Providence to consider privatizing school bus monitors

Source: Dan McGowan, WPRI, December 18, 2014

The head of Providence’s municipal employees’ union said Thursday his members would be opposed to any attempt by the city to privatize bus monitor services as part of its new school bus transportation contract. The city’s contract with longtime busing provider First Student, Inc. ends next year and school officials have put the new agreement out to bid. The 46-page request for proposal also seeks to “evaluate the cost associated with contractor employed bus monitors,” but does not guarantee that the city will hire private monitors.

When Nonprofit Hospitals Sue Their Poorest Patients

Source: Chris Arnold, Paul Kiel, NPR and ProPublica, December 19, 2014

…NPR and ProPublica have been investigating the increase in so-called “wage garnishment” by credit card and other companies. For this story, we looked specifically at nonprofit hospitals and found the practice widespread in five different states around the country.

Nonprofit hospitals get huge tax breaks — they are considered charities and therefore don’t pay federal or state income tax or local property tax. In exchange, they are obligated to provide financial assistance or “charity care” to lower-income patients.

Some nonprofit hospitals around the country don’t ever seize their patients’ wages. Some do so only in very rare cases. But others sue hundreds of patients every year. Heartland, which is in the process of changing its name to Mosaic Life Care, seizes more money from patients than any other hospital in Missouri. From 2009 through 2013, the hospital’s debt collection arm garnished the wages of about 6,000 people, according to a ProPublica analysis of state court data….

Advisory council orders GBI investigation of Darien-based South Georgia Probation

Source: Terry Dickson,, December 17, 2014

The state council overseeing private probation companies voted unanimously Wednesday to launch a criminal investigation against a Darien-based firm, South Georgia Probation Inc., the day after the company’s owner, Shea Smith, informed three courts she was quitting. … Neither Smith nor her lawyer appeared before the council, which is an arm of the Judicial Council of Georgia, to answer findings on noncompliance in its supervision of defendants on probation. The council noted it is likely to hear other such cases against private probation companies from around the state in light of a recent State Supreme Court decision that says the companies cannot extend the probation of misdemeanor defendants over nonpayment of supervision fees. After that ruling, which resulted from a battery of suits against Sentinel Probation in the Augusta area, thousands of arrest warrants were rescinded around the state. Many had been secured by large firms that provide probation services in multiple counties.

In South Georgia Probation’s case, an October compliance review showed that Smith, who is a registered probation officer, had given administrative employees authority to make decisions on probations, that probation officers didn’t meet education standards, had unregistered employees and didn’t have procedures for indigent defendants. Among other deficiencies the company let probationers buy out of community service, collected dismissal fees on active warrants, collected fees for drug tests that weren’t completed and collected its fees upfront rather than monthly as courts ordered, the review said….

Whistleblower Suit Alleges For-Profit College Tricked Veterans Into Debt /Documents unsealed last week also allege financial aid fraud by EDMC

Source: Molly Hensley-Clancy, BuzzFeed, December 16, 2014

Unsealed documents from a 2011 whistleblower lawsuit lay out a system of alleged financial aid fraud by EDMC, a financially troubled for-profit college operator that owns the massive Art Institutes chain, which includes falsifying federal financial aid documents and tricking veterans into taking out excess loans. The allegations add a new dimension to the case against EDMC, which includes two other whistleblower suits. The Justice Department and four states joined a separate suit filed in 2007 alleging that the company violated federal law by paying recruiters based on how many students they enroll. The DOJ has not yet said whether it will join this suit, said a lawyer on the case, Alan Perer…. The suit, which was unsealed by a federal judge last week, alleges EDMC recruiters were directed to falsify information on students’ financial aid documents to maximize the money flowing to the school, in what one former admissions representative described as a “pervasive” practice. EDMC derives more than 90% of its revenue from the federal government, including GI Bill funds that pay for the education of veterans. ….
Students say for-profit art college delivered debt – but no jobs
Source: Melody Petersen, Orange County Register, April 30, 2014

Art Institute’s high-pressure recruiters draw criticism. Students talk of staggering loan debt. … Bieri’s story, as well as similar accounts from other former students, are echoed in two pending federal lawsuits against Education Management Corp., the company that owns the 50 Art Institute campuses across the country. The lawsuits, filed by former employees, claim that the company’s recruiters frequently misled potential students because of the financial incentives they received for enrolling them. Chris Hardman, vice-president of communications for Educational Management Corp., or EDMC, said the company believes the lawsuits have no merit. He added that he could not speak about individual student cases because of privacy laws….

