Florida Department of Corrections locks-in “guaranteed profit” for vendor despite resistance from lawmakers

by | Mar 28, 2019

Few business ventures ever come with guaranteed profit margins built-in, but future entrepreneurs should look no further than Florida for a business model that guarantees at least 11.5 percent profit to the owners. Right now, frustrated lawmakers in the state legislature, including State Senator Jeff Brandes, are looking for ways to put an end to what critics say amounts to a sweetheart deal for a politically-connected prison health care provider called Centurion of Florida, LLC, a subsidiary of Centene Corporation.

Brandes has been sounding the alarm about the financial crisis at Florida’s Department of Corrections (DOC) for months. “The Department of Corrections is on an unsustainable path,” he said during a recent interview with Florida Watchdog.

The guaranteed profit contract with Centurion of Florida is a large part of the financial problem. Florida’s DOC has asked for $330 million in new funding to help patch huge holes in the budget, and the vast majority of the new money, if granted by state lawmakers, would go toward increased health care costs – with far too little left for long-overdue pay increases for prison staff.

The Centurion contract, which came about following the state’s shift of the prison inmate health care burden from the state to the private sector, was supposed to help keep those costs in check. But critics say any contract that guarantees profit is a recipe for disaster. The concept, called “cost-plus,” originally guaranteed Centurion a 13.5 percent profit (since reduced to 11.5 percent) over their costs, which provide no incentive for vendors like Centurion to keep costs low. Previous media coverage last summer called attention to the fact that the lucrative “cost-plus” concept was never offered to previous private sector prison health care providers:

While Centurion is looking at an 11.5 percent, “costs-plus” contract, earlier prison health care companies were denied this extra incentive, and claimed to be losing millions while working with the Department of Corrections.

Critics say Centurion’s parent company, Centene, landed the lucrative deal through more than $175,000 in political contributions to former Florida Governor Rick Scott. The previous DOC Secretary Julie Jones, reported directly to Scott.

There’s still time during this legislative session for lawmakers to address this issue and attempt to fix the problem by questioning the efficacy of continuing, extending, or enhancing a contract that guarantees a double-digit profit for a private sector vendor. Considering the contract was inherited from the prior administration, conservative watchdogs say Governor Ron DeSantis could use the opportunity to free taxpayers from what amounts to a long-term sentence of outrageous expense.

1 Comment

  1. Camille Morgan

    Legalize it!

    Reply

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