Sunday, August 4, 2013

ROUNDHOUSE ROUNDUP: Big Hourly Wages for Arizona Providers

A version of this was published in The Santa Fe New Mexican 
Aug. 4, 2013

For my analysis in today's New Mexican of the accusation that New Mexico mental health providers were targeted because of their "past ties to Democratic governors" CLICK HERE

Sec. Sidonie Squier
When the Boston company Public Consulting Group performed its audit on 15 New Mexico behavioral-health providers — the audit that provided “credible allegations of fraud” that led to the state suspending Medicaid payments for the providers — one of the findings involved “unusual compensation and/or benefits for key stakeholders” in the nonprofits.

Or, in the words of Human Services Secretary Sidonie Squier in a recent op-ed, chief executive officers of the providers were “improperly getting rich off Medicaid funds. … This money was supposed to pay for treatment for low-income New Mexicans …”

So, no, we don’t want behavioral health administrators serving poor people in the state to get rich off Medicare funds.

But a quick glance at the contracts of the five Arizona behavioral health firms being brought in to fill in for the New Mexico companies under investigation seems to indicate that none of the CEOs or other administrators from any of those companies are going to go broke.

All five of the Arizona providers — La Frontera, Agave, Valle del Sol, Turquoise Health & Wellness and Southwest Network — have agreements where the state will reimburse their chief executive officers $300 an hour between the time they are eligible to start billing OptumHealth New Mexico, the company that oversees the state’s managed care system.

That’s not a typo. $300. An hour. Should they work 40-hour weeks, that would be $12,000 a week.

Personally, I don’t make half that.

Of course, these CEOs might not bill the state for a full 40 hours, assuming they still have operations in Arizona to oversee.

In the contracts, the CEOs make the most. Both other administrators won’t be hurting very much. Chief operating officers and chief financial officers will be paid $275 an hour. Managers, system analysts, transition consultants and clinical leadership will be paid $250 an hour. Associate managers, business analysts and clinical trainers will get a mere $200 an hour.

At least one of the contracts, the one for Southwest Network, carves out hourly wages for other positions as well. That contract specifies that Southwest’s psychiatrists will make $275 an hour, nurse practitioners will be paid $250, clinicians will get paid $100 an hour, behavioral health technicians will get $75.

The contracts require that any single expense in excess of $10,000 “for tangible personal property” must have prior approval by Human Services.

Asked about the rates for the Arizona CEOs and others, Human Services spokesman Matt Kennicott said, “These are base hourly rates that are only a part of the initial contract, based on the need for emergency support under unique circumstances. We do not foresee paying out up to the capped contracted amounts.”

The state has budgeted up to $17.8 million for the Arizona providers.

What the audit found: So what examples of excessive compensation for New Mexico providers did the audit find?

A summary of the audit released by Human Services gives the example of an unnamed provider whose CEO and family allegedly were making $1.5 million a year when you add up salaries and “related transactions.” If this turns out to be true, that’s even more than $300 an hour.

The summary also tells of a New Mexico behavioral-health CEO who had a deferred compensation plan that would provide $60,000 a year for seven years (10 years after June 2014). This, the summary says, would go into effect after the executive had been terminated for any reason.

Of course, we don’t know who these executives are or which providers they work for because the actual audit has been kept secret by Human Services and the state Attorney General’s Office, which is investigating the providers for possible fraud.