Category Archives: Studies/Reports/Audits

Iowa’s Medicaid privatization: Kim Reynolds says right track; Fred Hubbell says ‘disaster’

Source: William Petroski and Brianne Pfannenstiel, Des Moines Register, September 4, 2018

Two months ahead of Election Day, Iowa’s gubernatorial candidates painted a vastly different portrait of the state’s Medicaid system Tuesday. In the morning, Republican Gov. Kim Reynolds defended the state’s decision to shift administration of the program that serves 685,000 low-income or disabled Iowans to private management, telling reporters that initial problems have been addressed and the system is on the right track. In the afternoon, Democratic businessman Fred Hubbell held a roundtable with providers where he described a system in crisis and criticized Reynolds’ handling of the program. The results of privatizing the massive federal and state program in Iowa have become one of the issues that will influence — and may decide — this year’s governor’s race. …

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A private Medicaid company that pulled out of Iowa has yet to pay thousands of medical bills
Source: Jason Clayworth, Des Moines Register, August 30, 2018
 
A Medicaid company that terminated its Iowa contract almost a year ago has yet to pay as much as $14.6 million for medical care provided to disabled, poor and elderly Iowans, a Des Moines Register investigation shows.  AmeriHealth Caritas’ outstanding bills include nearly 6,000 individual charges totaling more than $1 million at the University of Iowa Hospitals and Clinics and $541,000 at Broadlawns Medical Center, public records obtained by the Register show.  Several private and nonprofit medical groups told the Register they have tens of thousands of dollars in outstanding bills that they say are hamstringing their operations and efforts to provide medical care. …

Iowa agrees to give Medicaid management firms 7.5% raise to continue running program
Source: Tony Leys, Des Moines Register, August 24, 2018
 
Iowa has agreed to give 7.5 percent more state money to the two private companies managing its $5 billion Medicaid program, officials announced Friday.  The agreement will keep UnitedHealthcare and Amerigroup in Iowa, but it will mean state leaders must come up with about $103 million more than last fiscal year.  The new agreements cover the current fiscal year, which began July 1. The increase in state spending is more than double the 3.3 percent increase the state agreed to for last fiscal year.  Overall, the new contracts will give the two companies raises of 8.4 percent in state and federal money, totaling $344 million. …

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The case against Chartwells

Source: CBS News, August 17, 2018

… Imagine the only meal a schoolchild ate came from a school’s kitchen dishing out spoiled and rotten food. It happens, Mills found out. … In 2010, he took a hefty paycut to take a job as director of food services for Washington, D.C.’s public schools, where he would oversee feeding some 50,000 students. … He took over a system where the food was supplied by Chartwells, a multibillion dollar company that managed the menus and made all the purchase agreements for the food. He was shocked by what he saw. … Mills found the food was poorly prepared, not healthy and, in some cases, unsanitary. … He took his concerns to Chartwells with no real change. Then the contract was up for renewal by the District, and Mills called for an audit. He maintained the school district was being overcharged millions. The school district removed Mills and his team from oversight of the auditors. Mills was told to back off. Three years after he was hired, he was fired. He then sought an attorney for wrongful termination – and as a whistleblower. …

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Auditor: DC Schools Should Stop Outsourcing Food Service
Source: Associated Press, October 8, 2016

A report from the District of Columbia auditor said the city’s school system should stop turning over food service to outside contractors. The report released Friday said outsourcing food service has not saved the city money as school officials promised and will continue to cost the system millions of dollars a year. In their response to the auditor’s report, school officials said they continue to oppose bringing food services back in-house. Former schools chancellor Kaya Henderson repeatedly argued that food service was not a “core competency” of the school system. …

Chartwells Era Ends As DCPS Selects New Food Providers – Following a whistleblower lawsuit last year
Source: Andrew Giambrone, Washington City Paper, May 23, 2016

The school-food provider at the heart of a whistleblower lawsuit in 2015 that revealed substandard food quality and fraud will not serve D.C. Public Schools students next academic year. DCPS announced in a statement on Friday that it has chosen DC Central Kitchen and SodexoMagic, with Revolution Foods as a subcontractor, to provide meals at more than 110 facilities. … The announcement follows a request for proposals DCPS posted in December, featuring a one year contract with four options years to renew. Still, which entities applied for the RFP won’t be publicly available until the contracts are approved because of procurement rules. Under the proposal, 12 schools in Ward 7 would be served by DC Central Kitchen, while the rest would be served by SodexoMagic and Revolution Foods. DC Central and Revolution served hundreds of thousands of meals last year. ….

