Category Archives: Studies/Reports/Audits

Who Profits From Our Prison System?

Source: Michelle Chen, The Nation, August 9, 2018
 
The US prison system, now home to over 2 million Americans, runs like an economy unto itself: From the cafeteria line to the phone line to the assembly line, a steady stream of money is fueling our incarceration complex. But who profits off prisoners remains a trade secret.  That’s why advocates for criminal-justice reform are now harnessing big data to map out the carceral state, exposing the corporate networks that administer and finance the prison industry while driving its expansion. The Corrections Accountability Project of the Urban Justice Center (where, full disclosure, this author once interned) presents a kind of yellow pages of criminal justice, revealing the convoluted, self-serving mechanics of industrialized incarceration.

… Today, major private corporations administer services ranging from medical-record keeping to surveillance to psychiatric counseling. … But beyond direct in-house services, the CAP report points to various complex financing entities that fuel a built-in incentive to consolidate, monopolize, and expand the incarceration system and the sentencing and legal processes that keep it humming. …

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US government failing millions by paying below $15 an hour, study finds

Source: Mike Elk, The Guardian, August 10, 2018
 
The federal government employs more workers making less than $15 an hour than any other employer in the US, a new report has revealed.  The study, compiled by pro-union group Good Jobs Nation, analyzed federal data and showed that the government spends more than $1.6tn on federal contractors employing more than 12.5 million people with 4.5 million of those workers making below $15 an hour.  Many of these workers are employed by contractors as janitors, cafeteria workers, call center workers, administrative assistants and healthcare aides, and union campaigners say they are being kept on poverty wages. …

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White Hat Management Leaves Ohio Charter Industry

Source: Mitch Felan, WKSU, August 8, 2018
 
White Hat Management, the once-prolific Ohio charter school operator and early advocate for school choice in the state, is leaving the charter school business. The company has been steadily losing contracts over the past few years in the competitive market. …

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When it comes to facing down Ohio’s well-heeled charter school lobbyists, will state lawmakers be leaders — or lapdogs?
Source: Brent Larkin, Northeast Ohio Media Group, July 24, 2015

…… In the past 17 years, Ohio’s two largest charter school management companies — David Brennan’s Akron-based White Hat Management and William Lager’s Columbus-based Electronic Classroom of Tomorrow (ECOT) — have funneled more than $6 million to Republican candidates and causes. In the last election cycle, ECOT alone gave more than $400,000. The payoff? About $1.76 billion in taxpayer money has flowed into charter schools run by Brennan and Lager since 1998.

Start the investigation of the state Department of Education
Source: Editorial Board, Beacon Journal, July 18, 2015

Let the formal investigation begin, preferably by David Yost, the state auditor, or an independent investigator tapped by the State Board of Education. The target? The Ohio Department of Education, its director of school choice admitting last week that he removed or ignored failing grades for online and dropout recovery charter schools as part of evaluating the performance of sponsors, those organizations that oversee the publicly funded yet privately run schools.

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Amazon quietly signed a $5.5 billion deal to sell its products to American cities — here are some of the biggest spenders

Source: Leanna Garfield, Business Insider, July 22, 2018

… In 2017, Amazon signed a contract with US Communities to provide its products to 1,500 public agencies, ranging from Atlanta Public Schools to the Mesa, Arizona police department. According to the co-op, Amazon could receive up to $5.5 billion over the next 11 years (or $500 million a year) as a result. … These were the top 10 spenders, which span most regions of the US, in 2016:

  • Denver Public Schools — $1,560,726
  • Portland School District, Oregon — $629,031
  • Denver City and County — $548,419
  • Salt Lake County, Utah — $515,686
  • Austin, Texas — $501,724
  • Portland, Oregon — $493,677
  • Montgomery County, Maryland — $455,011
  • Pittsburgh, Pennsylvania — $289,128
  • Hennepin County, Minnesota — $233,819
  • Los Angeles County, California — $217,850

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How Amazon’s contract to sell office supplies to cities could hurt local retail
Source: Abha Bhattarai, Washington Post, July 10, 2018

