AUGUSTA, Maine — Lawmakers on the Legislature’s Health and Human Service Committee on Tuesday reviewed a $925,000 contract awarded to a Rhode Island-based consulting firm to study the state’s welfare system.
The no-bid contract, awarded to the Alexander Group by the Maine Department of Health and Human Services, has come under fire by Democratic leaders in the Legislature who question why the steeply priced study was awarded to a company whose president is a known opponent to the expansion of state Medicaid programs under the Affordable Care Act, also known as Obamacare
“Looking at the state’s own rules and statutes, the ability to do sole-source contracting is extremely limited,” said Rep. Drew Gattine, D-Westbrook.
Gattine, a committee member, raised a handful of questions about the contract.
He said he wanted copies of any proposals by the Alexander Group that led to the contract, as well as any invoices the group has submitted. He said his requests to DHHS have gone unheeded but perhaps a request from the committee chairs may carry more clout.
“I would like to understand what the justification was for giving a consulting company a sole-source contract without going out to bid,” Gattine said.
Gary Alexander, the firm’s CEO and president, served as Pennsylvania’s secretary of public welfare until February 2013 and prior to that in a similar Cabinet-level position in Rhode Island.
Democrats have assailed Alexander, calling him both a “political buddy” and “crony” of Republican Gov. Paul LePage.
“The national landscape is littered with former high-level HHS officials from the various states who go out and try to sell their services to other states when they are done doing whatever it is they are doing,” Gattine said. “The ability through the competitive bidding process to evaluate qualifications and evaluate whether or not particular potential vendors have issues in other states, what their experience is and how that experience stacks up with other people’s experience — I think these are all things the competitive bidding process is designed to work through.”
Republicans have been more complimentary of Alexander, pointing to his success in reducing welfare costs in Pennsylvania and Rhode Island.
While Rep. Deborah Sanderson, R-Chelsea, said she too had concerns about the process involved in awarding a no-bid contract of close to $1 million, she said Tuesday that somebody needed to audit Maine’s welfare programs.
“I do support bringing somebody in here to actually give an audit of our programs and actually take a look at things,” Sanderson said. She noted Alexander’s success in obtaining a “global waiver” from the federal government for Medicaid programs in Rhode Island.
“From what I understand and what I’ve heard, that essentially saved them quite a lot of money,” Sanderson said. “And if his group can come in and take a look at some of the things we are doing and help us accomplish that goal, then I think that’s a good thing.”
She also questioned whether Democrats on the committee would have supported any study that came back suggesting cuts to Maine’s welfare programs.
“It seems as though the past few years, any attempt to find some form of efficiencies and making sure the programs we have are serving adequately the folks who need them, regardless of what kind of justification,” Sanderson said. “No one wants to talk about making sure that justification is a true and accurate one.”
On Monday, Pennsylvania’s Auditor General Eugene DePasquale, a Democrat, raised additional concerns about Maine’s hiring Alexander. DePasquale pointed to an audit his agency did that showed mismanagement by Alexander and his staff may have cost Pennsylvania taxpayers an additional $7 million in Medicaid costs.
In comments to the Sun Journal, DePasquale said he found it “amazing” that Maine’s DHHS did not do more to vet Alexander before signing a nearly $1 million contract with him.
So far, LePage’s office has declined comment on the contract. However, LePage told a Bangor television station, WABI, a CBS affiliate, that he had no involvement in the hiring of the Alexander Group, and he knows Senate President Justin Alfond, D-Portland — a political rival — better than he knows Gary Alexander.
“I didn’t hire him, DHHS did,” LePage reportedly said.
Meanwhile, the first part of Alexander’s five-part report, which had a target date of Dec. 1 under his firm’s contract with Maine, has yet to be delivered to DHHS, according to department spokesman John Martins.
Martins has also said repeatedly that DHHS followed state procedures for no-bid contracts, and the Alexander Group was awarded the contract because the firm is “uniquely qualified.”
The company completed a similar study for the state of Arkansas, which it delivered in July. That study recommended, among other things, that Arkansas transition to a market-based health insurance system and that it “streamline basic benefit packages for Medicaid recipients.”
The scope of the Arkansas study, which cost $222,000, appears to be smaller than the contract Alexander has with Maine.
Based on state financial records, lawmakers learned that Alexander’s company was paid $123,360 and scheduled to receive several monthly payments of $61,680.
Rep. Heather Sirocki, R-Scarborough, said she supported the contract and the work Alexander’s firm was in the process of completing because it may lead to savings that could help find the funding to eliminate a waiting list for some program’s within the state’s Medicaid program, MaineCare.
Sirocki also echoed a theme of the LePage administration. She noted the separation of power between the Legislature and executive branch activities and defended the administration’s ability to act without guidance or input from lawmakers.
“The executive branch is a different branch of government, and they have the right, as have previous administrations, to look at cost savings,” Sirocki said.
But Sen. Margaret Craven, D-Lewiston, the Senate chairwoman of the Health and Human Services Committee, shot back.
“This $1 million would have gone a long ways toward reducing that wait list,” Craven said.
Lawmakers on the Legislature’s budget-writing Appropriations Committee are expected to discuss the contract Thursday at the State House.