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Archive for the ‘Transparency’ Category

Don’t do as I do; do as I say do

Posted in Auditor, Governor's Office, Public Records, Transparency, Uncategorized on May 5, 2011| 7 Comments »

When a state audit of the Governor’s Office of Homeland Security and Emergency Preparedness (GOHSEP) turned up a number of deficiencies, GOHSEP Director Mark Cooper, judging from his response, must not have gotten the message from Gov. Bobby Jindal.

Among the shortcomings found by the audit were;

Inadequate preparation of the annual fiscal report—for the fourth consecutive year, no less;

Understating the amount reported for the Public Assistance Program by $120 million;

Inaccurate Federal Financial Reports, including a $25 million understatement of the federal authorized amount on the Public Assistance Report for Hurricane Katrina;

Untimely draws and inaccurate reporting of draws to Office of State Reporting and Accounting Policy resulting in delays in state reimbursements and potential lost interest revenue;

The audit report made numerous recommendations to remedy the shortcomings and Cooper responded in classic fashion:

“I have reviewed the finding(s) in (the audit report) which covers activities of the Governor’s Office of Homeland Security and Emergency Preparedness for Fiscal Year 2010,” Cooper wrote.

“Additional staff has been hired and additional training is planned to ensure that multiple layers of review are implemented,” he said.
Wait. What?

“Additional staff?”

What was it that Jindal said a few months back about doing more with less?

Perhaps that doesn’t apply to certain agencies.

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Second week of hearings brings more confusion on OGB sale

Posted in Auditor, Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Transparency, Uncategorized on May 2, 2011| 7 Comments »

Some would call it bureau-speak but to those sitting through Monday’s Senate Retirement Committee hearings on the privatization of the Office of Group Benefits, it was more like gooney-babble.

Commissioner of Administration Paul Rainwater, just as he did last week, tried to convince legislators of the wisdom of privatizing the agency that has amassed a $500 million surplus and which has an administrative cost of only 3.5 percent.

As if that were not enough, Legislative Auditor Daryl G. Purpera testified that Rainwater has refused to provide documents that his office is constitutionally entitled to have in order to conduct proper assessments. “We requested certain documents, particularly those pertaining to the Chaffe contract we were told by Mr. Rainwater that those documents would not be provided,” Purpera said.

“We also tried to get specifics of the proposal but I received a letter from Mr. Rainwater saying those would not be provided under exceptions. My office cannot do its job if we have scope limitations,” he said.

The proposal to which he alluded was the proposal submitted by Goldman Sachs to conduct a financial assessment of OGB and to market the agency for a buyer, according to the RFP. The Chaff contract was a $49,999.99 contract with Chaffe and Associates of New Orleans to conduct an interim assessment. The contract amount was one cent less than the amount that would have required concurrence by the Office of Contractual Review.

Rainwater started his testimony by comparing Louisiana to other states, zeroing in on the staff sizes of the other states as compared to OGB’s 300 employees.

At times appearing to talk down to committee members and once even admonishing committee Chairman Sen. D.A. “Butch” Gautreaux (D-Morgan City) to not interrupt while he was speaking, Rainwater said the $500 million surplus “is not for sale. It will not be diverted for any other use other than to pay claims.”

What he did not say on Monday but did say a week ago was that while the surplus would indeed be used to pay claims, it would no longer be OGB surplus funds paying the claims because the surplus would go over to the buyer who would use the fund to pay claims.

It was only a couple of weeks ago that Rainwater said the OGB $500 million reserves are an attractive selling point because the private company that ultimately purchases the agency would not have to dip into its own capital to pay claims. His own office’s press release of April 26 describing his appearance before the Retirement Committee repeatedly alluded to his testimony on the “potential sale and privatization of the state’s Office of Group Benefits” and of the procurement of a financial advisor “to help the state evaluate a potential sale of OGB….”

On Monday, however, a casual observer would have had difficulty in believing Rainwater was talking about the same proposal. Suddenly, it turns out that OGB is not for sale after all, that the RFP will instead be for a third party administrator of the state’s PPO (Preferred Provider Organization).

“At the end of the day,” he told the committee, “we will still have the Office of Group Benefits with 149 employees.”

“I’m not getting answers to my questions here,” Gautreaux said.

“You are getting answers,” Rainwater shot back.

Gautreaux said if the agency is privatized, “There will have to be rate increases and/or benefit reductions. There’s no way to avoid that with a private company trying to turn a profit.”

