Privatization of Medicaid ride program probed
AUSTIN — The Texas Health and Human Services Commission has opened an internal investigation into the privatization of a program that transports poor Texans to medical appointments after a critical Legislative Budget Board report said the move has cost the state hundreds of millions of dollars more while serving fewer than half as many people.
The probe by the commission’s inspector general, Stuart Bowen, will examine why officials gave lucrative contracts for administration of the program to companies and nonprofit organizations that did not provide cost information and, in some cases, scored poorly on the state’s rating system.
The privatization effort led to a dramatic reduction in Medicaid recipients served by the program, a large increase in complaints and a tripling of the per-ride cost to the public, among other issues, according to a report released by the nonpartisan Legislative Budget Board in January. Overall, the board concluded, the privatization has cost Texas taxpayers an estimated $316 million more than would have been spent if the state was running the program.
Commission Executive Commissioner Charles Smith disclosed the investigation in a legislative committee hearing late last week, saying he had ordered it after a Houston Chronicle story on the program.
“I got that chronology on March 8, read it, looked at it and went, ‘this needs to be referred to the OIG (Office of Inspector General) for an investigation.’ ”
At least one of the entities that
received a contract is the subject of a criminal investigation, Bowen said.
The state’s Medicaid Fraud Control Unit and Grayson County prosecutors are probing that nonprofit, Texoma Area Paratransit System, whose contract was worth $2.1 million before being canceled, Bowen said.
The disclosures did little to assuage the concerns of state lawmakers, who used the House General Investigating and Ethics Committee hearing to express frustration about the privatization effort and the commission. Smith and other commission officials also faced heated questions about other issues.
Committee Chairwoman Sarah Davis, R-West University Place, pressed officials for answers about the Heidi Group, an anti-abortion organization recently reported by the Associated Press to have fallen short on its promises to use $1.6 million in funding to promote women’s health.
Lawmakers also asked why many large commission contracts were missing from a database run by the Legislative Budget Board, as recently reported by the Texas Tribune.
Smith also confirmed that a Child Protective Services employee had been placed on paid leave while officials probe a potential conflict of interest involving a pending contract and a family member. According to the Austin American-Statesman, the employee is Frianita Wilson, the wife of former commission Inspector General Doug Wilson, who resigned in a 2014 contracting scandal.
The lawmakers spent much of their time drilling into the Medicaid Transport Program.
Rep. Chris Turner, D-Grand Prairie, criticized Smith for not ordering the internal investigation sooner and for extending the contracts last year, even after the Legislative Budget Board had made the commission aware of issues.
Smith said he personally did not know about the problems before extending the contracts and said the extension was done to “synchronize” the agreements with upcoming procurements for Medicaid managed care organizations.
“The OIG is doing the investigation,” he said. “When that comes out, then I believe we can determine what to do going forward.”