Maine has hired the controversial former welfare chief of Pennsylvania to conduct a $925,000 review of its Medicaid program and the potential effects of expanding it through the federal health care law.

The Department of Health and Human Services announced Tuesday that it has contracted with The Alexander Group of Rhode Island to bolster ongoing “program integrity” efforts and assess the cost of expanding Medicaid – known here as MaineCare – under the Affordable Care Act.

The contract is worth $925,200, according to a copy of the document, and will employ the services of Gary D. Alexander, the former welfare chief in Pennsylvania who was criticized for policy initiatives that dramatically cut the state’s Medicaid rolls, eliminating health care coverage for 89,000 children.

DHHS Commissioner Mary Mayhew said in a media statement that Alexander’s firm brings much-needed expertise to evaluating social services that cost Maine $3.4 billion a year.

Democrats viewed the contract with suspicion, saying Alexander’s record shows that his review will not be impartial and will serve only to justify divisive initiatives favored by the LePage administration.

Alexander’s hiring may also spur more partisan fighting over Medicaid expansion. The issue is highly political in Maine and other states because broadening the public health insurance program is a key component of the federal health care law. Republican governors, including Maine Gov. Paul LePage, have resisted Medicaid expansion, while the Obama administration has launched a public push to pressure states to participate.

The hiring of The Alexander Group will likely feed into that debate, which dominated a large part of this year’s legislative session in Maine and is expected to resume when lawmakers reconvene in January.

The firm is led by Alexander, who was welfare chief for Republican Gov. Tom Corbett of Pennsylvania. Alexander left Pennsylvania in February after becoming a lightning rod over proposals that cut public assistance programs in the course of an aggressive anti-fraud initiative.

The Philadelphia Inquirer reported that Alexander’s Medicaid cuts prompted a review by the Obama administration after 130,000 people, including 89,000 children, lost health care coverage.

Alexander’s initiatives drew criticism from Democrats and advocacy groups for the poor. He also came under fire for issues unrelated to welfare reform, including instituting a dress code for female employees that prohibited open-toe shoes and required tights or panty hose.

Alexander, who previously headed the welfare division in Rhode Island, also was criticized for keeping his home in Rhode Island while working in Pennsylvania, billing the state for travel expenses and launching a real estate company while still working for the welfare department.

Earlier this year, Arkansas hired Alexander’s firm for $220,000 to do a four-month review of its welfare system, according to news reports. The extensive report, completed in July, recommended an array of changes, including beefing up fraud detection through all public assistance programs. Other recommendations included:

Identifying and “intensively” managing the top 100 high-cost Medicaid recipients and potentially restricting benefits paid to designated care providers and emergency services.

Reviewing hospitals’ claims for “upcoding” – schemes to overcharge for service.

Scrutinizing state employees’ health benefit plans.

 Reducing “high-end residential placement” for people with developmental disabilities through shared-living programs.

Cutting hospice costs with more aggressive authorization procedures.

Alexander’s recommendations in Arkansas appear to align with the LePage administration’s policy initiatives, particularly for welfare fraud. The administration has beefed up the DHHS fraud unit with a $700,000 annual investment to pay the salaries of new investigators. Democrats and advocacy groups for the poor have questioned whether the investment is politically driven.

The emphasis on fraud has increased the number of prosecution referrals to the state Attorney General’s Office, from 10 cases in 2010 to 45 in 2012. The number of successful prosecutions has increased more gradually, from eight in 2010 to 15 in 2012. The amount of restitution that courts have ordered increased from $92,339 in 2010 to $104,341 in 2012.

The administration is also pursuing anti-fraud initiatives that it hasn’t publicly disclosed. Documents obtained by the Portland Press Herald show that the state has launched a special investigation that targets Maine’s approximately 500 licensed elver fishermen. Other initiatives outlined in the documents focus on out-of-state beneficiaries and data-driven methods to quantify benefits that were denied by eligibility specialists.

Alexander included similar initiatives in his report for Arkansas.

Some elements of Alexander’s Maine contract appear to be under way already, including a feasibility study of Medicaid expansion. That initiative is scheduled to be complete by Dec. 1, according to the contract. A “system-wide program integrity action plan” is due May 15.

According to the contract, about $455,000 will be paid from the state’s general fund, and about $276,000 is “special revenue.” About $193,000 is federal matching funds.

In her media statement, Mayhew said the DHHS is “excited about the opportunity to work with such a knowledgeable group of experts.”

“In the constantly shifting landscape of the Affordable Care Act and ever-changing rules from Washington, it will be extremely helpful to have someone with significant Medicaid experience lending a hand to our program reform efforts,” she said.

Alexander did not return a call seeking comment.

Mayhew said in a phone interview that Alexander’s expertise will be valuable as the state considers additional public assistance reforms.

According to the DHHS, Alexander’s group will examine the state’s “welfare to work” initiative while heading “an enterprise-wide program integrity improvement effort to ensure those on welfare programs are truly eligible.”

The release said Alexander and members of his team led a similar initiative in Pennsylvania, winning the 2012 Innovations Award from the Council of State Governments.

Democrats expressed skepticism.

“What we don’t want to see is another gimmick to deny and delay health care for tens of thousands of Mainers, including nearly 3,000 veterans,” said Rep. Jeff McCabe, D-Skowhegan, the assistant House majority leader. “This is a million-dollar contract to pay someone whose controversial policies have failed struggling families in other states. Worse, it’s had no public review.”

Mayhew did not answer directly whether the contract was subject to a request-for-proposals process or competitive bidding, saying only that Alexander’s firm was uniquely qualified for the analysis.

Alexander’s work has been hailed by conservatives who have called for a reduction in Medicaid rolls and a crackdown on fraud. He was the host of a conference call sponsored by the Foundation for Government Accountability, a Florida-based conservative advocacy group founded by Tarren Bragdon, former chief executive officer of the Maine Heritage Policy Center, another conservative advocacy group.

Sam Adolphsen, a former policy analyst for the Maine Heritage Policy Center, will oversee “programmatic aspects” of the contract. Adolphsen works for the DHHS as the strategic development director.

Republicans applauded the contract. House Minority Leader Kenneth Fredette, R-Newport, said in a prepared statement that he is glad to see the LePage administration “take yet another important step in bringing accountability and cost savings to Maine’s welfare system by initiating this third-party review.”

“I look forward to seeing the results of this partnership because for too long, past administrations let welfare waste and spending grow to an unsustainable level,” he said.

Steve Mistler can be contacted at 791-6345 or at:

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