Miami-Dade County

Jackson costs balloon without warning

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?"


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."


Johnson told The Herald Friday that Omega had been much more successful in getting money from Medicaid than Jackson anticipated. She said she had contacted procurement and asked that the Omega contract be sent to the board. "For one reason or another, it kept getting delayed. They needed more information or one thing or another," Johnson said.

On Oct. 6, Omega Chief Executive Ann Fierro e-mailed Johnson: "Hi, Sandra, any update on the status?" Johnson responded: "We contacted procurement and are awaiting a response."

"We thought it would be before the board in September, then October, then November," Johnson told The Herald. "Procurement said it had to be put in Lawson," the new software system, "or they needed more information."

Over several months, Omega pestered Jackson about getting paid for its growing bills. Cherry says Johnson eventually stopped answering e-mails and they went to the procurement people. On Dec. 12, Omega says it sent a letter to John Copeland, chairman of the Public Health Trust, and Angel Medina, vice chairman. Omega says it didn't get an answer.

Lucas, the procurement chief, said his people didn't learn about Omega's huge sums until December. They asked for more information and that's why it wasn't presented to the board in January. In February, he planned to present the contract to the board during a revenue cycle workshop, but that was canceled, pushing Omega back to the March meeting, by which time Jackson's economic crisis was red hot and board members were upset about any spending proposals.

"I knew there'd be hell to pay," Lucas said. "But we couldn't delay it." Omega had agreed to reduce its fee to 33 percent of the amount recovered, but the board demanded to know why millions had been spent without its approval.

"Yes, it was a discrepancy," Lucas told the board. "We've already to told them to stop [work] March 15." He said Sandra Johnson hadn't told his department about the huge bills Omega was running up. "We didn't have a way to know."

Board members were not mollified.

"We have said several times: Stop bringing these retro-approvals," Martin Zilber said.


The board took no action on the Omega demand for $4.3 million.

Omega, which has 50 employees, is now talking to lawyers.

‘‘This has been a tremendous financial drain," Cherry said. "We put in all of our resources to help Jackson. We are now in danger of going under because they haven't paid their bills."

The same day that the board refused to approve the Omega deal, Jackson Health System Chief Executive Eneida Roldan had prepared to summit another $99,000 contract. This one was with Jarrard Phillips Cate & Hancock, a Tennessee company specializing in healthcare public affairs for hospitals in need of crisis management.

Jim DeFede of WFOR-CBS4 had said the day before that Roldan was bringing in the company and quoted Miami-Dade Mayor Carlos Alvarez's dismay about the financially strapped hospital spending money on public relations.


When the Omega deal was rejected, a board aide had copies on her desk for Trust members of the proposed Risk Management and Communication Plan, which was scheduled for discussion from 10:45 a.m. to noon.

Roldan, however, never introduced the item. After the meeting, Roldan said she had decided against hiring the group.

"We were looking for solutions," she said, because the negative publicity about Jackson's financial woes was causing patients and the employees to be "very scared."

David Jarrard said his company worked with Jackson three or four days. ‘‘It is not our role to replace anyone. We assist and move on."

After the criticism from the mayor, "we became a distraction," and Roldan decided not to hire them. ‘‘A contract was never signed," she said.

On that Friday when Roldan was considering the deal with Jarrard Phillips, Vice President of Communications Robert Alonso quit. He told The Herald it had nothing to do with the Jarrard team. ‘‘I want all the best for Jackson," he said. "But I really want to move on and pursue other options."

Related stories from Miami Herald