Legislature(2019 - 2020)CAPITOL 106
04/02/2019 03:00 PM House HEALTH & SOCIAL SERVICES
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Procurement Process & Contracts for Services for Alaska Psychiatric Institute | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
JOINT MEETING
HOUSE STATE AFFAIRS STANDING COMMITTEE
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
April 2, 2019
3:04 p.m.
MEMBERS PRESENT
HOUSE STATE AFFAIRS STANDING COMMITTEE
Representative Zack Fields, Co-Chair
Representative Jonathan Kreiss-Tomkins, Co-Chair
Representative Gabrielle LeDoux
Representative Andi Story
Representative Adam Wool
Representative Sarah Vance
Representative Laddie Shaw
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
Representative Ivy Spohnholz, Co-Chair
Representative Tiffany Zulkosky, Co-Chair
Representative Matt Claman
Representative Harriet Drummond
Representative Geran Tarr
Representative Sharon Jackson
Representative Lance Pruitt
MEMBERS ABSENT
HOUSE STATE AFFAIRS STANDING COMMITTEE
All members present
HOUSE HEALTH AND SOCIAL SERVICES STANDING COMMITTEE
All members present
OTHER LEGISLATORS PRESENT
Senator Tom Begich
Representative Dan Ortiz
COMMITTEE CALENDAR
PRESENTATION: PROCUREMENT PROCESS & CONTRACTS FOR SERVICES FOR
ALASKA PSYCHIATRIC INSTITUTE
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JASON SOZA, Chief Procurement Officer
Shared Services of Alaska
Department of Administration
Juneau, Alaska
POSITION STATEMENT: Presented a PowerPoint titled "Procurement
Overview".
ALBERT WALL, Deputy Commissioner
Office of the Commissioner
Department of Health and Social Services
Juneau, Alaska
POSITION STATEMENT: Testified during discussion regarding
procurements.
ACTION NARRATIVE
3:04:37 PM
CO-CHAIR KREISS-TOMKINS called the joint meeting of the House
Health and Social Services Standing Committee and the House
State Affairs Standing Committee to order at 3:04 p.m.
Representatives Kreiss-Tomkins, Fields, Zulkosky, Spohnholz,
Drummond, Jackson, Tarr, Claman, Story, Wool, Shaw, and LeDoux
were present at the call to order. Representatives Pruitt and
Vance arrived as the meeting was in progress. Also, in
attendance were Senator Begich and Representative Ortiz.
^PRESENTATION: PROCUREMENT PROCESS & CONTRACTS FOR SERVICES FOR
ALASKA PSYCHIATRIC INSTITUTE
PRESENTATION: PROCUREMENT PROCESS & CONTRACTS FOR SERVICES FOR
ALASKA PSYCHIATRIC INSTITUTE
3:06:08 PM
CO-CHAIR KREISS-TOMKINS announced that the first order of
business would be a presentation regarding the procurement
process and contracts for services for Alaska Psychiatric
Institute.
3:07:13 PM
JASON SOZA, Chief Procurement Officer, Shared Services of
Alaska, Department of Administration, presented a Power Point
titled "Procurement Overview." He shared his background,
reporting that he had worked for the State of Alaska for almost
20 years, with more than 18 years in procurement. He noted that
he held two professional public procurement certifications. He
introduced slides 1 and 2, titled "General Overview," and
paraphrased from the slides, which read:
State procurement is governed by law.
Became effective January 1988.
Based on the Model Procurement Code.
Adopted in whole or in part by at least 30 states.
Applies to all expenditures of state money except
where exempted by statute.
Various competitive processes exist depending on
dollar amount.
Competition is required unless certain conditions
exist.
If these conditions are present, alternate procurement
processes may be pursued.
MR. SOZA explained that less than $100,000 was the cut off to be
considered a small procurement, which entailed a more
straightforward, quicker, and easier to understand process;
whereas, everything greater than $100,000 was a formal
procurement with a more complex and rigid process.
3:09:35 PM
MR. SOZA moved on to slides 3 and 4, "Alternate Procurements,"
and discussed the typical procurement workflow. He explained
that the competitive process would start when an agency program
manager identified the need for goods or services. The program
manager would list the requirements and ensure the funding
before submitting the request to the procurement office for
review of a procurement strategy and the ensuing path forward.
He noted that the procurement officer may assist with market
research, benchmarking, and identification of the competitive
pool and then put together a solicitation document to be issued
to the public and the vendor community. He added that the
procurement officer would act as the liaison between the agency
and the vendor community. The vendor community would respond
with a proposal or a bid, the procurement officer would evaluate
these, make a determination based on the low bid or the most
advantageous offer, and then negotiate as necessary. After the
award, the contractor would begin.
3:11:31 PM
MR. SOZA directed attention to slide 4, "Alternate
Procurements," which read:
There are five types of alternate procurements:
Single Source
Limited Competition
Unanticipated Amendment
Emergency
Innovative
MR. SOZA stated that four of these types of procurement were
available under law and one was available under regulations. He
stated that the single source and limited competition were
closely related, with similar evidentiary requirements. He
explained that unanticipated amendment was found in regulations
and was intended to prevent performance under small contracts
from being grown into a giant contract. He explained that
emergency procurements were for the state to purchase the
necessary goods or services to treat threats to public health or
welfare without the necessity of a competitive process requiring
time that may ultimately put the public in danger. He explained
the innovative alternate procurement as a means for when the
necessary process does not "fit within the box of the
procurement code" and allows for a "distinct procurement plan
that gets vetted by the Department of Law and my office." He
acknowledged that this was not often used.
3:13:28 PM
MR. SOZA continued with slide 5, "Single Source," which read:
Single source procurements:
Authorized under AS 36.30.300.
Requires written evidence supporting:
Why it is not practicable to pursue a competitive
process.
Why award to the identified vendor is in the state's
best interest.
MR. SOZA explained that the review of a single source
procurement, as well as any alternate procurement, was to ensure
due diligence by his office and to guarantee the agency was
complying with the law. He added that his office wanted to make
sure there was written evidence in support.
3:14:26 PM
MR. SOZA shared slide 6, "Alternate Procurements," which
depicted a typical alternate procurement workflow procedure. He
said that this procedure would still start with an agency
identifying a need, developing a scope of the need and
collecting written factual evidence, as necessary. The agency
would work with its internal procurement officer to look at the
request and help ensure that the evidence complied with the
legal requirements, as well as requesting additional evidence,
as necessary, before preparing the document for submission to
the internal agency leadership. After approval, the document
would be forwarded to the statewide contracting office for
further review of the evidence supplied for what was required by
law. After this approval, it would be forwarded to the chief
procurement officer for the ultimate review and approval. If
there were still questions or a need for more information,
additional evidence could be requested.
3:16:25 PM
MR. SOZA paraphrased slide 7, "API Procurement", which read:
First contacted about potential API single source on
January 25, 2019.
Met with HSS leadership and counsel on January 31,
2019.
Single source request received and approved on
February 7, 2019.