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Auditors confirm company did not comply with medical services contract at Milwaukee County Jail, House of Correction

Source: Don Behm, Milwaukee Journal Sentinel, August 20, 2018

he private company responsible for medical services at the Milwaukee County Jail and House of Correction failed to meet contract staffing requirements during the time that several people died while in custody at the jail, county auditors said Monday in a report.  Armor Correctional Health Services Inc., the Miami-based company hired by the county, provided an average of 89% of its staffing requirements from November 2015 to August 2017, according to county audit director Jennifer Folliard. The company only achieved that level of service by relying on employees brought in from outside employment agencies, the report says. Staffing levels for several key jobs fell below the overall average, with only 83% of registered nurse hours and 85% of mental health staff hours covered, according to the report. … In February, Armor was charged in Milwaukee County Circuit Court with falsifying health care records of inmates at the jail, including Terrill Thomas, who died of dehydration while in custody in April 2016. Armor employees allegedly “engaged in a pattern and practice of intentionally falsifying entries in inmate patient health care records,” a criminal complaint says. …

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Sheriff ‘aggressively worked’ to correct problems found in review of Milwaukee County Jail operations
Source: Ashley Luthern, Milwaukee Journal Sentinel, April 5, 2018

An outside review of the Milwaukee County Jail found outdated policies, lengthy waits for inmate medical screenings, widespread use of overtime because of staff shortages and other problems. … Acting Sheriff Richard Schmidt asked the National Institute of Corrections to review all operations at the jail in the wake of seven custody deaths over two years. One of those deaths — that of Terrill Thomas who died of dehydration in April 2016 — led to criminal charges being filed against three jail staffers and Armor Correctional Health Services, the private medical contractor at the jail. …

Company Hired to Provide Health Care for Milwaukee Inmates Charged With Falsifying Records
Source: Marti Mikkelson, WVUM, February 21, 2018

The company that cares for inmates at the Milwaukee County Jail is facing criminal charges. Employees allegedly lied about checking on a man who died of dehydration, after water to his cell was shut off. The Milwaukee County District Attorney’s office on Wednesday charged Armor Correctional Health Care Services with seven misdemeanor counts of intentionally falsifying health records. The company is the latest defendant to face charges in the death of Terrill Thomas,who spent a week without water in his cell as punishment in 2016. …

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Michigan’s Failed Effort to Privatize Prison Kitchens and the Future of Institutional Food

Source: Tom Perkins, Civil Eats, August 20, 2018
 
The stated purpose of Michigan’s privatization plan was to save the state money on operating costs—replacing union workers earning $15-$25 per hour with low-wage Aramark workers earning $11-$13. But critics point out that disabling the union positions in prison kitchens served as an added benefit. In 2013, the MDOC signed a three-year, $145 million contract with Aramark despite the fact that a union—the American Federation of State, County, and Municipal Employees (AFSCME) Council 25—offered to match that price. The union-busting point was driven home in 2015, when the department dumped Aramark and switched to Tampa-based Trinity Food Services, with which it signed a three-year, $158 million contract—a more expensive contract than what AFSCME had offered. …

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Despite problems, Michigan is hiring Trinity employees to work in its prison kitchens
Source: Tom Perkins, Detroit Metro Times, June 19, 2018

For several years, private food service employees in Michigan’s prison kitchens have been a consistent problem. … Despite that, the Michigan Department of Corrections is now hiring some of Trinity’s employees, and they will be unionized state workers within the next several months. … The employees will be a part of the American Federation of State, County, and Municipal Employees union. Nick Ciaramitaro, legislative director for AFSCME Council 25, didn’t immediately respond to a request for comment. …