For-Profit College Chain Can’t Shake Lawsuit
Source: Rose Bouboushian, Courthouse News Service, June 4, 2013

Education Management Corp., the nation’s second largest operator of for-profit colleges, cannot dismiss claims it lied about its eligibility for federal student financial aid, a federal judge ruled. Based in Pittsburgh, EDMC offers career programs at 110 campuses in North America; it had nearly 132,000 students as of October 2012, according to its website.

Jason Sobek, who was its associate director of admissions from June 2008 through November 2010, sued the company and its subsidiaries, Education Management LLC, South University LLC dba South University Online, Argosy Education Group dba Argosy University Online, and The Art Institutes International LLC dba The Art Institutes Online.

In the lawsuit, Sobek said the colleges made false claims about their eligibility to receive federal student loan funding, and about (I) accreditation of nursing programs; (II) job placement statistics; (III) tuition costs; (IV) satisfactory academic progress statistics; (V) incentive compensation ban; and (VI) reverse False Claims Act – failing to report students who should have been dropped from school rolls.

…Goldman Sachs and Providence Equity Partners acquired EDMC and its 70 schools for $3.4 billion in 2006.

The Shady For-Profit Company Poised To Take Over DC Prison Healthcare

Source: Alice Ollstein, ThinkProgress, December 16, 2014

The DC City Council could vote as soon as Wednesday on a 5-year contract for the notorious prison healthcare company Corizon to operate at the DC Jail and Correctional Treatment Facility. The contract would give the company jurisdiction over the medical care of the more than 10,000 DC residents that cycle through the jail every year….

BREAKING: Donnellan Recommends Closing Artisphere

Source:, December 17, 2014

Arlington County Manager Barbara Donnellan says the county should close the Artisphere cultural center in Rosslyn. Donnellan made the recommendation at today’s County Board meeting, after being charged by the Board earlier this year to study Artisphere and suggest a way forward for the money-losing, county-run center. …. County staff will be studying options for sub-leasing Artisphere to a private company or a private-public partnership in the “arts, media, technology” space, or returning it to landlord Monday Properties, Donnellan said. ….

State law holds back Ohio’s charter schools

Source: Catherine Candisky, Columbus Dispatch, December 17, 2014

Almost two decades after Ohio lawmakers authorized the creation of charter schools, experts say most offer poor alternatives to traditional public schools. A report released yesterday gave a bleak assessment of charter-school regulation in Ohio, saying it has failed to attract good schools and allowed poorly performing schools to flourish. “You don’t have the great schools in nearly the number you would expect after 17 years of chartering here,” said Andy Smarick, co-author of the report by the nonprofit Bellwether Education Partners. …. The analysis placed blame largely on state regulations and laws that favor for-profit management companies, encourage less oversight and allow poorly performing schools to remain open while doing little to attract superior schools to Ohio….
The Road to Redemption: Ten Policy Recommendations for Ohio’s Charter School Sector
Source: Juliet Squire, Kelly Robson, Andy Smarick, Bellwether Education Partners, December 2014

In 1997, the Buckeye State embraced a new approach to public-education delivery, launching a pilot program of community (charter) schools. Since then, the state’s community schools sector has grown tremendously.

On privatization, Gov. Christie should practice, not preach, government transparency: Opinion

Source: Charles Wowkanech, president of the New Jersey State AFL-CIO, Star-Ledger, December 16, 2014

Gov. Chris Christie often talks about the need for transparency in government. He frequently points to his own administration as an example of how to carry out the functions of government in a forthcoming and above-board manner. Why, then, has the governor vetoed a bill that establishes oversight for deals that privatize government services?
Christie Nixes NJ Privatization Standards Bill
Source: Joshua Alston, Law360, August 11, 2014
(subscription required)

New Jersey Gov. Chris Christie has vetoed a bill to install standards for service and workforce levels for privatized state contracts, saying the legislation is ideology-driven opposition to his privatization efforts and would create needless red tape. In a message released Friday, Christie issued an absolute veto of S-770, a bill aimed at blocking private state contracts unless the state is assured privatization would achieve considerable cost savings without resulting in reductions in the quality of service or the workforce levels the state maintains.

