The People's Vanguard of Davis has learned that when Davis City Human Resources Administrator, Melissa Chaney, told the Davis City Council at the January 16, 2007 City Council Meeting, that the city's 23 year long provider of Employee Assistance Program (EAP), Psychological Resources Associates (PRA) was not in compliance with the Knox-Keene, act she was giving out false information.
According to a letter submitted to City Manager Bill Emlen last week and copied to each of the City Council Members from PRA director Dr. Dean Dickerson, PRA is not Knox-Keene act certified because they are exempt from Knox-Keene licensing requirement. Therefore they do not need to be licensed as an HMO or a large insurance company would.
The Knox-Keene act was enacted to protect consumers (such as the city of Davis and their employees) from potential abuse from large HMOs or insurance companies who have a history of over-promising and under-performing on those promises. PRA provides health care services on a per visit basis and therefore operates as a "direct contract provider" rather than as an insurance company.
Dr. Dickerson goes on to write, "Unfortunately these large companies have used the Knox-Keene licensing issue as a false and deceptive argument to capture contracts that previously had been provided by local professional groups." Essentially, these large HMOs market to prospective clients that they are Knox-Keene licensed and the small EAP providers are not thereby implying falsely that the small provider who is providing EAP services is doing so illegally or is out of compliance with the law.
This is exactly what has happened in this case.
Melissa Chaney acknowledged that she herself had just become aware of this provision of the law, just prior to the January 16 City Council Meeting, not during the RFP (request for proposal) process which was conducted during the prior six months. While she can perhaps be forgiven for not knowing whether the law applied to PRA, it is deeply troubling that she never bothered to ask a vendor that the city had done 23 years of EAP business with for clarification on this vital issue.
When asked by Mayor Greenwald, Chaney said, "we didn't realize that this provision was even in effect, that this license was mandated until we went through the RFP process." In fact, during the RFP process (conducted during the final six months of 2006) this issue did not come up as Ms. Chaney had not requested that Knox-Keene act certification be a requirement to provide EAP services to the city of Davis. Had she included that in her RFP (request for proposal) the current provider would have informed her that the Knox-Keene act did not apply to them.
Greenwald continued to press, "and you didn't discuss this with the 23 year local provider?"
Chaney responded, "No. During the RFP process we just followed the process of going through the RFP."
City Manager Bill Emlen made the unusual statement that they were not certain about this information. He even suggested that city staff might need more information on the Knox-Keene act and whether it applied to PRA, but that he felt that the bid by Cigna stood on its own merits. However, despite his statement the suggestion that PRA was somehow not licensed, changed the tone and course of the conversation.
(Click here to see the full video clip of this exchange)
Both Mayor Greenwald and Mayor Pro Tem Asmundson were sympathetic toward local business getting contracts if at all possible but they could not justify it when they got information suggesting that the local provider was not certified.
It thus was clear that both Mayor Greenwald and Mayor Pro Tem Asmundson's positions were swayed by this particular issue--the lack of a Knox-Keene license for PRA. Asmundson stated a preference to give the process more time given the length of the relationship and the fact that PRA was a local provider. However, the concerns about Knox-Keene licensing finally swayed her to support Cigna. Greenwald remained ambivalent about it, in the end voting for both the "take no action" substitute motion made by Councilmember Lamar Heystek (to allow for further fact finding) and then finally approving of Cigna. Heystek was the only dissenter in the end.
While I too was unaware that PRA was exempt from the Knox-Keene act, I found the entire issue very unsettling because it did not make any sense that a person or firm who had been in business as long as Dr. Dickerson would be out of compliance with state licensing requirements. Moreover, PRA provides EAP services to many of the other local municipalities and other governing bodies including Woodland City, Davis Joint Unified School District, and Yolo County. To put it simply, Ms. Chaney's claims seemed dubious.
Ms. Chaney's failure to follow due diligence is fundamentally troubling especially considering that the City Council must absolutely rely on and trust the advice and information presented by the city staff. And Ms. Chaney has violated this not only by getting the information wrong, but by not making a simple phone call to PRA to clarify this issue.
Both Mayor Greenwald and Mayor Pro Tem Asmundson voted in favor of awarding the bid to Cigna and therefore can ask for reconsideration. Regardless of the merits of the Cigna bid (which I have serious doubt about in its own right), due diligence requires a full investigation into this episode to ensure that this does not occur in the future.