MR. SOZA explained that he had first been contacted, by phone,
by Deputy Commissioner Wall late in the day on Friday, January
25, at which time the Deputy Commissioner had explained the
situation at API and asked for guidance to what might be
required under law for a single source procurement. He reported
that he was also invited to a meeting with the Department of
Health and Social Services leadership and their counsel on the
following Thursday, January 31, to speak about the situation at
API and the single source procurement process. He said that
they discussed in more detail the types of evidence necessary to
meet the statutory requirements, including expert written
testimony and other evidence which would substantiate the single
source procurement. He reported that his office received the
single source request in the following week. It was processed
in the normal way with a review by a contracting officer in his
office and then forwarded to Mr. Soza for his approval. He
acknowledged that, as there had been some confusion for whether
this should be an emergency procurement or a single source
procurement, the initial request had been for an emergency
procurement. He said that when he sought clarification, he
found that it was a mistake in terminology. He noted that
Deputy Commissioner Wall had labeled this as an "emergent single
source," which a procurement officer had taken as an emergency
procurement request. He stated that the intent all along had
been for a single source procurement, and he directed attention
to the e-mails which spoke to this. He said the request was re-
submitted as a single source, was reviewed, and was approved.
This concluded his "material involvement in the API contract"
and this granted the authority to the Department of Health and
Social Services to move forward on a contract with Wellpath.
3:19:51 PM
CO-CHAIR SPOHNHOLZ expressed her confusion between an emergency
contract and a single source contract. She asked why it was
thought there was only one provider in the United States able to
do this as there was not a focus on the emergency. She asked
about the research that documented and justified this decision.
3:20:42 PM
MR. SOZA expressed his agreement that an emergency procurement
was for a specific situation. He relayed that the discussions
"spoke to the possibility that yes, there was a short-term
situation that needed to be addressed." He stated that the
Department of Health and Social Services wanted to maintain the
possibility that "if the service provider did a good job in that
window, or performed within that window, that they wanted the
ability to go more long term with that, which leant itself more
to a single source procurement." He reported that the evidence
provided with the request indicated it was in the state's best
interest to award Wellpath as it was the most prepared to
respond to the situation.
3:21:59 PM
CO-CHAIR SPOHNHOLZ asked if there had ever been a multi-year,
$44 million per year, single source contract fast tracked in
this way.
MR. SOZA replied that the evidence provided had an emergent
quality, as there was risk for decertification and closing at
API. He said that, although that applied a sense of urgency to
the situation, the level of review and evidence applied to the
single source request substantiated the application.
3:23:00 PM
CO-CHAIR SPOHNHOLZ repeated her request to Mr. Soza asking
whether he had ever seen a contract of this size awarded in this
manner and in this time frame.
MR. SOZA replied that he could only think of one contract of
similar size to a single source, although it was not in the same
time frame. In response, he expressed his agreement that this
was exceptional.
3:23:42 PM
CO-CHAIR FIELDS relayed that testimony indicated an incident of
immediate jeopardy had been a determining factor in the
selection of Wellpath. He pointed out that this incident had
happened a week after the Deputy Commissioner had "started going
down the road of pursuing a single source contract" on January
22; whereas, the contact with Mr. Soza had occurred on January
25. He asked if it was normal to start the pursuit of a single
source procurement before the event that was the stated reason
for this pursuit.
MR. SOZA replied that he did not know what had precipitated Mr.
Wall to contact him on January 25. He relayed that, at that
time, Mr. Wall had explained the situation with API and had
asked about the parameters for a single source procurement.
CO-CHAIR FIELDS said that, during testimony in the Senate Health
and Social Services Standing Committee, Mr. Wall had stated the
reason for the request for a single source request had been for
the incident of immediate jeopardy on January 29. He asked if
concerns would have been raised if an agency were pursuing a
procurement and then subsequently attempted to justify a single
source procurement based on an event after they sought this
procurement.
MR. SOZA expressed his agreement that this would have raised
concerns but added that nothing dated on January 29 was
considered as part of the evidence in the alternate procurement.
3:26:13 PM
CO-CHAIR FIELDS pointed out that this was the reason Mr. Wall
stated for the request, and he asked what the average size for a
single source procurement was.
MR. SOZA replied that these procurements ran the gamut for size
but that the average would be below $44 million.
3:27:04 PM
CO-CHAIR KREISS-TOMKINS, referencing an earlier question by
Representative Spohnholz, asked about the one single source
contract that had exceeded the size of this single source
contract.
MR. SOZA replied it had been a longer-term contract for
firefighting related equipment. He said that although two
single source procurements typically requested maximum
authorization, the actual contract may come in under that
amount.
3:27:48 PM
REPRESENTATIVE LEDOUX offered her understanding that there had
been discussions between the Department of Health and Social
Services and Providence Alaska Medical Center. She asked if
anyone had reached out to Providence Alaska Medical Center for
immediate support.
3:28:21 PM
ALBERT WALL, Deputy Commissioner, Office of the Commissioner,
Department of Health and Social Services, in response, said that
there had been discussions with several CEOs of hospitals
throughout Alaska, including Providence Alaska Medical Center.
He added that the department had a good partner relationship
with Providence Alaska Medical Center, that he had a
conversation with them yesterday about this very issue, although
he could not recall the exact date on which he had spoken with
them previously.
3:29:23 PM
REPRESENTATIVE LEDOUX asked if Providence Alaska Medical Center
had said they could not do this in a timely manner.
MR. WALL replied, "not exactly in those words." He stated that
he was aware of the capacity at Providence Alaska Medical
Center, and that they would continue to work together toward
meeting these needs.
REPRESENTATIVE LEDOUX asked what Providence Alaska Medical
Center had said.
MR. WALL replied that Providence Alaska Medical Center had
offered to do whatever possible within their means to help. He
added that Providence Alaska Medical Center had shared two
advance nurse practitioners with psychiatric specialty to help
with the situation at API.
3:30:10 PM
REPRESENTATIVE WOOL asked for a distinction between the terms
emergent and emergency.
MR. SOZA explained that, as the term emergent did not show up in
procurement, this had led to the mistake.
REPRESENTATIVE WOOL expressed his confusion for the relationship
of the two terms.
MR. SOZA expressed his agreement that this was an emergency
situation.
REPRESENTATIVE WOOL asked when the evidence had been presented
to authorize approval for a single source procurement.
MR. SOZA replied that all the evidence was presented along with
the request on February 7, and that the initial phone call had
been to determine what constituted a single source procurement.
3:32:52 PM
REPRESENTATIVE WOOL referenced the discussions on January 25 and
January 31 for a single source procurement and asked if the
evidence for single source procurement had been supplied on
February 7, with approval on that same date.
MR. SOZA said that was correct.
REPRESENTATIVE WOOL asked about the evidence.
MR. SOZA said that the evidence was provided in the single
source request, adding that this was on record. He stated that
it consisted mainly of testimony in either e-mail or by
Commissioner Crum exercising his authority to take over API and
"put in a contractor." He noted that, as they had the
conversations and he was familiar with the situation at API and
the direction that Department of Health and Social Services was
moving, the expert written testimony submitted by Mr. Wall
became part of the evidence to be considered for whether the
request met the statutory requirements.
3:34:40 PM
REPRESENTATIVE WOOL referenced the other single source
procurement situations and asked if it was common to receive the
evidence and offer approval on the same day.
MR. SOZA replied that a lot of the evidence gathering, and
vetting would take place prior to the submission of the request.
He pointed out that, as Department of Health and Social Services
had their own procurement staff, as well, there was an
assumption that they were putting this together and had it ready
on February 7.
3:35:35 PM
REPRESENTATIVE WOOL asked if he was aware that Providence Alaska
Medical Center had approached API prior to this situation with
an offer to take over the management.
MR. SOZA said that he was not aware of that.