Division of Administration (DOA) Chief of Staff Dirk Thibodeaux, who had earlier promised the committee that a new RFP would be completed by week’s end, said Gautreaux was incorrect. “The legislature will have to approve any contract” for a third party administrator, he said, so lawmakers would have the opportunity to examine the rate structure.

Rainwater said there would be a five-year contract with a third party administrator. “At the end of the five years, we’ll take a look at it.”

“What’s going on here?” Gautreaux demanded. “Last week we were talking about selling OGB and now we’re talking about a contract with a third party administrator. You three (Rainwater, Thibodeaux, and OGB newly-appointed CEO Scott Kipper) may know what you’re talking about but the rest of us surely don’t.”

Rep. Hollis Downs (R-Ruston), sitting in as a guest for the second week in a row, said, “The state’s HMO is self-insured but administered by a third party, in this case, Blue Cross/Blue Shield, am I correct?”

“That’s correct,” Rainwater said.

“The state’s PPO is now self-insured and self-administered with the state paying all claims but you’re proposing that it become self-insured but administered by a third party?”

“Yes, sir.”

“And my understanding is you may combine both the HMO and PPO into one, am I correct again?”

“Yes, we could conceivably bundle the two for greater efficiency.”

“So, you’re just selling a block of business and the state would continue to have oversight?” Downs asked.

“That’s correct,” Rainwater said.

Following Rainwater’s departure from the committee room, Travis McIlwain, director of the General Government Section of the Legislative Fiscal Office spoke briefly on efforts by his office to analyze the administration’s proposal.

“Frankly, we have nothing in hand that would allow us to analyze this proposal,” he said. “Until today, we have heard only that the administration wants to sell OGB and now, Mr. Rainwater says it’s not for sale but is for lease to a third party administrator. I’m as confused as you, Mr. Chairman,” he said to Gautreaux.

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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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Of water slides and state health plan comparisons

Posted in Governor's Office, House, Senate, Legislature, Legislators, OGB, Office of Group Benefits, Politicians, Retirement, Transparency on April 29, 2011| 22 Comments »

Last Tuesday, as testimony wound down before the Senate Retirement Committee over the proposed sale of the Louisiana Office of Group Benefits, committee Chairman A.D. “Butch” Gautreaux (D-Morgan City) commented that perhaps the Jindal administration should consider selling the State Capitol because “it would make a great waterslide.”

Besides Commissioner of Administration Paul Rainwater’s describing published accounts about the administration’s shenanigans as reading “like a John Grisham novel” and Rep. Rogers Pope, reacting to Rainwater’s annoying habit of consistently giving evasive answers to his questions, saying that Rainwater “should be on Dancing With the Stars,” the committee hearing produced precious little levity.

But some comparisons of what was said earlier and what was said later might shed some light on the inconsistencies of statements by Gov. Bobby Jindal and Rainwater. Comparisons between Louisiana’s Preferred Provider Organization (PPO) and that of the state of Utah also are somewhat revealing. The state’s PPO plan is that part of the Office of Group Benefits (OGB) that contracts with doctors and hospitals for services to members and which Jindal is so desperate to privatize over the objections of plan members and legislators.

Jindal at first was pragmatic about his proposed auction of OGB, saying that it just made good financial sense for the state to rid itself of the burden of serving as a health insurance agency. Besides giving him a couple of hundred million dollars to plow into the $1.6 billion budget abyss, it would eliminate 149 state jobs, something he seems determined to do.

But in Friday’s Baton Rouge Business Report, Jindal shifted gears oh so subtly when he said his reasons for wanting to divest the state of OGB was rooted as much in his philosophical opposition to government-run health care–he equated it to his opposition to President Barack Obama’s health care plan–as any other reason.

As Archie Bunker might have said, he switched from pragmatic to philosophical in the blink of a hat.

Likewise, consider the words of Rainwater. A week ago, he said the reason OGB would be attractive to buyers in the private sector was because the $500 million existing surplus would allow a new owner to pay claims out of that reserve without the buyer having to dip into its own reserves initially.

But on Friday, Rainwater sent out a two-page letter to OGB members in which he emphatically claimed that was not the case at all. These are his words, lifted directly from that letter:

“Strong restrictions remain in place governing the OGB surplus, and it will continue to be utilized just as it is now – solely for the purpose of providing health coverage for plan members.”

So, with Rainwater making such a strong promise (in boldface type, no less), why was it necessary to inject those four notorious lines into HB-32 which would have the effect of directing the state treasurer to divert any surplus funds from OGB to the state’s General Fund when current law strictly prohibits just such action by the administration?

