Auditors: Pharmacist's $358K deal is excessive

BOISE - Every time the pharmacist at the State Veterans Home in Boise dispenses an over-the-counter or prescription medication to one of the residents, he's due $11.

Jan Poreba, the private pharmacist with the veterans home contract, has used this arrangement with Idaho to take in an average $14,884 every month - on top of a separate, $15,000 monthly fee that pushed the state's payments to him to $358,619 in the 2010 fiscal year.

State Legislative Services auditors now say Poreba's contract, first negotiated in 2007, is too generous compared to less-costly compensation agreements that Idaho's other two veterans homes in Pocatello and Lewiston have struck with their pharmacists. They don't include this extra medication fee.

"Costs for contract pharmacy services at the Boise facility are excessive when compared with the other facilities," auditors wrote in their report released Thursday. "Every effort should still be made to obtain the most favorable terms, conditions and price possible."

Boise's veterans home, tucked away on the shady campus of the Old Soldiers Home that dates back to 1895, includes 167 beds, with an 88 percent occupancy rate.

Lewiston and Pocatello have just 66 beds each, so it's to be expected that Boise's home's monthly pharmacy payments are higher.

But it shouldn't be more than three times higher, auditors said. Lewiston's contract was worth $107,316 in 2010, Pocatello's just $103,800.

State Rep. Janice McGeachin, the chairwoman of the House Health and Welfare Committee, said on Friday that Boise's home should justify the extra medication charge that amounts to $178,619 annually, given it's not part of the deal in Lewiston or Pocatello.

"Why are we charging an $11 fee on top of their monthly contract rate?" McGeachin said. "That's $178,000 that could be going to helping another veteran that isn't."

While Idaho State Division of Veterans Services administrator David Brasuell conceded Friday that the pharmacy contract is "probably a little high," he defended Poreba as a skilled, dedicated pharmacist whose tenure at the Boise facility has been a marked improvement from problems the home had in the past with previous contractors.

In 2003, for instance, the failure of the Boise home's pharmacy contractor to use the federal Veterans Administration drug formulary resulted in large potential losses - losses that were only avoided when the federal agency agreed to make an exception.

Poreba's small company, Apothecary Professional Services, took over that year, before winning the existing contract in 2007.

"The current contract is providing superior service to Idaho's veterans," Brasuell told the AP. "Although it was a little high, our veterans are being cared for in Idaho. And that's our mission. We're not going to waver in the care for our veterans."

In addition, the contract's price tag should come as no surprise to the state.

The Associated Press obtained a 2007 letter - from Brasuell to the Department of Administration - that proposes an agreement of up to five years, not to exceed an initial annual cost of $300,000, with increases based on inflation.

In that letter, Brasuell successfully sought a waiver of Idaho's normal competitive solicitation procedure, an attempt to narrow the field of prospective candidates in what he said at the time was a bid to avoid past problems the Boise veterans home had with contract pharmacists.

This comes up in the Legislative Services audit this week, too, where the reviewers contend Brasuell's agency's 2007 solicitation included very restrictive requirements aimed at ensuring Poreba won the contract.

Brasuell defended process, telling the AP, "We have a lot of peculiar situations in the medical area, which most of the state agencies do not have."

Teresa Luna, director of the Idaho Department of Administration, said Friday that Brasuell fulfilled all the commitments he made to secure the 2007 waiver, including a written pledge to solicit bids from at least two pharmacy services providers other than Poreba's.

Poreba's contract expires in 2012.

And when it does, Brasuell said, he'll make sure a new solicitation is distributed more broadly to a list of local area pharmacists, so they'll have a shot, too.

"We look forward to more people bidding," he said. "And we hope they do."