About like Neds former people running Xantus? The same ones who were insisting Medicaid was broke?
more sunquist n algore buddies???
By Marc Perrusquia
perrusquia@gomemphis.com
March 3, 2002
A TennCare subcontractor paid former congressman Harold Ford $45,750 a month through a consulting agreement that raises new questions about big-dollar side deals within the state's taxpayer-funded health plan for the poor.
Ford's consulting firm received $1.6 million between 1998 and 2001 from MIM Corp., a New York-based firm that has collected several hundred million dollars from TennCare.
Over that period, Ford also received more than $1 million to act as a registered lobbyist for seven firms, including MIM and the company that managed a defunct TennCare managed care organization.
Neither Ford nor MIM would talk about his specific duties on behalf of the company.
However, MIM hired Ford just as it launched an effort to win contracts worth $200 million to manage the pharmacy benefits for six TennCare managed care organizations.
Officials with MIM's chief competitor for those contracts say they believe Ford helped sway the MCOs to MIM.
Ford's influence on TennCare continues to grow. His consulting and lobbying firm, The Harold Ford Group, has hired Gov. Don Sundquist's former chief of staff, Wendell Moore, who's been pushing for TennCare concessions for MIM.
News of Ford's fees touches a nerve among critics who long suspected that consulting deals were padding costs and draining resources from TennCare.
"It's an awful lot of money to spend on one consultant, that's for sure," said Craig Becker, president of the Tennessee Hospital Association.
Becker was among those who pushed the state to release financial information on private companies hired by TennCare.
Goaded by persistent reports of MCOs funneling generous consulting fees to politically connected friends, Becker and others were concerned that some contractors couldn't pay health care providers.
In 1999, the state began requiring more financial disclosures from privately run MCOs hired by TennCare, but officials still know little about some firms' expenditures that are believed to have contributed to the failure of two health plans.
One failed MCO, Access Med Plus, had racked up an estimated $80 million to $100 million in debts to hospitals, doctors and other health care providers by the time the state took it over last fall.
Ford's deal with MIM came to light as The Commercial Appeal took a closer look at the state takeover of Access MedPlus. Serving 279,000 poor or otherwise uninsurable residents, the company received nearly all its revenue from TennCare and also had a large contract with MIM.
The company that managed Access MedPlus paid Ford $295,000 in lobbying fees, including $180,000 in 1998 to assist an ambitious health care venture in developing African nations.
Ford said his fees from Medical Care Management Co. had nothing to do with the failure of Access MedPlus because the health plan and the management firm were separate entities.
"I don't want to leave it out here, 'Oh, they paid Harold Ford, you know, he was a consultant, and didn't pay the providers,' " Ford said in a telephone interview from Miami, where his consulting and lobbying firm operates one of three offices.
"Well, the providers wouldn't have been paid out of the management money anyway."
Officials sifting through the Access MedPlus wreckage don't share that view.
Medical Care Management Co. received up to $53 million a year to run Access MedPlus. Those funds should have been used to ensure the health plan was run properly and providers were paid, said Manny Martins, the assistant commissioner of Commerce and Insurance overseeing TennCare MCOs.
"Those two entities are inseparable through this contract arrangement," he said.
MIM payments
Ford's consulting deal with MIM is revealed in a statement filed last June with stock regulators.
Monthly payments, totaling $549,000 a year over the three-year contract, were made for "lobbying and health care related services," according to an MIM proxy statement filed with the Securities and Exchange Commission.
Ford's fees exceeded the salary of MIM chief executive officer Richard H. Friedman, who received $451,596 in 2000, company records show.
Ford's consulting agreement began in October 1998 with an initial term set to expire Oct. 13, 2001. Ford joined MIM's board of directors last year, but it was unclear whether his consulting contract has been renewed.
"Harold does very, very good work for this company," said MIM vice president and general counsel Barry A. Posner. Calling Ford "a trusted adviser," Posner said the former Memphis congressman provides "advice on governmental contracts," but declined to discuss details of those services.
Records show MIM hired Ford 14 days after the benefits management firm ended a business relationship that could have cost it several hundred million dollars in lost TennCare revenue unless steps were taken to recover that income.