The city of Atlanta, Denver public schools and the Mesa, Ariz., police department are among the 1,500 public organizations that since last year have signed new contracts to buy office supplies, books, even musical instruments directly from Amazon, according to a report released Tuesday by the Institute for Local Self-Reliance, a nonprofit group that advocates for strong local economies. The contracts with Amazon could drive billions of dollars in public spending to the online giant in coming years, propelled in part by the ease of purchasing online — but which, like in consumer retail, risk penalizing independent retailers. … The local deals are part of a larger contract Amazon signed in January 2017 with U.S. Communities, a purchasing cooperative that negotiates contracts with suppliers on behalf of its members, which include a number of municipalities and government agencies. The five-year contract, which can be renewed for up to 11 years, is valued at $500 million a year. … But the Institute for Local Self-Reliance says the contracts do not include price guarantees or volume discounts that are typical of public purchasing agreements, potentially putting cities and counties at risk of overpaying for basic supplies. …

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Audit at Texas Health and Human Services Commission finds latest in long line of problems

Source: Robert T. Garrett, Dallas News, July 18, 2018

Texas’ sprawling bureaucracy for regulating health care and providing social services is vulnerable to a “perception of impropriety” because it routinely lets individual contracting personnel open bids on their own, without any witnesses, a new internal audit says. The Health and Human Services system also unwisely allows program managers and division leaders who control billions of dollars of spending to ask for the same contracting specialist every time, the audit said. That potentially creates a coziness that could harm taxpayers’ interests, it said. Problems highlighted in the audit, which was released to state GOP leaders last week, are the latest in a long line of problems at the Health and Human Services Commission. Six officials have stepped down since early April, when Gov. Greg Abbott called revelations of sloppiness and mistakes in scoring of bids “unacceptable.” …

Another audit released Tuesday by an independent arm of the Legislature looked at nearly 70 percent of the $6.7 billion worth of contracts that the commission awarded in a recent 27-month period. There were problems with every single one of the 28 separate calls for bids or grant proposals that the State Auditor’s Office examined. … Both the commission’s internal audit and the State Auditor’s Office review sharply criticized sloppy handling and scoring of bids for billions of dollars worth of work for the Medicaid program for the poor and other health and social services programs. …

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Pain & Profit series from the Dallas Morning News, published June 2018

  • The preventable tragedy of D’ashon Morris
    Doctors described him as “happy and playful” and told his foster mother he would be healthy by the time he went to kindergarten. That was before a giant health care company made a decision that saved it as much as $500 a day — and cost D’ashon everything.
  • As patients suffer, companies profit
    Imagine being trapped in a bed for more than a year because you can’t get the medical equipment you need. Years of poor oversight by the state have allowed health care companies to skimp on essential care for sick kids and disabled adults.
  • Texas pays companies billions for ‘sham networks’ of doctors
    The state tells foster parents that hundreds of psychiatrists will see their kids. We found only 34. Managed-care companies overstate the number of physicians available to treat the state’s sickest patients.
  • ‘Glossover of the horror’
    A whistleblower says taxpayers are not getting their money’s worth and sick people are not getting the care they need. Texas fails to act when health care companies put patients in peril.
  • Parents vs. the Austin machine
    “You can tell that he’s crying or screaming, but nothing comes out.” Texas families take fight for medically fragile children to the Legislature.

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Insurers Fall Short In Catching And Reporting Medicaid Fraud, Inspectors Find

Source: Chad Terhune, Kaiser Health News, July 12, 2018

Despite receiving billions of dollars in taxpayer money, Medicaid insurers are lax in ferreting out fraud and neglect to tell states about unscrupulous medical providers, according to a federal report released Thursday. The U.S. Health and Human Services’ inspector general’s office said a third of the health plans it examined had referred fewer than 10 cases each of suspected fraud or abuse to state Medicaid officials in 2015 for further investigation. Two insurers in the program, which serves low-income Americans, didn’t identify a single case all year, the report found. Some health plans terminated providers from their networks for fraud but didn’t inform the state. The inspectors said that could allow those doctors or providers to defraud other Medicaid insurers or other government programs in the same state. In addition, some insurance companies failed to recover millions of dollars in overpayments made to doctors, home health agencies or other providers. The inspector general said insurers stood to benefit financially from this because higher costs can justify increased Medicaid rates in the future. (The report didn’t name specific insurers or states.) …