That’s a question that only Jindal or Rainwater can answer but so far they have not addressed that provision of the bill.

Finally, there’s the comparison between Louisiana and Utah.

Why? Because no less than half-a-dozen times during last Tuesday’s Retirement Committee hearing Rainwater alluded to the fact that Louisiana is one of only two states in the U.S.—Utah being the other—that has a completely self-administered system. Put another way, the two states are the only ones that pay PPO claims exclusively in-house.

Each time Rainwater made the statement that Louisiana was one of only two such systems, he said it like it was a bad thing. And he said it so often that Gautreaux, apparently weary of hearing the line repeated as if by rote, finally interrupted Rainwater to say that after hearing it said repeatedly, everyone present was now aware the fact and there was no further need to dwell on that point.

But perhaps the point needs to be scrutinized more closely.

So, with that in mind, CNS contacted Jeff Jensen in Salt Lake City. He is Director of the “other” program in Utah.

Strangely enough, he said when asked the direct question that the Republican administration of that state had introduced HB-404 which seeks to privatize the Utah group benefits program. What a coincidence.

“Our program has worked well for 30 years,” he said in a telephone interview with CNS.

How well? Well, the Louisiana OGB has an administrative cost of roughly 3.5 percent compared to about 4 percent for Utah. Among private insurance companies, administrative costs run, on average, between 10 and 15 percent–some even higher.

“We don’t have quite the surplus, or escrow, that Louisiana does,” Jensen said. “When we accumulate a surplus at a certain level, we refund that to our members by reducing premiums.”

In Louisiana, members are happy with OGB because it averages no more than 48 hours on claims payments. In Utah, Jensen, said, the average is about 14 days, “but improving.”

In Louisiana, privatization of OGB would cut the number of employees in that agency by half, Rainwater has been quoted as saying. Later, the number was given as 149, meaning that the agency now employs about 300 people to service the health insurance needs of approximately 220,000 active members, retirees, and dependents. That’s one OGB representative for every 733 members.

Jindal said that number is far too many and is wasteful.

Utah currently employs 230 people to service the health needs of 140,000 members, or one representative for every 609 employees.

The comparisons, however, end there. Utah’s State Capitol is not conducive to use as a water slide.

Below is the blurb from the Business Report followed by Rainwater’s letter in its entirety:

Jindal says La. shouldn’t run health insurance program

Gov. Bobby Jindal is pitching his bid to privatize a health insurance program for state workers as a fight against government-run health care, equating it to his opposition to President Barack Obama’s health overhaul. Jindal says that he doesn’t think Louisiana should be in the business of running a health insurance program, as he tries to gain support for his plan to hire an outside company to run the program currently run by the Office of Group Benefits. The idea faces significant opposition from some lawmakers and current and retired state employees. Jindal says privatization would cut in half the 300-employee group benefits office workforce and generate $10 million in annual savings for the state, in addition to an up-front, lump-sum payment that could top $150 million. “In a time of serious fiscal challenges, these funds, in future years, could go a long way toward protecting critical taxpayer-supported services that benefit all our citizens,” says Paul Rainwater, commissioner of administration and Jindal’s budget chief. Rainwater made the statement in a letter to Office of Group Benefits plan members. He assured members that potential privatization would not affect service, coverage, benefits or premium rates.

Rainwater’s letter:

April 29, 2011

Dear Plan Member,

I write to you regarding the possible further privatization of the Office of Group Benefits (OGB). In the past few weeks, numerous rumors about this proposal have caused concern, among government employees and retirees alike, over what it might mean for their future health coverage. I certainly sympathize with those concerns, and I would share them too, if the rumors were true – but they are not.

As Commissioner of Administration, with responsibility for overseeing OGB, I believe strongly in the need to provide you with the facts, to separate rumors from reality, and hopefully alleviate any concerns you may have.

As you know, OGB has long used private companies to deliver various health plans, including the most popular plan, the HMO. These plans operate successfully and provide quality service, with administrative oversight by OGB. Only the PPO plan – which provides coverage for 61,469, or 27 percent, out of a total of 225,870 government employees, retirees, and dependents covered through OGB – is self-administered by state government, and it is only this plan, under the proposal, that would change in that regard.
My pledge to all plan members is this:

• You will continue to receive quality service and coverage regardless of the potential further privatization of OGB.

• Premiums rates, likewise, would be unaffected by this transition, and increases, when they occur, will continue to be reflective of medical market rates, as they are now.