3:36:17 PM
REPRESENTATIVE CLAMAN asked whether Mr. Soza believed that the
procurement code had a strong bias in favor of competitive bid
contracts, and not in support of single source contracts.
MR. SOZA replied, "yes."
REPRESENTATIVE CLAMAN asked if there was agreement that a single
source contract was an exception, and not the rule.
MR. SOZA replied, "yes."
REPRESENTATIVE CLAMAN asked whether there had been occasions
when an application for a single source contract was rejected
with a determination that it would be necessary to "put this out
for bid."
MR. SOZA replied, "yes."
REPRESENTATIVE CLAMAN asked how frequently this occurred.
MR. SOZA replied that his office tried to stop any applications
that would be rejected prior to submission. He explained that
this was often resolved with a preliminary talk.
REPRESENTATIVE CLAMAN asked how often there was a conversation
that determined a contract needed "to be bid out and hear from
other parties."
MR. SOZA replied that this probably happened 10 times each year.
REPRESENTATIVE CLAMAN asked how often there was approval of a
single source contract for more than $10 million.
MR. SOZA replied that more than $10 million was "on the higher
end of what we see."
REPRESENTATIVE CLAMAN asked why his office had followed the lead
of the Department of Health and Social Services and did "not
push them to go to bid this out" as it was no longer an
emergency. He asked how hard the Department of Health and
Social Services had been pushed to contract this out.
MR. SOZA replied that the leadership from the Department of
Health and Social Services had made the approach and asked for
advice about the single source contract. He stated that there
had been discussions and, as there had been a meeting on January
31 with the department's legal counsel, commissioner, and two
deputies, the discussion and evidence seemed to support a single
source contract per the current statute.
MR. SOZA, in response to Representative Claman, said that the
legal counsel had been someone from the Attorney General's
Office.
3:40:22 PM
CO-CHAIR ZULKOSKY referenced a memo dated February 15 from
Commissioner Crum in which he stated that Wellpath employees
arrived in Anchorage on Monday, February 4, and had then assumed
the safety protocols from the department. She noted that the
request for alternate procurement was not approved until
February 7, with the full contract signed on February 8. She
asked if this was proper protocol or practice for the Department
of Health and Social Services to engage in services with a
contractor prior to the authorization for procurement with a
signed contract.
MR. SOZA replied that this was not proper protocol, stating that
a contract should be signed before services were rendered.
CO-CHAIR ZULKOSKY asked for the reasons to not have an
authorized contractor in any state facility before a contract
was signed.
MR. SOZA replied that prior to the execution of the contract
there was not any protection for the state.
CO-CHAIR ZULKOSKY directed attention to the facility serving the
most vulnerable Alaskans and asked whether it was good practice
for any state department to invite contractors who had not been
fully authorized prior to the date the contract was signed.
MR. SOZA said that he did not know in what capacity the
contractors were brought in or if any protocols were violated,
but it would not be proper protocol for a vendor to provide
billable services to the state prior to the contract being
executed.
3:42:39 PM
REPRESENTATIVE TARR asked about an evaluation for a single
source contract with conflicting requests. She pointed to the
short-term request which presupposed the long-term relationship,
even as it appeared this would have allowed sufficient time to
go through a procurement process.
MR. SOZA expressed his agreement that the dates kept changing,
and that there were some conflicting dates. He shared that the
explanation and discussion for Phase 1 was that if a short-term
management service came in, it would be counter-productive to
change out the service provider in Phase 2.
3:45:04 PM
REPRESENTATIVE TARR shared her concern for the size of this
long-term contract with someone for whom the state had no short-
term work experience. She stated that the vendor should prove
they were the right operator "for this facility for vulnerable
Alaskans." She declared that it did not seem appropriate "to
enter into a conversation that seems more long-term in nature."
She stated that this was very troubling as it was "getting ahead
of ourselves in the process because there's plenty of reasons to
be concerned about this particular company." She asked if
looking at the "storied past" of this company would have been
part of the decision making to enter into a contract.
MR. SOZA offered his understanding of the contract that it was
in two distinct phases with the second phase dependent on
performance in the first phase. He said that his office would
rely heavily on the agency to conduct due diligence and that his
staff would also conduct due diligence if something looked
askance. He said that there had not been any indicators to his
staff to consider a "storied past."
REPRESENTATIVE TARR said that, as quick internet research
revealed troubling articles about death and lawsuits, there
should have been more research given the sum of money. She
acknowledged that she did not know the benchmarks used to
determine the agreement.
MR. SOZA replied that he was not sure to what degree his staff
would have researched. He pointed out that they were
procurement experts and did their best to advise the agencies
for procurement laws. He declared that, as they were not
experts in a subject area, they would rely heavily on the
agency. He noted that written testimony in support of award of
a contract draws a lot of deference. He emphasized that his
office advised on procurement law and did their best with due
diligence to ensure that it was being upheld.
3:49:20 PM
REPRESENTATIVE JACKSON referred to the Ombudsman report
detailing the decline of API. She asked why the procurement
request was not in the emergency category.
MR. SOZA explained that it was presented that the emergency
posed by decertification would be dealt with in Phase 1 of the
contract, with the potential to go for a longer term. He added
that the emergency procurement rules would only allow for the
initial situation to be dealt with.
REPRESENTATIVE JACKSON asked why, if Providence Alaska Medical
Center had shown interest before this urgent situation, it was
not considered.
MR. SOZA said he was not aware of any interest.
3:51:11 PM
MR. WALL, in response to Representative Jackson, said that there
was record of conversations about the needs of API over the
years. He referenced a letter from Providence Alaska Medical
Center to the House Health and Social Services Standing
Committee which explained their position on API and the speed
"at which they could be there to perform the work." He pointed
to the significant difference for the type of in-patient
psychiatric care of the two institutions, which had a lot to do
with the speed of intervention.
REPRESENTATIVE JACKSON asked for clarification that the
necessary level of care required more special needs than what
Providence Alaska Medical Center could have offered in the time
to save API.
MR. WALL stated that it was almost na?ve to consider that all
in-patient psychiatric care was the same. He detailed three
basic types of in-patient psychiatric care: the voluntary
psychiatric patient who does not need court intervention or a
court order, noting that Providence Alaska Medical Center did a
great job providing that level of care; those individuals who
need in-patient care but do not want to willingly submit which
raises a legal issue for intervention into a person's rights,
noting that Providence Alaska Medical Center did not offer this
level of care; and finally, those individuals charged with a
crime and held until Title 12 for either restorative care for
competency to stand trial, or for evaluation for restorative
care, pointing out that this was also a very complex population
which required a great deal of interaction with the law. He
shared that there was a courtroom at API for these cases. It
was the level of complexity and legality involved which
differentiated these three types.
3:55:02 PM
REPRESENTATIVE VANCE asked if the state was still at risk for
the loss of certification and its funding at API.
MR. WALL stated, "absolutely, we are." He shared the timeline
of events. The survey team from CMS (Centers for Medicare and
Medicaid Services) was at API during the week of January 29,
which was to be the last survey. The department was very
concerned by the letter threatening decertification from CMS
dated February 1. He offered that the reason he contacted the
procurement office was to be pro-active for options should
certain things occur. He reported that he sent an e-mail which
outlined "where exactly we were and how dire the situation was."
