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Health Contractor Maximus Fined in BC, Investigated in US
Firm has long record of legal controversies, Tyee reported last year.
Maximus, the U.S. company in charge of BC’s Medical Service Plan (MSP) and PharmaCare, is being fined for the second time this year after failing to uphold a requirement of their contract with the BC government. The company must maintain a three minute waiting time for people calling in to the automated services. Currently, the waiting time is five times that much, at fifteen minutes per call.
The National Union of Public and General employees (NUPGE) released a statement yesterday calling on the BC government to terminate the contract with the company.
“Surely these basic violations that Maximus has been fined for should trigger cancellation provisions in the contract,” union president George Heyman was quoted as saying. “It may well be time to look at bringing this important service back under public administration.”
“The fact the company has been fined not once but twice for failing to live up to basic quality of service contract provisions is disturbing and should sound alarm bells,” says Heyman.
Wants new $135 million BC contract
The lag is partly due to the unprecedented number of calls that came in as a result of letters sent out by BC health about changes in premium coverage requirements.
"In fairness, in June they received 177,000 calls about MSP requirements, which was a record number for that service and double what is a normal number of calls for that period," BC Health Minister George Abbott told the Victoria Times Colonist. "But we'll be following through every month to make sure the service levels provided are consistent with levels set out in the contract.”
Because employees of the two programs both work with the phone lines and conduct paper work, mailed applications are slowing down as well. According to the Times, in June, 62 per cent of new applications for MSP were processed within 40 days. In 2004, that number was 64 per cent. Both are far behind the Maximus target, which was 99 per cent within 20 days.
Maximus, now in the process of bidding to privatize BC Nurseline, a contract worth $135 million over 15 years, is also being investigated by the U.S. Attorney for the District of Columbia, according to Bill Tielman of 24 Hours.
According to the story, shareholder disclosure documents filed by Maximus state that: "The U.S. Attorney's Office appears to be investigating issues pertaining to compliance with federal health care laws. Maximus does not believe it has violated those laws and is cooperating fully with the U.S. Attorney's Office."
Maximus and the BC liberal government drew fire last year when the company won a ten year, $324 million contract to privatize the health insurance programs. Critics feared that allowing a US based company to collect thousands of medical records left BC residents vulnerable to the Patriot Act, which would allow the US government unlimited access to their information.
US controversies
Maximus brought a history of controversies to its dealings with the BC Liberals, as a Tyee special report revealed on December 3, 2004.
Maximus was found by the state of Wisconsin to have misappropriated public funds. A legislative audit of the company’s privatized welfare program found that the company billed more that $400,000 in questionable expenses to Wisconsin taxpayers, plus $1.6 million that lacked documentation for reimbursement.
According to the audit, as reported in The Tyee, staff members went on a $15,000 Lake Geneva vacation. The company also inappropriately used funds to buy $1.1 million in advertising. The company has since fixed up the program and has since been used as a template for other privatized welfare services.
In New York City, then city comptroller Alan Havesi refused to sign off on $104 million worth of contracts with the city because of family ties between New York City Human Resource Administration commissioner John Turner and his father-in-law, who was a Maximus subcontractor. Eventually, the New York State Supreme Court ruled he had overstepped his bounds and gave Hevesi the order to sign the contracts.
Maximus has also had problems with Florida, West Virginia, New Jersey, Arizona and Colorado, where Maximus’ contract was discontinued after the state received over 3,000 complaints about their services.
The decision on the BC Nurseline contract is expected to come through in September.
Carrie-May Siggins is on staff of The Tyee.
Previous related Tyee articles:



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Grumpy
6 years ago
Comments on "Health Contractor Maximus Fined in BC, Investi
I wonder how much Naximus donated to the provincial liberal Party?
Is their any connection with Campbell junior and Maximus?
Enquiring minds want to know!
Grumpy
6 years ago
Maximus, those **** typo's will be the death of me!
Fiat lux
6 years ago
In all the readings I've seen on privatizations in any country, I can't recall a single case where it had improved services and cut costs to the public. Nowhere on Earth. The story is always poorer services, poor wages, huge cost incraeses and so on and on, yet governments still fall for this privatization baloney, supported by the stupid public. E.g. BC's road services have ben privatized by Zalm for some 17 or 18 years now. Can anybody claim that the act of privatization had improved services at a lower cost to the public ? How about BC Rail, or Accenture ? The same story all over. Privatizations have killed and bankrupted the Argentinian economy, once at par with Canada. Millions of children in Africa, who used to have some basic education, now have none, thanks to the criminal organizations called World Bank, IMF, WTO and so on. The same story in all the former Soviet and satellite republics. Are these politicians, who go for it, crazy, or just plain crooks. I would say the latter, or they wouldn't be involved in the GATS talks at the WTO in Geneva, right now.
