PHOENIX (CN) - An Arizona political group claims in court that Maricopa County's taxpayer-funded health system is illegally spending $10 million to start up a private company to enter into the health care market.
The Arizona Public Integrity Alliance sued the Maricopa County Special Health Care
District dba Maricopa Integrated Health System and its CEO Betsey Bayless, in Maricopa County Court.
The Arizona Public Integrity Alliance describes itself in the complaint as "a not-for-profit corporation founded in 2012 to advance the principles of limited, constitutional government; integrity and accountability in government and public officials; government fiscal responsibility; and lower taxes. It actively supports political candidates and public office holders committed to these principles."
The group claims that the defendant "is poised to make an ultra vires gift of $10 million in Maricopa County taxpayer funds to Mercy Maricopa Integrated Care ('MMIC'), an Arizona not-for-profit membership corporation that the District formed (in partnership with several other private companies), The District former the nonprofit to bid on the State of Arizona contract (estimated to be worth $3 billion) to provide largely Medicaid-funded behavioral health care services to the poor in Regional Behavioral Health Authority, District 6 that encompasses Maricopa County and part of Pinal County. With the District's backing, MMIC won the lucrative government contract, but now requires an infusion of $10 million from the District to meet the contract's successful-bidder capitalization requirements.
"Using $10 million of Maricopa County taxpayer funds to form and capitalize a private start-up company to enter and compete with private business in the broader health care market goes far astray of the District's narrowly defined mission and constitutes a misuse of public funds. The District is not in the venture capital business or in business at all for the matter. The voters formed it to operate and staff Maricopa Medical Center and its related clinic system to care for the indigent sick in Maricopa County and nothing more. They did not green light the District taking their money to start a separate health care company in order to compete with private business for state and federal health care dollars.
"Plaintiffs ask the Court to declare the impropriety of and enjoin the District's imminent gift of $10 million of Maricopa County taxpayer funds to capitalize
its new start-up company, MMIC."
The plaintiff claims that the defendant district "may only use the secondary property tax that it levies 'for maintaining and operating the district's facilities and for payments for professional and other services.'"
Co-plaintiff Pace Ellsworth, a resident of Maricopa County who "pays the secondary property tax levied by the District," asked Attorney General Tom Horne in June "to institute an action in the name of the State of Arizona against the District and its President and Chief Executive Officer, Betsey Bayless (or her successor in interest), to enjoin the District from making the planned $10 million gift to MMIC and, in the event any payments had already been made, to recover such amount(s) plus 20 percent," the complaint states.
Horne responded on July 3 and declined to take action because of a conflict of interest in representing the Arizona Department of Health.
The plaintiffs are represented by Christopher LaVoy, with Tiffany & Bosco.
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