MIM helped service six TennCare MCOs through a contract with RxCare, a for-profit prescription drug network owned by the Tennessee Pharmacists Association. As a pharmacy benefits manager, MIM manages client files for MCOs to track prescription drug use and help keep costs down.
TennCare accounted for about $327 million, or 72 percent, of MIM's $451 million in revenue in 1998, company rec ords show.
But on Sept. 29, 1998, MIM and RxCare announced they were parting ways.
At the time, federal agents were investigating an alleged kickback scheme surrounding MIM's original landing of TennCare contracts in 1994.
Three men, including an RxCare executive and MIM's founder, eventually pleaded guilty to misdemeanor health care fraud charges.
But MIM's explanation for severing its ties to RxCare dwelt in part on the company's intention to expand business operations outside Tennessee, a move that has gradually reduced MIM's reliance on TennCare.
After separating, former partners MIM and RxCare agreed to compete for TennCare contracts set to expire at the end of 1998.
MIM executives noted in a quarterly financial statement that failure to directly market to the Tennessee MCOs "would have a material adverse effect on the Company's financial condition and results of operations."
In direct competition, MIM beat the pharmacists' group on its home turf to win contracts with six TennCare MCOs, including Access MedPlus, Xantus and Memphis-based firms TLC and Omnicare.
Two Tennessee Pharmacists Association officials believe Ford had a hand in influencing MCO executives to pick MIM over RxCare, the TPA subsidiary, for the multimillion-dollar pharmacy management contracts.
"They had some political clout," said Baeteena Black, TPA executive director.
Black said she began seeing Ford at government meetings on MIM's behalf at the time and was told Ford was employing his extensive contacts across the state to ensure that MCOs would go with MIM.
Ford declined comment when asked if his agreement with MIM included persuading MCOs to sign with the firm.
Asked the same, MIM's Posner terminated an interview with a reporter.
Some of Ford's work for MIM involved lobbying the federal Health Care Financing Administration, the executive branch and the House of Representatives, according to his lobbying reports filed between 1998 and last year.
Ford's $180,000 in lobbying fees from MIM represented about a tenth of the firm's total payments to him, the remainder evidently stemming from consulting work he and his client consider confidential.
Ford's influence
In the wake of the Access MedPlus collapse in October, Ford arranged a meeting in the Governor's Office to ask state officials to let MIM retain the pharmacy benefit work it had performed through Access MedPlus.
State officials listened - and even asked another provider to help - before determining that the logistics of Ford's proposal weren't feasible.
Among those attending the high-stakes meeting was attorney Hardy Mays.
Mays, former chief of staff to Gov. Sundquist and President Bush's nominee for a federal judgeship, declined comment on the meeting, saying he couldn't ethically disclose the name of the client he represented.
Wendell Moore, who succeeded Mays as Sundquist's chief of staff before resigning last fall, now is working for The Harold Ford Group in Nashville. Moore did not respond to calls for comment. Ford declined comment when asked about Moore.
According to sources, Moore recently contacted state employees on behalf of MIM, inquiring about the business lost when Access MedPlus folded.
Ford retired from his Ninth District congressional seat in 1996 after 22 years, but he and his family remain influential.
His son, Harold Ford Jr., succeeded him. He also has siblings on the Memphis City Council and Shelby County Commission. His brother, state Sen. John Ford (D-Memphis), sits on the TennCare Oversight Committee.
TennCare subcontractor Behavioral Health Group paid John Ford $3,000 in consulting fees in 1994 and 1995 in a failed deal with an Access MedPlus subsidiary in Mississippi. BHG also paid consulting fees to Harold Ford, said owner Stephen H. Winters.
The hospital association's Becker said the state could do more to curb consulting and other costs by scrapping MCOs, which may spend up to 13 percent of TennCare revenue on administration, in favor of Administrative Services Only contracts with agencies that just pay medical bills.
TennCare officials say managed care is the efficient method for health care, noting MCOs must spend at least 85 percent of TennCare money on medical care.
Still, legitimate questions remain about whether MCOs like Access MedPlus made proper use of management fees, said the state's TennCare supervisor Manny Martins.