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Those records indicate that it is not uncommon for the news of a member's demise to take months to work its way backward through the system. Even if a health plan returns the money AHCCCS has paid it, or has AHCCCS payments cut by a like amount the next year, the net result is (at the very least) an interest-free loan of government funds to a private health plan.

Verifying the eligibility of each of the hundreds of thousands of people who receive AHCCCS funds is not a task for which the program is wholly responsible. Depending on the specifics of individual cases, eligibility for AHCCCS will be determined by either the Social Security Administration or the Arizona Department of Economic Security.

Even AHCCCS officials acknowledge, however, that their agreements with health plans require those providers to notify the state whenever they learn of the death of an AHCCCS member.

And it would seem likely for doctors to know, in most cases, when their patients die.

AHCCCS higher-ups are used to answering charges that their programs are too dependent on outside contractors. A 1992 audit of the program performed by Project SLIM, the state's cost-cutting program, complained that state employees and contract consultants were assigned to duplicate tasks. The audit also revealed that half the state employees working in the AHCCCS data services department were inadequately trained, fostering that department's dependence on outside help.

Such outside help is expensive. The scale ranged between $8 per hour for clerical support staff and $150 per hour for a project manager. Most consultants in the division were paid between $45 and $70 per hour.

SLIM also said the data services operation had:
Unclear lines of authority, meaning that some employees and supervisors were not sure whether their boss or bosses were contractors or state employees.

High turnover among the workers who were state employees. The audit said many of those employees had often been hired even though they clearly lacked the qualifications for their jobs.

Animosity between state employees and outside consultants because of huge disparities in pay.

SLIM suggested the obvious solution: Get rid of the consultants, and quickly. The audit recommended that the dependence on outside consultants be eliminated in 12 to 18 months, because state personnel could be trained to do the same jobs. SLIM said such moves could create savings of $5.5 million a year--while reducing turnover and increasing productivity.

Nearly three years later, not much seems to have changed at AHCCCS.
Despite what AHCCCS officials term "an expansive effort to develop, acquire and maintain state employees," only six consultants left the division in 1994. There are 24 remaining. AHCCCS officials say they expect more consultants to leave as time goes on, but there will probably always be at least 15 under contract to the program.

AHCCCS claims it has been unable to attract qualified personnel for these jobs because skilled data management employees are in high demand in the health-care field. The state, AHCCCS executives say, simply cannot compete with the salaries available in the private sector.

Longtime employees of the data services division, however, say the dependence on consultants is far from accidental. They point to relationships among contractors, management and others in the division as the reason that reliance on consultants remains high.

Relationships among consultants and division higher-ups have indeed been cozy over the years. Here's how cozy: A former assistant director in the division directly supervised work that was being performed by consultants. The consultants worked for a company she owned.

According to AHCCCS documents, in April 1989, Barbera Bridgewater formed a consulting firm called FourThought Group, Inc. That firm was formed to do business with AHCCCS. (Bridgewater had worked at AHCCCS previously as a consultant for another company.)

Bridgewater spent the next two years working on AHCCCS' data system as a consultant, helping to modernize it and guiding it through the federal certification process. In 1992, the director of the project resigned. AHCCCS asked Bridgewater to take the job.

There was one problem with that idea: The division of AHCCCS Bridgewater would oversee was filled with subcontractors employed by her own company. The state was essentially asking her to supervise her own employees as a public, rather than private, employee.

AHCCCS management sought a legal opinion on the hiring from its attorney; the opinion said Bridgewater could be hired, if certain conditions were met. Bridgewater and AHCCCS subsequently inked a written agreement, which stipulated: 1) She would come to work for the state; 2) She would not designate or assign the work that the FourThought Group would be allowed to do; 3) She could remain a shareholder and an officer of FourThought Group but would not be allowed to vote on any AHCCCS-related matters; and 4) She would not be entitled to any FourThought Group earnings that were related to AHCCCS.

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Dave Plank