The much touted PPP doesn't mean Public Private Partnerships, but Plundering the Public's Purse. Some horrible examples in Britain in Australia. Ed Deak, Big Lake.
runningdog
6 years ago
Those who are in favour of privatization usually kneel to the "God of Free Markets". Nevermind that in reality there are no truly free markets. (Adam Smith's vision was of thousands of small businesses with the same product(s) and the same information (ie transparency) acting in their own short-term self interest. No account was made for fraud, altruism, and the long term would be taken care of by the "Invisible Hand".) The market place is an efficient way to allocate resources amongst MANY competing businesses. A business is efficient or dies; the lowest sustainable price is available to the consumer.
Public services, however, such as medical care, water supply, power, transportation infrastructure tend to be large single source services which when privatized become monopolies. Monopolies are not subject to competition, there are no market efficiencies to be had. A monopoly can make it's money (especially with an essential service) by increasing prices and/or reducing services. If the price is regulated or there is only a certain amount of money in the pot (medicare) then the way for a company to make money is to cut services.
Several American cities (Philadelphia?, Atlanta?, and others) have privatized water services and education and in many cases, after many problems, have rescinded the contracts. In the case of water services, boil water advisories became almost weekly occurrences in some locations. More than one city with Edison(?) providing educational services saw student performance plummet against its previous record and that of surrounding counties.
A study published in the New England Journal of Medicine comparing hospital costs for non-profit versus for profit hospitals showed that the for profit hospitals were less efficient because of increased administrative overhead, requirements for advertising, and dividends to shareholders.
mbraun
6 years ago
I would further your statements about monopolies runningdog: the examples that you cited are all perfect examples of the "natural momopoly". The thing about natual monopolies is that even neo-classical economists appreciate that they are run better with government "intervention". Without regulation what results is exactly what we are seeing in the new era of neo-con economics: drastically reduced service quality and increased costs (to the public). Unfortunatley, we're constantly taught by the msm that gov't and business do not mix; ergo, we'll be hearing about the "virtues of p3s for some time yet.
Ron Erwin
6 years ago
It's easy to provide good service when you have the entire public purse to plunder. Unfortunately private business has to control costs in order to make a profit. Unlike Govt. who does not need to control cost. They simply send out a higher tax bill. Meanwhile a disproportionit amount of money goes to Public Sector Unions. Too much really, that is what is causing our standard of living to slide to 75% of the USA.
A responsible Govt. should be trying to offload as much salary and benefits as it can. This is not easy as we have too mant Govt. run monopolies. These don't help Canadians, they hurt us.
In Alberta you can go to a kiosk in the mall to aquire a marriage licence. No CUPE members there.
If Govt. is so good at providing service then I assume they should run everything like in Cuba.
Besides, I believe some of what BC has done to privatize such things as cleaners at hospitals instead of HEU members, is sabatoged by sympaathetic members of the public as well as employees themselves who are not happy.
Fiat lux
6 years ago
As I wrote, "....governments still fall for this privatization baloney, supported by the stupid public". I should have written, "the stupid part of the public"..... Ed Deak, Big Lake.
skeptikool
6 years ago
Privatization is one of the mantras of this stench-ridden government. When multi-million dollar deals are made, who can trust those supposed to be guarding the interests of taxpayers?
We may strongly suspect sweetheart deals but, in all probability, will never know what transpires under the table.
Who can forget that sweet deal with AirCare that we are all still, in my opinion, overpaying for?
When casinos were allowed in this province, a maximum $5 wager prevailed. This government, that has campaigned against expanded gambling while crucifying the NDP for its Nanaimo penny-ante bingo adventures, now allows a $2,500 maximum bet and allows thousands of slot machines.
We will never know if our elected and top bureacrats were feted in Vegas, Palm Springs or some such retreat, or what happened under the tables and/or under the blankets with whom, before that mother of all expansions became fact.
chuckstraight
6 years ago
And as per usual, Ron Erwin has been sucked in hook, line , and sinker to the big lie. As taxpayers we should be concerned that our services are bit by bit being sold off to American interests who profit from our tax monies. When are all Canadians going to wake up and become more aware of what is going down?And as usual, Ron seems to believe that union wages are the cause our standard of living to go down. Nothing to do with the inflationary costs of homes, fuel, food etc,etc? Ron, do you actually believe the BS you write?
jesterjogger
6 years ago
Dear Tyee
I know this entry is'nt related to the disgraceful bc government and it's ill-conceived privatization schemes but could you please remove the mega-creepy hatching larvae picture? It's giving me nightmares.
