Terrell State Hospital needs help, badly. So why is Texas privatizing the psychiatric facility—and picking a notorious company to run it?

It took the residents of Terrell a long time to figure out that there was nothing they could do.

As they filed into the Rockwall and Brin Church of Christ on November 3 for a town hall meeting about privatizing the local psychiatric hospital, attendees were handed a purple flier from the Texas State Employees Union. It said, “THIS IS NOT A DONE DEAL!”

But over the next three hours, the 250 or so men and women present, many of whom had worked at Terrell State Hospital for years if not decades, would trickle back out to the dark parking lot in silence as, one by one, they realized this wasn’t true.

They were angry, worried, and most of all confused about why privatization was coming to Terrell at all. The hospital has labored to improve since 2012, when a patient died after being restrained for 55 hours. Ann Simmons, 62, was only at Terrell three days before being killed by pulmonary thromboembolism—a blood clot that formed in her immobilized limbs, broke free, and lodged in an artery to her lungs.

Nothing would have come of her death if the Austin American-Statesman hadn’t tipped off the Centers for Medicare and Medicaid Services about it while reporting on Terrell. The hospital’s internal investigation—and that of the Department of State Health Services, which manages the state hospitals—had found no fault with Simmons’ treatment. But a federal investigation uncovered problems so serious that it put Terrell on “immediate jeopardy” status and gave the hospital just 23 days to start fixing the conditions that killed Ann Simmons.

In October of last year, federal investigators ruled Terrell reformed.

“We learn from our experiences,” Carrie Williams, spokesperson for the Department of State Health Services, told the Statesman at the time.

But now Texas is privatizing Terrell—a move that will likely shield the hospital from the kind of scrutiny that prompted reform and could even inhibit state oversight. That has patients’ rights advocates asking what, exactly, officials learned.

Equally troubling is the state’s choice of contractor, selected without input from employee unions or patients’ rights advocates. Last month, state officials announced that they’d awarded a five-year contract to run the hospital to Correct Care Solutions, a Nashville-based correctional healthcare corporation. The company’s track record in other states includes allegations or confirmed reports of rape, suicide, neglect and medical malpractice that make Simmons’ cause of death look almost merciful.

Given Correct Care’s history—and the fact that state officials say they’re not trying to save money but to improve care—the selection seems inexplicable. But it’s slightly less so in the context of another company’s record in Texas: GEO Care. GEO Care, the newly divested healthcare arm of notorious private-prison giant GEO Group, has been trying to break into Texas’ public psychiatric health system for years, often with mysterious or questionable help from elected officials. Correct Care Solutions recently absorbed GEO Care.

At the town hall meeting in Terrell, worried residents and staff questioned Correct Care Solutions president Jorge Dominicis for three hours but got few straight answers. Neither he nor state Rep. Lance Gooden (R-Terrell), also present, would disclose anything about Correct Care’s bid or plans, saying it could compromise the state’s negotiations. Dominicis could only discuss “what we have done in the past, in other similar procurements.”

Dominicis, a tall, Richard Gere-ish caricature of wealth and power, looked badly out of place striding among the wooden pews with a wireless microphone sprouting from his temple. But his partner made sure he never broke a sweat. Rep. Gooden, a 31-year-old insurance consultant who introduced Dominicis as “a great man,” stood off to the side with his own microphone, turning it on occasionally to interject on his guest’s behalf. Sometimes he chastised citizens for the tone or content of their questions; other times, he rephrased statements by Dominicis to sound sweeter, clearer, or more certain. In those cases, Gooden began, “He won’t say this, but…”

Several people asked how Correct Care could serve patients as well as the state and still make money. “We think we can do it more efficiently,” Dominicis said at one point, “and there will be a very small profit.”

“So your heart’s in it? It’s not about the money?” a man asked.

“My heart’s in this, yes. I’m a believer and I pray, Lord, every night, I ask God to give me strength and to do my best and to help all of my coworkers be their best the next day,” said Dominicis.

The man smiled. “You make $40,000 a year?”

That’s when Rep. Gooden interrupted. “I just want to point out, this gentleman came down, and he didn’t have to,” Gooden said.

Actually, Dominicis made over $1 million in 2013 as a senior vice president at GEO Group before becoming president of Correct Care Solutions.

