PA 09-210—sSB 954

Human Services Committee

Government Administration and Elections Committee

AN ACT CONCERNING PERSONAL SERVICE AGREEMENTS, PURCHASE OF SERVICE CONTRACTS AND NONEMERGENCY MEDICAL TRANSPORTATION SERVICES

SUMMARY: The law establishes two types of contracts that state agencies execute when procuring services from private providers—personal service agreements (PSA) and purchase of services (POS) contracts. PSAs are written agreements defining the services or end product to be delivered by a contractor to a state agency. A POS is a contract between a state agency and a private provider organization or municipality for the purchase of ongoing direct health and human services for agency clients. This act:

1. changes how the Office of Policy and Management (OPM) reports to the legislature annually on PSA activities, and eliminates a requirement that OPM report on POS activities;

2. eliminates (a) the requirement that state agencies submit semi-annual reports on their PSA activities and (b) other reporting requirements;

3. prohibits state agencies from hiring certain health or human service providers without first executing POS contracts; and

4. clarifies the POS definition.

The act also deletes an obsolete reference to purchase orders and makes technical and conforming changes.

Additionally, the act requires any contractor (broker) (1) to which DSS awards a contract to coordinate nonemergency transportation (NEMT) to Medicaid recipients and (2) that also coordinates transportation for individuals not receiving Medicaid to disclose to any transportation provider with which it contracts the source of payment when the transportation service is requested. (If the Medicaid recipient requests the transport from the broker, the broker would not be able to contact the provider at the same time. )

And the act requires all NEMT brokers to make prior authorization (PA) decisions for nonemergency hospital discharge ambulance trips no later than three business days after the hospital or ambulance company submits the PA request. If the broker fails to communicate a decision by the deadline, the request is deemed approved.

EFFECTIVE DATE: Upon passage, except the NEMT provisions are effective on July 1, 2009 and the provision requiring the annual reports on PSAs is effective October 1, 2009.

PSA AND POS CONTRACTS

OPM Reports

Beginning October 1, 2009, the act requires the OPM secretary annually to submit a report to the General Assembly on PSAs executed during the preceding fiscal year. This information includes the name of the personal service contractor, a description of services provided, the term and cost of the agreement, selection methods, and amounts paid for each contract. The act eliminates a requirement that OPM submit a summary report on PSA activity annually.

Previously, the Department of Transportation (DOT), every six months, had to report to OPM on agreements it executed with (1) persons or entities performing consultant services or (2) federal or state agencies. The act instead requires OPM to report separately to the General Assembly on agreements for these specific types of contracts, not just DOT ones, executed during the preceding fiscal year, as well as those for contractual services as defined in state law (see BACKGROUND).

By law, personal service contactors are people or entities that state agencies hire to provide services to the agency. They do not include those performing contractual or consultant services (CGS 4-212).

Finally, the act eliminates a requirement that the OPM secretary report every two years on the POS system.

Elimination of Agency Responsibilities

The act eliminates two separate requirements that every six months each state agency submit reports to the OPM secretary on PSAs executed during the previous six months. The first one required a report for PSAs costing no more than $20,000. The second one required a reporting of PSAs executed with a person, firm, or corporation providing “contractual services,” regardless of the PSA cost, as well as those between agencies and consultants and federal or state agencies. By definition, a PSA cannot cover these types of services so it is not clear how this was interpreted under prior law.

The act also eliminates a requirement that each agency with proposed PSAs costing between $20,001 and $50,000 submit information about the PSAs to OPM at the same time it submits the information to the commissioner of administrative services or the attorney general.

POS Contracts

The act codifies prior practice by prohibiting state agencies from hiring a private provider organization or municipality to provide direct health or human services to the agency's clients without executing a POS contract with them.

The act explicitly subjects POS contracts to the same competitive procurement requirements as the law requires for PSAs. The law already authorizes the OPM secretary to waive these requirements for POS contracts.

The act specifies that POS contracts are generally not for administrative or clerical services, material goods, training, or consulting services and do not include a contract with an individual.

The act also defines terms already in the POS law. For example, it defines a “private provider organization” as a nonstate entity that is either a for- or nonprofit corporation or partnership that receives funds from the state, and may receive federal or other funds, to provide direct health and human services to agency clients.

BACKGROUND

Contractual and Consulting Services

The law governing general state purchases defines “contractual services” as any and all (1) laundry and cleaning, pest control, janitorial, or security services; (2) rental or repair or maintenance of equipment, machinery, and other state-owned personal property; (3) advertising, photostating, and mimeographing; and (4) other service arrangements where the services are provided by someone other than a state employee.

“Consultants” are defined in the state law governing the construction and alteration of state buildings as (1) architects, professional engineers, landscape architects, land surveyors, accountants, interior designers, environmental professionals, or construction administrators registered or licensed to practice their profession or (2) planners or financial specialists.

Core-CT and PSA and POS Reports

CORE-CT, the state's central financial and administrative computer system, encompasses central and agency accounting functions for executive branch agencies. Since 2005, agencies have been required to enter their contracting data into CORE-CT, and OPM has the ability to generate reports about agencies' PSA and POS activities. OPM requires agencies to enter all contract data with CORE-CT and can access this data to get the reports that the law requires the agencies to provide. OPM's annual report on PSAs includes POS contract activity.

No Legal Distinction Between PSA and POS

In 2005, the attorney general issued a formal opinion (No. 031) that there is no legal distinction between a PSA and POS contract, and that both are subject to competitive procurements.

Medicaid Nonemergency Transportation

DSS presently contracts with three transportation brokers that coordinate nonemergency transportation for Medicaid recipients. State regulations require prior authorization (PA) for most nonemergency ambulance trips, and the brokers must obtain this from DSS before they can authorize them. The contracts do not require the brokers to obtain PA within a specific time, including after hours and weekends, but at least two have back-up systems to receive and respond to PA requests.

OLR Tracking: RC: KM: JL: DF