000 from Lawton, his business interests and family members;

• Chester Lee Mallett: $15,000;

• John George: $10,000.

What’s even more difficult to fathom is that 12 of the 15 members of the LSU Board of Stuporvisors actually coughed up more than a quarter-million dollars for the privilege of serving as a pack of submissive lap dogs for the governor—obviously with no will of their own.

So now, salary or no, George is allowed to serve as President and CEO of the foundation while also serving as a voting member of the LSU Board of Stuporvisors which, in its collective wisdom, has just approved a contract for his foundation to take over the LSU Medical Center in Shreveport and E.A. Conway Medical Center in Monroe—a contract with millions of dollars and hundreds of state jobs at stake—and a contract which contains 50 blank pages but which also:

• contains no specific offer;

• contains no acceptance of a specific offer;

• contains no termination clause and from all appearances to our admittedly layman’s mind;

• is susceptible to a challenge by some indignant taxpayer(s) or group of affected hospital employees in that it could be interpreted as invalid because of the court’s inability to compel compliance, and

• has no competent parties—at least on the LSU Board of Stuporvisors’ side of the bargaining table.

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Jindal needs to understand that Revelation is not always a Biblical term: Let my people know OGB financial status

Posted in Governor's Office, Health Care, Layoffs, OGB, Office of Group Benefits, Privatization, Revenue, Transparency on April 15, 2013| 10 Comments »

It was supposed to save the state some $40 million.

It cost more than 100 dedicated, efficient state employees their jobs.

It was supposed to be the best thing for the state even though studies commissioned by the Jindal administration said it was not a good deal.

It was such a great idea that the Office of Group Benefits (OGB) reduced its premium rates by 7 percent last July, six months before Blue Cross-Blue Shield of Louisiana (BCBS) was scheduled to take over as third party administrator for OGB’s Preferred Provider Organization (PPO). And if it was going to save $40 million, why not reduce rates?

Well, for one reason, since BCBS took over in January, that alluring $500 million reserve fund that former OGB Director Tommy Teague had helped the agency build up is now said to be less than half that amount because expenditures (claims payments) have been outpacing revenues (premiums).

Except no one really knows because the administration has not provided the monthly reports.

Our open, accountable and transparent administration has not been forthcoming with financial information on the agency.

We can’t seem to see any early evidence of that $40 million savings.

When revenues don’t keep up, BCBS has been forced to dip into the reserve fund to pay claims. Obviously, when the fund is depleted, there is just one way out for BCBS: increase premiums.

That’s not exactly an unexpected development. In fact, a retired OGB employee said last October the rate reduction was a formula for fiscal irresponsibility. “The program operated at a small deficit for the fiscal year ending June 30, 2010 (before the premium rate reduction), and is almost guaranteed a significant loss for Fiscal Year 2013 with the 7 percent reduction,” he said.

“The only reason that premiums could be reduced was the fact that the program had a significant surplus. For the current fiscal year, the program will be operating on its surplus for significant portion of the current year’s operating expenses…but this cannot go on forever,” he said.

“It is another example of using one-time funds to pay for continuing operations of the state. Once the reserve fund is exhausted, rates will need to be increased significantly to cover continuing operations.”

A member of the OGB board of directors requested copies of February’s monthly financial statement several weeks ago but has met only with frustration.

It can’t be that the report is not ready; word coming out of the agency is that not only is the February report complete, but the monthly report for March as well is complete.

Funny thing about this is that financials has always been provided to board members in the past. Suddenly things have changed.

With that in mind, we decided to submit our own request pursuant to the Louisiana public records laws.

In past requests for records from the Division of Administration, we have encountered delays and stonewalling that would test the patience of the Dalai Lama. DOA consistently offers the lame excuse that DOA personnel are “searching for records and reviewing them for exemptions and privileges.”

Anticipating the usual foot dragging, we submitted the following request:

From: Tom Aswell [mailto:azspeak@cox.net]
Sent: Monday, April 15, 2013 3:55 PM
To: doacommissioner@la.gov
Subject: PUBLIC RECORDS REQUEST

• Pursuant to the Public Records Act of Louisiana (R.S. 44:1 et seq.), I respectfully request the following information:

• Please allow me the opportunity to review the monthly financial statements for the Office of Group Benefits for February and March of 2013.

• And please do not insult my intelligence by giving me your B.S. stock response (below) that you are “searching for records and reviewing them for exemptions and privileges.” You and I both know this is not privileged information and it certainly is not exempt. I will call on you Tuesday to review the documents. Any delays on your part will be met with prompt legal action.

Our most recent public records request to DOA was on March 10. Here is DOA’s response:

From: Joshua Melder [mailto:Joshua.Melder@la.gov]
Sent: Thursday, March 28, 2013 4:53 PM
To: ‘azspeak@cox.net’
Cc: David Boggs (DOA)
Subject: RE: PRR BenefitFocus

Mr. Aswell,

We are still searching for records and reviewing them for exemptions and privileges. Once finished, we will contact you regarding delivery of the records. At that time, all non-exempt records will be made available to you. As of now, we will not be ready to produce records on Monday.

Regards,

Joshua Paul Melder
Attorney
Division of Administration
Office of General Counsel

Under Louisiana’s public records laws, public agencies, from town hall to the governor’s office, have three days in which to provide requested records or to respond in writing why the records are not available and when they will be available.

Here is that March 10 request for which we still are waiting for the records:

From: Tom Aswell [mailto:azspeak@cox.net]
Sent: Sunday, March 10, 2013 9:19 PM
To: doacommissioner@la.gov
Subject: PUBLIC RECORDS REQUEST

Pursuant to the Public Records Act of Louisiana (R.S. 44:1 et seq.), I respectfully submit the following request:
Please provide me the opportunity to review the following information dating back to July 1, 2012:

• all written (email and traditional mail) correspondence between the Division of Administration (DOA) or any of its representatives, spokespersons and/or agents and BenefitFocus or any of its representatives, spokespersons and/or agents relative to any contract, Request for Proposal or any other contractual or business relationship between DOA and BenefitFocus or between the Office of Group Benefits (OGB) and BenefitFocus;

• all written (email and traditional mail) correspondence between the Office of Group Benefits (OGB) or any of its representatives, spokespersons and/or agents and BenefitFocus or any of its representatives, spokespersons and/or agents relative to any contract, Request for Proposal or any other contractual or business relationship between OGB and BenefitFocus or between DOA and BenefitFocus;

• all written (email and traditional mail) correspondence between the Division of Administration (DOA) or any of its representatives, spokespersons and/or agents and the Office of Group Benefits (OGB) or any of its representatives, spokespersons and/or agents relative to any contract, Request for Proposal or any other contractual or business relationship between DOA and BenefitFocus or between OGB and BenefitFocus.

We will keep you posted on how this silly, unnecessary drama plays out.

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