August 20, 2013

MaineCare ride provider has history of problems

The contractor hired to coordinate rides for Maine Medicaid recipients was forced to drop a contract in Wisconsin.

By Joe Lawlor
Staff Writer

Maine hired Atlanta-based LogistiCare as one of two contractors to coordinate rides for MaineCare recipients starting Aug. 1 even though the company's problems in Wisconsin were reported thoroughly in the news media there over the past two years.

click image to enlarge

Shirin Cabraal, managing attorney of Disability Rights Wisconsin, addresses the crowd as state senators hold a public hearing into problems with LogistiCare at Washington Park Senior Center in Milwaukee Center on Oct. 18, 2012.

Mike De Sisti / Milwaukee Journal Sentinel

click image to enlarge

Clippings from the Milwaukee Journal Sentinel

Related headlines

In several respects, Wisconsin's troubles with its nonemergency Medicaid transportation system mirror those that have developed in Maine this month. Both states got swamped with complaints about missed rides to doctor's appointments.

Mary Mayhew, Maine's health and human services commissioner, said the state knew of the problems in Wisconsin but believed they could be avoided here.

Before Wisconsin and Maine overhauled their Medicaid transportation systems, both relied heavily on local systems to dispatch and give rides to low-income patients to doctor's appointments, therapy and other medical services. Each state has a large rural population without easy access to public transportation.

"You would just call Joe's Van Service, and they would come and give you a ride," said Kit Kerschensteiner, managing attorney for Disability Rights Wisconsin, a group that advocates for patients. "There was much more direct contact with the provider and an ability to work things out."

In 2011, Wisconsin hired LogistiCare to broker rides statewide.

Maine devised the regional system that it has now, dividing the state into eight regions. It hired LogistiCare to coordinate rides in the York County region for $5.1 million a year and hired Coordinated Transportation Solutions of Connecticut for $28.3 million to coordinate rides in most of the rest of the state.

One Maine nonprofit, Penquis, won a $7 million state contract to maintain service in the Bangor region. Since Aug. 1, MaineCare patients have lodged more than 2,000 complaints about MaineCare rides, according to the state. The dozens of complaints the Portland Press Herald has received by phone and email have been about Coordinated Transportation Solutions or LogistiCare.

Mayhew said in a telephone interview that Maine looked at what happened in Wisconsin and concluded that that state had underestimated the number of patients who would use the ride system. She said Maine officials saw that as an avoidable problem.

Since contractors are paid flat fees based on the number of patients, Wisconsin made it difficult for LogistiCare – a for-profit company that NASDAQ listed as having more than $1 billion in revenue in 2012 – to earn a profit because it underestimated the number of patients, according to Mayhew.

LogistiCare officials made that argument, saying they lost money in Wisconsin.

"LogistiCare lost more than $6 million over a 20-month span, an untenable amount for any organization," wrote LogistiCare CEO Herman Schwarz in an online opinion column earlier this year. "So, we made a business decision and in accordance with our contract terms we resigned from the program."

After LogistiCare dropped the contract in 2012, Wisconsin solicited new bids and is now paying another company millions more for the same service, the Milwaukee Journal Sentinel reported this spring.

While LogistiCare was still providing service, one person died after missing rides to his dialysis treatments, according to a Journal Sentinel story published last year.

Gary Goyke, legislative director for the Specialized Medical Vehicle Association of Wisconsin, said regardless of whether it's LogistiCare or another contractor, flat fees give a company incentive to arrange as few rides as possible.

The contractor is paid the same amount regardless of how many rides it arranges, he said.

"The less service they provide, the more money they make," said Goyke, a former Wisconsin legislator.

While Maine pays its contractors flat fees, Mayhew said, Goyke's view "completely ignores" the performance standards that Maine's contractors must meet, including a requirement that complaints from riders be below 1 percent of all calls. The state may cancel the contract at any time if the contractor's performance is unsatisfactory.

(Continued on page 2)

Were you interviewed for this story? If so, please fill out our accuracy form

Send question/comment to the editors

Further Discussion

Here at we value our readers and are committed to growing our community by encouraging you to add to the discussion. To ensure conscientious dialogue we have implemented a strict no-bullying policy. To participate, you must follow our Terms of Use.

Questions about the article? Add them below and we’ll try to answer them or do a follow-up post as soon as we can. Technical problems? Email them to us with an exact description of the problem. Make sure to include:
  • Type of computer or mobile device your are using
  • Exact operating system and browser you are viewing the site on (TIP: You can easily determine your operating system here.)