Virtual Ruckus

C. Lodge, executive director of Adult Care Management, considers himself an innovative guy. He talks about breaking away from "the patriarchal relationship between provider and consumer" in the health-care field, about "empowering the client," about setting up "virtual offices" and flex time so that employees who are single mothers can work out of their homes and so that money that might have gone to office overhead can be spent in better ways.

All very 1990s--but perhaps a tad too bold for Denver's Department of Social Services. For the past three years, DSS contracted with Adult Care to provide case managers who supervised home care for 2,500 elderly and disabled clients--people who might end up in nursing homes if they didn't have someone to help arrange at-home personal and medical services. But this past summer the nonprofit organization lost its contract with the city, worth roughly $2.1 million a year, to Home Care Management--an experienced, albeit more conventional, for-profit company.

The move has been a critical blow to Lodge's company, which was forced to lay off fifty employees, or two-thirds of its workforce. And it has generated alarm and complaints among some advocates of the aging and the disabled, who have questioned the process by which the contract was awarded, the lack of consumer input in the decision and, most of all, the degree to which the move may have disrupted the services available to ailing, homebound Medicaid clients.

Lodge claims that the decision to put the contract up for bid resulted from philosophical disagreements between his board and Kitty Pring, DSS's director of adult services. "This is about the way the city does business--allowing one person to screw with people's lives so dramatically," he says. "Kitty wanted things done her way, and that was it."

Pring, however, denies any personal motives and defends the move as both warranted and successful. "The transition created a tremendous amount of organizational upset for staff and administrators, but I don't think clients got hurt at all," she says. "I'm convinced they're getting better services now."

Adult Care's contract with the city had been on a year-to-year basis since 1993 and had not been subject to competitive bidding until a few months ago--chiefly because of a lack of qualified bidders, Pring says. But that doesn't mean DSS was entirely satisfied with the company's performance. Last February Pring wrote a letter to Lodge outlining her objections to Adult Care's plans to create a for-profit shell that would manage the company; she also expressed "substantial concerns" about how Lodge's virtual-office concept--for example, having case managers work out of their homes and report to supervisors and DSS by phone and computer--would work.

Lodge says Pring's adamant stance about how the company should operate and how it should be structured "was interfering with our ability to do business. We had an obligation to the people we're serving, not the contract adminstrator. This was micromanagement for personal reasons rather than sound business judgment."

A few weeks after spelling out her concerns, Pring decided to put the contract up for bid. "She told me, 'The only reason we're going through this is to give you a wake-up call,'" Lodge recalls.

Pring says Adult Care was "acting more like a wholly independent agency than a subcontractor" and failing to consult with the city on decisions that affected clients, such as the virtual-office experiment. She cites one "adult protection crisis" that resulted when "the case manager was in a virtual-office mode and had the case file in her car. We couldn't get any information, so we couldn't deal with the problem." Lodge says he investigated the complaint and found it to be "totally bogus," but says he had difficulty reaching Pring to explain the measures Adult Care was taking to make the concept succeed.

In any case, Pring insists that her differences with Adult Care weren't the only reason for seeking other bidders. "Other groups wanted to know when a competitive situation would be available again, and I think all contracts need to have an opportunity for public review," she says.

But the review of the home care contract took a strange turn. A committee of seven current and former metro-area administrators reviewed the proposals from Adult Care, Home Care and one other bidder. Even though a majority ranked Adult Care higher than Home Care, the latter wound up winning the three-year contract due to the vagaries of the scoring process, which allowed two Home Care enthusiasts to sway the decision.

Three of the seven, including Pring, rated Adult Care's proposal slightly higher than the others. A fourth member gave his top rating to the dark horse, Home and Health Care, but still preferred Adult Care over Home Care. A fifth gave the nod, by a slight margin, to Home Care. Yet because the remaining two members scored Home Care as vastly superior, it reaped enough points to carry the day.

