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Plans to Privatize Terrell State Hospital Scrapped After Release of State Audit

Last week plans for GEO Care/Correct Care Recovery Solutions' to take over the Terrell State Hospital were scrapped after the release of a state audit. This effort was a privatization scheme that was part of GEO Care's, a subsidiary of private prison company GEO Group, expansion ambitions into state hospital and civil commitment centers.  This decision was instigated by a large contracting scandal in the state and a critical state audit.

 

Last week, the State Auditor’s Office released a seething audit of Texas’ Health and Human Service Commission’s (HHSC) attempt to privatize Terrell State Hospital last year.  The audit acknowledges that some procurement processes were followed. Yet, significant breaches to protocol occurred. According to the audit “the Health and Human Services Commission (Commission) did not ensure that its decision to tentatively award a contract to GEO Care, LLC to manage selected operations at Terrell State Hospital provided the best value to the State. The Commission and the Department of State Health Services (Department) did not fully comply with the Commission’s contract planning and procurement processes.”

 

The results of the audit included a list of mishaps on the part of HHSC. This included  failure to conduct a preliminary needs assessment and a cost-benefit-analysis, tardy purchase requisitions, and failure to adequately verify the background, qualifications, and experiences of vendors. In addition, there were a number of discrepancies in the bid evaluation process including inconsistencies in scoring, lack of a minimum qualifying score, and failure to receive non-disclosure agreements prior to negotiations.

 

In 2012, Texas Department of State Health Services attempted to offer a contract with GEO Care to operate the Kerrville State Hospital. In the end, Commissioner Dr. David Lakey rejected GEO Care’s bid to privatize the Kerrville State Hospital on the grounds that savings in the proposal were achieved “primarily through reductions in staffing and benefits to a degree that would put both our patients and the State of Texas at risk.” Even with this conclusion, HHSC chose to move forward with solicitation to privatize Terrell State Hospital in 2014. Nevertheless, the audit has rendered current attempts to privatize Terrell State Hospital momentarily dead.

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