Printer Friendly

A writer's bonanza - three paragraphs for $17,500.

Yet Another State Contract For Walt Patterson Creates Controversy At The Capitol

There is a new controversy swirling around Walt Patterson, the former director of the state Department of Human Services who is now a Little Rock-based consultant.

The state Workers' Compensation Commission has given the task of devising a medical fee schedule to Patterson in a sole-source contract.

Patterson's consulting firm, PATCO Services Inc., has been incorporated only since June.

The state contract with PATCO says, "Only one contractor |was~ identified with specific experience |that~ could perform the contract before Dec. 15, 1991."

The commission did not seek bids or proposals before the $35,000 contract with PATCO was signed Oct. 31.

Patterson pledged in an Oct. 29 letter that he and his associates would present a fee schedule "based on actual Arkansas experience and research."

On Feb. 3, however, the commission accepted a simple three-paragraph recommendation from Patterson. He suggested that the state adopt the federal government's Medicare fee schedule as a cost-control measure. March 20 is the public comment deadline.

Patterson has been paid $17,500 so far.

"Any fee schedule or cost-containment plan is going to be met with resistance from the affected parties, as I'm sure this effort will," Patterson wrote in his recommendation.

Sen. Nick Wilson of Pocahontas says he had nothing to do with the contract, although numerous Capitol observers have alleged the powerful senator is involved. Wilson says Senate foes are doing a "hatchet job" on Patterson in a campaign "directed at me."

Patterson, Wilson says, has a "national reputation" for developing fee schedules and instituting health care training.

The senator says that if Patterson weren't black and weren't a small businessman, "nothing would be said about it."

Wilson defends the commission's delay in moving on a fee schedule. The Legislature said six years ago the commission should establish such a schedule. Intentionally or not, Wilson says, the commission dragged its feet because it "dreaded" facing the controversy doctors and hospitals would create.

If adopted, Patterson's recommendation would reduce by 15 to 50 percent the amount doctors, hospitals and other providers receive for treating injured workers.

State AFL-CIO Secretary-Treasurer Jim Clark also is unhappy. Clark questions the contract with Patterson, has requested a public hearing and contends the schedule will strictly limit the kinds and extent of treatments injured workers receive.

The commission's executive director, George Harris, says he fielded 175 telephone calls and held several private meetings with providers in the first two weeks after a required legal notice was published.

Harris already is considering one change, giving pharmacists a Medicaid-like fee for dispensing medications rather than saying workmen's compensation prescriptions must be filled at cost.

The parties involved can't seem to get their stories straight when it comes to what other states are doing regarding medical fee schedules for treatment provided injured workers.

Patterson says adoption of a Medicare fee schedule by Arkansas would be unique among states.

Harris, meanwhile, says Pennsylvania uses such a schedule and Louisiana is considering it.

Brenda Trolin, a workmen's compensation expert for the Denver-based National Conference of State Legislatures, twice told a meeting of two Arkansas legislative committees Feb. 20 that "at least 30 states" have fee schedules "based on Medicare."

None, she says, uses the straight Medicare form as Patterson has recommended, and none has fees that are the same or less than Medicare.

The workers' medical fees in New York, for example, are 13 percent above the Medicare schedule.

The two joint interim legislative committees -- Public Health, Welfare and Labor and Insurance and Commerce -- are embarking on a comprehensive study of the state's workmen's compensation system following business complaints about escalating insurance premiums.

Rep. Bobby Hogue of Jonesboro says workmen's compensation insurance costs have replaced group health insurance premiums as the chief complaint of employers across the state.

Trolin told the lawmakers that 49 states are having such problems but that Arkansas' problems are "relatively mild" compared with most states.

The Arkansas system is administered "fairly well," she says, and litigation costs due to attorney fee schedules are "not outrageous."

Rep. Sturgis Miller of Pine Bluff, a chiropractor, and others attacked Patterson's recommendation at the legislative committee meeting.

At the joint committee meeting, Wilson cut off Hogue when Hogue attempted to find out more from Trolin about why Idaho is the one state without workmen's compensation problems.

Trolin put the blame for Arkansas' problems on what she termed "outrageous" medical costs. Trolin alleges that when the government reformed Medicare and some insurance companies began using the concept of "managed care" to clamp down on costs, health care providers made up for lost income by shifting costs to workmen's compensation cases.