The survey result was "even worse than I had thought it was,
although we did not lose certification because of actions we
took." He explained that he had re-sent the original e-mail,
adding an amendment paragraph at the bottom which included the
findings of the survey team. At that point, he stated, there
was a choice to either make immediate change or be de-certified
with a threat for the loss of accreditation and licensure. He
pointed out that this would mean closure of API with the
patients being moved to hospitals in other states. He
reiterated that he was being pro-active by exploring all the
options up to this point. Upon receiving the findings of the
survey team, the department immediately instituted a higher
level of safety protocol. The patient involved in the
altercation who had been the immediate jeopardy finding was
isolated and moved to a different, vacant ward for the
protection of all patients and staff. A 24/7 video surveillance
of all patients was instituted for all wards and all patients
with an hourly accounting until a safety officer was hired. He
noted that the safety protocol and the safety officer were in
place prior to the arrival of the contractor. He pointed out
that they had an informed idea of what could potentially be done
in case of an emergency, which resulted in the selection of
these options. He offered his belief that the confusion about
the emergency language, the emergent language, and the sole
source language all "really speaks in my mind about stability at
API." He reminded the committee that a contract for $44 million
in perpetuity had not been signed, but that this was a two-phase
contract stating that the vendor must meet certain expectations
prior to movement to the next phase. He pointed out that the
date to move to the next phase had been amended from April 15 to
June 15, 2019. He added that, if Wellpath did not meet certain
deadlines and outcomes, they would not be the contractor.
However, as the department was looking for stability to maintain
the hospital certification and licensure, to open more beds and
bring on more providers, and to increase the safety for staff
and patients, there was no reason to put the hospital back in
chaos in order to find another provider.
4:02:08 PM
MR. SOZA, in response to Representative Pruitt, said that he had
been in his position for about six years.
REPRESENTATIVE PRUITT asked about the terms of the appointment.
MR. SOZA explained that the position of Chief Procurement
Officer was created under statute with a six-year term, was
appointed, and was "for cause."
REPRESENTATIVE PRUITT asked if four different agency letters of
correction had been presented to him as evidence.
MR. SOZA offered his belief that this was part of the written
testimony.
REPRESENTATIVE PRUITT asked if it had been presented that there
would be a potential loss of $37 million in annual federal
funding.
MR. SOZA offered his belief that this was also part of the
evidence.
REPRESENTATIVE PRUITT asked if the necessity of swift action had
also been presented.
MR. SOZA said that there was a sense of urgency for certain
upcoming dates whereby actions could happen to potentially cause
an adverse impact.
REPRESENTATIVE PRUITT asked about the difference in time frame
for the regular procurement process instead of this process.
MR. SOZA replied that a formal request for proposals could take
between 90 - 120 days.
REPRESENTATIVE PRUITT asked if he had been informed about the
90-day deadline, imposed in July 2018, which had not been met.
MR. SOZA replied that this had been part of the evidence.
REPRESENTATIVE PRUITT asked if it had been reported that on
November 26, 2018, there was a potential to revoke the license,
but that the earthquake four days later had allowed for an
extension.
MR. SOZA replied, "I do recall that."
REPRESENTATIVE PRUITT reiterated that Mr. Soza had been
approached on January 22 with the need for a contract as quickly
as possible because the third and final chance would expire on
February 1; whereas, it would take potentially 90 - 120 days for
the regular procurement process to find someone to fill the
contract.
MR. SOZA said, "that is correct."
4:05:47 PM
CO-CHAIR KREISS-TOMKINS asked if the decision for the
appropriateness of a single source contract was made solely by
Mr. Soza.
MR. SOZA replied, "that is accurate."
CO-CHAIR KREISS-TOMKINS asked if it was typical for a sole
source contract proposal to be received and approved on the same
day.
MR. SOZA replied "yes," and noted that it was atypical for him
to be involved as early in the process as for this proposal.
CO-CHAIR KREISS-TOMKINS asked if the decision to approve the
sole source contract in this instance was "yours and yours
alone."
MR. SOZA replied, "at the end of the day, it does roll, this
responsibility rolls to me as part of statute." In response to
Co-Chair Kreiss-Tomkins, he added that this was a "yes."
4:07:41 PM
CO-CHAIR KREISS-TOMKINS offered Mr. Wall the opportunity to make
any comments that would be helpful for how the department had
encountered Wellpath and any other important points.
MR. WALL replied that he did not have a prepared statement. He
offered his belief that there had been a lot of confusion for
the timeline of events and why, to the different types and
levels of care and who could provide these, and to what was at
stake. He stated that, as the Department of Health and Social
Services was faced with an upcoming event that could have been
catastrophic, there were many things to be done in preparation.
He said that many eventualities had to be vetted and, as he did
not know exactly what was coming, it was necessary to ask many
questions of many people, including procurement, other
providers, and legal guidance. He stated that the team from CMS
was going to be on-site during the week of January 29 and that
the department was more than 180 days in arrear of the
contractual obligation for the conditions of inclusion with CMS.
He expressed his concern that API would be de-certified, if not
closed. [Due to technical difficulties, segments of this
testimony are not audible.] He listed concerns for many
complexities of detail, including knowing which out of state
agencies could take patients and under what terms, and would
they honor the Alaska Title 12 conditions of competency under
the law. He cited that this was what the agency was doing in
the weeks prior to the arrival of the team from CMS, emphasizing
that "I would be remiss in my duties had I not." He shared that
there had been a series of conversations about the upcoming
events to ensure the involved staff were aware for how dire the
circumstances could be. He relayed that there was a very short
period of time after the arrival of the CMS team in which to
respond, as the team left on January 29 and the department had
until February 1 "to get our ducks in a row and show them that
(1) we could meet the danger that we were facing and (2) we
could care for patients in an appropriate manner." He expressed
his pleasure that the department had done a lot of work in
advance, as otherwise they "would have been caught flat-footed."
He acknowledged that Wellpath was not the only provider on the
planet, "but they were there, and they have done this before.
They know CMS and CMS knows them." He reported that the work
and the plans of correction by Wellpath had allowed API to
remain certified, accredited, and licensed. For the first time
in two years, CMS teams had reviewed the department's response
to an issue and said, "you did the right thing" and that the
plan of correction was working. He declared that this was a
sign of improvement at API. He reported that there had been
recent success with recruiting providers and a new CEO. He
emphasized that the change in culture at API and the stability
for providers and patients was extremely important.
4:13:57 PM
CO-CHAIR SPOHNHOLZ expressed her concern for safety at API,
pointing out that the House Health and Social Services Standing
Committee had held a hearing in the spring of 2018 about the
safety at API, and that the Alaska State Legislature had seen
fit to fund additional positions at API to ensure the staffing
ratios were appropriate and to increase salaries as well as add
hiring bonuses. She expressed her concerns for the contract,
pointing out that "how you do something is as important as what
you do." She referenced that Mr. Soza had described this as "an
exceptional contract" given its scope and size, pointing out
that Phase 2 was for five years at $44 million each year to
operate the only in-patient acute psychiatric hospital in
Alaska. She asked if it had occurred to separate the two phases
of the contract.
MR. SOZA replied that the concept did come up in discussions
with the Department of Health and Social Services leadership,
and that Mr. Wall had explained why this approach would be in
the state's best interest.
CO-CHAIR SPOHNHOLZ questioned some of the logic used to underpin
this. She acknowledged that although there were challenges at
API, there were other alternatives that had not meaningfully
explored. She pointed out that Providence Alaska Medical Center
did operate in-patient acute psychiatric hospital care as well
as emergency psych care, in Alaska. She asked if Mr. Wall had
every asked Providence Alaska Medical Center if they were
willing to operate API.
