Florida prison vendor issued hefty fine in Philly case
The company awaiting final approval from Gov. Rick Scott's administration to privatize health care services for most Florida prison inmates has agreed to pay a $1.85 million fine in Philadelphia for skirting minority contracting requirements. The vendor, Prison Health Services, now known as Corizon Health, is accused of falsifying official documents and federal prosecutors are looking for evidence of mail and wire fraud.
News accounts in Philadelphia newspapers report that the city's inspector general, Amy Kurland, described the arrangement as a classic "pass-through" in which health care for city jail inmates was subcontracted to JHK Inc,., a female-owned business in Indiana that handled pharmaceutical supplies. The company said it had permission from prison employees for the arrangement.
"PHS's contract actions were transparent throughout the process, with no attempt to hide anything, and a desire only to comply with contract provisions concerning minority, women and disabled subcontractor participation," the company said in a statement. PHS would not have proceeded with the subcontract arrangement if we had known that we needed additional approvals. As soon as the company learned it was non-compliant, it immediately changed subcontractors."
Philadelphia Mayor Michael Nutter called the city's settlement with the company"a significant moment that sends a very, very strong message to everyone who does business with the city," the Philadelphia Inquirer reports.
On July 5, Corizon President Stuart Campbell notified Florida that his firm "is prepared to immediately enter into contract negotiations ... (and) then begin the transition process in an effort to implement the proposed savings as soon as possible."
As the story was breaking in Philadelphia, Scott's Department of Corrections was formally asking the Legislature for approval to shift $58 million in health care funds across categories so that it can hire Corizon and a second private vendor, Wexford Health Sources, by January 2013. The request for a budget amendment is pending before the Legislative Budget Commission and appears below.
To All Legislative Members:
This Budget amendment is pending approval by the Executive Office of the Governor and requires LEGISLATIVE BUDGET COMMISSION approval. If the Commission chairman elects to agenda this amendment it will be implemented on 8/8/2012.
Budget Amendment Request #:
Department of Corrections
The department has requested and received proposals for the statewide privatization of comprehensive health services. In order to award the contracts, budgetary action is needed to transfer funding to the appropriate category.
The department requests to transfer $57,668,391 in General Revenue to the Inmate Health Services budget entity, Inmate Health Services category from the following categories within Inmate Health Services: Salaries and Benefits $ 37,535,005 Other Personal Services 12,875,012 Expenses 6,697,952 OCO 199,229 Contracted Services 361,193 Approval of this request will enable the department to move forward with the statewide privatization of comprehensive health care services based on a January 1 implementation date.
Recommend approval for the transfer of $57,668,391 in General Revenue in the Department of Corrections between various categories within the Inmate Health Services program. The transfer is necessary for the department to move forward with the statewide privatization of comprehensive health services with an anticipated January 1, 2013, implementation date.