Republicans fight back against criticism of $1 million no-bid contract for welfare study

Posted Dec. 12, 2013, at 7:01 p.m.
Mary Mayhew, commissioner of the Maine Department of Health and Human Services.
Contributed photo
Mary Mayhew, commissioner of the Maine Department of Health and Human Services.

AUGUSTA, Maine — Republicans on the Legislature’s budget-writing Appropriations Committee on Thursday defended a controversial no-bid $1 million contract with a Rhode Island company to study Maine’s welfare programs.

The Maine Department of Health and Human Services signed the $925,000 contract with the Alexander Group in September, but did not make it public until November. The group’s CEO, Gary Alexander, and Republican Gov. Paul LePage have come under withering criticism from Democratic leaders and others in recent days after the consultant failed to deliver the first part of its analysis by the Dec. 1 target date.

When Democrats on the Appropriations Committee launched new criticisms of the Alexander Group during a committee meeting Thursday at the State House, Republican lawmakers jumped to the consultant’s defense.

Maine DHHS Commissioner Mary Mayhew also issued a statement Thursday defending her agency’s decision to contract with Alexander’s company, which she described as a credible and competent vendor.

The group, hired for $925,000, is contracted to issue a five-part series of reports and recommendations aimed at finding savings and other efficiencies within the state’s welfare programs. The first portion of the report was meant to examine the impact of a possible Medicaid expansion in Maine.

“They’ve done similar types of analysis and work for other states — five other states I believe it is,” Rep. Dennis Keschl, R-Belgrade, said. “In most of those states, they’ve found ways to save money in the program.”

Rep. Kathleen Chase, R-Wells, the ranking Republican on Appropriations, agreed that efforts to find fraud, waste and abuse within the state’s welfare system, which consumes a large portion of the state’s overall budget, made sense to her. She also said the final recommendations from the Alexander Group may or may not be implemented based on what the Legislature decides.

The last portion of Alexander’s report is not due until May, after the Legislature adjourns.

Meanwhile Adrienne Bennett, LePage’s press secretary, confirmed Thursday that the governor has met twice with Alexander in Augusta.

The first meeting occurred in March, before Alexander was awarded the contract for the work. The second meeting came in October after the contract was issued, she said.

Bennett said the first meeting with Alexander was to discuss fraud within Maine’s welfare system. She also said the company had been updating DHHS with verbal reports so the notion that the consultant had missed a target due date was misinformed.

“He has a track record of working with the federal government and working to receive flexibility for [Medicaid] plans that work with various states,” Bennett said.

The decision to hire Alexander was made by officials at DHHS and LePage was not directly involved in the contract process, according to Bennett. She also said she knew of no written communications between LePage’s office and DHHS regarding Alexander’s contract.

In her statement issued to the media via email Thursday, Mayhew said DHHS had issued other no-bid or “sole-source” contracts in the past, some of them for amounts larger than that paid to the Alexander Group.

“The notion that the cost of this contract is larger than most and, as such, should have gone out to bid is motivated by politics and reflects both selective and short-term memory,” Mayhew said in the prepared statement.

She also noted that part of the delay in the first portion of Alexander’s report was because DHHS did not produce data needed for the analysis in a timely manner.

“We are confident that the work completed by the Alexander Group will be of the highest quality and will be valuable as Maine continues to reform its welfare programs to make them more efficient, cost-effective and sustainable and to ensure that we are serving those who are most in need,” Mayhew said.

Democrats, however, said they remained concerned and frustrated over the lack of information on how well Alexander’s company was vetted.

This week, Pennsylvania’s Auditor General Eugene DePasquale, a Democrat, questioned Maine’s lack of research on the Alexander Group before signing the contract. Alexander served as secretary of Pennsylvania’s Department of Public Welfare until February 2013. An audit done by DePasquale’s staff suggested mismanagement by Alexander cost the state $7 million in increased Medicaid costs.

“There’s $7 million missing — attributed to this leader in the state of Pennsylvania, that’s massive,” said Rep. Mike Carey, D-Lewiston. “Maybe there’s a good reason for that. Was that a conversation DHHS had? I don’t know, I would love to ask him. … How do we know he is going to be a good steward of the money here?”

Republicans dismissed the Pennsylvania audit, noting the increased costs were puny when compared with Pennsylvania’s overall budget.

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