…Health insurers serve about 55 million Medicaid patients across 38 states, and play an increasingly vital role in running the giant public insurance program. … One in 5 Americans is on Medicaid and enrollment is poised to rise even further as more states consider expansion under the Affordable Care Act. About 75 percent of Medicaid patients are part of a privatized system in which managed-care companies are paid fixed fees per patient to coordinate their care. Big, publicly traded companies such as UnitedHealth, Anthem and Centene dominate the business. In some states like California, evidence shows the funding often flows to the plans with little oversight, sometimes regardless of their performance. These companies tout their expertise at spotting suspicious billing patterns and chasing down criminals using sophisticated data mining, but the inspector general found that their fraud-fighting results don’t always match the rhetoric. …

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Trump Administration Backs Off Reshuffling of Student Debt Collection

Source: Andrew Kreighbaum, Inside Higher Ed, July 9, 2018

The Department of Education planned this month to begin reshaping the role of private debt collection firms in handling student loans by pulling defaulted borrower accounts from a handful of large private contractors. Lawmakers who control the department’s budget had other ideas. After a recent Senate spending package warned the department against dropping the debt collectors, the plan is on hold. And it’s not clear how those companies will figure into the Trump administration’s proposed overhaul of student loan servicing. Private loan servicers handle payments from borrowers on their student loans and provide information on payment plan options. … The tactics and performance of debt collectors have come under attack from Democrats and consumer advocates. And the Education Department has been involved in a years-long legal dispute over contract awards for the collectors. But the Trump administration, in a resolution of that legal fight, in May said it planned to cancel the entire debt collection solicitation. … Members of Congress, who have already expressed concerns about aspects of the department’s so-called NextGen loan servicing system, warned in separate appropriations bills against the move. … The week after Senate appropriators voted the bill out of committee, and just before it planned to start reassigning borrower accounts, the department notified collections firms it was postponing that step. …

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Editorial: The Student Loan Industry Finds Friends in Washington
Source: Editorial Board, New York Times, March 18, 2018
 
Education Secretary Betsy DeVos made clear even before taking office last year that she was more interested in protecting the companies that are paid by the government to collect federal student loan payments than in helping borrowers who have been driven into financial ruin by those same companies. Ms. DeVos’ eagerness to shill for those corporate interests is apparent in a craven new policy statement from the Education Department. The document claims that the federal government can pre-empt state laws that rein in student loan servicing companies if such a law “undermines uniform administration of’’ the student loan program. …

Banks Look to Break Government’s Hold on Student-Loan Market
Source: Josh Mitchell and AnnaMaria Andriotis, Wall Street Journal, March 7, 2018
 
Private lenders are pushing to break up the government’s near monopoly in the $100 billion-a-year student-loan market. The banking industry’s main lobbying group, the Consumer Bankers Association, is pressing for the government to instate caps on how much individual graduate students and parents of undergraduates can borrow from the government to cover tuition. That would force many families to turn to private lenders to cover portions of their bills. While that could mean lower interest rates for some, it could constrain funding to households with blemished credit histories. A group of investors also is lobbying for legislation to provide a clearer legal framework for “income-share agreements,” under which private investors provide money upfront to cover tuition in exchange for a portion of a student’s income after school. …

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Representative Bureaucracy and Government Contracting: A Further Examination of Evidence from Federal Agencies

Source: Benjamin M Brunjes and J Edward Kellough, Journal of Public Administration Research and Theory, June 2018

Abstract
The theory of representative bureaucracy holds that demographic characteristics of public managers influence policy design and implementation, but only a few studies have been conducted on the impact of representative bureaucracy on contract decisions. This paper contributes to that work by examining the relationship between minority representation in federal agencies and the awarding of agency contracts to minority-owned businesses. Using federal-level employment and contracting data, we determine that variables measuring minority representation overall, the presence of college-educated minorities, and minorities in certain positions related to contract decision-making are all positively correlated with increased numbers of contracts going to minority-owned firms. Our findings build on earlier work and provide additional support for the importance of the theory of representative bureaucracy in a governance system where contracting is common.

