AZPIA Files Lawsuit To Halt Betsey Bayless’ Misuse of Maricopa County Taxpayer Funds

Moves Violate Constitution, Benefit Another County,  and Jeopardize Support for Healthcare District

(MESA, Ariz.)  An increasingly influential public interest group, Arizona Public Integrity Alliance (AZPIA), has filed suit in Maricopa County Superior Court alleging that Betsey Bayless has or is about to illegally give away $10 million of Maricopa County taxpayer funds to a private entity.

Bayless is the CEO of the Maricopa County Special Health Care District (District), which does business under the name Maricopa Integrated Health Systems (MIHS).  AZPIA has had success impacting local politics and public policy and is now challenging Bayless’ misconduct.

The District infamously spiked Bayless’ salary last New Year’s Eve, from $375,000 to half a million dollars.  The spike occurred despite her pending retirement, drawing the ire of media and taxpayers alike.

“The New Year’s Eve salary spike was outrageous, but not illegal.  However, the subsequent activities by MIHS to flagrantly disregard its voter-approved mission and invest $10 million to displace an award-winning private sector provider of behavioral health services was the last straw,” said Pace Ellsworth with AZPIA.

In its bid proposal for the three-year contract to serve as the Regional Behavioral Health Authority (RBHA) for Geographic Service Area 6 which includes Maricopa and parts of Pinal County, MIHS promised $10 million for its joint venture with Southwest Catholic Healthcare Network (d/b/a Mercy Care), to form and fund the entity called Mercy Maricopa Integrated Care (MMIC).

“Taxpayers authorized the District to provide certain services within Maricopa County.  This isn’t one of them,” Ellsworth said. Furthermore, the District is actually proposing to use Maricopa County Taxpayer funds to serve parts of Pinal County.

“Obamacare is so distasteful because it crowds out the effectiveness and efficiency of the private sector for a government takeover.  And that’s what is starting to happen now with MIHS.  They must not be allowed to stray from their core mission and the trust taxpayers have placed in them,” Ellsworth said.  He also called the use of Maricopa County taxpayer dollars to benefit Pinal County healthcare “outrageous.”

“Maricopa County voters would never have taxed themselves knowing of these plans and abuses. And they won’t pass further support for the District if they insist on proceeding,” Ellsworth said.

AZPIA attorney, Chris LaVoy, said this is a  plain violation of Arizona law and a serious misuse of taxpayer funds.

“We are not only going to pursue this legal action, but we are considering recall actions against each of the voter-installed members of the District board who never told voters about this money grab.  Between the ridiculous raise provided the CEO and now this, we think voters will revolt against the very people who empowered these abuses,” Ellsworth said.

For a copy of the lawsuit filed by Chris LaVoy of Tiffany & Bosco, please contact Michael Scerbo.

For more information or to make a contribution please go to www.azpia.org or visit them on Facebook.

MIHS Meets in Closed Door Session to Discuss Controversial State Contract


The Maricopa County Integrated Health Systems Board of Directors
is currently meeting in closed-door Executive Session to discuss the current legal challenge and protest filed by Magellan and United RHBA against MMIC (Mercy Maricopa Integrated Care), MIHS CEO Betsey Bayless, and Maricopa County Special Health Care District.  The current agenda shows a 30-minute spot dedicated to discussion of this subject, all of which will be exempt from records requests and exempt from public inspection.

It is not surprising that the MIHS Board is keeping a low profile and is remaining tight-lipped about this controversial contract after being awarded a possibly illegal $2 billion to $3 billion dollar contract from the State of Arizona.  This came on the heels of a controversial pay raise for MIHS CEO Betsey Bayless that raised her taxpayer salary to $500,000.

Accountability and SunshineThe board will apparently receive legal advice on the protest to the bid and discuss options moving forward.  An administrative law judge is likely to uphold the Department’s awarding of the contract, leaving a lawsuit targeting the state as a possible option.  Magellan has already filed a civil suit seeking financial damages in Maricopa County Superior Court against MIHS and MIHS’ CEO Betsey Bayless.  Magellan alleges MIHS was awarded the contract improperly and used proprietary information from Magellan to win the bid.

The new contract was set to begin on October 1, 2013, but the protest and lawsuit are likely to delay implementation.  Previously MIHS responded to the formal protest with the following statement:

“We are studying those protests and will respond in the appropriate venues,” the statement said. “We are confident in the strength of our bid, and we are proud to offer a unique, collaborative approach to meet Maricopa County Medicaid recipients’ behavioral-health needs and to integrate the behavioral- health and medical services for those with serious mental illness.”

