The Arizona Health Care Cost Containment System has placed one employee on indefinite leave, apparently in response to revelations that the program had footed the health-care bill for people who had been dead for years.

The suspended employee, Farrell Janssen, a 59-year-old computer programmer, says he was placed on administrative leave on April 24 after superiors accused him of obtaining and examining records he had "no reason and no business" looking at.

Janssen says he also was told he was being sent home because of concerns that he was sharing program documents with outsiders.

Janssen's suspension came on the heels of a New Times investigative report that referred to a variety of internal documents from AHCCCS, the state health-care system for the poor ("Dead and Forgotten," April 27). The story summarized memoranda that document what appears to be millions of dollars of AHCCCS payments to health-care providers for the medical care of clients who had been dead for as long as a decade.

The report also detailed what appeared to be conflicts of interest in AHCCCS' use of outside consultants and a lack of state and federal oversight of AHCCCS that has allowed the system's management and purchasing problems to continue.

AHCCCS officials did not return repeated phone calls from New Times last week.

Janssen and other current and former employees say AHCCCS management has never taken kindly to employees who complain about the system's problems.

In 1990, Janssen says, he discovered that AHCCCS had been making monthly health-care payments for about 600 clients who had been dead for at least five years.

It was not the first time such a discovery was made, and it would not be the last. AHCCCS employees wrote memoranda detailing similar problems in 1989 and 1992. Although the dead people identified in each instance were apparently taken off the AHCCCS rolls, the state apparently made no attempt to collect the money already paid to health providers for medical care of those long-buried corpses.

Despite the memoranda, AHCCCS seemingly has made no attempt to search its membership rolls looking for recipients who are deceased. And the problem of dead AHCCCS clients continues. A small, nonscientific search for dead recipients performed recently for New Times by AHCCCS employees revealed that in some eligibility groups, as many as one in four names appearing on the rolls belonged to a dead person.

The state spent about $1.8 billion last year to provide health coverage for 450,000 AHCCCS clients.

Janssen says he reported his 1990 discovery to an AHCCCS auditor. He says he was told that the dead would be removed from AHCCCS member lists, but no attempt would be made to reclaim payments made to their health plans because efforts to recoup the money could put medical providers "out of business."

The auditor, still employed by AHCCCS, did not return phone calls last week.

Janssen is just one of several current and former AHCCCS employees who believe their careers went astray because they voiced the wrong concerns to the wrong people.

Mike Smith, who was employed as a supervisor by the program from 1990 to 1994, told New Times he thinks he was forced out of his job for calling attention to the large numbers of consultants charging AHCCCS exorbitant hourly fees for doing work that could have been done by state employees. After his performance reviews took a nose dive, Smith accepted a demotion and went to work at another state agency.

Another ex-AHCCCS employee who thinks he fell victim to management's "see-no-evil" posture is Greg Kahlstorf. After joining AHCCCS as a data processing manager last April, Kahlstorf says he immediately started feeling pressure to ignore inefficiency and waste.

"It didn't take me long to find out that things were the way they wanted them, and that there were large numbers of consultants, who had been there for years, feathering their beds," Kahlstorf says.

At various times, he says, he raised objections about the number of consultants AHCCCS was employing and the amount of money they were paid. He also voiced concerns about what he considered glaring conflicts of interest involving AHCCCS consultants. Kahlstorf was terminated in November after seven months at the agency.

AHCCCS officials have maintained that Kahlstorf is nothing more than a disgruntled gadfly, an ex-employee terminated because he couldn't do the job. They say allegations he and others have made are, at best, sour grapes--and, at worst, complete fabrications.

But Teri McCall, Kahlstorf's attorney, says others have complaints about AHCCCS.

"They're all concerned about the conflicts of interest and potential fraud," says McCall, who currently represents one other individual in personnel actions against AHCCCS. McCall also says she has spoken with, and is likely to take as clients, three more such individuals.

"And the state's position [in each case] is basically the same--that they're all crazy."

McCall and Kahlstorf claim AHCCCS has taken a strange step in fighting its whistle-blowers: refusing to release public records.

In a letter dated April 12, Charles Adornetto, AHCCCS' hearing administrator, told Kahlstorf that he would no longer receive public records he requested from the agency.

Adornetto wrote that Kahlstorf was using the information provided to him for "personal gain and harassment," and that "to continue to comply with [his] requests is contrary to the best interests of the state." Adornetto also said that AHCCCS had secured a legal opinion that it no longer needed to honor his public-records requests.

"Not only do we have these six employees who are raising the same concerns, but we've got [AHCCCS] not releasing any documents to us and making their own conclusions," McCall says.

In a May 2 letter, Adornetto also warned Kahlstorf that he had made "false and spurious allegations" about AHCCCS to, among others, "Hillary Clinton, the Health Care Financing Administration (HCFA), the Office of the Inspector General, the media, former co-workers and neighbors."

Adornetto went on to say that the Office of the Inspector General had "concluded, as did AHCCCS many months ago, that your allegations are those of a vindictive former employee rather than evidence of wrongdoing on the part of AHCCCS."

Last Friday, however, a spokesman in Washington, D.C., said that the Phoenix division of HCFA's inspector general's office is still receiving information on Kahlstorf's case, and no conclusions have been reached.


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