MR. WALL offered his belief that although they had conversations
about it in the past, he had not asked directly. He shared that
there was some concern for how fast Providence Alaska Medical
Center could have been ready.
CO-CHAIR SPOHNHOLZ asked whether Providence Alaska Medical
Center had been asked specifically and under what time
constraints they would be able to perform.
MR. WALL replied that they had this general conversation prior
to this emergency.
CO-CHAIR SPOHNHOLZ emphasized that this was in contrast with her
conversations with Providence Alaska Medical Center, which had
stated that they were not asked and were not told that a
contract to run API was being undertaken, but that they would
have liked to bid on such a contract.
MR. WALL replied that there had been a general conversation
prior to this, noting that Providence Alaska Medical Center had
sent a letter to the House Health and Social Services Standing
Committee sharing the type of care and the time frame they could
offer.
4:18:14 PM
CO-CHAIR SPOHNHOLZ declared that, as Providence Alaska Medical
Center was a place committed hospital which provides a similar
level of care in the State of Alaska, as well as seven other
states, she was perplexed that there had not been a direct
conversation as a crisis was looming. She directed attention to
the e-mail dated January 22, in which it was stated that
decertification of API would mean the loss of $37 million of
federal funding. Subsequently, in testimony to both the Senate
and House committees it was stated this loss would be $23
million in federal funds. Finally, a fiscal note attached to HB
86, regarding the prevention of privatization of API, stated the
amount to be $12 million of federal funds. She asked which
figure was true.
MR. WALL stated that this depended on what federal funds and
what time period as there were many separate federal funds, not
all of them Medicaid, which were directed to API.
CO-CHAIR SPOHNHOLZ asked about the federal funds for fiscal year
(FY) 20.
MR. WALL said that he would get those exact numbers.
CO-CHAIR SPOHNHOLZ expressed concern for the wide discrepancy to
the numbers presented on the record. She declared that this was
a real problem. This was a case statement for an urgent
situation, and it was necessary for those supporting documents
to be accurate and consistent. She emphasized that it made it
difficult to trust the veracity of these statements when the
statements changed over time.
MR. WALL offered his belief that the differences for these
numbers had already been explained by the Department of Health
and Social Services to the House Health and Social Services
Standing Committee. In response, he said that he did not have
the numbers with him.
CO-CHAIR SPOHNHOLZ, referencing the Wellpath contract, asked who
would be doing the medical billing and financial management at
API.
MR. WALL said that the billing for patient activity, including
Medicaid, would be done by the vendor but those funds would go
back to the state.
CO-CHAIR SPOHNHOLZ asked if the financial management would be
done by the vendor or the department.
MR. WALL replied that the facility and the structure at API
would remain owned by the state but would be run by contract.
In response to Co-Chair Spohnholz, he said that the current food
service contract was up for renewal and the department would
have "that conversation when the time comes."
CO-CHAIR SPOHNHOLZ asked if there would be an additional fiscal
note to fund these contracts which were not currently included
in the budget.
MR. WALL offered his belief that these were included in the
"pass-through cost" and said that he would supply the specific
numbers.
4:22:31 PM
REPRESENTATIVE LEDOUX asked whether the conclusion by the
Department of Health and Social Services was regarded as
evidence in the discussion for a single source contract request.
MR. SOZA explained that written testimony becomes evidence and
part of the file in the single source contract request. In
response to Representative LeDoux, he said that the solution
presented by Mr. Wall was similar to evidence presented by a
witness on the stand in a courtroom trial.
MR. WALL explained that there had been a search for solutions to
the API problems which did not include "any sort of takeover."
He acknowledged that the problems at API were known prior to the
emergency situation, as "beds were closed, there weren't enough
providers, there was an unsafe work environment, there were
findings from many different organizations, and so we were
looking for solutions to those problems in advance of any
decision that we made in this procurement." He stated that the
procurement was the result of an emergency situation that
required immediate response. He acknowledged that the decision
for privatization was not "necessarily done under procurement
law. It was done under Title 47.32 which gives the Commissioner
of [Department of] Health and Social Services the authority to
step into any facility licensed by the state that has patients
that in jeopardy of life, limb, or eyesight." He stated that
the procurement process had allowed the commissioner to exercise
that authority. He noted that, although the department had been
looking for solutions to other problems prior to this, this was
not a solution that they had planned for ahead.
4:26:41 PM
REPRESENTATIVE LEDOUX relayed that she was really confused, as
testimony for the past one- and one-half hours had been about
procurement, and now she "was hearing that this wasn't done
under the procurement policy, it was done under something else."
MR. WALL declared that this was done under the procurement law
and that the department had followed procurement rules. He said
that the decision for the commissioner to step in was an
exercise of Title 47, and not an exercise of the procurement,
per se.
CO-CHAIR KREISS-TOMKINS shared that the request from
Representative LeDoux had been for what constituted evidence
when a procurement decision for a sole source contract was being
made.
REPRESENTATIVE LEDOUX asked for clarification from Mr. Soza that
the decision to approve this was his decision and his decision
alone. She pointed out that he had not investigated whether
there were any lawsuits, judgements, or litigation against the
provider. She asked who was responsible to determine this
information.
MR. SOZA expressed his agreement that "part of that does lie
with us in procurement to look at vendors capability to perform
under a contract, to perform the services that they say they
will." In a situation like this, his office would rely on the
agency and its procurement staff to have done due diligence on a
vendor who was presented as the only capable vendor that could
perform the services. He acknowledged that the final
determination was his responsibility.
REPRESENTATIVE LEDOUX asked if anyone from the agency discussed
these judgements or litigations against the vendor.
MR. SOZA replied, "no."
4:29:32 PM
CO-CHAIR FIELDS asked if Mr. Soza would have an opportunity to
review the 1400 lawsuits and numerous examples of death
resulting from negligent care in other facilities and examine
the appropriateness of the continuation for a sole source
contract for "what is effectively permanent management of API
under Wellpath."
MR. SOZA explained that the procurement law stated that an award
could only be made to responsive, responsible vendors. If there
were questions as to the responsibility of a vendor under
contract, there were actions that could be taken to either
investigate and remedy, or to terminate the contract.
MR. WALL, in response to Co-Chair Fields, replied that there
were currently 26 patients at API.
CO-CHAIR FIELDS offered his understanding that Wellpath was
being paid $43.7 million for available beds, and not necessarily
beds that were filled.
MR. WALL asked if this was a reference for Phase 1 or Phase 2 of
the contract.
CO-CHAIR FIELDS asked about both as the budget proposal would
potentially cross over into both.
MR. WALL explained that Phase 1 was a $5 million contract to
make the deliverables, or the contract would be terminated. He
pointed out that in this first phase there was not any payment
for beds and there was not any medical service or clinical care.
He reported that Phase 2 was paid at a bed rate, which was
slightly under the current cost for beds, although inclusion of
the pass-through costs brought this "just a little over what our
current cost is."
CO-CHAIR FIELDS asked whether Wellpath would draw the full
contract value if the number remained about 26 patients.
MR. WALL replied that this was not correct. He stated that it
would be failure for the contract if API did not return to full
capacity of 80 beds.
CO-CHAIR FIELDS replied that this was not what the contract
appeared to say. He asked Mr. Soza whether they would have
approved the single source contract or done more investigation
had he known about the multiple lawsuits, deaths, and
understaffing.
