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Facts, Figures Debated Regarding State Contract

Posted on: Friday, 11 November 2005, 12:00 CST

By Kathleen T. Brady

O'Fallon-based Medical Transportation Management Inc. bid $23 million for the nonemergency medical transportation services because it experienced competition for the first time, according to the state Office of Administration.

It is our belief that the biggest reason for the change of price is it was open competition, said Michael Keathley, commissioner of administration.

He was comparing the contract MTM had with the state last year, which was around $41 million, to this year's latest bid price of $23 million. Although MTM was the lowest bidder for the contract, Atlanta-based LogistiCare Inc. was awarded the contract at $25.5 million based on certain services the company was willing to provide, such as providing a 24-hour call center for customers, Keathley said.

Announcing LogistiCare as the new provider of nonemergency medical transportation for the state's Medicaid patients, Keathley cited how much money the state would save with LogistiCare's $25.5 million contract versus MTM's previous $41 million contract.

Carol Rosse, MTM spokesperson, said in a prior interview that MTM lowered its contract bid drastically because of the cut in services the state provides for its Medicaid patients, such as dental or physically therapy.

But the only Medicaid cuts Keathley cited were the cuts to the number of Medicaid-eligible patients in the state, which dropped 9 percent from last year.

There is a slight reduction in the eligibles, less than 10 percent change in the number of Medicaid recipients who would be eligible for this type of service, Keathley said. If you changed the bid price based on that, then there would be a $4 million to $5 million change from last year to this year, he said. But their quote is $15 million less.

In response to Keathley's statements, Rosse said MTM was reimbursed $36.2 million by the state for fiscal year July 2004 to June 2005 and that the 10 percent reduction in Medicaid-eligible people equates to a number of trips, which will lower the amount of the program.

There are Medicaid-covered services that have been eliminated from this program, including rehabilitation, dental, pharmacy and other high-utilization services. If you go on http://Missouri.gov, and you go into the Division of Medical Services, there's a listing of everything they've eliminated from the program, she said.

The Letter

Last week, Keathley sent a letter to Missouri Attorney General Jay Nixon asking him to look at possible anti-trust violations concerning some providers of nonemergency transportation.

In the letter, Keathley writes that the reports indicated that many of the transportation vender are engaging in unfair trade practices by refusing to negotiate with Logisticare in a lawful manner and that there may be collusion involved in an attempt to drive up prices that would take more money from Missouri taxpayers.

Ed Domansky, director of corporate communications for LogistiCare, said that members of a group known as the Missouri Transportation Coalition are using intimidation and threats to keep other providers from contracting with LogistiCare.

When asked if the amount of pay the venders were being offered was a reason for the resistance, Domansky said that LogistiCare is willing to pay its transportation venders what they were getting from the previous broker.

We believe that it's a punitive action against LogistiCare being waged by supporters of the previous broker, who are unwilling to sit down individually and work with them. And so to that extent, we hope that the Missouri Attorney General's office expeditiously moves forward with the investigation of this disruptive behavior.

Carol Huskey, owner of Huskey's Gogetters Inc., said her company has been a provider of nonemergency medical transportation for MTM for six years. Her company is located in Jefferson County, and she transports Medicaid patients that live in St. Francois, St. Genevieve, Iron, Jefferson, Franklin, Washington counties.

Huskey said she has not contracted yet with LogistiCare for several reasons.

They cut the prices in half. They want to do all their own dispatching . . . for trips up here. . . . They want you to take their insurance, which, I might add is 3-3/4 more than what the state requires you to carry. They want you to carry $1 million liability, which the state does not require that, she said

I run 17 vehicles, and I pay $5,000 a month on just pure liability on $300,000, which is more than what the state requires, and . . . I just absolutely could not pay $1 million worth of liability a month.

She said that LogistiCare has not offered her the same rate of pay that she received with the prior broker.

Reading from the latest contract LogistiCare sent to her, Huskey said LogistiCare would pay $10 for the first 5 miles for a person who is able to walk, $15 for the next six to 10 miles, $20 for the next 11 to 25 miles and so on. That is half of what MTM paid, she said.

I also heard that [LogistiCare is] making special contracts for special venders, which I don't think is right because the little guy ought to have just as much a chance as the big guy. Now, I understand they cut a special contract with EMT and with Oats. Well, they're huge; I'm not. And I can kind of understand that, but by the same token, it's not fair to the little guys. As they can cut that deal for two outfits, they can cut it for everybody.

Huskey, a member of the Missouri Transportation Coalition, said she has not heard of the coalition taking any action toward the situation. She said she just hears people complaining at the meetings she attended recently.

Since state Medicaid nonemergency medical transportation made up about 99 percent of Huskey's business, she said she does not know what she will do next.

I always was satisfied when MTM was the broker. And I didn't explore any other avenues, and unfortunately now it's coming back to haunt me.

When asked about his position on the claims that some providers are being paid half of what they were getting from MTM, Keathley said, First of all, we are hearing no such number, and I've heard absolutely no one quote a number like that. In fact, Oats just signed an agreement with LogistiCare at the same rate that MTM was paying them as did several providers, I know for a fact, in St. Louis.

When asked if the claims were true, Keathley said, That's LogistiCare's individual dealing with the individual provider. [LogistiCare is] responsible to the state for putting together a network. Obviously they're going to have to do something to make enough people happy to provide that service.

The Attorney General's office replied to Keathley's letter about the possible anti-trust violations by stating, As the state's chief legal officer, I am concerned the contract you entered into with LogistiCare might not be fully implemented for those required state services.

Jim Gardner, spokesperson for the Attorney General's office, said the attorney general will be looking into whether LogistiCare is fulfilling its part of the contract with the state.

Source: St. Charles County Business Record

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