Michigan’s $56.8B budget tackles prisons, potholes and pot
Source: Emily Lawler, MLive, June 12, 2018

The House and Senate on Tuesday voted to approve a $56.8 billion budget for Fiscal Year 2019, putting more money toward things like roads and regulating medical marijuana facilities while saving $19.2 million by closing a prison. … In his budget proposal earlier this year, Snyder moved to get rid of the contractor altogether and go back to state workers. The legislature followed suit, putting an extra $13.2 million into food services and authorized 352 new full-time equivalent employee positions.    Overall the Department of Corrections gets $2 billion in the budget. …

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JobsOhio will likely survive the election

Source: Jay Miller, Crain’s Cleveland Business, August 19, 2018
 
It looks likely that JobsOhio,, the private-sector economic development nonprofit created by outgoing Gov. John Kasich, will survive in 2019, regardless of whether Democrat Richard Cordray or Republican Mike DeWine becomes the next governor. Both candidates issued statements indicating that they intend to keep the state’s principal business attraction organization outside of state government. The only question may be who will get to choose the nonprofit’s next leader: the current, nine-member board, all named by Kasich, or the board that will lead the organization after the new governor fills five seats that have four-year terms that expire in July 2019? …

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Despite 34 making six figures, true amounts of JobsOhio salaries still lowballed
Source: Randy Ludlow, Columbus Dispatch, March 12, 2018
 
JobsOhio continues to under report the amounts it pays employees — including 34 workers who make at least six-figure annual salaries — in a move that could run contrary to state law. In its 2017 filings with the state, Gov. John Kasich’s privatized economic development agency again reported employees’ taxable income — which does not include salary diverted to non-taxable retirement contributions and health insurance costs — instead of their gross income. State law requires the nonprofit to report “total compensation.” But its practice of reporting only taxable income serves to understate employee earnings by thousands of dollars each. …

Justices again rule JobsOhio can’t be challenged
Source: Randy Ludlow, Columbus Dispatch, August 31, 2016

The Ohio Supreme Court stood on identical ground Wednesday to reject another attempt to declare JobsOhio unconstitutional. In a 6-1 vote, the court ruled that Victoria Ullmann, a Columbus lawyer, lacked the legal right — or standing — to pursue her action seeking to declare Gov. John Kasich’s privatized economic development agency as illegal. … The court threw out another challenge to JobsOhio in 2014 on grounds the parties lacked proper standing, leaving some to question then if the legality of the nonprofit could ever be questioned in the courts. Ullmann argued she had standing to sue since she, and other Ohioans, support JobsOhio through their purchase of liquor, the profits from which support the entity under its long-term lease of state’s liquor sales enterprise. … Ullmann sued Kasich, Secretary of State Jon Husted and Auditor Dave Yost, asking that the court order the Republicans to take steps to dissolve JobsOhio. A spokesman for Attorney General Mike DeWine, who defended the officeholders, said his office was pleased with the ruling. … JobsOhio reported earlier this year it attracted a record 23,602 new jobs and $6.7 billion in corporate investment in 2015. The agency reported revenue of slightly more than $1 billion last year, largely from the state’s liquor-sales operation, which racked up record sales last year to produce net income of $235.2 million. …

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Contracting Models Shift Dynamics of Engineering and Construction

Source: Jean Pedley, Journal of the American Water Works Association, July 31, 2018

Whether it’s construction of a new treatment plant or a water main replacement project, successfully delivering capital projects in the water industry requires utilities, engineers, and construction experts to work together effectively. Faced with the need to address aging infrastructure and challenged by restrictive regulations, concerned citizens, and attention to budgets, the water industry needs to explore efficient and innovative models for engineering and construction now more than ever. … This article identifies some of the best practices and tools for alternative project delivery that have been tested in a variety of markets, including power generation and water. Successful alternative delivery projects always involve stakeholders who are adaptable and open to collaboration. In addition, the success of alternative project delivery often depends on integration of advanced tools and technology that create efficiencies in tracking and identifying opportunities to avoid project pitfalls. …

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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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