Neo-Math Of Entitlement

The Miami Herald writes about the wonderful world of Florida’s privatized services: Prison vendor sues state over secret deal

The lawsuit was filed by MHM Correctional Services, which wants to extend its 2 ½ year contract to provide mental health care to more than 15,000 inmates in a dozen South Florida prisons.

In an effort to save money, the state privatized prison health care several years ago, but a legislative watchdog agency said in a report last January that the change has yielded “mixed results.”

The Department of Corrections wants to fire MHM and replace it with a rival, Correctional Medical Services of St. Louis, even though CMS would charge the state $5.5 million more for the same service over a five-year period.
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MHM says the prison system began “secret” and “closed-door” talks with CMS more than two weeks before MHM and another vendor learned that their proposals were rejected. The department said the state has agreed to pay CMS $70 per inmate per month, in the first year of the contract, but with a $2.50 increase in each of four successive years. CMS would have a 30-day grace period to fix contract violations before the state could impose fines, which MHM called highly irregular.

MHM is paid $77.62 per inmate per month under its current contract, which will expire July 1.

In a statement, CMS said: “The negotiation process utilized in this situation is specifically allowed by Florida law,” and noted that MHM failed to meet the necessary financial criteria to successfully bid. CMS also said its contract will save the state nearly $1.7 million in the first year, compared to what MHM is now charging the state for the same services.

First off, the meaning of “mixed results” from that legislative oversight group is not what most people think. Out in the real world is means “abysmal failure”, but the Republican legislature thinks that would be too prejudicial to their attempts to enrich their friends.

Given that MHM is charging $77.62, and the CMS price of $70 saves about $1.7 million, the overall cost of the current contract is in the area of $17.3 million/year.

MHM claims the CMS contract will cost the state an extra $5.5 million over the 5 year span, but the CMS hourly rate doesn’t exceed the current MHM rate until the fifth year, it only climbs to $77.50 the fourth year, still below the current $77.62 that MHM is getting. If the basic information is accurate the state will save $2.9 million over the five years of the contract with CMS, versus an extension of the current contract with MHM.

MHM obviously failed to buy the right legislators or agency heads, so they should be suing their lobbyist, not the state. The state is in a meltdown financially, so they have to find any way they can to save some money, and get the savings as soon as possible. MHM should have reduced their rates a little.