July 7, 2005

Bredesen Gave What Lobbyist Asks For

How serious was Tennessee Gov. Phil Bredesen about reforming TennCare? So serious that, when the company that serves as TennCare's pharmacy benefits manager was found to be grossly incompetent - causing TennCare to spend too much money - the Bredesen administration did what Bredesen's good friend urged the administration to do: It gave the incompetent company a contract extension without competitive bidding, tripled the firm' fee to $45 million, and hired another company to take on some of the duties that had been the first company's responsibility.

In other words - more money for less work, with no accountability for past failure.

Details of how Gov. Bredesen rewarded an incompetent company on behalf of his friend Dick Lodge - a lobbyist and former chairman of the Tennessee Democratic Party - emerged today from the sixth day of court hearings on TennCare. The Tennessee Justice Center released the following summary...

Dr. Wendy Long, medical director of TennCare, conceded under cross-examination that TennCare officials earlier this year had considered firing First Health, TennCare's pharmacy benefit manager (PBM). She testified that the firm had mishandled mail and data that affected program integrity and resulted in overspending on TennCare. In addition, she stated that state officials considered imposing penalties and even discussed finding a new contractor. She admitted that the position of PBM is critical to the ability of the state to carrying out any of the drug cost savings plans or disease management initiatives that the Governor outlined early last year, but has yet to implement.

Internal state documents complained of "foot dragging" by First Health as state officials vainly tried to make the firm meet its contractual obligations. But instead of firing the firm, the state paid another consultant, Schaller Anderson, to take on some of the duties that First Health was already supposed to provide.

Then after lobbying by Richard Lodge, a former state Democratic Party chair and friend of the Governor, the state decided to extend First Health's contract without competitive bidding, and tripled the firm's fee from $15 million to $45 million.

This testimony followed on admissions earlier this week from Manny Martins, former TennCare director, that more than a year ago he had discussed terminating First Health's contract because the state could not count on any of the firm's data or systems.

As for Bredesen and Lodge, their relationship is emblematic of the highly incestuous relationship between the Bredesen administration and lobbyists. Lodge's wife, Gina Lodge, served in Bredesen's cabinet. Lodge's former lobbying partner, longtime lobbyist Anna Windrow, became Gov. Bredesen's special assistant and policy adviser. And Lodge managed to get Bredesen's administration to give Lodge's client a $30 million raise.

How much does a lobbyist get paid for helping his client pocket an extra - and undeserved - $30 million of taxpayers' money? And how much of it will find its way into helping Bredesen's reelection campaign?
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For more scrutiny of the Bredesen record, see Bredesen Watch.