"Now that the process is over, I wish we'd taken the time to compare the scores and discuss them," says Lisa Brabo, director of aging services for the Denver Regional Council of Governments and a member of the review committee. "I can't recall ever having been involved in a [contract] situation where people disagreed so radically on the scores."

More troubling, to some observers, was the failure to include anyone on the committee who actually used home-care services. "The clients should have been allowed to participate in this," says Julie Reiskin, co-director of the Colorado Cross Disability Coalition, a statewide disability-rights organization. "It was a really fast process, and nobody from the community was invited."

Pring counters that the committee was "broad-based" and included one "exceptionally disabled" administrator who has used long-term-care services in the past. "I don't know how I would have chosen consumers," she says. "I've got the Arthritis Foundation, the multiple sclerosis organizations--it goes on and on."

Reiskin praises Adult Care as a progressive company that supported "client-directed programs" and attracted competent, caring staff and supervisors. In her view, the virtual-office concept had the potential to give clients more access to case managers, not less. "I don't think clients care where case managers do their paperwork," she says. "So much of the contact is in their own home. To me, this [contract change] is like saying, 'Let's keep doing the same old thing, because it's more lucrative.'"

By contrast, Reiskin says, Home Care executive director Florence Jones "hasn't made an effort to get to know the client community." She says her group has fielded several calls from elderly residents who've encountered difficulty obtaining services from Home Care since the contract changed hands July 1.

"There's a problem system-wide with case managers not being properly trained," Reiskin says. "I worry about people being needlessly institutionalized or being denied services when they should have them."

Lucile Weiss also questions Home Care's performance. An American Association of Retired Persons activist and Adult Care boardmember, she charges that Adult Care received dozens of complaints from former clients, as much as one per hour, during the first few weeks of the transition--complaints about not being assigned case managers or not knowing how to contact them, about being told that it would take months before they could obtain services. "We recommended that they call Home Care, and they'd call back to say they couldn't reach anybody," Weiss says. "All they got was voice mail or being put on hold."

Home Care's Jones, though, counters that the transition has gone quite well. She says she was scheduled to meet with Reiskin's group but was bumped off the agenda until later this year. And she insists no clients have been left begging for services. "We have not received any complaints," she says. "Not from consumers."

Pring says she's aware of only two complaints--both of them referred to her by Reiskin. Home Care wasn't fully staffed on the day the contract began, she notes, but the company has met all of the city's deadlines for the transition. "Were they functioning perfectly when they started? Of course not. No more than Adult Care did when they first got the contract."

The biggest problem in the transition, she adds, wasn't Home Care's scramble to hire and train qualified case managers, but the "bad blood" between the two competitors. "Once it was announced that Adult Care hadn't gotten the bid, things began falling apart," she says. "Staff quit--not surprisingly. Staff were demoralized. There was a lot of finger-pointing, a lot of frustration. I spent a considerable number of sleepless nights sorting it out.

"If there had been any kind of positive communication between Adult Care and Home Care, an easier transition might have been worked out, but there wasn't."

Through its attorney, Adult Care protested the contract award, arguing not only that the scoring process was "fatally flawed," but that Home Care lacked the resources to perform. (Home Care, which also has contracts with Arapahoe, Douglas and Elbert counties, hired dozens of new employees for the Denver contract, including twelve former Adult Care case managers.) Adult Care also contends that its rival's potential conflict of interest should have disqualified it from consideration; under a state waiver, Home Care also provides direct health-care services in other counties but has pledged not to refer cases to its own "providers" under the Denver contract. Both Jones and Pring say that the contract will be closely monitored and that the potential conflict is a non-issue. After review by Pring, the city attorney's office and the city purchasing office, the appeal was denied.

But that doesn't mean the dispute over Denver's home-care services has ended. Lodge contends that the city still owes Adult Care close to $80,000 for client services. Last week, though, he learned that the city wants reimbursement for the cost of relocating eighteen "eligibility technicians"--DSS employees who determine if applicants are eligible for home care--from Adult Care's offices to Home Care's offices a few blocks away.

And how much does the city figure it costs to relocate those employees? "About $80,000," Lodge says.


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