By New Times
By Connor Radnovich
By Robrt L. Pela and Amy Silverman
By Ray Stern
By Keegan Hamilton
By Matthew Hendley
By Monica Alonzo
By Monica Alonzo
Van Dyk did not return calls from New Times.
Shortly after the mental-health contracts Van Dyk had helped negotiate were awarded, some spurned bidders say they told AHCCCS they believed the bidding process had been tainted. However, none of the 14 providers who filed formal complaints ever went so far as to allege it in writing.
Van Dyk left AHCCCS for a position with Sanus Health Plan, a managed-care corporation owned by New York Life and based in New Jersey. Van Dyk worked in New Jersey for several months. Blue Cross has denied that there was any impropriety in either Van Dyk's hiring or his relations with AHCCCS. David McIntyre, a spokesman for the company, says that Van Dyk--in compliance with state law--was gone from AHCCCS for more than a year before Blue Cross hired him.
When it lost out to Blue Cross in bidding last fall, Comprehensive complained to AHCCCS' Office of Grievance and Appeals, where hearing officers consider complaints about the program from health plans and doctors. A hearing officer ruled the bid process was fair. Comprehensive subsequently sued AHCCCS in Coconino County, reiterating that the process was flawed and the company was not judged fairly, but later dropped the suit.
Officials of Comprehensive refused last week to explain why the suit was dropped. Whether they settled with AHCCCS and are not allowed to talk about it or are simply wary of complaining about the program because they hope to do business with it in the future, they refuse to say.
Complaints about AHCCCS' last batch of contracts started almost as soon as they were awarded. Before the dust cleared, there would be formal protests, restraining orders and lawsuits.
When the bidding process started, AHCCCS received 95 offers from 22 different health plans, more than twice as many bids as the agency had ever received. And, for the first time, large commercial insurers such as Blue Cross lined up to court the plan, attracted by the more than $44 million in profits health plans had earned from the program in 1993.
Immediately after the successful bidders were announced in mid-July, 14 letters of protest were filed with AHCCCS.
One health plan which complained about the bidding procedure was Health Choice Arizona, a Mesa-based plan that had contracted with AHCCCS for years to provide services in Maricopa and Pima counties.
Like Comprehensive, Health Choice Arizona had spent years developing a network of doctors and specialists for AHCCCS. Also like Comprehensive, the plan lost out in one of its counties to other plans which had not previously done business with AHCCCS.
The similarities don't end there. Like Comprehensive, Health Choice complained to AHCCCS' own Office of Grievances and Appeals, which found that the complaint was groundless. Health Choice sued AHCCCS, alleging that existing plans were judged too harshly compared to new ones, that AHCCCS accepted "letters of intent" to create provider networks, and that AHCCCS evaluators changed scores without documenting the basis for such changes.
Pat Levin, president of Health Choice, would not say why the company dropped its suit. She would only say that the firm has addressed its problems with AHCCCS and is confident that a solution can be found without any further court action.
Blue Cross is hardly the only health plan that has put an ex-AHCCCS executive on staff. Sources inside AHCCCS and several health plans say that several contractors' companies are thick with ex-state personnel. Many, if not most, of the health plans which contract with AHCCCS have hired lower-level administrators, rank-and-file state employees and outside AHCCCS contractors to help oversee and administer their programs. These employees perform tasks ranging from data processing to personnel management to actual delivery of care, and possess knowledge specific to AHCCCS and its procedures.
AHCCCS defectors fill top slots at several of the program's largest contracted health plans, including Advantage Health Plan, which operates in Maricopa and Pima counties, and Regional AHCCCS Plan in Pinal County.
Also doing well in last year's bid process was the Arizona Physicians' Independent Physicians' Association. APIPA has provided services for hundreds of thousands of AHCCCS members across the state for years. Before contracts were reevaluated last year, APIPA had contracts in 12 counties. After the bidding process was over, it retained contracts in eight. It is still, however, the largest AHCCCS-contracted health plan, providing medical services to more than 112,000 recipients, nearly a fourth of all AHCCCS members.
APIPA is a not-for-profit corporation owned by Samaritan Health Services of Phoenix and the Tucson Medical Center. APIPA is managed, however, by Schaller-Anderson, a Phoenix-based consulting company.
Don Schaller, M.D., is the president of Schaller-Anderson. He served as AHCCCS director from 1984 to 1986. Joseph Anderson, vice president of Schaller-Anderson, was Schaller's deputy at AHCCCS during the same time span.
From 1991 until 1994, Schaller was the senior vice president of managed care programs for Samaritan Health Services, a local health-care empire that counts among its branches five Valley hospitals, five behavioral-health centers, an air evacuation unit, a poison center and a credit union.
Schaller-Anderson's agreement with Samaritan and Tucson Medical Center also makes Anderson the president and chief executive officer of APIPA, which, according to state records, made $21 million in AHCCCS-related profits in 1993. At no time during the last bid process was it alleged that APIPA did anything untoward to obtain its contracts.