NASHVILLE - A legislative watchdog group agreed Monday to delve deeper into the state Department of Correction's awarding of a $200 million-plus contract to handle inmate health care to a relative newcomer despite its $6.4 million higher bid.
Fiscal Review Committee members want the winner of the contract, Centurion LLC, to come before the panel in September.
Correction Department officials went before Fiscal Review for approval of their request to extend the current contract of Brentwood, Tenn.-based Corizon until Sept. 30 to provide Centurion additional time to prepare taking over the service.
While the business at hand was the 90-day extension of Corizon's existing contract, committee members devoted most of their time questioning Centurion's winning of the new three-year contract.
Corizon, which had the existing contract, lost the competition to Centurion on the new three-year contract. Corizon protested but two state panels upheld the award to Centurion, the most recent coming in a June 6 ruling.
Recently, Correction Department officials said, Corizon indicated it would not push the protest further by going to court.
Lawmakers criticized the request-for-proposal process and raised concerns about the higher cost and what they see as the recently created Centurion's relative lack of experience.
Rep. Tim Wirgau, R-Buchanan, said it raises "red flags" for him.
"Give me some reasons why you decided to spend $6.4 million more," he told Wes Landers, chief financial officer for the Correction Department.
Rep. Jeremy Faison, R-Cosby, was highly critical of Centurion's experience.
"That seems a little shady there," Faison said, adding that the state either had standards or not in awarding points in the request-for-proposal process for experience.
In remarks both during the committee and afterward, Wes Landers, the Correction Department's chief financial officer, defended the decision to go with Centurion.
Centurion is a relatively new joint venture between MHM Services Inc., which has a track record in inmate mental health care, and Centene Corp., which specializes in managed care.
The RFP allowed for "unique" ventures as the state seeks to cut its costs on inmate health care, Landers said. Between MHM and Centene, the experience requirement was met, Landers said, noting MHM has a history of work in Tennessee.
Centene, he said, has cost-containing agreements with a number of hospitals in the state.
The remarks about the RFP allowing room for "unique" ventures prompted Faison's remark about "shady" requirements.
Landers later said in an interview that through Centene, Centurion will be able to pay the hospitals at Medicaid rates, which are cheaper, for inmate care. He said the company also has provided for a risk-sharing model that financially rewards the state for holding down unnecessary hospital visits.
"I've got really high hopes for what we might be able to do," he said.
Landers said under the RFP process, the decision is based on three factors: cost, the proposal itself and experience. Cost accounts for 35 percent of the decision while the technical proposal accounts for 45 percent and 20 percent is based on a firm's experience.
Following the initial RFP, General Services' Central Procurement Office took over and continued negotiations with both firms to reduce costs. Landers said after all was said and done, Centurion had a six-point advantage despite Corizon's lower costs.
Corizon's initial offer was around $229 million while Centurion's was $247.3 million, Landers said. After several rounds of negotiation, Corizon ended up at $225.6 million while Centurion was $232 million.
Last month, eyebrows were raised after The Tennessean reported that Correction Commissioner Derrick Schofield's wife works in a midlevel capacity for Centurion in Georgia. Officials said there is no conflict and that Schofield recused himself from involvement in the awarding of the contract.
Corizon, meanwhile, has had problems in other states with allegations the company's inmate care was inadequate. Kentucky television station WHAS reported it found "multiple wrongful death lawsuits" filed against the company, including one involving an inmate's death in the Lexington-Fayette County jail in 2012.
Landers said Tennessee has assessed the company $37,000 for several problems, including failure to maintain adequate staffing and failure to perform tuberculosis skin tests on inmates.
The Fiscal Review Committee granted the department's 90-day contract extension for Corizon. Landers said it was necessary because of delays caused by the bid protest with Centurion unable to come in to begin planning until the issue was settled.
Contact staff writer Andy Sher at 615-255-0550 or email@example.com.