ALABAMA DEPARTMENT OF CORRECTIONS
ENDS NAPHCARE CONTRACT
----- Original Message -----
Sent: Saturday, May 03, 2003 6:23 PM
Subject: DOC ends NaphCare contract
By SAM HODGES
Amid cost overruns and lawsuits alleging grossly inadequate health care for Alabama inmates, the Department of Corrections has decided to cancel its $30 million a year contract with NaphCare Inc., of Birmingham, which has handled medical and dental treatment in state prisons the last two years.
The Mobile Register obtained a copy of a letter sent Friday by Corrections Commissioner Donal Campbell to NaphCare CEO and owner James S. McLane, announcing the contract "shall terminate immediately upon the expiration of 90 days from your receipt of this notice."
The letter also states NaphCare is expected to continue to provide medical care to the prisons for that 90 days. The letter does not give a reason for the cancellation, but alludes to a section of the contract that allows either party to cancel for "convenience" with 90 days notice.
Campbell was visiting a prison in north Alabama Friday, and could not be reached for comment.
But DOC spokesman Brian Cor bett confirmed that the cancellation letter had been sent and said the agency would soon request bids for a new health care provider -- an action certain to result in a more expensive contract as state government faces a fiscal crisis.
"This does not relate to the quality of care as provided by NaphCare per se," Corbett said of Campbell's decision. "It's been canceled more for reasons of deficiency in the contract itself."
Corbett said DOC decided the contract provided the agency too little leverage to demand changes from NaphCare in such areas as staffing, administrative policy and cost overruns.
NaphCare officials did not respond to phone and e-mail requests for comment.
The contract between DOC and NaphCare dates to early 2001, after NaphCare won a controversial bidding process initiated by the administration of former Gov. Don Siegelman. Private practice lawyers oversaw the bidding, and leaned on competitors to reduce the size of their bids.
NaphCare had never handled a state prison system before, only county jails. That fact -- and the size of its bid -- led to criticism by competitors.
"It was not realistic, from the word go," said Gary McWilliams, vice president for sales and marketing of Correctional Medical Services of St. Louis, which had the Alabama contract before NaphCare won it. "Now the chickens are coming home to roost."
Earlier this year, Campbell had to ask the Legislature for $6.9 million to cover cost overruns legally shifted to DOC by NaphCare under the contract's terms.
DOC has also found itself a co-defendant with NaphCare in lawsuits filed by prisoners' rights groups. One targets treatment of HIV inmates at Limestone Correctional Facility in north Alabama. Another claims NaphCare and DOC have failed to provide adequate care for inmates at Tutwiler Prison for Women near Montgomery.
A more recent suit, filed by the Southern Poverty Law Center in Montgomery, alleges that DOC and NaphCare are not providing adequate care of diabetic inmates.
Certain allegations in the suits have been supported by an outside consultant's periodic audits of prison health care in Alabama. Those audits -- performed by Jacqueline Moore & Associates of Chicago and disputed by NaphCare -- have found understaffing in physicians and nurses, lapses in care for chronic conditions such as diabetes, and medicine shortages.
Rhonda Brownstein, a lawyer for the Southern Poverty Law Center, applauded Campbell's decision to cancel the NaphCare contract. But she noted that studies show Alabama has long spent less per inmate on health care than any state.
"Getting rid of NaphCare will not solve the problem," she said. "The DOC, and ultimately the Alabama taxpayers, will have to bite the bullet and triple the amount currently spent on medical care."
McWilliams agreed that Alabama will have to pay its next health care provider signifi cantly more, even as the state is facing a $600 million deficit in its operating budgets.
"To do it right, you'd have to be upwards of $45-$50 million, if indeed you wanted to bring service to levels more in keeping with what you see in other parts of the country," he said.
McWilliams said CMS -- which has faced criticism and lawsuits for its work in other states -- is "very interested" in regaining the Alabama contract.
He added that Alabama needs to get the bidding process under way quickly.
"Normally on these statewide programs, you have a minimum of 90 days -- many times 120 or 150 days -- to transition and get a program up and running," he said. "They're putting themselves behind the eight ball."
Tamara Serwer, a lawyer for the Southern Center for Human Rights in Atlanta, which has sued on behalf of Tutwiler inmates, said she too was concerned about the transition.
"My experience with these kinds of situations is that this is often a very difficult period, as far as patients actually getting care," she said.
NaphCare's contract was due to run through February 2003, with an option to extend. It's unclear whether NaphCare might fight the contract cancellation, or join in a new round of bidding.
Corbett said NaphCare "theoretically" could win the contract again, but he expects DOC will require of bidders at least five years experience in handing a large prison system, something the company does not have.