The Office of the State Comptroller (OSC) on Thursday, March 21, 2024, directed Hudson County not to proceed with an award of a $13.5 million contract to a prison healthcare management company because it used an improper process without free and open competition.
While private prison companies are often at the center of debates over inhumane detention, thousands of other outsourcing companies like the one illegally awarded this Hudson County contract are also involved in the multibillion-dollar human warehousing industry.
OSC’s review also found that Hudson County had used an improper procurement process in 2018 when it procured services from the prison healthcare management company named Wellpath.
As part of watchdog agency’s statutorily established oversight, OSC has repeatedly advised the county how to properly procure the services, but officials there failed to comply and refused to follow a directive to report how it will comply with New Jersey’s procurement laws.
In the March 21 letter addressed to County Counsel, OSC said that the County circumvented transparency and public bidding requirements when it didn’t advertise the opportunity to bid, invited a few hand-picked firms to apply, and improperly entered into private negotiations with the preferred vendor.
Since December 2023, Hudson County has repeatedly disregarded OSC’s directive to submit a corrective action plan to procure the services using a competitive, publicly advertised process, as the law requires.
OSC’s letter directed the county to submit this plan within five days. Acting State Comptroller Kevin Walsh also sent a letter to Governor Murphy, Senate President Scutari, and Assembly Speaker Coughlin, notifying them of Hudson County’s ongoing violations and failure to cooperate with OSC.
The Local Public Contracts Law was “enacted to benefit New Jersey taxpayers and instill trust that public officials are making well-reasoned and unbiased decisions that serve the public good,” said Walsh’s letter. “Disregarding important public bidding requirements, as the County has done here, threatens to erode public confidence in the public bidding laws and their use by local officials.”
OSC found that Hudson County disregarded OSC’s statutorily established oversight and submitted the procurement in November 2023, two months after proposals had already come in, and the lowest bid exceeded $12.5 million.
By law, if a contract is valued at $12.5 million or more, the local government is required to submit it to OSC for review and approval at least 30 days before beginning the procurement process.
The county renewed Wellpath’s contract year after year, without advertising, resulting in an expenditure of over $39.5 million over five years.
Wellpath, formerly known as Correct Care Solutions, is a company based in Nashville, Tennessee, and “one of the nation’s largest for-profit healthcare providers for prisoners.”
After being acquired by a multibillion-dollar private equity firm, Wellpath achieved massive corporate growth, but a CNN investigation of complaints at nearly 120 locations found the company has provided substandard care that has led to deaths and other serious outcomes that could have been avoided.
According to an investigation by nonpartisan independent Project on Government Oversight, Wellpath and the companies that merged to create it have a litigation history of at least 1,395 lawsuits that range from stolen items to substandard care of pregnant inmates and medical errors.
In 2018, Correct Care Solutions merged with Correctional Medical Group to create Wellpath, which has acquired other healthcare management companies. Wellpath provides medical and mental health services to over 300,000 patients daily in more than 530 facilities, including prisons, jails, state hospitals, forensic treatment, civil commitment centers, and community-based services.
Former U.S. Representative Patrick J. Kennedy—whose wife Amy was the Democratic candidate for Congress in New Jersey’s 2nd Congressional District defeated by Republican incumbent Jeff Van Drew in the 2020 election—is a member of Wellpath’s board of directors.
The company’s political action committee gave a $500 contribution to Republican Monmouth County Sheriff Shaun Golden, who announced a three-year contract with the Wellpath in January. More than 7,600 other federal political contributions were made by employees of the prison profiteer, according to public records.
The quality of and access to health care in detention centers resulted in avoidable, serious health outcomes, including more than a few deaths, that are attributed to substandard health care provided by Wellpath in local jails and prisons.
In 2018, after six people died in the jail in a year, the Hudson County Correctional Center was investigated and blasted as “inhumane.”
At that time, Hudson County Executive Tom DeGise said the county was reviewing its $29.4 million contract with CFG Health Services to provide medical services at the jail and a professional services contract was awarded to Wellpath on July 12, 2018.
CFG Health Services is still responsible for healthcare management at scores of facilities throughout the Mid-Atlantic states, inlcuding jails in 11 New Jersey counties.
In the letter to Hudson County, OSC said, “It is against the public interest to permit this significant expenditure of taxpayers’ funds to be spent without the protections of New Jersey’s public bidding laws and OSC’s statutory review.”
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