Contact Center Industry News

TMCNet:  Despite LogistiCare's problems, state hasn't assessed penalties

[January 04, 2013]

Despite LogistiCare's problems, state hasn't assessed penalties

Jan 05, 2013 (Milwaukee Journal Sentinel - McClatchy-Tribune Information Services via COMTEX) -- Over the past four months, LogistiCare has received more than 7,000 valid complaints about rides not showing up or arriving late to take Medicaid patients to dialysis, cancer treatment and other medical appointments.

Hold times on LogistiCare's hotlines have exceeded the time allowed under the company's state contract more than 60% of the time.

Yet, state officials didn't assess any penalties, partly out of consideration for LogistiCare's bottom line and partly for fear that service would get worse, an official said Friday.

LogistiCare's two contracts generally give the state the right to withhold or deduct money if the company didn't live up to the terms of the contract.

The company has terminated its contracts with the state, effective Feb. 16. The firm says it was losing money on the deal.

"The department's principal focus is the long-term viability of having a nonemergency medical transportation manager," Department of Health Services spokeswoman Claire Smith said in an email. "As LogistiCare indicated in its termination letters, the two contracts currently in place were not financially viable and the company was continually operating at a loss by serving as the manager and providing those services. We monitored both performance and financial aspects of the contracts closely and were ultimately concerned that financial sanctions would result in further decline in quality of service." Part of the problem is that state officials failed to include provisions in LogistiCare's contract that allowed it to seek financial damages for specific daily violations.

"It's very difficult to enforce a contract without clear guidelines," said Shirin Cabraal, managing attorney with Disability Rights Wisconsin. "There were no consequences for LogistiCare when it violated the contract with impunity." A request for proposals released Thursday establishes damage amounts for specific violations. For instance, a new provider can be asked to compensate the state up to half the amount of the contract -- as much as $1,000 every time a ride isn't provided to an eligible patient or shows up late, or hold times on the hotlines are too long.

"These provisions were added to enhance vendor accountability by providing a clear fiscal impact for failing to meet performance standards," Smith said in an email.

That's a welcome change, but it doesn't address the major problem -- enforcement, said Rep. Penny Bernard Schaber (D-Appleton).

"The first contracts allowed (the Department of Health Services) to fine the contractor or terminate the contract if the company was not living up to their end of the bargain," she said in a statement. "If the department didn't enforce the protections in the current contract, I am very skeptical that a new contract with some increased protections will make much difference unless (the Department of Health Services) does its job of enforcing it." Legislators and advocacy groups have expressed concerns about whether LogistiCare was actually logging all of its complaints and resolving problems. They urge state officials to get a third party to oversee the complaints. .

"The internal advocate/ombudsman that LogistiCare had was ineffective," Cabraal said. "She was more of an apologist for LogistiCare than an advocate for the Medicaid members trying to get rides to access Medicaid services." The new contract proposal says the contractor's ombudsman must be willing to cooperate with a third party on complaint resolution, but the state's Smith said officials have not yet decided whether to put out a contract proposal for a third party.

Meanwhile, legislators continue to question LogistiCare's performance. A group led by Schaber plans to renew their call for the state to conduct an audit of the company by sending a second letter to the state's audit committee.

Gary Goyke, a legislative consultant for several transportation coalitions, said several Republican legislators have questioned the company's performance behind the scenes and may soon come forward to demand some answers. One question is how much of the money that the state pays LogistiCare actually goes toward transportation services, he said.

"That's a legitimate taxpayer question to me," Goyke said. A group of transportation providers and county transportation coordinators across the state have officially formed a cooperative and plan to bid on the contract.

"What we're doing is communicating and one thing LogistiCare hasn't been doing is communicate on a regular basis. All they came up with denial of rides, lack of rides and lack of service," said Red Christensen, general manager at American United, which is part of the coop. "I think we'll be able to provide a better job of it." ___ (c)2013 the Milwaukee Journal Sentinel Visit the Milwaukee Journal Sentinel at Distributed by MCT Information Services

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