If you recall, the lawsuit also alleges “serious conflicts of interest” by MIHS because Mercy Maricopa both manages the system and provide services, which is “prohibited by the contract and by state law.” Magellan also alleges that the bidding process contained “serious irregularities,” such as the state’s bidding process being amended twice to unfairly benefit MIHS over their private competitors.  Additional claims include conflicts of interest, improper scoring, licensing problems, and disclosure of proprietary information to competitors. Magellan originally serviced the state contract since 2007.

The serious allegations require attention and deserve public scrutiny.  MIHS should be holding discussions on the contract and the protest, but they should be doing this in the face of the public.  Not behind closed doors immune from public records requests. MIHS is a government entity that collects nearly $60 million dollars in property taxes every year and is run by a publicly elected Board of Directors.  When the state awards a contract that could be worth up to $3 billion dollars, possible bias in favor of a taxpayer funded MIHS over private competitors deserves more sunshine and certainly more accountability.

If you’d like to contact the MIHS Board of Directors and demand more transparency for taxpayers, they can be reached via email as follows:

 

Follow the Money…..

MIHSThe recent mental health contract awarded by the state to Maricopa County Integrated Health System or MIHS is raising eyebrows. MIHS, a government funded and owned entity, is on the cusp of receiving a 3-year contract that is potentially worth $3 billion dollars.

Any $3 billion dollar deal should be viewed as suspect by watchdog groups and taxpayers, but what makes this deal special is that MIHS is a government owned, property tax levying entity bidding against private providers.  In fact, MIHS currently collects nearly $60 million dollars in property taxes each year.  MIHS is even allowed to go into debt with revenue bonds that can be paid for through the district’s operating property tax levy without voter approval.

To secure the lucrative contract, MIHS teamed up with Aetna-owned Schaller Anderson, Medicaid provider Mercy Care Plan, Carondelet Health Network and Dignity Health.  Not surprisingly, private providers Magellan Health Services and UnitedHealthcare (both of whom bid on the same contract) have filed formal protests against MIHS and MIHS CEO Betsey Bayless.

MagellanWhy would the state award the largest contract its ever offered to another government entity in what appears to be a clear violation of the Arizona Constitution’s “gift clause?”  When you pull the thread and follow the money trail, it’s hard to not suspect corruption, cronyism, and a healthy dose of conspiracy.

MIHS was created by Proposition 414 in 2003 after voters approved the measure in a special election by a margin of 58% to 42%.  At the time, AZ Republic columnist Robert Robb called the establishment of a property-tax-supported hospital district “unnecessary and unwise.”  Robb even warned voters that “…special tax districts, focused on only a single service with independently elected boards, are bad fiscal policy.  Hard choices are good for taxpayers and make for more efficient government.”

Robb even called the publicity pamphlet and ballot question used to promote the measure “the most blatant case of government propagandizing I’ve seen in over a quarter century of Arizona elections.”  Bold statement for a columnist who typically calls it as he sees it.

The lobbying firm responsible for the passage of the ballot referral legislation at the Capitol also ran the ballot campaign.  Phoenix-based HighGround public affairs is run by consultant Chuck Coughlin, Brewer’s campaign advisor and a man who has been referred to as Arizona’s “shadow governor.”   According to their website:

“Our team was the principal public affairs and lobbying team for the legislation that authorized the creation of the new Maricopa County Hospital District on behalf of Maricopa County.  Following the successful passage of the legislation, HighGround was retained as the principal campaign consultant for the Yes on 414 Committee.”

Fast forward to 2008.  HighGround is once again rewarded for their work and is retained by MIHS with their first lobbying contract.  Today, HighGround works hand-in-hand with Betsey Bayless who was hired as MIHS’ CEO in September 2005.

BaylessIn February 2013, Bayless was given a 33% pay raise, an extra $125,000 per year, bringing her annual taxpayer-funded salary to a whopping $500,000.  This despite a poor rating issued by a national accrediting group, the Joint Commission, which found widespread record-keeping problems and other flaws that posed risks to patients’ safety.  This even despite the fact that Bayless has already announced she’s leaving her position at the end of 2013.  Two of MIHS’ board members even voted against the pay raise, saying they opposed raising the pay of a CEO who is leaving in less than a year and working for a public hospital.

“It really rubs me the wrong way that we’re spending this type of money,” board member Elbert Bicknell said. “Don’t get me wrong. Betsey is a smart … woman, and she’s done a hell of a job from 2005 to now. But a ($125,000) raise in a year when we give our janitors maybe a 1 percent raise or lay off people? It just doesn’t make sense.”  Dissenting board member Sue Gerard commented: “I think having that kind of salary is totally inappropriate.”

