June 22, 2010

$189 million contract to run Maryland veterans home stirs protest

Print More

By Barbara Pash
For MarylandReporter.com

A potential $189 million contract to operate Maryland’s only state-run veterans home is being protested by the low bidder for the contract, which contends the winner and current operator failed to disclose significant information.

That information included major problems with patient care at an Alabama veterans facility it runs that was cited in a report by the U.S. Justice Department.

UPDATED: The Board of Public Works on Wednesday approved a three- to six-month extension to HMR of Maryland of its five-year contract to run the Charlotte Hall Veterans Home while the State Board of Contract Appeals considers the protest by Mid-Atlantic Health Care, the lower bidder.

Mid-Atlantic raised concerns about the treatment of residents by HMR — Health Management Resources- Government Services, based in South Carolina – pointing to a 2008 report by the Civil Rights Division of the Justice Department that found serious abuses at an HMR-run veterans’ facility in Alabama.

Mid-Atlantic also cites 2009 charges filed against two then-HMR workers at Charlotte Hall for assaulting a dementia patient.

Scott Rifkin, managing partner of Mid-Atlantic Health Care, which operates six nursing homes in Maryland and one in Delaware, expressed surprise that “the state would want to continue a contract with a company with a record of taking care of veterans that HMR has. If the allegations are correct, it strikes me that there is a huge breakdown in institutional control.”

Rifkin added that “there seems to be a willingness to back a company that’s had trouble I’ve never seen before in a nursing facility.”

Disappointed bidder

HMR attorney Robert Fulton Dashiell dismissed Mid-Atlantic’s charges, saying that “Mid-Atlantic is searching for any reason to disparage HMR because they are the disappointed bidder and that’s what disappointed bidders do. Rarely does it constitute a legal basis” for denying a contract, Dashiell said.

Located in St. Mary’s County, the Charlotte Hall Veterans Home operates under the Maryland Department of Veteran Affairs, but the federal government picks up most of the tab. Charlotte Hall director Sharon Mattia said the facility houses 412 male and female military veterans and their eligible spouses.

In 2002, the state Veterans Affairs Department recommended awarding HMR a $123-million contract for Charlotte Hall for five-years with one two-year renewal period. This is the first time the HMR contract has come up for renewal.

In its request to the BPW for an extension and the estimated $189 million contract, the veterans department praised HMR for its “exemplary service” and its management staff for being “very helpful and friendly” with Charlotte Hall residents and employees. Veteran Affairs Department spokesperson Kate Conroy declined to comment because of the dispute.

Mid-Atlantic Health Care filed a protest with the department over the contract. Last August, the department denied the protest, and Mid-Atlantic filed an appeal with the quasi-judicial Maryland State Board of Contract Appeals.

The Board of Contract Appeals has scheduled a July 12 hearing. Deputy clerk Michael Carnahan indicated that the almost year-long delay between the appeal and the hearing may have been partly due to Mid-Atlantic’s filing two appeals that were subsequently consolidated into one appeal.

Attorney Scott Livingston said that while Mid-Atlantic was the low bidder for the contract, it is not objecting on financial grounds. Rather, he contended, HMR withheld relevant information.

When HMR of Maryland was asked if it had been subject to a government investigation, it replied in the negative, according to Livingston, a partner of Rifkin, Livingston, Levitan & Silver. HMR of Maryland has not been subject to such an investigation, Livingston said, but the Justice Department investigated an HMR-managed facility, the W.F. Green Veterans Home in Alabama.

“If the higher-priced offer is technically superior then in some circumstances, the government will award the contract at the higher price,” said Livingston. But “HMR failed to disclose this” information.

Dashiell said HMR’s argument is that the veterans affairs department “investigated all the allegations by Mid-Atlantic and said they lacked merit.”

Justice Dept. report

In its 2008 report, the Justice Department’s Civil Rights Division stated that “numerous conditions and practices at W.F. Green violate the constitutional and federal statutory rights of its residents.” The report criticized medical, nursing and nutritional services, failure to protect residents from harm due to falls and failure to investigate allegations of patient abuse, among others.

In 2009, the family of a deceased resident of W.F. Green filed a wrongful death lawsuit against HMR.

Besides the federal report, the St. Mary’s Enterprise reported last year that two then-HMR employees at Charlotte Hall were charged with allegedly abusing and assaulting a dementia patient. Last month, the two went before a St. Mary’s County District Court judge, where one pleaded guilty to reckless endangerment and the second requested a jury trial.

Joseph Shapiro, spokesman for Comptroller Peter Franchot, who sits on the three-member Board of Public Works, typically does not comment on upcoming board matters. Shapiro said Franchot is reviewing the material.

Howard Freedlander, deputy treasurer for external affairs and liaison for state treasurer Nancy Kopp with the Board of Public Works, said the board “acts on many different items. It is not uncommon to act on extensions, particularly if there is a protest.”

Freedlander added that it would be unlikely for the public works board to deny the extension because of its interest in the outcome of the contract appeal. Once the dispute is settled, he said, the public works board can then proceed on a new contract for Charlotte Hall.