MR. SOZA replied: "it certainly would have become a line of
questioning and further information gathering to determine
exactly the nature of all of that and how it relates to the
responsibility of the contract."
4:33:38 PM
REPRESENTATIVE CLAMAN asked for an explanation why the second
phase of the project was not made a competitive bid given the
amount of time available.
MR. SOZA replied that the idea presented had been to maintain
stability, as a switch to another vendor could possible
jeopardize that.
REPRESENTATIVE CLAMAN asked whether it was a typical process for
determination in any open bid contract to factor in how well the
party had been performing. He said that this would not prohibit
Wellpath from competing for Phase 2 in an open bid process. He
declared that he was "at a loss as to why for Phase 2, given the
time that you had, that you're not going and having an open bid
for Phase 2." He added that the answers so far had not been
very compelling.
MR. SOZA offered his belief that, as this contract was about
people, he could "relate to instability and it certainly had it
in my life." He acknowledged that, although Wellpath may have
prevailed in the bid for Phase 2 after 5 months, a change in
vendors would have required to "essentially start over."
REPRESENTATIVE CLAMAN asked what the next plan was if Wellpath
did not produce the deliverables, as there was not even a bid
for an alternative.
MR. SOZA replied that the evidence presented to him described
Wellpath as the only vendor capable of performing these
services.
MR. WALL said that there were at least three overlapping
significant dates and requirements from three separate bodies.
He listed CMS for the ongoing plans of correction and the dates
to meet these deadlines, noting that there were roughly 20 plans
of correction at API. He reported that the other target dates
were set by the joint commission, which was the accreditation
body, as they also had findings and plans of correction at API
included in those 20 plans. He added that these dates were
different or overlapped with the dates from CMS. He shared
that, as the state's licensure body had given API a provisional
license, June 30 was when many of the requirement dates crossed.
He pointed out that it was necessary to do whatever was
important to maintain the accreditation and the licensure, and,
as the dates were somewhat spread out, the department was
attempting to provide continuity over those periods of dates as
it moved forward.
4:38:50 PM
REPRESENTATIVE CLAMAN offered his belief that, as there was a
lot of uncertainty, this made a compelling case for another
competitive bid effective July 1.
MR. WALL offered his belief that Wellpath were the only ones to
do this in a timely fashion. He acknowledged that there were
other providers "who could do this over time."
REPRESENTATIVE CLAMAN expressed his understanding for hiring
Wellpath in February. He shared his concern that the department
had not made any case for Phase 2, as it had been stated that
Wellpath could be terminated if they did not deliver. He asked
when Wellpath was scheduled to have filled 80 beds.
MR. WALL clarified that Wellpath only needed to have 80 beds
prepared to be filled, and that the current amended date was for
September 1. He detailed that April 15 was a decision point and
that July 1 was the date to meet all the goals and that these
were the only two dates in the contract. He added that both had
been extended 60 days from the original dates in order to give
more time to move forward with the process and complete the
update of the feasibility study.
REPRESENTATIVE CLAMAN asked Mr. Soza at what point he could step
in and tell the department this would have to be competitively
bid as he was hearing more problems and questions for the
validity of this method. He pointed out that should Wellpath
not meet the qualifications for Phase 1, there would really be
issues for Phase 2.
MR. SOZA replied that, under procurement law, he could do that
today. In further response to Representative Claman, he
explained that he could step in at any point in which it was
evident that the vendor was not capable of doing the work. If
they were not a responsible party, there was no longer a legal
contract and it would have to be terminated. He declared that,
based on the information that had come to light, "I don't know
where that line in the sand is right now."
4:42:31 PM
REPRESENTATIVE WOOL asked about the date for the firing of the
two API psychiatrists and whether it had contributed to the
emergency.
MR. WALL reflected that it might have been the second or third
week of December.
REPRESENTATIVE WOOL asked if that would have elevated the state
of emergency per the CMS team of examiners.
MR. WALL acknowledged that it would have been a concern;
however, he explained that the emergency was the overall
situation of dire emergency as well as the immediate jeopardy
finding for a single point in time. He stated that emergency
could be defined by CMS citation, or by "the state of how things
are." He expressed his agreement that CMS was concerned when
there were only a certain number of medical prescribers per
patient load.
REPRESENTATIVE WOOL asked about the difference between an
emergency procurement and a single source procurement.
MR. SOZA explained that the emergency procurement statute had a
different set of requirements and that the agency would review
the competition practical for the emergency situation. He said
that it was "a very loose regulation because it tries to account
for any type of emergency situation that might ever exist." He
relayed that the single source requirements were more stringent
for review and evidentiary requirements. He said that the main
limitation to an emergency procurement was that it could only
address a specific emergency.
REPRESENTATIVE WOOL asked if an emergency procurement was "more
of a short-term fix."
MR. SOZA replied that, in general, it would be shorter term as
it could only address the duration of the emergency.
REPRESENTATIVE WOOL reviewed the timeline, noting that Mr. Soza
had been contacted on January 25 and that the procurement was
approved on February 7, the same day that Mr. Soza received the
evidence. He asked if Mr. Soza had been in touch with the
department in the intervening time to detail the type of
evidence necessary. He offered his belief that there had not
been any due diligence for the evidence.
MR. SOZA replied that he took pride in his staff for its
integrity in upholding the procurement process, and that they
did their due diligence to ensure the necessary evidence was
collected to satisfy the statutory requirements. He reported
that, with any trigger for concern, his staff would ask for more
information. He stated that the proactive approach by the
Department of Health and Social Services to learn the necessary
evidence required had resulted in a quicker review, even as it
went through the same process and was reviewed at the same high
level of detail as any other single source request for alternate
procurement (RAP). He stated that he and his staff read all the
provided evidence.
REPRESENTATIVE WOOL pointed out that this contract was for a
large amount of money in a short period of time, which Mr. Soza
had stated was unusual because it involved taking care of
vulnerable people. He asked if Mr. Soza should have been
informed about lawsuits, litigation, and deaths at other
facilities run by this contractor.
MR. SOZA replied that this would have been helpful information
to have considered.
REPRESENTATIVE WOOL asked when the last time was that API had
been at full capacity, noting that the hospital in his district
had shared its problem for transferring patients to API for long
term care.
MR. WALL replied, "July of 2017."
REPRESENTATIVE WOOL asked why the capacity was going down so
quickly and why was there a lack of staffing at API.
MR. WALL replied that the problem resulted from attrition and
the difficulty for recruitment and retention of staff. He
expressed his appreciation for the efforts by the Alaska State
Legislature in recruitment and increased pay for staff but
pointed out that the "net gain in staff is going backwards." He
reiterated that it was very difficult to recruit and retain
personnel and reported that applicants were either not qualified
or not interested after the interview.
REPRESENTATIVE WOOL asked if Providence Alaska Medical Center
and other medical hospitals had the same recruitment issues.
MR. WALL, in response, said that API was using travelling
nurses. He stated that health care professionals were at a
shortage across the state and across the nation. He pointed out
that the greatest dearth of care was for psychiatric care,
noting that there were very few licensed psychiatrists in
Alaska.
REPRESENTATIVE WOOL asked about the plan for hiring more
psychiatrists.
MR. WALL offered his belief that one of the providers who left
had returned to API, and that two more psychiatrists had been
hired. He added that by the end of April there would be more
psychiatrist medical doctors in API than were there in December.
