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Health Contractor Maximus Fined in BC, Investigated in US

Firm has long record of legal controversies, Tyee reported last year.

By Carrie-May Siggins 29 Jul 2005 | TheTyee.ca

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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:

B.C. Contractor Maximus Mishandled Public Funds in U.S.

Public Spending behind Closed Doors  [Tyee]

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