"Why not?" she asks. "No one was saying anything about it."

Minnesota doctors charge twice as much to treat an identical injury if it is covered by workmen's compensation insurance, Trolin says.

The Legislature authorized the Workers' Compensation Commission to adopt a medical fee schedule during a special 1986 session.

In an interview last spring, Harris said the commission had spent the years since then developing an attorneys' fee schedule, dogging insurance companies to improve their claims practices and working with the state Department of Labor to get businesses to improve safety programs. He said at the time that a medical fee schedule would be developed before the end of 1991.

Why didn't the commission take bids or make a request for proposals before signing a sole-source contract with Patterson?

Harris says the commission voted in May to have a medical fee schedule in place by March 31. He says he spent much of the summer gathering and analyzing data. Harris found that the Blue Cross-Blue Shield fee schedule being considered, which is higher than the Medicare schedule, couldn't be used by the state.

Harris adds that data from neighboring states showed there was no relation between what was being charged in those states and what was being charged in Arkansas on workmen's compensation cases.

The commission felt it had to have a recommendation by Dec. 15 if it were to meet its self-imposed March 31 deadline, Harris says. The director maintains it was Patterson who contacted the commission initially but that "we were familiar with his work with Medicare" as DHS director.

Harris says Patterson met with the commission Dec. 16 and recommended verbally that it use the Medicare fee schedule. Patterson returned with his three-paragraph written recommendation and a cost analysis on Jan. 20.

Patterson, who did not return calls, has been quoted as saying he "ran numbers until I was blue in the face" to reach the conclusion the Medicare schedule was right for Arkansas.

Did Wilson recommend Patterson?

Harris says he talked about a medical fee schedule with several legislators including Wilson, Sen. Mike Beebe of Searcy, Sen. Jay Bradford of Pine Bluff and Rep. Lloyd George of Danville.

Harris says he "can't remember" whether Wilson recommended State senators often "adopt" state agencies, steering their budgets and other needs through the Legislature. Wilson long has filled that role for the Workers' Compensation Commission, having inherited the job when Bill Walmsley of Batesville was defeated for re-election in 1978.

This is the second major state contract Patterson has picked up in recent months.

Patterson, who left DHS in September 1989, became president of Health Care Training Corp. of Arkansas in January 1991 after returning from a year of consulting work in Texas.

When Patterson came aboard, HCTCA already had a $500,000 contract with DHS to keep the state in compliance with federal regulations for training nursing home aides.

Wilson amended an appropriations bill during the 1991 legislative session to extend the training requirement to home health care aides. No money was appropriated for the extension, but HCTCA's contract with the state was amended to include such training effective Jan. 1.

Wilson says Patterson told him the federal government would require training for home health care aides and that there should be "uniformity." No such federal requirement has been approved, though. Unlike nursing home aides, there are no public funds available to train home health care aides.

The HCTCA contract dealing with workmen's compensation was delivered to the Legislative Council for its approval by Cathy Feild. She is director of the Joint Performance Review Committee, which Wilson has chaired since he and Walmsley established it as their legislative power base in the early 1970s.

Contrary to legislative rules, the contract was not considered by the Review Committee before being approved by the Legislative Council on Nov. 15.

Joy Jackson, the Review Committee's secretary, says this was because the Workers' Compensation Commission said it had an "emergency" and could not wait for the next Review Committee meeting. Harris' signature was missing on the document declaring such an "emergency," however, and the document was returned to the commission. An assistant initialed it for him Nov. 4.

Senate sources say Feild worked overtime to get the contract on the Legislative Council's Nov. 15 agenda.

"She was just a messenger, just trying to do the commission a favor," Jackson says.
COPYRIGHT 1992 Journal Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:controversial payment made to Walt Patterson for revision of medical fee schedule of the Workers' Compensation Commission allegedly influenced by Sen. Nick Wilson
Author:Griffee, Carol
Publication:Arkansas Business
Date:Mar 2, 1992
Previous Article:New businesses: a listing of new businesses in Central Arkansas.
Next Article:Merger mania: will a Worthen-Union combination top the $70 million sales mark?

Related Articles
A workmen's compensation compromise: Arkansas Medical Society and state Chamber of Commerce reach an agreement, but labor is locked out.
Reforming workers' comp.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters