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ESA claimants set for leap ‘from frying-pan into fire’ as Maximus wins WCA contract

The government has sparked fury after appointing a US company with a lengthy record of discrimination, incompetence and alleged fraud to take over delivery of its controversial “fitness for work” tests from the much-criticised Atos Healthcare.

Disability News Service (DNS) revealed two weeks ago that Maximus was in prime position to win the three-and-a-half-year contract to carry out hundreds of thousands of the hugely-controversial work capability assessments (WCAs) every year across England, Wales and Scotland.

Iain Duncan Smith, the Conservative work and pensions secretary, confirmed today (Thursday) that Maximus had won the contract – which also includes the delivery of other health-related assessments, such as eligibility tests for disability living allowance and attendance allowance, but not the new personal independence payment – in a written statement to MPs.

Maximus is due to take over responsibility for delivering WCAs from 1 March 2015, but will be working alongside Atos during a transition period. The contract is believed to be worth about £500 million.

Richard Montoni, chief executive of Maximus, said in a statement: “Assessments for people who need health-related benefits should be timely, respectful and fair.

“Our goal is to improve the overall customer experience by addressing certain challenges that exist today.”

He said the company wanted to “reduce waiting times without compromising quality by bringing in more health care professionals”.

And he said Maximus wanted to improve the quality of the WCA – which tests eligibility for employment and support allowance (ESA) – through recruiting more medical professionals specialising in mental health, improving assessments of claimants with fluctuating conditions, and introducing new ways to help customers complete forms and access independent advice.

Most existing healthcare professionals currently working for Atos will transfer to Maximus, Duncan Smith said.

But the passing of the WCA contract from one scandal-drenched multinational to another has caused anger and shock, even among hardened disabled anti-cuts activists.

A string of scandals has been unearthed by UK researchers since Maximus was handed a another lucrative contract in July, this time to deliver the government’s new health and work service in England and Wales. The company is also a provider of the government’s much-criticised Work Programme.

John McArdle, co-founder of Black Triangle, said Maximus had been found guilty of “disability discrimination and massive financial irregularities in the use of public funds in the US”.

He said: “The idea that this company will improve on the track record of Atos is absolutely risible.

“They have been appointed as nothing more nor less than henchmen for more Tory cuts and the systematic attack on the fundamental human rights of sick and disabled people will continue unabated, with scant opposition from the Labour party.”

Disabled People Against Cuts warned that Maximus should “be in no doubt that they will get the same treatment as Atos did – disabled people will continue [to] protest and [carry out] civil disobedience – a name change doesn’t mean a thing.

“This company knew exactly what they were taking on – but money talks louder than conscience.”

Michelle Maher, from the WOWcampaign, said: “Out of the frying-pan and into another fire with Maximus.

“We all knew that changing contractor would not change the failings of the WCA but really, a company with a long track record of deception and court cases… Iain Duncan Smith must have been delighted.

“It was estimated that it would cost three times more to get a new contractor to take the poisoned chalice of the WCA.

“Maximus are laughing all the way to the bank… or the high court.”

Pat Onions, founder of Pat’s Petition, said: “Given Maximus’s history in the US, we suspect this is out of the frying-pan and into the fire.

“We previously warned that Atos were only doing the dirty work for the government. This news makes us more fearful about what the government has up its sleeve.”

And campaigner and blogger Sue Marsh, a key member of the Spartacus online network, said: “I just hope Maximus negotiated significant changes to ESA itself before accepting the contract.

“Simply changing the provider will not sort out the fundamental flaws of the benefit. Delivery is pretty irrelevant if the design itself is wrong.”

Kate Green, Labour’s shadow minister for disabled people, said the “jury was out on Maximus”, but she added: “There will be real concerns in disabled people’s minds about some of the reports… about their behaviour on other contracts.

“They will have to work really hard to give disabled people confidence and reassurance in the process.”

She added: “The most important thing as far as I am concerned is to have a process disabled people can have trust in and confidence that it [makes] all the right decisions.”

She has written to Mark Harper, the Conservative minister for disabled people, to ask him if there would be enough flexibility in the Maximus contract to “offer a government all options for appropriate action if a contract isn’t delivered satisfactorily”, including replacing the company if needed.

A DWP spokesman refused to comment on the past conduct of Maximus in the US.

A Liberal Democrat spokeswoman referred DNS to the Duncan Smith written statement.

Maximus yesterday (Thursday) attempted to distance itself from its past record.

A company spokesman said the concerns were “historic issues overwhelmingly”, and there was now a “different leadership team” in place which had “put those issues right”.

Lisa Miles, the company’s senior vice-president for corporate communications, told DNS that the alleged wrongdoing from the most recent case in fact took place between 2004 and 2006.

US government auditors published a report last year which found that all but $2 million of $41.4 million claimed by the state of Wisconsin – on advice from Maximus – had been “improperly claimed” under Medicaid, the US healthcare insurance programme for those on low incomes.

Maximus was paid a fee based on how much extra revenue the state collected, but Miles insisted that the alleged wrongdoing ended in 2006, while the state of Wisconsin “completely disagreed” with the audit’s findings, which had not yet been acted on by the Centers for Medicare and Medicaid Services.

Miles said Maximus had “accepted full responsibility” for another case, in which it agreed in 2007 to pay $30.5 million compensation, after allegations that it had defrauded the US government by helping the Child and Family Services Agency for Washington, DC, to submit false claims to the Medicaid programme.

She said Maximus had since taken “massive steps to improve our processes and documentation”, and the people responsible were “no longer with the company”, which had “righted those programmes that were wrong”.

Miles insisted that Maximus was “the right organisation to be running this programme” to assess sick and disabled people for their eligibility for benefits.

Asked whether Maximus had a difficult public relations battle ahead of it, after taking over from the discredited French outsourcing company Atos, she said: “I think we are focused most importantly on improving the customer’s experience, and delivering the operations that we have committed to.”

When asked whether Maximus – with its own history of alleged fraud – was the right organisation to be responsible for a programme that is partly aimed at cutting down alleged fraudulent claims, she said: “We do think we are the right organisation to be running this programme.

“We accepted responsibility for that issue that occurred several years ago… You are welcome to dredge up the past but we are trying to move on.”

Other cases of concern include heavy criticism for its performance in delivering a privatised child support enforcement service in Tennessee; and being fined $50,000 two years ago under disability discrimination laws for refusing to promote a female employee because she had had a stroke.

It was also criticised in 2010 for allowing scores of medical workers in a programme for substance-abusing health professionals to continue working, because a subcontractor working for Maximus was using the wrong standard to measure them against.

And in the same year, Maximus and one of its subcontractors agreed to pay compensation of $2.5 million over the botched update of a criminal justice service IT system in the state of Connecticut.

Further back, in 2000, Maximus was forced to pay back $500,000 in improper or questionable expenses claimed as part of a welfare-to-work programme it was delivering.

And in the same year, the United States Equal Employment Opportunity Commission found Maximus had violated federal law by paying lower wages to women than men placed in the same jobs in a Milwaukee warehouse.

In a statement responding to these “past issues”, Miles said: “Since our current management team and CEO took over in 2006, Maximus has gone through a huge investment and improvement programme.

“This included fixing contracts that did not live up to the Maximus standards and in all of these cases we took quick remedial action to put problems right.

“We have also refocused our business on those areas where our experience of helping people access health and social programmes can make the most difference.”