The state Human Services Department is paying chief executive officers of five Arizona mental health care providers $300 an hour to take over the operation of New Mexico providers identified in a fraud investigation. A look at the regular salaries of these executives shows that’s a much higher rate than they normally make in Arizona.
The contracts of all five Arizona providers specify that the state will reimburse their chief executive officers $300 an hour until the time they are eligible to start billing OptumHealth New Mexico, the company that oversees the state’s managed care system.
Assuming a 40-hour work week and 52 weeks in a year, $300 an hour would translate to about $624,000 a year — more than twice the annual compensation of the highest paid of the Arizona CEOs. But all five contracts expire at the end of the year. And it’s likely that these administrators won’t bill the state for a full 40 hours, assuming they still have oversee their operations in Arizona. The state has budgeted up to $17.8 million for the Arizona providers.
The rate in the contracts is slightly lower for other executives: The state will pay $275 an hour for chief operating officers and chief financial officers; $250 an hour for managers, system analysts, transition consultants and clinical leadership; and $200 an hour for associate managers, business analysts and clinical trainers.
Human Services spokesman Matt Kennicott said last week, “These are base hourly rates that are only a part of the initial contract, based on the need for emergency support under unique circumstances. We do not foresee paying out up to the capped contracted amounts.”
Some of the 14 New Mexico providers whose Medicaid funding was frozen by the state during the investigation have begun shutting their doors and laying off employees. The Arizona companies were hired to step in and take over the caseloads of the New Mexico agencies.
So how much did the Arizona CEOs make before the New Mexico contracts? Their agencies’ most recent forms filed with the Internal Revenue Service shows the following:
La Frontera: Daniel Ranieri, president and CEO, made $275,183 in 2011, the most recent year available. The total amount of executive compensation for the nonprofit is more than $1.4 million. The state of New Mexico is paying La Frontera up to $4.75 million.
Southwest Behavioral Health Services (which created the New Mexico nonprofit Agave Health): CEO Jeffrey Jorde made a total of $266,606 in 2011. The total executive compensation for the company was more than $1.4 million. Southwest Behavioral Health Services is potentially making the most money from New Mexico, with a contract amounting to up to $7.1 million.
Southwest Network Inc.: CEO Amy Henning in 2011 received a total of $248,890. But the provider’s highest-paid employee was Kent Eller, the chief medical officer, whose total compensation amounted to $294,466. The total executive compensation was more than $1.9 million. New Mexico is paying up to $2 million to this company.
Valle del Sol: Luz Sarmina, the CEO and president received a total of $189,620. Total executive compensation for the provider was $610,676. This provider will be paid up to $2 million by New Mexico.
Lifewell Behavioral Wellness: In 2010, CEO Thomas McKelvey’s compensation amounted to $141,131. But the highest-paid Lifewell employee was nurse practitioner, Roger Mayorga, whose total compensation was $169,231. The total executive compensation that year was $520,703. Their contract with New Mexico is limited to $2 million.
A similar look this week at New Mexico providers under investigation showed a wider range in salaries and other compensation — from more than $400,00 a year to as little as $80,710.
Contact Steve Terrell at sterrell@sfnewmexican.com. Read his political blog at roundhouseroundup.com.