When Jackson recently announced the hiring of PricewaterhouseCoopers as a new consultant, its governing board and the County Commission demanded details:
How long was the contract? And for how much?
The answers: $50,000 for one month, extensions to be negotiated.
Mayor Carlos Alvarez said it's nonsense'' to imagine that will be the final bill, which he believes could run into many millions.
The overseers were suspicious because the financially desperate Jackson Health System has a reputation for spending millions on outside services, sometimes without board approval.
The PricewaterhouseCoopers contract was approved by the Public Health Trust, but in other instances Jackson executives sneaked in outside services by starting them out at under $100,000 -- the threshold for needing board approval.
In one example revealed by The Miami Herald last month, Capitol Consulting was paid $1.8 million, including the costs of four of the firm's employees hidden on the Jackson payroll -- much of that done so that the board wouldn't be aware of the deal. Eventually, the Capitol contract was brought before the board -- and was approved.
Earlier this month, in an event that became lost in the crush of news about Jackson's plans to recover from its massive deficit, the board put its foot down on another stealth contract -- sending a message to Jackson executives that they were tired of the practice.
The issue involved Omega Solutions, a Fort Lauderdale company hired on a $99,900 contract to help with Medicaid billing. Jackson executives say the system has already received $6.7 million from Medicaid because of Omega's efforts and is expecting as much as $6 million more when Medicaid processes claims. By the time the contract came to the board, Omega said it was owed $4.3 million for its efforts.
Trust members reacted with anger.
"How can a $99,000 contract become a $4 million contract before coming before the board?" Vice Chairman Angel Medina asked.
"We're like potted plants. Things come before us -- it's a done deal," complained Judy Rosenbaum, a retired Medicaid administrator. Why should we be paying somebody for what we should be doing ourselves?"
CUT OF THE MONEY
Ted Lucas, the Jackson vice president of procurement, said Omega was brought in as a pilot project. The agreement called for Omega to get 40 percent of the Medicaid money it obtained.
In May 2009, Lucas signed the Omega contract, but the consultants worked with Sandra Johnson, vice president of revenue cycle. Johnson left Jackson in January and now works in Atlanta. Carmen Pla, the new head of revenue cycle, said Omega was brought in "at the time of the system conversion," when Jackson was switching to new billing software. Omega was hired "to be sure we had no lost revenue during the conversion period," Pla said.
Steve Cherry, an Omega executive, said his company has special software to analyze insurance claims. He showed The Herald the contract -- which makes no mention of "pilot project'' or a $99,000 limitation.
Omega, which works with hospitals nationwide, took Jackson's Medicaid claims that had been rejected and "mined'' them for opportunities, Cherry said. When it found them, Omega nurses would study the medical charts and re-bill Medicaid.
Starting in August, Omega sent bills to Jackson that totaled more than $100,000. On Aug. 19, according to Cherry, Johnson said, "This exceeds my approval authority. I'll have to take this to the board."