---Doug Paul Davis reporting
According to a letter submitted to City Manager Bill Emlen last week and copied to each of the City Council Members from PRA director Dr. Dean Dickerson, PRA is not Knox-Keene act certified because they are exempt from Knox-Keene licensing requirement. Therefore they do not need to be licensed as an HMO or a large insurance company would.
The Knox-Keene act was enacted to protect consumers (such as the city of Davis and their employees) from potential abuse from large HMOs or insurance companies who have a history of over-promising and under-performing on those promises. PRA provides health care services on a per visit basis and therefore operates as a "direct contract provider" rather than as an insurance company.
Dr. Dickerson goes on to write, "Unfortunately these large companies have used the Knox-Keene licensing issue as a false and deceptive argument to capture contracts that previously had been provided by local professional groups." Essentially, these large HMOs market to prospective clients that they are Knox-Keene licensed and the small EAP providers are not thereby implying falsely that the small provider who is providing EAP services is doing so illegally or is out of compliance with the law.
This is exactly what has happened in this case.
Melissa Chaney acknowledged that she herself had just become aware of this provision of the law, just prior to the January 16 City Council Meeting, not during the RFP (request for proposal) process which was conducted during the prior six months. While she can perhaps be forgiven for not knowing whether the law applied to PRA, it is deeply troubling that she never bothered to ask a vendor that the city had done 23 years of EAP business with for clarification on this vital issue.
When asked by Mayor Greenwald, Chaney said, "we didn't realize that this provision was even in effect, that this license was mandated until we went through the RFP process." In fact, during the RFP process (conducted during the final six months of 2006) this issue did not come up as Ms. Chaney had not requested that Knox-Keene act certification be a requirement to provide EAP services to the city of Davis. Had she included that in her RFP (request for proposal) the current provider would have informed her that the Knox-Keene act did not apply to them.
Greenwald continued to press, "and you didn't discuss this with the 23 year local provider?"
Chaney responded, "No. During the RFP process we just followed the process of going through the RFP."
City Manager Bill Emlen made the unusual statement that they were not certain about this information. He even suggested that city staff might need more information on the Knox-Keene act and whether it applied to PRA, but that he felt that the bid by Cigna stood on its own merits. However, despite his statement the suggestion that PRA was somehow not licensed, changed the tone and course of the conversation.
(Click here to see the full video clip of this exchange)
Both Mayor Greenwald and Mayor Pro Tem Asmundson were sympathetic toward local business getting contracts if at all possible but they could not justify it when they got information suggesting that the local provider was not certified.
It thus was clear that both Mayor Greenwald and Mayor Pro Tem Asmundson's positions were swayed by this particular issue--the lack of a Knox-Keene license for PRA. Asmundson stated a preference to give the process more time given the length of the relationship and the fact that PRA was a local provider. However, the concerns about Knox-Keene licensing finally swayed her to support Cigna. Greenwald remained ambivalent about it, in the end voting for both the "take no action" substitute motion made by Councilmember Lamar Heystek (to allow for further fact finding) and then finally approving of Cigna. Heystek was the only dissenter in the end.
While I too was unaware that PRA was exempt from the Knox-Keene act, I found the entire issue very unsettling because it did not make any sense that a person or firm who had been in business as long as Dr. Dickerson would be out of compliance with state licensing requirements. Moreover, PRA provides EAP services to many of the other local municipalities and other governing bodies including Woodland City, Davis Joint Unified School District, and Yolo County. To put it simply, Ms. Chaney's claims seemed dubious.
Ms. Chaney's failure to follow due diligence is fundamentally troubling especially considering that the City Council must absolutely rely on and trust the advice and information presented by the city staff. And Ms. Chaney has violated this not only by getting the information wrong, but by not making a simple phone call to PRA to clarify this issue.
Both Mayor Greenwald and Mayor Pro Tem Asmundson voted in favor of awarding the bid to Cigna and therefore can ask for reconsideration. Regardless of the merits of the Cigna bid (which I have serious doubt about in its own right), due diligence requires a full investigation into this episode to ensure that this does not occur in the future.
---Doug Paul Davis reporting