Camgra
6 years ago
It is Nafta that has made it possible. Rescinding Nafta requires 6 months notice.
Fiat lux
6 years ago
Talking about the new political mantra, virtually unlimited gambling. There's a new gambling casino South of Williams Lake on Hwy 97. We usually go to town twice a month and arrive in that vicinity between 10-11 am. The parking lot is not necessarily full, but there are a lot of vehicles in it already by that time.
When it comes to slot machines, somebody wrote in the local paper that some people are so addicted to them that they're wearing diapers, so they won't lose any time going to the washroom. This is what the deregulation enthusiasts call a "globally competitive, wealth creating economy". Ed Deak, Big Lake.
warpengi
6 years ago
RON, how about the fact that most of the tax in this country has been offloaded from corporations to personal taxes. Since that is the case then higher wages would mean more income taxes. Lower wages for the same services farmed out to corporations, P3's whatever would see less money in income taxes so less money to pay for the services.
As has been pointed out by others, privatization (especially in relation to medical services, education and utilities) has proven to be a nightmare for the public.
Bobb999
6 years ago
To Beers /Ghostmachine: Give it a rest. The
Tyee had every right to remove the abusive, possibly libelous post.
There remain questions about the Maximus fines
that so far the BC Fibs are refusing to answer:
-They won't tell us the amounts of the fines. Were they deterrant level or wrist slaps?
-We don't know precisely what the fines were for. Were they for long waits on the phone only, or were there other reasons?
For a gov't that claims to be transparent, they
keep the public in the dark about a lot of taxpayer funded public serices. eg. The secrecy of BC Ferries, which Freedom of Information laws do not apply to, and therefore they are not accountable to the public.
allan
6 years ago
Bobb999, I'm still waiting for something resembling a shred of information regarding the search, seizures and accompanying arrests of three political appointees within the Liberal cabinet's corps of political aides nearing two years ago.
As for the ferry service now, I think they should send that Hahn back to the Rykers Island ferry run in NY City.
Bobb999
6 years ago
allan: yes, that's another good one, the Leg. raids.
And the Libs were clever to stay hushed on the amount they overspent on gov't "feel good" ads last year before the election. They went over budget by 50% or something.
Those are just a couple of many issues that should have seen more media coverage and investigation of prior to the election. CanWest did it's darndest to help the gov't get re-elected.
I say give the Ferries back to the taxpayer and make all taxpayer funded services be wide open to public scrutiny.
Eddy Haskel
6 years ago
Actually Ron... big biz just goes whining to the taxpayer when they need to show a profit. Air Canada, Bombardier, all auto makers, Cominco, Railways, you name it because the list goes on and on and on. And big biz will make you line up for services too, just like the supermarket, bank, and drug store because "your account is important" to them.
Working Man
6 years ago
I suggest all leftie free-loaders take some direct action in tackling the "homeless problem."
In line with all the tenets of the socialism and "direct action" they espouse, why should they completely skip capitalist-stooge-gordo-Mayencourt's agenda and directly admit homeless into their homes? Then the homeless will not be homeless anymore, and the socialists can wax supreme for having showed Gordo they really want to take "direct action" that does not involve smashing things and running away.
Then there won't be any more homeless.
allan
6 years ago
Working man, you told us in another thread here at Tyee that you were going to spend today on holiday with your "loved ones".
I'm curious. Is the love not returned or are there other reasons you continue to lurk around here on a nice August holdiday?
rockon
6 years ago
Unfortunately most of the Canadian public is either unaware or uncaring of the insidious aspects of the NAFTA agreement. Taking back control of formerly public services opens up the taxpayer to lawsuits from private corporations for "lost profits". All is not lost however, provinces did not sign on to the NAFTA agreement, the Feds did. So a new provincial government with the balls to cancel a bad privitization agreement would not have to pay any secret court decision for compensation, the Feds would. So sad that one way or another it all comes out of our taxpaying pockets. But, if enough provinces took a stand, the political pressure on the Feds might force a change. Remember Cretien promised to re-negotiate free trade as an election issue, but when he met Clinton he said "yeah, well, whatever." He took a popular stand to get re-elected, but faced no pressure afterwards to carry through with his promise. We sat back in the 70's and watched the OPEC nations get rich, and now that Canada is a top supplier to the US for oil, we are stuck in an agreement that limits us to giving the US war machine oil for the same price that we charge ourselves. The stupidity of Neo-cons never ceases to amaze me.
Fiat lux
6 years ago
NAFTA is a criminal, political treaty to remove the democratic decision making powers of societies and replace them with corporate dictatorships. However, it is only the beginning of a long line of far worse sellouts of human rights, like the FTAA, etc.
