Critics cast doubt on new Ariz. prison health-care contractor
April 6, 2012
The private contractor taking over health care in Arizona's prisons promises significant improvements in care while saving money, in effect saying it will do more with less. But critics charge that Wexford Health Sources' record elsewhere suggests that sometimes it fails to live up to its promises and may do less with less.
Arizona's Department of Corrections, fighting a federal lawsuit that accuses it of providing grossly inadequate health care, issued a contract to Wexford this week as part of the state Legislature's attempts to save money by privatizing prison health care.
See the Wexford contract
Wexford, which is due to take control of operations by June 1, said in its contract with the state that it will:
Hire the equivalent of at least 781 full-time health-care workers, a number that is a 30 percent increase from Corrections' current health-care-staffing level.
Offer the 600 current correctional health-care employees first crack at the jobs and won't cut the salaries of any of those workers it hires.
Have nursing staff on hand at every state prison 24 hours a day, seven days a week, which is not currently the case.
Provide every correctional officer in the system 40 hours of training on dealing with mentally ill inmates.
Have its medical staff monitor inmates in isolation daily and have mental-health staff see those inmates at least weekly, representing a significant increase in frequency.
The company promises to do all this for $116.3 million a year, which is more than the $111.3 million the Department of Corrections spent on health care last fiscal year. In that year, 20 to 25 percent of health-care positions were unfilled, with the department slow to replace employees who left before the pending privatization.
But Wexford's budget would be less than the roughly $120 million the department projected spending this fiscal year. Wexford plans to keep $5.4 million as profit and spend $2.7 million on out-of-state administrative expenses. It is headquartered in Pittsburgh.
Some prison-system observers are raising questions about whether the company can provide the savings the state hopes for while providing significant improvements in service.
"There are reasons for great skepticism" that Wexford can deliver what it promises, said Caroline Isaacs, director of the Tucson office of the American Friends Service Committee, a prison-watchdog group. "One is that Wexford has a clear pattern of not living up to its commitments in other contracts," and another, she said, is that the Department of Corrections has a history of failing to hold other contractors, such as private-prison operators, accountable when they haven't lived up to the terms of their contracts.
Rep. John Kavanagh, House Appropriations Committee chairman, who led the push in the Legislature for privatizing correctional health care, said he expects the company will cut costs and save the state money by, for example, bringing into the prisons some services for which inmates are now transported.
The switch to privatization comes at a time when the state is fighting a lawsuit over allegations of inadequate prisoner care and defending itself against accusations by Amnesty International of inhumane treatment of prisoners.
A federal lawsuit, filed against the Department of Corrections last month by the American Civil Liberties Union and the Prison Law Office of San Quentin, Calif., alleges that inmates have died, been disfigured or permanently harmed by poor medical care in state-run prisons and that mentally ill inmates held in isolation often go months without seeing a psychologist or getting counseling.
If privatization improves care, that's a bonus for Kavanagh, R-Fountain Hills. "The caliber of service wasn't an issue" in the state prison system at the time lawmakers voted to privatize prison health care, he said. Lawmakers weren't aware of the allegations -- which he stressed are not yet proved -- in the ACLU lawsuit.
The impetus for privatization, Kavanagh said, "was always to save money in tough economic times."
In the contract, Wexford offered some specific examples of ways it may save money: for example, hiring an oral surgeon who will travel a circuit of the prisons to extract teeth and perform other procedures for which inmates currently must be taken to outside providers, escorted and transported by correctional officers.
Wexford noted in the contract that it and the state also will save money beginning in 2014, when the majority of inmates will become Medicaid-eligible and reimbursement rates for Medicaid will increase by half because of changes related to the Patient Protection and Affordable Care Act.
However, the contract and bid documents provided to Corrections by Wexford raise questions about how fully the company disclosed performance issues elsewhere. Wexford lists 20 contracts it said ended either because the company lost a rebid or didn't rebid, among other reasons.
Although there were pre-existing problems, that audit, by the Institute for Law and Policy Planning, was more critical than Wexford admitted. It concluded that "Wexford has systematically failed to comply" with its contract and had failed to provide adequate staffing, properly licensed staff, and adequate and timely medical service.
The auditors, who said they examined Wexford's record elsewhere, wrote that "past experience in other counties reveals that jail administrators typically put up with Wexford's cost cutting and substandard level of care until the problems become too egregious to be borne."
Wexford disputed the allegations.
In Mississippi, Wexford said that a 2007 audit by a state legislative committee made "recommendations related to documentation and record keeping."
Wexford didn't disclose that the audit was harshly critical of both the company and state corrections officials for failing to provide timely, adequate medical care. Nor did it disclose that the audit said Mississippi's Department of Corrections failed to collect $931,310 in fines its chief medical officer recommended against Wexford after the company charged the state for more staff members than it actually provided.