He shared that "I tend to beg a lot for help," reporting that he
had spoken with the Alaska State Hospital and Nursing Home
Association and had called the list of licensed psychiatrists in
Alaska. He declared that the greatest need was for more
qualified, good psychiatric nurses. He pointed to a
misunderstanding for the staffing of units, stating that it was
necessary for a certain number of staff in some units regardless
of the number of patients.
4:55:41 PM
REPRESENTATIVE WOOL asked whether Mr. Wall had spoken to the
other local hospitals, in addition to Providence Alaska Medical
Center.
MR. WALL clarified that Providence Alaska Medical Center did not
do forensics care, and that was the biggest area of need for
API, as there were "people backed up in our prisons right now
who have need of evaluation and restorative care and nobody else
in the state does it." He pointed out that other hospitals were
already doing the evaluation and treatment, but the forensics
was unique and very difficult.
REPRESENTATIVE WOOL opined that the bigger problem was that the
80 beds were underutilized, even as the 10 beds designated for
forensics were not being utilized.
4:59:08 PM
REPRESENTATIVE JACKSON stated that "this has been the biggest
political theater I've ever witnessed, but, that's okay." She
pointed out that funding seemed to be the answer to everything.
She asked how much had been spent on "bad behavior last spring
on bonuses and all the other things that Representative Co-Chair
Spohnholz has mentioned."
MR. WALL asked if she was referring to the sign-on bonuses.
REPRESENTATIVE JACKSON said that she was referring to the money
spent last spring on bonuses and other fixes at API.
MR. WALL said that he would provide that. He reflected on a
presentation on February 13 [2018] in front of Senate Health and
Social Services Standing Committee which "reported on everything
that had happened for bonuses and such until then." He added
that he would update this to the present.
REPRESENTATIVE JACKSON opined that the questions regarding the
contract seemed to be "fear based" in order to undermine it
before results were available. She shared her confidence that
the contract could be canceled at any time.
MR. WALL expressed his agreement.
5:01:49 PM
REPRESENTATIVE DRUMMOND reflected on earlier testimony by Mr.
Wall and asked about the original means of contact with
Wellpath. She asked if CMS had ever stated that February 1 was
the last chance for API "to get their ducks in a row or that
they would de-certify."
MR. WALL clarified that his first introduction to Wellpath was
during a discussion for healthcare at the juvenile justice
facilities in December [2018]. He added that there were
conversations regarding psychiatric care at a later date. He
directed attention to a letter from CMS regarding conditions of
participation, the February 1 date, and the loss of "deemed
status" or decertification.
REPRESENTATIVE DRUMMOND asked whether there would have been
decertification if API did not have a contractor by February 1.
MR. WALL replied: "I am surprised we were not decertified even
with the contractor, but the answer to your question is yes."
5:04:40 PM
CO-CHAIR ZULKOSKY declared that the timelines offered in
response by the Department of Health and Social Services had
shifted and that she would instead focus on timelines identified
from e-mails and time stamps. She expressed concerns about pre-
supposed outcomes that had pushed the state in a particular
direction. She referenced an e-mail dated January 22 from Mr.
Wall to department leadership which indicated that CMS had
discovered a series of immediate jeopardy, yet the CMS survey
team had not arrived at API for a return visit until January 28
when a violation was discovered which put API in immediate
jeopardy on January 29. She referenced additional departmental
e-mails with the subject relating to the privatization of state
hospitals, and no reference to emergent circumstance at API.
She asked if there was an intent by the Department of Health and
Social Services throughout this series of events to privatize
API, or to resolve accreditation in the related findings.
MR. WALL offered his belief that the clarification of dates on
the specific e-mail had already been addressed to the House
Health and Social Services Standing Committee. He pointed out
that this e-mail originally had an addendum in red at the end,
after it had occurred. He declared that privatization "has
never been the point to me. This is a matter of patient care,
it's a matter of how we are possibly going to solve the problem
of an institution that is falling apart, that is failing, and
that, in any moment, has patients and staff members that are in
danger of being hurt." He suggested that providing continuity
and consistency in leadership within that organization was the
direction. He stated that privatization was a means to an end
if it was necessary. He emphasized that "the state has failed
that hospital. It has failed its patients, and I believe it has
failed its staff."
CO-CHAIR ZULKOSKY highlighted that the e-mails provided by the
department had indicated that an individual from NASMHPD
(National Association of State Mental Health Program Directors)
had followed up the discussions for privatization of state
hospitals. She read: "with whom you've talked about getting
information on other states experiences with privatization of
their state hospitals." She pointed out that Providence Alaska
Medical Center had reached out to the Department of Health and
Social Services several times over the past three years, as
recently as February. She asked if the procurement division was
aware that local, non-profit, established health care facilities
in Alaska had indicated an interest in a partnership with the
state on some elements of the operation of API.
MR. SOZA replied "no, we were not."
5:09:20 PM
REPRESENTATIVE PRUITT asked about the Division of Health Care
Services and the National Association of State Mental Health
Program Directors (NASMHPD) and any information that these
organizations had provided for entities that could provide this
service.
MR. WALL replied that the department was being proactive in its
search for solutions to the problems before they reached "the
worst point." He declared that NASMHPD was a tremendous, non-
profit organization, the association of all the state mental
health directors. He explained that it was a specialty group
which helped states with the in-patient psychiatric process and
best practice; although they did not specifically offer "this is
what you should do," they would report what other states were
doing and what had worked. They were able to address things
from the clinical milieu to the structure of states and laws
regarding competency evaluations. He declared that NASMHPD was
a group of experts that did this work on behalf of states.
REPRESENTATIVE PRUITT asked if this had been the initial point
of information regarding Wellpath.
MR. WALL offered his belief that Wellpath may have been
discussed during a telephone conversation. He reported that he
had called NASMHPD almost immediately upon his appointment to
his current position, explained the current issues and
situation, and asked for recommendations.
REPRESENTATIVE PRUITT asked if this was comparable to the
National Conference of State Legislatures and the Council of
State Governments, as an equivalent for state mental health
operators.
MR. WALL replied that it was a good analogy.
REPRESENTATIVE PRUITT offered his belief that it was Wellpath
that had been referenced by NASMHPD in the e-mail dated February
7.
MR. WALL opined that, after the initial introduction to
Wellpath, he had asked about Wellpath during his on-going
conversations with NASMHPD.
REPRESENTATIVE PRUITT questioned whether Wellpath only worked in
mental health hospitals, or if they also worked in correctional
facilities.
MR. WALL stated that he was not an authority on the company and
pointed out that representatives from Wellpath had testified
before the committee. He offered that the majority of lawsuits
associated with the parent company were on the corrections side
of the business, although he did not know the corporate
structure. He stated that the hospitals run by the Wellpath
agency, as well as the state officials in those states, had
shared glowing recommendations.
REPRESENTATIVE PRUITT reported that previous testimony to the
House Health and Social Services Standing Committee from
Wellpath had indicated that most of the lawsuits were from the
corrections side of the company.
MR. WALL pointed out that API also had lawsuits against it. He
declared that this was a litigious field of work, and everything
about this field had legal overtones.
REPRESENTATIVE PRUITT offered his belief that CMS had indicated
through its investigation that there were instances of immediate
jeopardy discovered, and that the provider was so non-compliant
that there was a concern for potential harm or impairment to an
individual. He asked whether Mr. Wall, in hindsight, still
believed that this was the best course of action for the most
vulnerable people at API. He stated that his care was for
providing "the best thing for those people who happen to be the
patients there."
