All Locked Up

Prison-health firm's contract renewed despite abuses, minority scam

Posted: February 08, 2013

WHAT DO YOU have to do to lose a city contract?

That's what some City Hall skeptics are asking after Corizon Health, which provides medical care for 8,600 Philly prison inmates, recently renewed its deal with the city for $42 million per year.

The Tennessee-based firm has been dumped by Maryland's system following abuses, grilled by investigators about years of negligent treatment in Idaho's prisons, and criticized by lawmakers in Maine for failing to give medicine to thousands of sick inmates - all in the past year.

Philadelphia's prisons almost split with the company 10 years ago, after harrowing tales of negligent care came to light, but then declined to after the alternatives were deemed too expensive.

And this summer, Corizon was nailed with an unprecedented $1.85 million settlement for passing money through a sham subcontractor to meet Philly's minority-participation requirements.

The city's decision to keep doing business with the firm has confounded many observers, but none more so than Correctional Medical Care, or CMC, a competitor that offered to do the job for $3.5 million less per year.

Now, CMC is weighing a lawsuit against the Nutter administration, a city councilman is calling for a public hearing on the city's relationship with Corizon, and the crackdown on Corizon's minority-contracting violations - a huge problem in Philly - is looking like a slap on the wrist.

The basics of the Corizon deal have been agreed upon, although the Law Department is still writing up the contract, said Mayor Nutter's spokesman, Mark McDonald.

The city passed over CMC, he said, because it wasn't up to the task.

"I'm not going to go into the details, but they were deemed not to be up to the standard of care of the prison system," McDonald said.

But Hahnemann University Hospital had signed on to CMC's bid and pledged to provide "staffing, on-site specialty services and any ancillary services which may be required," according to a letter from the hospital's chief executive, Michael Halter, to the city, and obtained by the Daily News.

"Hahnemann is a recognized, high-quality provider of comprehensive health-care services. On our staff are a large number of medical professionals at the top of their respective fields who stand ready to support the [Philadelphia Prison System] health care program," Halter wrote.

Councilman Jim Kenney is calling for a hearing on the decision to renew Corizon.

"Hahnemann is local and is extremely well-thought-of, and it's one of our premier medical institutions in the city," Kenney said. "Why would they not be capable?"

City leaders, meanwhile, don't want to talk about it.

Prison Commissioner Louis Giorla deferred comment to the Mayor's Office. Nutter then referred questions back to Giorla, who did not respond to a follow-up request.

And it doesn't seem that Kenney will be getting many answers, either.

City Solicitor Shelley Smith, in a January letter obtained by the Daily News, told CMC that the administration will look into its complaints about the contract process, but not Kenney's.

"Nobody with knowledge of the facts of the City's decisions will be available to testify at such a hearing," Smith wrote.

Kenney said he doesn't understand why the administration won't let Council vet a contract worth tens of millions of dollars per year.

"I'm upset with the belief that somehow you can ordain unilaterally that kind of amount of public expenditure," he said. "Why wouldn't they be able to at least give rationale at a public forum?"

Corizon, which operated in Philly as Prison Health Services (PHS) from 1996 until a 2011 merger, declined to comment.

According to reports filed with the city Board of Ethics, Corizon hired S.R. Wojdak & Associates to lobby the Nutter administration on its contract. The firm has strong connections in City Hall: Nutter has hired Wojdak to lobby on the city's behalf in Harrisburg.

PHS had made small donations to several local politicians, including Kenney, but none so generously as to Nutter, whose campaign committee has received $25,600 from PHS and $1,000 from Corizon, according to city records.

CMC, based in Blue Bell, is a smaller company that does much of its business in New York state and has not donated to Nutter. Its owner and chief executive is Maria Carpio, who, as a woman of Guatemalan descent, would satisfy the city's requirements for participation by firms owned by female, minority or disabled people.

Those requirements were exactly why, last summer, Corizon's days in Philadelphia seemed to be numbered.

The company agreed to pay the city $1.85 million after an investigation by Inspector General Amy Kurland found that it had fudged documents to make it seem as if JHK Inc., a female-owned subcontractor, was getting 40 percent of the work. In fact, JHK did virtually none of it.

JHK's owner, Jamie Kovacs Burks, was banned from city contracts for two years. Kurland originally recommended a similar treatment for Corizon.

But not only was the firm allowed to keep doing business with the city, the administration went out of its way to make sure it could bid on the next prison contract, which was due in August, weeks after the settlement.

CMC submitted its bid on time and said it was ready to go, but the city pushed back the deadline by six months to give Corizon time to implement reforms it was required to adopt as part of its settlement. And in the meantime, the city simply extended Corizon's existing contract for those six months for a cool $21 million.

When the administration made accommodations for Corizon, sources said, Kurland was frustrated and confused.

Asked about the contract renewal, Kurland said that those decisions are "not my job" and that Corizon had made many of the reforms she recommended.

And so, six months after the company was tagged with a fine meant to send a message to dishonest contractors, it scored a contract worth 20 times as much as the penalty.

"They've taken the appropriate action. The company has implemented a compliance program, which includes . . . a corporate-level vendor-diversity program," said McDonald, the mayor's spokesman. "The committee and the commissioner deemed Corizon the most capable bidder at the most reasonable cost."

The city, McDonald said, is "satisfied" with Corizon's performance, noting that its facilities have been accredited by national groups that monitor prison health care, including the National Commission on Correctional Health Care.

But industry experts say accreditation by one of those groups has more to do with facilities management and stated policies than actual patient outcomes and complaints.

In fact, Idaho's Corizon-operated prisons had the same NCCHC certification as Philadelphia's when, last year, a court-ordered investigation documented years of consistent negligence as part of a lawsuit against the state.

One inmate wasn't told for seven months that he probably had cancer. Others died after not receiving treatment for long periods of time.

Corizon objected to the Idaho probe, saying it focused on "anecdotes, hearsay and selective sampling."

Executives at Corizon and other prison health-care firms argue that complaints are inevitable when dealing with prison populations, which are often poorer, less healthy and more likely to have a history of substance abuse than the general public.

Inmate advocates doubt whether Philadelphia's prisoners would be better off if the city hired CMC or any other provider. The problem, they say, is not one company or another, but the widespread privatization of prison health-care services by state and county governments.

Adequate health care is an accepted Eighth Amendment right for inmates, and by outsourcing those services, governments are also outsourcing much of the blame for inadequate care, advocates say.

"As long as there's a profit motive there, you're going to get companies that cut corners," said Layne Mullett, a member of Decarcerate PA. "It's cheaper for a reason. They're cutting costs with medication."

But even among its peers, Mullett said, Corizon has "a terrible reputation in terms of providing health care in the Philly jails but also across the country."

On Twitter: @SeanWalshDN


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