Mississippi's Department of Corrections didn't respond to requests for comment. In its bid documents, Wexford said that it addressed the audit's concerns and that Mississippi renewed its contract. Wexford said that, in Mississippi, it collaborated with the American Civil Liberties Union to get a consent decree lifted last year that had been imposed by a federal court, requiring that state to improve its correctional medical care.
ACLU officials in Mississippi did not respond to requests for comment.
Wexford's bid noted a $12,500 fine by New Mexico's Department of Corrections in 2006 "for infirmary rounds/physicals not conducted within contracted time frames," an issue it said it corrected. Wexford didn't mention that a 2007 audit by a state legislative finance committee reported extensive medical-staff shortages and long delays in reporting inmate deaths, among other problems.
Wexford disclosed that it was fined $106,000 by Ohio's Correction Department in 2009 for contract violations for what it described as "non-critical incidents," such as failing to fill a vacancy or comply with procedures for disposing of used "sharps." In its bid document, Wexford said it addressed the problems and has been in compliance with its Ohio contract ever since.
Wexford listed other fines, including $50,000 by Chesapeake, Va., in 2006 for staffing shortages; three fines totaling $273,000 by Florida's Department of Corrections in 2005 for what it described as "service-delivery issues that were resolved" before the contract's end; and a $68,000 fine by the Broward Sheriff's Office in Florida in 2003 for delays in providing medical services.
The company also noted in its bid document that, over the five years ending Sept. 1, 2011, it received 794 formal or informal legal claims, including many that it termed "frivolous 'alleged deliberate indifference' " suits. The company said it settled 18 claims confidentially for a total of $252,425 and won six claims in court.
One state health-care employee, who asked not to be identified, said that whatever happens with Wexford, "the only way to go is up." According to allegations in the ACLU/Prison Law Office suit, Corrections systematically and unconstitutionally fails to provide adequate care to inmates and has done so for years. The department has not filed a legal response to the allegations.
Arizona Republic
Bob OrtegaApril 6, 2012
The private contractor taking over health care in Arizona's prisons promises significant improvements in care while saving money, in effect saying it will do more with less. But critics charge that Wexford Health Sources' record elsewhere suggests that sometimes it fails to live up to its promises and may do less with less.
Arizona's Department of Corrections, fighting a federal lawsuit that accuses it of providing grossly inadequate health care, issued a contract to Wexford this week as part of the state Legislature's attempts to save money by privatizing prison health care.
See the Wexford contract Wexford, which is due to take control of operations by June 1, said in its contract with the state that it will:
Hire the equivalent of at least 781 full-time health-care workers, a number that is a 30 percent increase from Corrections' current health-care-staffing level. Offer the 600 current correctional health-care employees first crack at the jobs and won't cut the salaries of any of those workers it hires. Have nursing staff on hand at every state prison 24 hours a day, seven days a week, which is not currently the case. Provide every correctional officer in the system 40 hours of training on dealing with mentally ill inmates. Have its medical staff monitor inmates in isolation daily and have mental-health staff see those inmates at least weekly, representing a significant increase in frequency.The company promises to do all this for $116.3 million a year, which is more than the $111.3 million the Department of Corrections spent on health care last fiscal year. In that year, 20 to 25 percent of health-care positions were unfilled, with the department slow to replace employees who left before the pending privatization.
But Wexford's budget would be less than the roughly $120 million the department projected spending this fiscal year. Wexford plans to keep $5.4 million as profit and spend $2.7 million on out-of-state administrative expenses. It is headquartered in Pittsburgh.
Some prison-system observers are raising questions about whether the company can provide the savings the state hopes for while providing significant improvements in service.
"There are reasons for great skepticism" that Wexford can deliver what it promises, said Caroline Isaacs, director of the Tucson office of the American Friends Service Committee, a prison-watchdog group. "One is that Wexford has a clear pattern of not living up to its commitments in other contracts," and another, she said, is that the Department of Corrections has a history of failing to hold other contractors, such as private-prison operators, accountable when they haven't lived up to the terms of their contracts.
Lowering expenses
Wexford spokeswoman Wendelyn Pekich said the company is still identifying, in cooperation with Corrections, where it can cut costs and improve efficiencies while providing what she termed "an industry-standard quality of care." As possible areas for improvement, she cited more efficient staffing patterns, improved training and record keeping, and use of telemedicine -- diagnosing patients remotely via video.Rep. John Kavanagh, House Appropriations Committee chairman, who led the push in the Legislature for privatizing correctional health care, said he expects the company will cut costs and save the state money by, for example, bringing into the prisons some services for which inmates are now transported.
The switch to privatization comes at a time when the state is fighting a lawsuit over allegations of inadequate prisoner care and defending itself against accusations by Amnesty International of inhumane treatment of prisoners.
