AUGUSTA, Maine — The controversial head of a Rhode Island consulting group recently hired by Gov. Paul LePage could face an attorney general’s investigation in Pennsylvania amid concerns about the role he played in securing a state contract for a Boston-based company.
A recently released report by the Pennsylvania auditor general also raised concerns about mismanagement and questionable procurement practices resulting in many state caregivers going unpaid for weeks and costing the state millions of dollars.
The Alexander Group, led by Gary Alexander, received a nearly $1 million state contract in September to study the long- and short-term effects of Medicaid expansion in Maine and analyze the state welfare system. Alexander was secretary of Pennsylvania’s Department of Public Welfare from 2011 until February of this year.
On Nov. 20, Pennsylvania House Minority Whip Mike Hanna, a Democrat, sent a letter to Kathleen Kane, the state’s Democratic attorney general, requesting an investigation into a contract procurement process that led to Public Partnerships LLC of Boston taking over sole management of payroll for home health caregivers, replacing 36 companies that had previously managed caregiver payrolls and that were effectively barred from applying for the contract.
The contract was the subject of a recent audit by the state’s auditor general which revealed “long-term mismanagement” that continues to cost the state $7 million per year. The mismanagement began before Alexander took control of the agency but was exacerbated during his time in office, the report states.
Hanna had requested an investigation of Alexander once before, but was denied. He hopes his second request will meet a different fate now that the auditor’s report has been released.
The audit does not specifically name any criminal concerns, citing only mismanagement and a questionable request-for-proposals process. But a Hanna staffer said Friday that the audit’s findings were cause for an investigation.
“We felt the evidence the auditor general reported, those issues warrant at least [the attorney general] to look into it to see if there was any improper use of taxpayer dollars or private benefit to Mr. Alexander,” said the staffer, Adam Wagonseller.
A spokesman for Kane would not say whether an investigation is pending.
“As to any referrals from Rep. Hanna or anybody else, we cannot comment on referrals or whether or not we’re investigating something — or even whether an investigation exists,” said her spokesman, Joe Peters.
On Friday, Maine Senate President Justin Alfond, D-Portland, said he had not heard about the Pennsylvania lawmaker’s request for an AG’s investigation.
“Every day, we learn more and more that discredits Alexander, discredits the work that he’s done and brings more and more questions into play,” he said. “We’ve got all these questions swirling about the integrity of The Alexander Group.”
Attempts to reach Alexander for comment on Friday were unsuccessful. The LePage administration offered no comment for this story.
Democrats in Maine have come out swinging against Alexander, who they call an ideologue determined to cut social safety programs at all cost, because of his record of slashing benefits in other states.
Mary Mayhew, Maine’s DHHS commissioner, said The Alexander Group offers needed expertise reforming the state’s welfare system. Republicans have praised Alexander for his focus on fighting fraud and slowing the ballooning growth of social service spending, and for winning unparalleled flexibility in managing Medicaid while running Rhode Island’s health and human services department before taking the Pennsylvania job.
Pennsylvania uses a “consumer model” for home caregivers funded with Medicaid dollars. About 20,000 elderly or disabled residents on Medicaid choose their caregiver and work with a state-contracted payroll agency, which writes the service provider’s paychecks.
From 2009 to 2012, the audit states, the department did not adequately monitor the 36 such payroll agencies that contracted with the state, leading to noncompliance with state and federal laws, regulations and financial service standards.
Thousands of in-home service providers “went for weeks and months without a paycheck because DPW failed to provide adequate oversight and demand accountability of contracted payroll providers,” wrote Pennsylvania Auditor General Eugene DePasquale.
Instead of taking corrective action, Alexander opted to “start over with new provider because DPW believed aggressive monitoring of the former providers was ‘cumbersome,’” DePasquale wrote.
The department hired Partnerships to be the sole provider of payroll services. The audit found that PPL was given an $18 million contract advance despite other applicants being told that advances weren’t possible. The procurement process also effectively barred many payroll services — including all those with previous experience — from applying.
“DPW essentially rolled out the red carpet for the Boston-based firm to take over Pennsylvania payroll provider services. At best, this procurement process appears to be questionable,” DePasquale wrote.
The transition was, by all accounts, a disaster. At least 1,500 disabled or elderly Pennsylvanians were so perplexed that they switched to a more expensive model of care that cost the state an additional $7 million per year, according to the auditor general. And service providers, again, went for weeks or months without paychecks.
PPL continues to be the sole payroll agency for Pennsylvania’s in-home service providers.
Maine House Minority Leader Ken Fredette, R-Newport, said people shouldn’t get too worked up about Hanna’s request, which he characterized as a political stunt comparable to a bill by Rep. Diane Russell, D-Portland, to sell the governor’s mansion. Fredette urged Mainers to let The Alexander Group issue its findings before casting stones.
“I think we realize that lawmakers can make silly comments,” he said. “Obviously, there’s a lot of politics and motivations swirling around, not only in Maine but also out of state. People ought to take a deep breath, take a step back, and let the process move forward.”
Follow Mario Moretto on Twitter at @riocarmine.