• Benefits for all plan members, including retirees, will NOT change. We will continue to provide an HMO, PPO, and other plans with a benefit structure that is the same or better than the health plans OGB now offers.

• Current eligibility rules for coverage will not change for all plan members, active and retired alike.

• And OGB’s administrative oversight will continue, securing the continued success of all the plans.

As for the allegation that OGB’s surplus will somehow be “stolen” and diverted for other budgetary purposes, let me be absolutely clear: This claim is categorically untrue. Strong restrictions remain in place governing the OGB surplus, and it will continue to be utilized just as it is now – solely for the purpose of providing health coverage for plan members.

So why, then, explore such a proposal? Well, the simple fact of the matter is that taxpayers, who pay 75 percent toward plan member premiums and the cost of providing coverage, also have a stake in this discussion. A preliminary estimate suggests that a financial transaction with a commercial health provider involving the HMO and PPO plans could generate for the state at least $150 million. In a time of serious fiscal challenges, these funds, in future years, could go a long way toward protecting critical taxpayer-supported services that benefit all our citizens.

Our research of best practices shows that every other state besides Louisiana that offers a PPO plan does so through private companies, so we know it can be done with positive results. In the coming weeks we will engage an expert financial advisor to assist us in a thorough evaluation of this proposal, and to help us make a careful determination to proceed on a course of action that’s in best interest of both plan members and taxpayers.

This lengthy evaluation will also prepare us to present a detailed presentation of the proposal to you, as well as to the Legislature’s appropriation and finance committees, whose members have jurisdiction over OGB and whose approval would be needed for any contract involved.

In closing, I hope that expressing to you the reality of the situation, which runs so counter to the rumors you have may have heard, has helped to dispel concerns these rumors have caused. As we gather more information, I will see to it that you are given updates as they develop. More importantly, I will make sure that you continue to receive the quality service and coverage from your health plan that you expect and deserve.

Sincerely,

Paul Rainwater
Commissioner of Administration

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New OGB game plan: placate but don’t help callers

Posted in Governor's Office, Health Care, Transparency on April 28, 2011| 8 Comments »

Representatives of the Office of Group Benefits (OGB) Customer Service Department have been instructed by the Division of Administration to be patronizing but not necessarily helpful or even supportive to callers concerned about the proposed sale of the agency.

An official memorandum, quoted verbatim below, instructs the OGB Customer Service reps to inform callers that “they have reached the right place,” and further directs them to repeat the same general promises that Commissioner of Administration Paul Rainwater made to the Senate Retirement Committee during Tuesday’s hearings.

Among those promises are pledges that would seem difficult, if not impossible to make with any certainty once OGB is taken over by a private entity. Those include assurances that members will continue to receive “quality service and coverage regardless of any potential sale,” the continuance of HMO and PPO health plans that will be “the same or better” than those presently offered, and that OGB’s reserve fund (the $500 million surplus) will continue to be used for its “dedicated purpose” to provide health coverage to state employees.

The memo instructs customer service personnel to allow callers to vent “briefly and reasonably,” but personnel are not to “suggest or recommend” that callers contact other agencies or people to voice their concerns.

Callers are to be referred to OGB’s “Latest News” section on the agency’s web page where, the memo says, OGB “will post additional info as it becomes available.”

We can only hope that the web updates will be more informative and forthcoming than was Rainwater at Tuesday’s Retirement Committee hearing.

Finally, calls from reporters or bloggers are to be referred to OGB communications.

Below is the full text of the memorandum:

O.G.B. Response to Calls from Plan Members about Privatization

The Division of Administration (DOA) wants OGB Customer Service to relay this info to plan members who call or write:

Commissioner of Administration Paul Rainwater wants OGB plan members to know that:

Plan members will continue to receive quality service and coverage regardless of any potential sale and privatization of OGB.

The Division of Administration plans to continue to provide HMO and PPO health plans with a benefit structure that is the same or better than the health plans OGB now offers.

OGB’s reserve fund will continue to be used for the dedicated purpose: to provide health coverage to state employees.

Refer plan members to the Latest News section of our website for more details if needed, which contains all the information now available, and tell them that’s where OGB will post additional info as it becomes available.

If they are calling to voice their concerns, let them know they have reached the right place. If they want to vent, allow them to do so (briefly and reasonably).

Plan members certainly have the right to call other agencies or people, but DOA cautions OGB employees not to suggest or recommend that they do so.

The Division of Administration (DOA) wants OGB employees to refer all media calls from reporters or bloggers to OGB Communications.

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