The Daniels administration’s ongoing efforts to privatize Indiana’s Medicaid eligibility screening process has hit another snag. One of the two prime candidates for the billion dollar contract, Affiliated Computer Services (ACS) — FSSA Secretary Mitch Roob’s prior company — has had its CEO and CFOs resign after they were caught performing financial shenanigans designed to boost the value of stock options. Falsifying dates on option dates will apparently result in $51 million in extra taxes for ACS.
Certainly proponents of privatization could argue that this, like the tortures at Abu Ghraib, was the result of a few bad apples. But, whether it’s endemic or just a couple of rogues, it highlights one of the problems with privatization — lack of transparency and lack of accountability. It’s much more difficult for administration officials to find out exactly what’s being done with the money once a contract is signed, and probably even more difficult to change the way the money is used if one is not satisfied. Sure, if you’re not getting the results to which you think you’re entitled, you can cancel the contract. But, with a billion dollars on the line, you can bet the other party to the contract isn’t going to just agree that it has breached the contract and, ultimately, it’s probably going to drag through the courts for a few years at great expense to everybody. As the saying so colorfully goes, it’s pretty tough to unshit the bed.
it always amazes me that people assume that government is corrupt and that anything privately controlled is efficient and scruplously managed.It should give pause to the current trend of privatizing in the guise of better value for the dollar….Better value for the few sitting at the money trough,to be sure.
I think government and business are alike in that they are all populated by ordinary humans, a fair number of whom are greedy and/or lazy. Absent proper controls, those folks will succumb to their greedy or lazy inclinations. I think business tends to have better controls against laziness and government tends to have better controls against greed.
Doug, You make a really great observation. I agree.
ACS is already used to pay childcare providers for services of families who receive childcare assistance in Indiana. I cannot begin to tell you the problems with THIS set up.
Please: begin, begin! I am ignorant of this part of Indiana government. And, I expect that this is exactly the sort of thing that policymakers should be aware of, but are not.
Oh Doug, where to start..
I think the POS (point of service) machine so that ACS can reimburse providers began in this state in 2002. When this happened, FSSA took the providers right to be paid out of the hands of the provider and into the parent’s hand. Meaning, the swipe card issued to the parent needs to be used in order to be paid. If the parent looses or forgets the card, the provider must also babysit a machine to assure that they are getting paid. Oh, and heaven forbid if a parent forgets. If the provider doesnt catch it, they will not know until 2 weeks after the fact. Then the provider must file a discrepancy form, issue it to the state, and wait up to 5 months to be paid. We are not talking about big cooporations, we are talking small 1 person businesses that have already put money out for supplies, rent, payroll,etc…based on future forcasting of monies received for the care they give children. This system has put many good childcare providers out of business, as well as providers refusing to take children on assistance for the few reasons I mention above, as well as many many others.
Before, with paper vouchers, the provider filled in the time, and all the parent had to do is sign a form every 2 weeks. The provider submitted it and was paid. What a wicked web FSSA weaves…