A federal lawsuit, filed against the Department of Corrections last month by the American Civil Liberties Union and the Prison Law Office of San Quentin, Calif., alleges that inmates have died, been disfigured or permanently harmed by poor medical care in state-run prisons and that mentally ill inmates held in isolation often go months without seeing a psychologist or getting counseling.
If privatization improves care, that's a bonus for Kavanagh, R-Fountain Hills. "The caliber of service wasn't an issue" in the state prison system at the time lawmakers voted to privatize prison health care, he said. Lawmakers weren't aware of the allegations -- which he stressed are not yet proved -- in the ACLU lawsuit.
The impetus for privatization, Kavanagh said, "was always to save money in tough economic times."
In the contract, Wexford offered some specific examples of ways it may save money: for example, hiring an oral surgeon who will travel a circuit of the prisons to extract teeth and perform other procedures for which inmates currently must be taken to outside providers, escorted and transported by correctional officers.
Wexford noted in the contract that it and the state also will save money beginning in 2014, when the majority of inmates will become Medicaid-eligible and reimbursement rates for Medicaid will increase by half because of changes related to the Patient Protection and Affordable Care Act.
However, the contract and bid documents provided to Corrections by Wexford raise questions about how fully the company disclosed performance issues elsewhere. Wexford lists 20 contracts it said ended either because the company lost a rebid or didn't rebid, among other reasons.
Some problems
In one example, Wexford said it opted not to renew a contract with Clark County, Wash., that expired at the beginning of 2010. Wexford noted that an independent audit "cited several instances of poor operations, which were already in effect when Wexford Health took over the contract" in 2007.Although there were pre-existing problems, that audit, by the Institute for Law and Policy Planning, was more critical than Wexford admitted. It concluded that "Wexford has systematically failed to comply" with its contract and had failed to provide adequate staffing, properly licensed staff, and adequate and timely medical service.
The auditors, who said they examined Wexford's record elsewhere, wrote that "past experience in other counties reveals that jail administrators typically put up with Wexford's cost cutting and substandard level of care until the problems become too egregious to be borne."
Wexford disputed the allegations.
In Mississippi, Wexford said that a 2007 audit by a state legislative committee made "recommendations related to documentation and record keeping."
Wexford didn't disclose that the audit was harshly critical of both the company and state corrections officials for failing to provide timely, adequate medical care. Nor did it disclose that the audit said Mississippi's Department of Corrections failed to collect $931,310 in fines its chief medical officer recommended against Wexford after the company charged the state for more staff members than it actually provided.
Mississippi's Department of Corrections didn't respond to requests for comment. In its bid documents, Wexford said that it addressed the audit's concerns and that Mississippi renewed its contract. Wexford said that, in Mississippi, it collaborated with the American Civil Liberties Union to get a consent decree lifted last year that had been imposed by a federal court, requiring that state to improve its correctional medical care.
ACLU officials in Mississippi did not respond to requests for comment.
Wexford's bid noted a $12,500 fine by New Mexico's Department of Corrections in 2006 "for infirmary rounds/physicals not conducted within contracted time frames," an issue it said it corrected. Wexford didn't mention that a 2007 audit by a state legislative finance committee reported extensive medical-staff shortages and long delays in reporting inmate deaths, among other problems.
Wexford disclosed that it was fined $106,000 by Ohio's Correction Department in 2009 for contract violations for what it described as "non-critical incidents," such as failing to fill a vacancy or comply with procedures for disposing of used "sharps." In its bid document, Wexford said it addressed the problems and has been in compliance with its Ohio contract ever since.
Wexford listed other fines, including $50,000 by Chesapeake, Va., in 2006 for staffing shortages; three fines totaling $273,000 by Florida's Department of Corrections in 2005 for what it described as "service-delivery issues that were resolved" before the contract's end; and a $68,000 fine by the Broward Sheriff's Office in Florida in 2003 for delays in providing medical services.
The company also noted in its bid document that, over the five years ending Sept. 1, 2011, it received 794 formal or informal legal claims, including many that it termed "frivolous 'alleged deliberate indifference' " suits. The company said it settled 18 claims confidentially for a total of $252,425 and won six claims in court.
Arizona's contract
Arizona's contract with Wexford took effect Tuesday and goes into full operation June 1. It gives the Department of Corrections authority to impose fines or suspend or terminate the contract for violations of its terms. The fine amounts vary according to the severity and extent of the violation, from $10,000 for an act of deliberate indifference that risks an inmate's health or safety to those of $25,000 a day or more. Corrections also will have on-site monitors at every prison and will conduct quarterly audits, according to the contract.One state health-care employee, who asked not to be identified, said that whatever happens with Wexford, "the only way to go is up." According to allegations in the ACLU/Prison Law Office suit, Corrections systematically and unconstitutionally fails to provide adequate care to inmates and has done so for years. The department has not filed a legal response to the allegations.
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