Despite protests, $600 million contract for inmate health care approved

May 03, 2012 at 7:38 am

Board of Public Works: State Treasurer Nancy Kopp, Gov. Martin OMalley and Comptroller Peter Franchot

Board of Public Works: State Treasurer Nancy Kopp, Gov. Martin OMalley and Comptroller Peter Franchot.

By Len Lazarick
Len@MarylandReporter.com

The comptroller railed about the contract’s “Cadillac” costs; prison officials touted its benefits at improving health care and reducing violence; the attorney for the losing bidder complained of lack of due process and another said the complaint was just a delaying tactic; competing company presidents trekked in from St. Louis and Pittsburgh to defend their claims; and the governor stared into space as the testimony droned on.

In the end, despite the strong protest, the Board of Public Works unanimously awarded a $598 million contract to provide health services to 26,000 prison inmates over the next five years to Wexford Health Sources of Pittsburgh. As prison officials advised, it rejected the bid by Corizon Inc. of St. Louis, which has been providing two-thirds of the services to the prisoners for the last seven years.

Both companies are currently providing different health services for the prison system. Corrections officials said the two companies were both capable of performing an expanded contract that combined their functions.

Each company deemed capable

“There’s no doubt that each company had the ability to perform” the services, medical director Sharon Baucom told the board.

But Wexford came in with a bid $20 million lower than Corizon

The new contract is designed to have a single contractor provide health care and monitor its costs. The contract also calls for increased use of telemedicine to reduce expensive inmate trips to hospitals and other health facilities where they must be guarded. (The department provides its rationale for the decision on pages 27B-34B of the BPW agenda.)

The contract also will increase the use of electronic medical records and has “a significant safety component,” said Tom Sullivan, director of treatment services.

“This was a fair and thorough procurement contract,” Sullivan said. A previous attempt to award the contract had been rejected due to mistakes in the procurement process.

Official denies its “Cadillac of systems”

Comptroller Peter Franchot asked, “Are we just paying for the Cadillac of systems?”

Sullivan said the annual cost of the contract averages out to about $6,000 per inmate, placing Maryland “in the middle of the pack” in terms of inmate health care spending. “This is not the Cadillac of systems,” Sullivan said.

“It’s a lot more than the average Marylander gets,” Franchot said. “This is a huge amount of money. Where are the savings?”

Gary Maynard, secretary of Public Safety and Correctional Services, pointed out that costs for inmate care have not gone up in the last two years, but that prisoners are in far worse shape than the rest of the populace.

“We get a population that is not in good health,” Maynard said. “They smoke and they drink and they hang out with the wrong people” and have addictions.

State Treasurer Nancy Kopp said the cost of inmate health care was actually below the national average. The Centers for Medicare and Medicaid, a U.S. agency based in Woodlawn, estimated that the cost of health care per person in 2010 was $8,400.

She also noted that HIV infection in Baltimore was higher than Third World countries.

Losing bidder cites lack of due process

Corizon attorney Philip Andrews said that it was unusual for the board to award a contract in the face of a protest that was going to the Board of Contract Appeals. “Corizon is asking for nothing more than due process,” Andrews said. “We were told this would not happen,” and only learned of the contract award last week.

Peter Franchot

It was casual Wednesday for Comptroller Peter Franchot at the Board of Public Works. He blamed it on “politician’s elbow.” Franchot, who is left-handed, said he has tendinitis in his right hand from shaking hands. He said one of the most painful things to do with the condition is tie a necktie. So he left it off.

But department officials said there was a compelling state interest in awarding the contract since Corizon’s existing contract was about to expire.

Andrews also said that Lakewood Associates, Corizon’s major minority subcontractor, would be put out of business by the loss of the contract. Wexford representatives said they expected to hire most of Lakewood’s employees to perform the same duties.

“We hope there will be no loss of MBE (minority business) participation,” attorney Ken Weckstein said.

Corizon President Stuart Campbell denied claims that the company’s protest was simply seeking to continue its current contract. Campbell said the company has bid on prison contracts all over the country, but only appealed awards in five states.

Wexford President Mark Hale said his company seldom protests contract awards.

At the end of the hearing, Franchot said, “In my view of it, the taxpayer has not been well-served. We certainly do not need to have all the bells and whistles. I wish we were going to deliver better care.” But despite all that, the comptroller said he would vote for the contract, because the problem was with how the program and the request for proposal were designed.

Kopp said, “We have two outstanding companies that have served citizens well” and there was a need to move forward.

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