Even NAFTA is chickenfeed in comparison to the now being negotiated GATS (General Agreement on Trade in Services), at the WTO in Geneva. GATS will throw all public services, medicare, education, water, power and 160 more up for grabs by multinationals. Cutting services, removing all public control and increasing costs to the public, as all privatization schemes do. It also includes the wording of the discredited MAI of 1995-97, totally destroying any vestiges of democracy.
All this is eagerly pushed by the Liberals and the Conservatives to please their behind the screens masters.
Yet, thanks to the controlled media, the Canadian public has very little idea even of what NAFTA really is about, except the official line, that the GDP rose and "our exports doubled under NAFTA". Perhaps 1 in 100 of the public ever even heard of the GATS.
Mulroney published the text of the FTA and 57% of Canadians voted against him. Chretien learned his lesson and kept and signed NAFTA in
secret and got away with it. Now, the GATS negotiations are wrapped under tight cover so that people won't find out that they're being sold out, until it is to late.
And this is what "wealth creating neoclassical market economics" and the "globally competitive equilibrium" are about, while a few multinationals become the lords and masters and humanity goes down the tube. Ed Deak, Big Lake.
jesterjogger
6 years ago
Look at what just happened in Squamish with a huge CN Rail toxic spill in the Cheakamus River. F'in gordo and his fraser institute guru's stabbed us in the back yet again.
Everything these lying morons say is affront to logic and common sense. How can a corporation, whose primary mandate is to make shareholder's profit, be expected to uphold any semblance of an adequate preventive maintenance program? Add to that their puppets in right-wing "think-tanks" and corrupt and complicit goverments like the bc liberals removing regulations to protect us from this very type of situation and OFCOURSE you have a man-made recipe for disaster.
F*CK YOU GORDO! I hear you'rer coming up to Squamish in the near future. We've saved some river water and a couple of dead fish for you ASSH%LE!!!!
I can't wait for the suprises in store for us with BC Gas being sold to an enron clone outta texas ALREADY under investigation for numerous ENVIRONMENTAL AND HEALTH AND SAFETY VIOLATIONS.
trickyrick
6 years ago
Yes maybe we should go back to public water systems such as the one run by
the slackers at Walkerton. As far as I know nobody has died with a privately
run water system, because if that were to happen the liability side of that
problem would be huge, well beyond the self imposed limits mandated by the
government.
As for the Maximus contract, well we can agree on that one at least but for
very different reasons. I think that a Canadian company could have a should
have been found, even at a higher cost than Maximus. In any case at least
there os a provision in the contract that deals with such potential
contracts and we, the taxpayers have recourse. What would have happened if
it was run by the public sector and people had to wait for 15 minutes or
more, you guessed it nothing with no possible recourse.The Argentinian economy on par with Canada, not in my life time has it been.
The place was run by a despotic dictatorship for most of the last 100 years
and they are paying the price. Every contract with every company in that
place was run by a government agency directly controlled by one of it's
government leaders. Once the pillars of corruption were removed so that they
could begin to compete worldwide businesses were sent into shock and the
economy collapsed. You simply cannot have a government run system of state
businesses compete with a free market system and expect to trade to your
benefit. Maybe you can force your own people to suffer and pay the obscene
prices necessitated by all the graft and corruption so rampant in a country
such as Argentina but if you want to trade with the rest of the world your
prices are going to have to be "sans" the corruption tax or we won't buy.
In essence that is what the World Bank does. They are a force that operates
in an environment that does not support corrupt regimes. Naturally third
world countries that have a cozy relationship with family run government
operations are not happy with the World Bank. Think Philippines and Marcos
Totally unregulated capitalism is a mistake. Adam Smith is often
misunderstood as a man in favour of a free enterprise solution to
everything.In fact the champion of Free?Enterprise capitalism believed in a
controlled capitalist system, something I too support.
April
6 years ago
I immigrated to Canada in mid April, and have lived in Vancouver since. I applied my MSP few days after my arrival, and according to regulations my coverage should have begun already July 1st. I used to live in BC before, and had therefore a Medicare card before, so this is a replacement card. I heard nothing
in early July so I phoned them, and was promised to be placed as a priority receiving the card in 10 days. Nothing by mail by the end of July so I phone again. They promised to send me the card in few days. Mid August I phoned them again, and this person promised to bring my application to his supervisor so that something would get done. He then asked me to phone back next week. I would like to know who can I complain about this, if I still do not get my MSP card after next week. It will start to feel like they will never send me one. Their services must be regulated by someone. My friend received his card long time ago even thhough me moved here around the same time as me.