Could the pay raise have anything to do with the fact that it was widely speculated that MIHS was going to be awarded the enormous mental health contract?  Was this Betsey’s “swan song” on her way out the door?  Possibly.

But where this story gets really tangled is when one considers the ramifications of the state adopting Governor Brewer’s Medicaid expansion proposal.  Again, the value of the contract could increase an additional $1 billion dollars if the state accepts federal Medicaid dollars.  Who is running the campaign in Arizona for Medicaid expansion?

If you guessed Chuck Coughlin and HighGround, you’re correct.  Serving as Coughlin’s wingman is Peter Burns, a former Brewer budget advisor.  Perhaps that explains the governor’s complete flip-flop on this issue from less than a year ago.  The Wall Street Journal went as far as to describe the governor’s flip-flop as a “political 540°” and “a case study in the political pressure and fiscal gimmicks designed to get states to succumb.”

The New York Times sums up the magnitude of political forces and financial incentives behind this coordinated effort:

Recently, 40 lobbyists, representing at least 110 groups pushing for the expansion, among them hospitals, health care associations and business organizations, huddled in the executive wing of the State Capitol to update the governor’s advisers on their progress and hone strategies.

The Wall Street Journal goes further, discussing how “Ms. Brewer was nonetheless besieged by health-industry lobbying, especially from hospitals that want more government money and the insurers that administer Medicaid.”

There is something wrong with the State of Arizona climbing into bed with private business to give away billions of dollars in public funds.  When those decisions are tied to the largest health contract the state has ever awarded and possibly the biggest expansion of federal government our state has ever seen, tax-paying citizens are owed an explanation and deserve transparency.

Aside from the arguments of whether accepting federal Medicaid dollars related to the full implementation of Obamacare is good or bad policy, the one thing that is clear is that the consultants, lobbyists, and hospital administrators pushing the plan stand to make millions of dollars in profits.

Money makes people do strange things, indeed.

Government Contract Rigged for MIHS?

CASH

Magellan Health Services filed a “formal protest and a lawsuit” against Maricopa Integrated Health Services or MIHS. Magellan had managed a contract that included serving Maricopa County’s poor since 2007. Magellan’s complaint alleges numerous irregularities:

In its protest, Magellan alleges that Mercy Maricopa has “serious conflicts of interest” because Mercy Maricopa intends to both manage the system and provide services, which is prohibited by the contract and by state law. Magellan also claims that Mercy Maricopa should have been ineligible to bid on the contract but that state procurement officials improperly amended the request for proposals “to permit the winning bidder to qualify as an eligible bidder.”

Magellan Arizona CEO Richard Clarke told The Arizona Republic that there were “serious irregularities in the bidding process,” such as the state twice amending the proposal request “at the last moment” to allow bidders to subcontract services, which benefited the Mercy Maricopa proposal.

Magellan also claims that the bids were improperly scored and that “there was an overall bias in favor of the winning bidder.”

For example, Clarke said, both organizations proposed eliminating the separate provider network for children’s treatment and using the administrative savings for direct services. Mercy Maricopa earned points for that portion of its proposal, but Magellan did not, he said. “There are a number of errors like that where it’s really clear to us that the two entities were judged very differently,” he said.

Magellan’s complaint targets not only MIHS but Betsey Bayless, MIHS’ CEO. Bayless has previously been under scrutiny for receiving a $125,000 taxpayer funded pay raise earlier this year, bringing her annual salary to $500,000 – in taxpayer money.  Bayless was viewed by many as a spoiler in the 2002 governor’s race between Matt Salmon and Governor Napolitano. Napolitano won by less than 10,000 votes and in return, Bayless was appointed as director of the Department of Administration. Bayless’ appointment would serve as a launching pad to her lucrative position at MIHS, a position which many view is beyond her qualifications.

The Arizona Republic also states an interesting fact about the state contract:

The contract, worth $2 billion to $3 billion, depending on whether the state expands Medicaid, is the states first for integrated health care, which blends physical- and mental-health treatment.

The difference between $2 billion and $3 billion is staggering. The Arizona Republic understates the amount and ignores the underlying possible nefarious motive for the changing of state law, bidding processes, and why MIHS would want the contract.  To put this into context, the difference between $2 billion and $3 billion is the difference between, say, Jerry Jones and Steven Spielberg.

Another key factor easily glossed over by the Arizona Republic is that MIHS receives nearly $60 million dollars in property taxes each year.  So, you essentially have a taxpayer-subsidized government entity bidding against private providers for the largest behavioral health contract the state has ever offered.  Does that seem fair?

The legal challenge by Magellan will hopefully shed light on the seemingly back door deal and reveal what really took place in the bidding process. When $3 billion in taxpayer dollars is at stake, the people deserve complete transparency on state contracts.