Wednesday, January 10, 2007

Is FSSA Privatization Contract Legal?

Sen. Vi Simpson (D-Simpson) is raising questions about the legality of Gov. Daniels' 10-year, billion-dollar privatization contract for the administration of the Family and Social Services Administration's welfare programs. In particular, she cites a state statute which limits the term of any contract to administer the State's Medicaid program to 4 years, with an option to extend for an additional 2 years. The statute Sen. Simpson cites is I.C. 12-15-30-4, which reads:

Sec. 4. (a) A contract to administer any part of the Medicaid program may be for an original term of not more than four (4) years.
(b) At the option of the office, the term of the contract may be extended for a term of not more than two (2) additional years.
(c) An extension may be granted for a contract that is in effect.

This particular statute was primarily written to address the agency's contract for processing Medicaid claims. The State has contracted with EDS for many years to perform that service. The statute, however, applies to any contracting by the Office of Medicaid Policy and Planning. If I understand the privatization contract, it applies to several welfare programs, including the Medicaid program. At least the portion of the contract applying to Medicaid eligibility and other Medicaid administration responsibilities, on its face, would be covered by this statute. According to the Star article, the administration claims the Attorney General, from whom Simpson is seeking a legal opinion, has already signed off on the contract.


Anonymous said...

You expected this combover goofball AG to do anything other than the partisan hack routine?

See, I didn't expect anything different, so I'm not concerned.

I trust your legal review better than this AG's.

It does appear improper. How do these reviews happen without the cursory pass by the current statutes? Seems pretty simple to me.

Enlighten us as to process, please.

Gary R. Welsh said...

From Steve Carter's Office:

"During this process, we specifically reviewed the applicability of IC 12-15-30-4 regarding the administration of Medicaid claims, and are satisfied that it does not apply to the work to be performed by IBM regarding eligibility. We understand that the federal government also reviewed the contract regarding the state's oversight and administration of this program."

In other words, he says this statute doesn't apply to Medicaid eligibility. It clearly applies to any contract to administer any part of the Medicaid program. I don't understand an interpretation which excludes eligibility administration.