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Tuesday, August 19, 2014

Ind. Gov't. - Controversy about Indiana public employee salary databases [Updated with comments]

Earlier this month, perhaps on Aug. 7th, I read an online Indianapolis Star story about the 20 highest paid public employees in Indiana. There wasn't much there, other than the names and salaries, so I expected it to become part of an expanded Sunday story on the topic. What struck me as I read the list was that, other than the usual university football and basketball coaches, the rest of the top-twenty highest-paid public employees list consisted of folk from Citizens Energy and two county hospitals, in Daviess and Dearborn counties! I looked forward to the Star story explaining this.

But there was no story that weekend of August 10th. There was a little-noticed story on August 14th, by Haoyun Su and Michael Auslen, headed "20 highest-paid public employees in Indiana." Some quotes:

When it comes to Indiana's highest-paid public employees overall, we see a slight overlap from our list of the highest-paid coaches — five of them made this list, too.

However, broadening the 2013 list to include all public, state, county and municipal workers adds several well-paid Citizens Energy Group executives and county hospital doctors, knocking some Indiana coaches out of the overall top 20.

Once again, men dominate the list, with only a couple women represented, including Margaret Richcreek, Senior Vice President and Chief at Citizens Energy Group and Sharon Versyp, head coach of women's basketball at Purdue University.

Citizens Energy executives are considered public employees because they work for a nonprofit public trust. * * *

Six doctors made the top 20, all working for either Dearborn County Hospital or Daviess Community Hospital. However, just 41 percent of the state's county hospitals filed forms detailing employee compensation with the state, as is required by law.

The State Board of Accounts hasn't taken any action against these hospitals, said Paul Lottes, general counsel for the board. But, he said, finding a way to ensure all public entities in Indiana follow the law is a priority.

Some doctors have become public employees in recent years as an increasing number of community hospitals have bought local physicians' practices.

See the end of the Star story for the complete list of 20 and their salaries.

But it doesn't end there. The next day the Washington Times Herald had a story (here via Indiana Economic Digest) by Nate Smith headed "Daviess, Dearborn County hospitals question state requirement on reporting salary." Some quotes from the long story:

The fallout from media reports about salaries at county hospitals throughout the state has raised questions about requiring their disclosure.

Daviess Community Hospital and Dearborn County Hospital physicians were named in an Indianapolis Star article naming them to a list of the 20 highest-paid public employees in Indiana. Daviess Community surgeon Marcus Thorne and former surgeon John Clayton were Nos. 10 and 19 on the list. The Times Herald published the state list of all hospital employees following The Star's report.

While the two hospitals were featured on The Star list, many of Indiana's hospitals did not file or did not have to file at all. According to state data, out of the 29 required to file salary data with the state, only 11, or 38 percent, did.

Daviess CEO David Bixler, along with others involved with county hospitals, said the state should either enforce the law or change it for county hospitals.

"If there are rules that we have to follow, it should be for all of us or none of us," Bixler said.

According to Indiana Code 5-11-13-1, the State Board of Accounts requires county hospitals to file annual personnel reports, known as 100R. This is the same report that counties, cities, townships, schools, libraries and other units of government are required to file by law and are publically available. If not, hospitals are subject to a penalty. In a letter dated Feb. 10 provided by Bixler, the state agency said they had to fill out the 100R or risk penalties. Bixler said it was then that he and the hospital's Chief Financial Officer complied.

"We're going to keep the hospital in compliance with state laws, state regulations or things that we receive of an official nature," Bixler said.

But according to Paul Lottes, general counsel for the State Board of Accounts, there has not been a penalty issued to a hospital for not complying. He also said State Examiner Paul Joyce does not intend to take any action against other county hospitals for not following the law.

"There should be penalties that are put in place, or we retrieve our data," Bixler said. "Everybody should be all in or everybody should be all out."

Dearborn County Hospital, which had four physicians on the list, also complied and submitted its salaries. The hospital also falls under the state law, requiring disclosure. A spokesperson declined comment for this story, other than to say the hospital does not receive county funds. Daviess Community Hospital also does not receive funding from the county, but county government does back up the hospital's bonds.

