Waste-Case Scenario

While negotiating a $21 million contract with Broward County, Unisys swept a $100 million health-insurance mess right under the rug.

Last month, Broward County commissioners reluctantly gave the Unisys Corporation $21 million to manage a computer project so risky one commissioner described it as going "into the abyss." State Sen. Walter "Skip" Campbell could certainly understand their fear. At the time, he was poring over stacks of documents in Tallahassee, where Unisys had already botched another complex project: running the state employees health-insurance program.

Campbell now makes this startling charge: Unisys wasted as much as $100 million in state tax money through "fraud, misrepresentation, and mismanagement." The company was forced to surrender the insurance contract last December, after two years of complaints about billing errors, unpaid claims, and customer neglect.

"The contract should never have been awarded," Campbell (D-Tamarac) said in an interview conducted during a month-long New Times investigation. "Unisys was deceptive in informing us they were capable of handling the contract when clearly they were not. Clearly this was not a company you would want managing your health insurance."

Unisys admits to mismanaging the $300 million health-insurance program, which covers some 215,000 state workers, dependents, and retirees. "We didn't do the job. It was a bad scene," said David H. Pingree, Unisys vice president for government relations. He added, however, that the company has already paid for its mistake: about $2 million in penalties for contract nonperformance.

It's not nearly enough, insists Campbell, who wants the state to sue Unisys to collect damages for breach of contract. The senator also questions whether Unisys was awarded the $86 million contract in a game of political hardball played by Douglas M. Cook, Gov. Lawton Chiles' "health care czar" and long-time friend. Cook refused to be interviewed for this article, but in the past he has denied that politics played a role in awarding the contract, which he considered part of the state's effort to cut soaring health care costs.

Chiles rejected Campbell's $100 million fraud allegation. "The governor's Office of Planning and Budget that headed up the Unisys effort disagrees very strongly with the senator's comments," said April Herrle, Chiles' communication director. "If fraud were to be found, we would look into it, but we do not believe this to be the case. The Florida Department of Law Enforcement (FDLE) and many state entities have reviewed the Unisys contract, and we do not agree with the conclusions that Mr. Campbell made. We will not be pursuing a lawsuit in any way."

Last May, however, Chiles publicly acknowledged the Unisys contract was a mistake and negotiated the pullout agreement to end it on December 31, 1997. State legislature committees and auditors have also criticized the company's mismanagement, and, as early as 1996, FDLE and the Office of the Statewide Prosecutor opened a criminal investigation.

Despite the Tallahassee controversy, the Broward County Commission on February 17 awarded Unisys a $21 million contract to manage an already-troubled computer project called the Integrated Justice Information System (IJIS). The project is supposed to link and upgrade computers in the county's courts, criminal justice agencies, and Clerk of Courts office. But with complex technical and political obstacles to overcome, no one knows whether IJIS will actually work.

Pingree argues that there is no connection between the state health-insurance mess in Tallahassee and the IJIS project in Broward. Unisys is a global company with 32,000 employees, more than $6.6 billion in annual sales, and many different business and computer contracts. Broward County, he says, is dealing with a division of the company that knows what it's doing.

But some people acquainted with the Tallahassee version of Unisys disagree. County Court Judge William W. Herring, whose hospital bills were bungled by Unisys, told New Times: "Hey, if a company is incompetent in one context, why shouldn't we believe they're incompetent in another?"

Judge Herring's complaint comes from the heart. As an employee of the state judicial system, his health insurance was provided through a plan administered by Unisys. In June 1996 he underwent heart-bypass surgery at Broward General Medical Center, then had to decide whether to go through a twelve-week cardiac rehabilitation program. Broward General checked with a Unisys service representative and was told the state's insurance covered the therapy. "Based on that I went ahead," Herring recalled. "When someone tells you you're covered, you figure you have a right to rely on it. Only later did I find out the hospital had been given incorrect information by the Unisys service rep. It turned out there was no coverage at all." Unisys also told him the service rep who provided the inaccurate information was no longer employed by the company. "It left me holding the bag," the judge said.

For months Herring tried to get satisfaction from Unisys as Broward General threatened to sue him over the unpaid bill, which totaled about $5600. After many letters, Unisys "troubleshooters" told him to appeal. "These Unisys representatives told me, 'Don't worry about it, it's 99 percent sure your appeal will be sustained and they'll find coverage,'" Herring said. "I was told this two or three times, only to find out through a form that was sent to me that my appeal was denied." Eventually Herring reached a settlement with Broward General. But from Unisys, "I got nothing but empty promises," he said.

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