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Editorial: Iowa’s Medicaid money mystery is growing old

Source: The Gazette, July 7, 2018
 
More than two years has passed since Iowa moved to privatized Medicaid. This board, as well as others statewide, have demanded transparency. Unequivocally, we’ve said Iowa taxpayers have a right to know if the switch is saving money, how much is being saved and how those savings are being realized.  Amid these calls, nearly every agency remotely connected to Medicaid has sounded alarm bells. Iowans who rely on the program’s coverage report denied services. Providers who care for these patients point to unresolved claims. Medical suppliers have presented unpaid bills.  The Iowa Office of the Ombudsman saw a 157 percent increase in cases connected to Medicaid managed-care organizations, leading the agency to issue one of the most scathing annual reports in its history.  Accurate numbers and a full, public accounting of the program isn’t unreasonable and shouldn’t be this difficult. Such transparency is, after all, what the governor promised. …

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Iowa’s new private Medicaid manager has paid millions of dollars in penalties in a dozen states
Source: Jason Clayworth, Des Moines Register, July 1, 2018
 
The corporation selected to help manage Iowa’s controversial privatized Medicaid system has faced serious charges of mismanagement resulting in at least $23.6 million in penalties in more than a dozen states, a Des Moines Register investigation shows.  Iowa Total Care, a subsidiary of Centene, was awarded a state Medicaid contract in May by the Iowa Department of Human Services despite scoring nearly 14 points lower on its evaluation than when it had applied and was rejected in 2015, public records show.  But with only two companies bidding for the work, Iowa Total Care won a spot managing Iowa’s annual $4.8 billion Medicaid program. The Centene subsidiary replaces AmeriHealth Caritas, which pulled out because it said it was losing too much money. …

The state has no data to support Medicaid savings claim, health care official says
Source: Michaela Ramm, Sioux City Journal, June 30, 2018
 
As Iowa Medicaid Enterprises Director Michael Randol continues to assure lawmakers and the public that the state’s managed-care model is saving money, the Iowa Hospital Association contends the director has no data to back up the claim.  And as the dispute continues, Iowa hospitals say the state is saving money because the Medicaid insurance companies are not adequately reimbursing health care providers for their services — including a Vinton hospital that says it is owed $90,000 in emergency room visits alone.  According to the latest estimates from the Iowa Department of Human Services, the state of Iowa is saving $140.9 million from having privatized the Medicaid program. …

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Colyer: Kansas Will Pursue Medicaid Work Rules Despite Court Ruling

Source: Jim McLean, Salina Post, July 3, 2018
 
Kansas Gov. Jeff Colyer says he will continue to push for a Medicaid work requirement despite a recent court order blocking a similar policy in Kentucky. Last week, U.S. District Judge James Boasberg, an Obama appointee in the District of Columbia, questioned whether the Trump administration had adequately considered the consequences of Kentucky’s work requirement before reversing longstanding federal policy to approve it.  Despite the setback, Colyer said his administration will continue discussions with federal officials about requiring some of the more than 420,000 Kansans enrolled in KanCare, the state’s privatized Medicaid program, to work or pursue job training. …

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Kansas chooses 3 companies to manage Medicaid
Source: Associated Press, June 22, 2018
 
The Kansas Department of Health and Environment has awarded new contracts to three insurance companies to manage the state’s privatized Medicaid program.  Two of the new contracts announced Friday are renewals for companies currently in the program, Sunflower State Health Plan Inc. and United Healthcare Midwest Inc. The Lawrence Journal-World reported that the third contract went to a company new to the program, Aetna Better Health of Kansas Inc….

KanCare Contractor Must Fix Backlog Problems Soon Or Face Fines
Source: Jim McLean, KCUR, May 30, 2018
 
The company that processes applications for Kansas’ privatized KanCare Medicaid program faces potentially steep fines if it doesn’t fix problems, responsible for massive backlogs, by the end of this week. Maximus, a Maryland-based company that specializes in managing “human service programs” for states and the federal government, has operated the “KanCare Clearinghouse” since 2016. There have been problems from the start. In March 2016, federal officials grew concerned about growing backlogs and ordered the state to provide monthly reports about what it was doing to fix the problem. …

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