Bill regulating privatization efforts heads to Christie’s desk
Source: Michael Linhorst, The Record, June 16, 2014

A bill that Democrats say would guard against “irresponsible” plans to outsource government services is heading to Governor Christie’s desk. The bill, which passed the Assembly 48-30 today, would forbid privatization unless real cost savings could be shown. In addition, the work environment, including wages would have to stay the same or be better than the public sector and there would also be public disclosure requirements….

Editorial: Privatization deals / Oversight needed
Source: Press of Atlantic City, May 2, 2014

Democratic leaders in the state Senate are pushing a bill that would increase oversight of deals privatizing government services. The bill will never become law – not as long as Chris Christie, or any other privatization-loving Republican, is governor. And it is a blatant attempt to curry favor with public-worker unions, which of course lose members and jobs when government services are privatized. But all that aside, the measure (S770) is sound. Indeed, for the most part, it isn’t increasing oversight of privatization deals as much as it is establishing oversight for the first time.

Arkansas’ model Medicaid experiment in jeopardy

Source: Andrew DeMillo, Associated Press, December 17, 2014

Arkansas became the first Southern state to expand its Medicaid program in a way that many Republicans found acceptable. The state bought private insurance for low-income people instead of adding them to the rolls of the Medicaid system, which GOP lawmakers considered bloated and inefficient. Now Arkansas could be on the brink of another distinction: becoming the first to abandon its Medicaid expansion after giving coverage to thousands of people. A wave of newly elected Republican lawmakers who ran on vows to fight so-called “Obamacare” — including the state’s “private option” Medicaid expansion — has raised doubts about the future of a leading model for conservative states to gradually adapt to the federal health care law. Arkansas’ incoming Republican governor, Asa Hutchinson, is remaining mum on the plan’s fate….
Medicaid Demonstrations: HHS’s Approval Process for Arkansas’s Medicaid Expansion Waiver Raises Cost Concerns
Source: U.S. Government Accountability Office (GAO), GAO-14-689R, September 8, 2014

From the summary:
In approving Arkansas’s Medicaid Section 1115 demonstration, the Department of Health and Human Services (HHS) gave the state the authority to test whether providing premium assistance to purchase private coverage offered on the health insurance exchange will improve access to care for individuals newly eligible for Medicaid as a result of the Patient Protection and Affordable Care Act (PPACA).

In approving the demonstration, HHS did not ensure that the demonstration would be budget- neutral—that is, that the federal government would spend no more under the state’s demonstration than it would have spent without the demonstration. Specifically, HHS approved a spending limit for the demonstration that was based, in part, on hypothetical costs—significantly higher payment amounts the state assumed it would have to make to providers if it expanded coverage under the traditional Medicaid program—without requesting any data from the state to support the state’s assumptions. GAO estimated that, by including these costs, the 3-year, nearly $4.0 billion spending limit that HHS approved for the state’s demonstration was approximately $778 million more than what the spending limit would have been if it was based on the state’s actual payment rates for services under the traditional Medicaid program.

Furthermore, HHS gave Arkansas the flexibility to adjust the spending limit if actual costs under the demonstration proved higher than expected, and HHS officials told us that the Department granted the same flexibility to 11 other states implementing demonstrations that affect services for newly eligible beneficiaries. Finally, HHS, in effect, waived its cost-effectiveness requirement that providing premium assistance to purchase individual coverage prove comparable to the cost of providing direct coverage under the state’s Medicaid plan, further increasing the risk that the demonstration would not be budget-neutral.

As of June 2014, HHS has approved one additional state’s—Iowa’s—demonstration to use premium assistance to purchase exchange coverage. Iowa’s demonstration is more limited in scope in that it covers a portion of the expansion population, those with incomes of 101 percent to 133 percent of the federal poverty level. As with its approval of the Arkansas demonstration, HHS gave Iowa the flexibility to adjust its spending limit and waived the cost-effectiveness requirement. According to HHS officials, three other states as of June 2014 had indicated an interest in implementing a similar approach.