MR. WALL said that he did feel he had made the best decision.
He expressed his desire that others could see the challenges to
the care providers and advocates, as this group of people had no
voice. He pointed out that a lot of treatment was initially
against the patient's will although when they "come back into
compliance with treatment in their right mind then they know it
was the right thing to do." He declared that this was a very
difficult field, and that the decisions were ever changing and
made it feel like an ongoing battlefield. He offered his belief
that something had to be done in a major way in order to effect
safety and ongoing change in the hospital for our patients.
5:18:07 PM
REPRESENTATIVE TARR asked what could have been done differently.
She pointed out that the issues at API were a known problem, and
that three individuals had resigned in mid-September with an
entirely new leadership put in place. She added that the FY 19
budget had included additional funding for salary increases and
the hiring of 20 new staff at API. She reiterated that a new
administration had been elected, knowing that there was a
problem at API. Even though there was new leadership, and the
budget had been increased to fill staff positions, instead of
identifying the problems to make them a priority, the
administration, on November 15, had forced the "resignations
from all state employees." She pointed out that this only
served to further increase the disruption at API as two of the
doctors refused to participate "in what they felt like was a
partisan shakedown, like some kind of political allegiance
rather than the commitment to their patients." She stated that
this action could have been done differently. She continued,
noting that the new administration took office on December 3,
"fully aware of all these problems, already two weeks into
firing people, don't change course." She declared that it would
have been possible to go through the proper procurement
procedure for a contract. She reported that many API employees
had contacted legislators expressing fear for losing their jobs.
She acknowledged that, although these problems had been
mounting, she was not convinced that this was the only option to
address these problems. She addressed Mr. Wall, and pointed out
that, as he had a lot of experience in the Department of Health
and Social Services, he had full knowledge of the problem. He
could have made this a number one priority and immediately
entered into a proper procurement procedure without firing some
of the most difficult to find professionals in this field.
There would not have been the loss of key professionals to help
address the problem but would have instead allowed a focus on
the necessary staff hiring. She reminded that the problem had
already been identified by the funding for 20 new positions.
Instead, "all of that was just sort of thrown by the wayside,
and it feels very arbitrary that instead this was just plopped
in place of everything that had happened before it." She
declared that she was aware of "a completely alternative path
that could have been taken that maintained safety for patients,
that maintained key professionals at the institution, that gave
more support." She added that the staff was very receptive to
more training. She pointed to the first document received from
Wellpath, dated January 21, which would have required many weeks
to prepare. She stated that it was clear that conversations
were taking place before there was any e-mail proof, noting that
the first report referenced long term privatization. She asked
why the alternative path had not been taken.
MR. WALL stated that, in actuality, "that alternative path was
being taken." He clarified that he had been gone from the
department for three years, and that API had not had full
capacity since 2017. He stated that he "was not entirely in the
know," that he did not know where things were in the plan of
correction process. He added that the 180-day deadline had
already been passed when he returned to the department on
December 3. He declared that the department had been pro-active
by putting things out for procurement and looking at a longer-
term process. He declared that everything was on the table in a
review for solutions, and that there was not any pre-determined
idea or course of action. He shared that the discussions
included what had happened in other states, how problems were
fixed, how criminal cases were handled, and how the Title 47
process was to be fixed in Alaska. He stated that the
department had been seeking information "in order to roll things
out in a much more languid pace." That would have been great
had they not been forced in early February to make this
decision. He acknowledged that, although there were surface
appearances that everything had been pre-determined, "man, I
wish I was that smart." They were looking for solutions to
problems, with nothing off the table, and planning to roll
things out methodically to fix those problems. He listed some
of the possible actions: contracting out the medical care,
contracting with an administrative services organization to do
the plans of correction, contracting out other pieces, doing
nothing, having an entire privatization, having one expert or a
team of experts, and "looking at everything we possibly could do
to fix this problem." This had been the plan until the
immediate jeopardy occurred. He expressed his understanding for
her viewpoint, but declared "our hand was forced, and I wish it
hadn't a been that way." He stated his desire to roll things in
at a much more languid pace and for API not to be in this
situation.
REPRESENTATIVE TARR pointed out that the January 21 proposal
from Wellpath proposed the provision of treatment and support
services and total facility management for API, which, it
appeared, had been the intention of Wellpath since "the get-go."
She declared that this was inconsistent with the testimony by
Mr. Wall. She offered her belief that the emergency procurement
would have been appropriate for a short duration while a proper
procurement procedure could have been presented for a long-term
contract. She stated: "I think we did it wrong."
5:26:23 PM
CO-CHAIR KREISS-TOMKINS, noting that there had been a lot of
attention and scrutiny, and he opined that this was a critical
juncture for the procurement policy. He offered his belief that
the role of chief procurement officer was politically
independent. [Mr. Soza indicated that this was an accurate
statement.] He asked whether, with additional information, Mr.
Soza had the ability in his "present position in this present
climate" to "pull the plug" for proceeding with this single
source contract. He asked Mr. Soza if, when the proposal had
been presented to him on February 7, he had the ability to say
"no, there is not sufficient evidence, or this does not seem in
the best interest of the State of Alaska."
MR. SOZA replied that, if the evidence had not been there on
February 7 that met the statutory requirements, his department
could have said "no, this isn't the way to proceed" and "that
call could have been made."
CO-CHAIR KREISS-TOMKINS asked if Mr. Soza felt that he had the
independence on that day to make that call.
MR. SOZA offered, as an analogy to his position, that he was
"Switzerland, we're comparing what's presented to us to the
law." He noted that he was engaged with the information [Due to
technical difficulties this was not on the recording but
reconstructed from the Gavel Alaska recording.] that had been
given to him and it went through the review process, at the end
of the day it was approved. He shared that, as he had worked
with the department leadership and the assistant attorney
general, the level of scrutiny that this was getting prior to
his reception of the application had felt sufficient. "It felt
like a lot of care was being put into ensuring that the evidence
being provided was going to meet our statutory requirement." He
acknowledged that he had the independence to go back and ask
more questions and he had not because he felt what had been
given to him had met the statutory requirements.
CO-CHAIR KREISS-TOMKINS asked whether, in yes or no terms, Mr.
Soza felt he had the political independence and could have said
no had he felt it was warranted.
MR. SOZA agreed that he could have said no, although it would
have required a "different set of talks." He added that, if he
did not feel that the evidence had met the statutory
requirements, he could have and would have gone back for more
information "or said no at that point."
5:31:07 PM
ADJOURNMENT
There being no further business before the committee, the House
Health and Social Services Standing Committee meeting was
adjourned at 5:31 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Alaska Psychiatric Institute - HSS & STA Procurement Overview - Apr 2 2019.pdf |
HHSS 4/2/2019 3:00:00 PM |
|
| Alaska Psychiatric Institute - Request for Alternative Procurement Supplemental-Emails.pdf |
HHSS 4/2/2019 3:00:00 PM |
|
| Alaska Psychiatric Institute - DHSS SOA Contract with WellPath Feb 8 2019.pdf |
HHSS 4/2/2019 3:00:00 PM |
|
| Alaska Psychiatric Institute - Single Source Request for Alternate Procument Feb 7 2019.pdf |
HHSS 4/2/2019 3:00:00 PM |