Many hospitals did not choose to file with the state. One of those hospitals was Good Samaritan Hospital in Vincennes. A spokesperson with the hospital said they did not file the 100R form based on the advice of the Indiana Hospital Association. The association, as does Good Samaritan, believes county hospitals should be exempt from filing the 100R form.

Bixler said the policy leaves county hospitals at a disadvantage in terms of recruiting and keeping quality personnel. The salary criteria listed for physicians like Thorne and Clayton, Bixler said, comes from data supplied by the Medical Group Management Association, a group that supplies salary data to hospitals and member health organizations. He went on to say those salaries are competitive with other hospitals but if competitors get hold of that data, they could try to take advantage.

"We have a lot of positions that in health care are in high demand and it's very competitive," Bixler said. "They may be able to see this and say 'Hey, we could steal that person for whatever that be.'"

The Indiana Hospital Association, which serves 164 hospitals in the state, is working with the state Attorney General's office to change salary disclosures for county hospitals. Lottes would not disclose what those changes might be, and Bryan Corbin, a spokesman for the Attorney General's office, also would not comment or confirm the changes. Douglas Leonard, president of the IHA, said in statement they are awaiting to hear what the decision is from the state.

"IHA believes publishing this data violates the privacy of hundreds of hard-working employees and puts county hospitals at a competitive disadvantage compared to privately owned hospitals," Leonard said. "We look forward to continuing this discussion with the Attorney General until a final ruling is issued."

But if the practice is not changed, Bixler said he would seek legal counsel before complying in 2015.

"I think a lot will be learned in the coming weeks and months," Bixler said.

Joyce said in an email the Attorney General's office did affirm county hospitals did have to keep filing the 100R forms, but said he could use some descretion as to what actually gets posted on the state's website as a public document.

"I did just receive this advisory opinion last week and I am in the process of considering any changes that may be made," Joyce said. "However at this time no decision has been made. I would rather not speculate as to changes as that doesn't help anyone."

And it doesn't end there. State employee salaries are available at the Indiana Transparency Portal. But what we are talking about is public employee salaries - a broader list including local government, universities, etc.

The Indianapolis Star database is based on the "Certified Report of Names, Addresses, Duties and Compensation of Public Employees (Form 100R) [which] provides taxpayers with compensation information for public employees of state government, state universities, state boards and commissions, and all local units of government." It is a product of the "Certified Report of Names, Addresses, Duties and Compensation of Public Employees (Form 100R) [,which] provides taxpayers with compensation information for public employees of state government, state universities, state boards and commissions, and all local units of government."

But the results of a Star database search today for the 20 highest-paid Indiana public employees show only university and Citizens Energy officials. Interestingly, the county hospital names no longer show up ...

Something else interesting: If you filter the Star database for "local government," and start with highest paid, it is not until the 6th screen of 10 names each that you find anyone other than Citizens Energy: #56 highest paid is Riggs, David T., Marion County Director of Public Safety. If you continue clicking, Citizens Energy names predominate screen after screen, until the 17th screen, where the annual salaries have fallen into the $105,000 range.

[Updated at 3:10 to add some comments]

Doug Masson tweeted:

Doug Masson ‏@DougMasson 2h
Via @indianalawblog http://indianalawblog.com/archives/2014/08/ind_govt_3.html … // Also, maybe I should try landing a gig with Citizen's Energy.
And a reader sent this note:
Let me see if I understand this: The Attorney General is now censoring the information going into the Public Employee Salary Database because competitors might see the salaries? First of all, that's just ridiculous. Hospitals know what other hospitals are paying. Secondly, doesn't that defeat the purpose of the database...letting the public know where they are spending their money? So if John Q. Taxpayer wants to know what a public hospital employee is making, he's just out of luck? Does Mr. Zoeller work for the citizens of the State of Indiana, or the Indiana Hospital Association?

Posted by Marcia Oddi on August 19, 2014 12:09 PM
Posted to Indiana Government