A key Illinois House lawmaker has called for state hearings and suspension of a new program under which a Massachusetts company is paid to monitor sick children and educate their parents via the Internet even though three-quarters of the families don’t own a computer.
The company is paid $2,000 for each Medicaid family signed up for the service.
“Every day, hospitals and human service providers are choking on debt and struggling to make payroll,” said Rep. Jeff Schoenberg (D-Evanston). “And at the same time, this creative scam siphons off Medicaid dollars that could be used to pay for more pressing human needs.”
The Tribune disclosed on Sunday that state Department of Public Aid officials earmarked $400,000 for the program, Baby CareLink, at Cook County Hospital and Mt. Sinai Medical Center, Chicago hospitals that record the state’s highest number of Medicaid births.
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The online program is aimed at low-income parents of premature infants who require weeks of hospitalization in intensive care. Parents can access information about their child’s condition and read dozens of educational articles on how to provide better care at home. They also can view photos of their child.
If the no-bid pilot program is expanded statewide, Clinician Support Technology of Framingham, Mass., a for-profit company, could earn as much as $12 million a year, according to the company’s business plan obtained by the Tribune.
Schoenberg, a House appropriations committee chairman, said: “These Medicaid dollars are public funds and should be undergo the same scrutiny of any other expenditure of public funds. However, the agreement is constructed in a way to take the accountability out of it.”
Dennis Farrell, executive vice president of Clinician Support Technology, said he enlisted the help of a key Republican lobbyist, Robert Kjellander, who asked Public Aid officials to consider Baby CareLink.
Kjellander is a longtime Republican insider and the state’s representative on the national GOP committee.
Farrell said the program reduces hospital costs because better-educated parents help reduce the length of hospital stays.
Clinician Support Technology has about 60 investors, including members of a Chicago law firm and the former director of the state Department of Commerce.
An internal business plan obtained by the Tribune indicates that direct costs for the firm are $500 for every $2,000 payment–representing a 300 percent profit margin. Direct costs are identified as commissions, royalties and other costs.
But Farrell said the profit margin doesn’t represent the company’s payroll or research-and-development costs.
Critics of the program, which include pediatric doctors at both hospitals, say much of the Web-based information is easily and less expensively obtained through other sources, such as books and hospital pamphlets.
Dennis Culloton, Gov. George Ryan’s press secretary, said he did not believe anyone in the governor’s office had any knowledge of the pilot program.
Culloton said he did not anticipate suspending the program.