In commenting on a draft of this report, HHS disagreed with GAO’s findings that HHS’s approval process did not ensure that the Arkansas demonstration will be budget-neutral. GAO maintains the validity of these findings.

GAO: Arkansas Medicaid Plan Not Revenue-Neutral
Source: Kelly P. Kissel, Associated Press, September 9, 2014

Arkansas’ Medicaid expansion plan, in which the state uses federal dollars to buy private health insurance for its poorer residents, will cost taxpayers an extra $778 million over the next three years rather than being “revenue-neutral” to the federal budget, according to a government report released Monday. The plan’s supporters disputed the findings. According to the U.S. General Accountability Office, the U.S. Department of Health and Human Services didn’t ensure that Arkansas’ “private option” Medicaid plan wouldn’t cost the federal government additional money. It said DHHS-imposed spending limits of $4 billion were about $778 million more than what would have been expected under the traditional fee-for-service Medicaid program….

Arkansas: A Leading Laboratory for Health Care Payment and Delivery System Reform
Source: Deborah Bachrach, Lammot du Pont, and Mindy Lipson, Commonwealth Fund, Issue Brief, Commonwealth Fund pub. 1766 Vol. 20, August 2014

From the overview:
As states’ Medicaid programs continue to evolve from traditional fee-for-service to value-based health care delivery, there is growing recognition that systemwide multipayer approaches provide the market power needed to address the triple aim of improved patient care, improved health of populations, and reduced costs. Federal initiatives, such as the State Innovation Model grant program, make significant funds available for states seeking to transform their health care systems. In crafting their reform strategies, states can learn from early innovators. This issue brief focuses on one such state: Arkansas. Insights and lessons from the Arkansas Health Care Payment Improvement Initiative (AHCPII) suggest that progress is best gained through an inclusive, deliberative process facilitated by committed leadership, a shared agreement on root problems and opportunities for improvement, and a strategy grounded in the state’s particular health care landscape.

‘Private Option’ for Medicaid Expansion Would Cut Some Benefits
Source: Christine Vestal,, March 27, 2014

When Arkansas won federal approval to use Medicaid expansion dollars to help low-income people purchase private health insurance, officials on both sides of the aisle applauded the compromise ….. Now, as more states craft their own versions of what is known as the “private option” – and Arkansas seeks revisions to its original plan – advocates are increasingly concerned that the private market approach to Medicaid expansion could erode the effectiveness of the Medicaid program.

‘Private Option’ Bill Fails in Arkansas House, 70-27
Source: Andrew DeMillo, Associated Press, February 18, 2014

The Arkansas House failed Tuesday to renew the state’s compromise Medicaid expansion plan, leaving in limbo the future of a program heralded as a model for Republican-leaning states to implement the federal health overhaul. The House voted 70-27 to reauthorize funding for the “private option,” falling five votes shy of the 75 needed in the 100-member chamber to continue the program. Under the private option, Arkansas is using federal Medicaid funds to purchase private insurance for thousands of low-income residents. The program was approved last year as an alternative to expanding Medicaid’s enrollment under the federal health law. ….

In Arkansas, ‘Private Option’ Medicaid Plan Could Be Derailed
Source: Abby Goodnough, New York Times, February 10, 2014

Last year, the Republicans who control this state’s Legislature devised a politically palatable way to expand Medicaid under President Obama’s health care law. They won permission to use federal expansion funds to buy private insurance for as many as 250,000 poor people instead of adding them to traditional Medicaid, which conservatives disparage as a broken entitlement program. But just as the idea is catching fire in other states with Republican or divided leadership — Iowa has adopted a version of the plan, and New Hampshire, Pennsylvania, Utah and other states are exploring similar avenues — Arkansas may abruptly reverse course, potentially leaving the 83,000 people who have signed up so far without insurance as soon as July 1.

