Logisticare- keep plucking that costly unaccountable chicken

Hidden in the start of the new year was the state's release of the RFP for its statewide brokerage system for Medicaid-funded transportation to non-emergency treatment and appointments (click here if you want to read the whole thing).

This is the state's second try at finding a vendor to set up the appointments to transport people on Medicaid after Atlanta-based Logisticare terminated its contract with the state this November. The move followed a slew of negative PR since Logisticare became the state's only NEMT broker July 2011 - PR so bad that Logisticare said the Wisconsin experience caused the company "irreparable damage."

This is despite the Journal-Sentinel report that was released this evening, which said DHS officials refused to step in and tell Logisticare to shape up despite the history of underperformance.

Over the past four months, LogistiCare has received more than 7,000 valid complaints about rides not showing up or arriving late to take Medicaid patients to dialysis, cancer treatment and other medical appointments.

Hold times on LogistiCare's hotlines have exceeded the time allowed under the company's state contract more than 60% of the time.

Yet, state officials didn't assess any penalties, partly out of consideration for LogistiCare's bottom line and partly for fear that service would get worse, an official said Friday.

LogistiCare's two contracts generally give the state the right to withhold or deduct money if the company didn't live up to the terms of the contract.

The company has terminated its contracts with the state, effective Feb. 16. The firm says it was losing money on the deal.

"The department's principal focus is the long-term viability of having a nonemergency medical transportation manager," Department of Health Services spokeswoman Claire Smith said in an email. "As LogistiCare indicated in its termination letters, the two contracts currently in place were not financially viable and the company was continually operating at a loss by serving as the manager and providing those services. We monitored both performance and financial aspects of the contracts closely and were ultimately concerned that financial sanctions would result in further decline in quality of service."

In other words, the DHS felt it couldn't crack down on Logisticare and pull its funding because it believed that doing so would cause Logisticare to stop trying altogether, and leave even more Wisconsinites out in the cold. So the state was stuck between overpaying for bad service, or cutting costs and get even worse service. Tell me how that made us better off than the delgated, county-by-county Medicaid NEMT service we had in the past?

And much like what the Walker Administration has chosen to do with the corrupt and money-losing WEDC, they're going to stick with this losing system. Although the DHS does claim they've taken some steps to improve the Medicaid brokerage this time.

Changes to the RFP made based on feedback and suggestions include:

•A requirement that members and providers are able to create reservations online;
•A requirement that members have the ability to submit complaints online;
•A clarification and implementation of member appeals and fair hearing process; and
•Establish liquidated damages for issues such as:◦Failure to provide transportation;
   ◦Transportation providers arriving late;
   ◦Transportation providers use of vehicles that do not meet established vehicle standards;
   ◦Transportation providers failure to transport members to dialysis and cancer treatments and    
    getting members there on time; and
   ◦Ensure call hold times are in compliance.

I'd say having an online reservation and complaint system is a good step up, as is allowing for the provider to have to pay for damages associated with screwing up, but it begs the question- Why the hell wasn't the Walker Administration demanding these sorts of things in the 18 months that Logisticare was in the business? Who's minding the store up there?

And several Democratic lawmakers have taken a look at the new Medicaid NEMT services RFP and see the same types of costly mistakes coming on the horizon. First up is State Sen. Lena Taylor, who sees an attempt to give the contract back to Logisticare at a much higher price tag, and fears much of the same gaps in services, particularly givwn that you're dealing with a poor population that is less liklely to have Internet access.

Citizens in Wisconsin rejoiced when the announcement came that LogistiCare was ending its contract with the State. Today those same citizens should cry. I have rarely seen such a blatant effort by the state to provide a contract back to the same company that has so woefully failed at the job.

This RFP allows the department to accept service that is worse than they are getting with LogistiCare, there is zero effective oversight over this massive contract to make sure state tax money is well spent and accounted for, and there is absolutely no automatic penalties for the company failing to meet quotas.” Sure sounds like WEDC, doesn't it?

While the addition of a mandatory on-line reservation system is helpful, this new RFP ignores the fact that low-income communities rarely have enough access to web resources to use this function. Instead the poor in Milwaukee get sent back to the phone where the state will now allow the company to keep citizens on hold for longer!”

This RFP smells as bad as the place it belongs. Gov. Walker should pull it back and start over. 

Four of Taylor's fellow Dems from all corners of the state also jumped on the flaws they saw in the RFP with a release this afternoon, particularly the fact that the NEMT provider and DHS aren't going to be kept in line.

The legislators agree that although the new RFP includes increased penalties for missed rides and a clearer appeals process, the RFP does not address some of the biggest concerns brought to their attention by those who rely on these services to get to medical appointments. The RFP fails to create an independent complaint process, leaves enforcement up to the Department, and establishes little to no legislative oversight. In addition, the RFP prohibits Wisconsin-based entities from bidding on the contract. I'm not sure Wisconsin companies are prohibited, but the RFP asks the bidder to show it can handle a statewide NEMT system, and obviously no such company exists inside the side since no state company has ever had this contract.

Since implementation of the Non-Emergency Medical Transportation program, there have been serious problems with the program’s reliability, performance, and finances. In November 2012, LogistiCare abruptly canceled their contract with the Department of Health Services (DHS). The new RFP was issued earlier this week.

“The first contracts allowed DHS to fine the contractor or terminate the contract if the company was not living up to their end of the bargain,” said Rep. [Penny] Bernard Schaber. “If the Department didn’t enforce the protections in the current contract, I am very skeptical that a new contract with some increased protections will make much difference unless DHS does its job of enforcing it.”

Especially with the sketchy Dennis Smith in charge, that does seem to be a legit concern, Rep. Schaber. And I have a couple of other ones.

1. The RFP deadline for submitting bids is February 21, which is 5 days after Logisticare says it would end its contract. And then there's going to be time to decide who gets the bid, as well as the transition time to set up a new vendor and to get people hired up to handle the calls and contracting with the local providers. What happens in those weeks in between the end of Logisticare's contract and the new provider getting up to speed? Are these Medicaid recipients just SOL? I haven't seen any interim plan to handle this situation with the transition to a new vendor....unless the plan is to not have a new vendor and bring back Logisticare (nahh, that can't be it.)

2. Logisticare's CEO said last month that the same contract would cost around $75 million a year, nearly $40 million above the maximum they could have received under the old contract. Not surprisingly, this $40 million is not included as part of the DHS's Medicaid budget request for the upcoming budget, and that money's got to come from somewhere. So chalk that up as yet another reason that the Walker Adminstration's claims of a budget surplus is bullshit.

Much like other state privatization initiatives, keep an eye on this as the bidding process continues, particularly as mid-February's deadline for Logisticare's termination approaches. I got a feeling there are quite a few more surprises waiting to pop up. Hold onto your pocketbooks, and give your best wishes for our most vulnerable, because I fear they're going to need them due to this ongoing Logisticare fiasco.