Ark. House passes ‘private-option’ Medicaid funds
Source: Associated Press, April 16, 2013

The Arkansas House on Tuesday approved a plan to use federal Medicaid funds to buy private insurance for low-income residents, with many Republicans saying the approach is the best way to maintain some control over provisions of a new federal healthcare law they still oppose. The private-option plan was presented to legislators in two parts, with one part including language authorizing the plan and a second part setting up the funding. The funding element finally won its needed three-fourths vote in the House, though it still needs to be approved by the same margin in the Senate.

Arkansas wants to privatize its Medicaid Expansion: Is this the start of a trend?
Source: Robert I. Field,, Field Clinic blog, April 7, 2013

..The Beebe plan would have the state pay for private policies for residents with incomes below 138% of the federal poverty level. They would purchase the policies on the new insurance exchanges that will operate under Obamacare starting next January 1. This would avoid the need to expand the existing Medicaid program directly….

Editorial: Using Medicaid Dollars for Private Insurance
Source: Editorial, New York Times, March 31, 2013

The Obama administration and Republican officials in several states are exploring ways to redirect federal money intended to expand Medicaid, the main public insurance program for the poor, and use it instead to buy private health insurance for Medicaid recipients. The approach could have important benefits for beneficiaries and for the future of health care reform. But the idea also carries big risks. Federal officials will need to enforce strict conditions before agreeing to any redirection of Medicaid dollars that were originally intended to enlarge the Medicaid rolls.

So you want to privatize Medicaid? Has HHS got a guide for you
By Sarah Kliff, Washington Post, March 29, 2013

States have lots of questions about whether they can use Medicaid expansion dollars to buy private insurance coverage, the so-called Arkansas option. Now, they have a few more answers. The Centers for Medicare and Medicaid Services on Friday issued a Q&A to address some of the questions posed by states. It’s not comprehensive—it includes three questions that span two pages—but it has a few new details that might help states make up their minds….

Privatizing the Medicaid expansion: ‘Every state will be eying this.’
Source: Sarah Kliff, Washington Post, March 8, 2013

Arkansas has turned heads with its plan to expand Medicaid using the private insurance market. The idea — which is still preliminary — would be to use Medicaid dollars to buy private insurance coverage for the expansion population. For health policy experts, this has raised a huge number of questions: Will private plans guarantee the same benefits that Medicaid does? How will states pay for the private insurance, which generally costs more than the public program? And does HHS even have the legal authority to do this? George Washington University’s Sara Rosenbaum, an expert on Medicaid policy, recently dove into the regulations to answer these questions. She wrote an excellent policy primer here and, on Thursday, we had a lengthy conversation about it. What follows is a transcript of that discussion, lightly edited for clarity and length.

Private Medicaid Plans Get Push
Source: Ana Campoy, Louise Radnofsky, Wall Street Journal, March 11, 2013
(subscription required)

A pair of states are proposing to use new Medicaid funding to help the poor buy private health insurance, a new twist in how to implement the 2010 federal health-care law that is winning support from some Republicans. Arkansas Gov. Mike Beebe, a Democrat, wants U.S. health regulators to let the state use federal dollars intended to expand eligibility for the Medicaid program to instead buy private insurance policies for low-income people. Ohio Republican Gov. John Kasich is pushing for a similar deal. The new option could appeal to conservatives, who argue that the private sector could provide care more efficiently than the government-run Medicaid program. It would also meet the Obama administration’s goal of coaxing into the expansion several states that have signaled they would pass on it, citing problems with Medicaid and concerns about increased government spending….

Medicaid Expansion Is Rejected in Florida

Source: Lizette Alvarez, New York Times, March 11, 2013

Rebuffing Gov. Rick Scott’s support of Medicaid expansion, a Florida Senate committee on Monday rejected the idea, all but ending the possibility that the state would add more poor people to Medicaid rolls. But the Senate panel debating the expansion proposed a compromise: to accept the federal money but use it to put low-income people into private insurance plans. Accepting the money would please the governor and a number of Floridians, while steering people away from Medicaid, which many lawmakers and residents view as troubled. … It is unclear whether the Obama administration would accept such a proposal. Several states, including Arkansas, Indiana and Ohio, are exploring using private insurers to enroll uninsured patients. …