Citizens asked again and again how Correct Care could turn a profit, unsatisfied with Dominicis’ refrain about “finding inefficiencies.” Slowly, they eked out examples, like cuts to medicine and food.

“One of the things that we found in many of the facilities that we had the opportunity to become a partner [with] is a very high use of multiple atypicals,” Dominicis said, meaning atypical antipsychotics, a common treatment for serious mental illnesses like schizophrenia. Correct Care’s policy of putting patients on just one drug saves on pharmacy.

Another place Correct Care saved was on food. “We provide high-quality food, but we’re very careful,” he said. “What we found is that sometimes in the hospitals where we took over, literally the food inventory was twice what [it should be.] When you ran the numbers, you realized either every patient was gaining ten pounds a week or there was something going on…”

“The thing is,” a woman said, “is that our stock drugs, our antipsychotics, make people ravenous. And that’s what a lot of people, even our employees, really don’t realize. So I hate to see what little they get be reduced…”

Dominicis replied, “There’s so much to answer there, so you’ll forgive me if I don’t get it all…” Then, for the second time that night, he gave a detailed history of GEO Care, ignoring the question.

He wound around to this: “As a company, we’re committed to helping people recover. We believe that that’s real. When I go to our hospitals, one of the questions I’ll ask staff from time to time is, ‘Have you seen a miracle lately? Tell me about a miracle that’s happened in this hospital.” And every time I go, people have a story.’”

Those are not the stories about Correct Care Solutions that make the news. These are:

In January, 57-year-old James Embry died after being allowed to starve to death in the Kentucky State Penitentiary, where Correct Care Services provided medical care. According to an Associated Press investigation, Embry discontinued his medication for anxiety in May 2013 but in December, asked to restart, saying he felt anxious and paranoid. The staff psychologist denied the request. Seven days later, Embry began banging his head on his cell door and refusing food. On January 13, a head nurse refused a request by other medical staff to move Embry to the infirmary, instead ordering him taken off hunger strike watch. Embry died that day. Only then did Correct Care Solutions fire the lead physician, Steve Hiland, who’d been sued in federal court 103 times by inmates and their families since 1992.

In Feb. 2014, the family of Charlene Karr agreed to mediation with Correct Care Solutions to resolve their suit over her death, a move that will conceal details of any settlement, should one occur. Karr attempted suicide by drinking isopropyl rubbing alcohol in November 2012 and was brought to the detox center run by Correct Care in Minnehaha County, Iowa, where the suit says caregivers failed to read the intake officer’s report, failed to observe her every 15 minutes as required, and instead left Karr visibly impaired and face-down in bed. Her body was found more than two hours later.

In 2011, Eugene Gruber, a 51-year-old man, died of a spinal cord injury suffered at the hands of officers at the Lake County Jail in Illinois. The jail’s medical staff, provided by Correct Care Solutions, told guards Gruber was faking the injury. Gruber lay untreated for 15 hours until a supervisor noticed his “severe distress” and called an ambulance. The county fired Correct Care and settled a suit by Gruber’s family for $1.95 million.

More stories from Correct Care facilities can be found here, here, here, here,and here.

While the Terrell audience seemed unaware of Correct Care Solutions’ history, they did know about GEO Care’s. In 2011, three patients died gruesomely in as many months at the GEO Care-run South Florida State Hospital. One leaped from a parking garage. Another was heavily medicated and died in a scalding bath. A third was found with her head slammed through a wall and died of her injuries.

“Part of the anger is that we read about three deaths…” a woman at the town hall asked, “and that it wasn’t reported. These are things we see about GEO Care.”

“Actually, I have to correct you,” said Dominicis. “That’s not true. They were reported. So there are deaths at hospitals. All right? Is that news to anybody here?”

“Well,” she pressed, “part of the reason we’re being supposedly sold off is that we had a death, but what we see are several abuses at your company and we’re just wondering why, you know—”



He cut her off. “Well, I don’t agree with the characterization of abuse. That’s not what happened. They were reported immediately. And in the cases where there were things that should have been done differently, our company took direct action.” He said they’d added training on prisoner transport and required staff to enter more information on patients during welfare checks.

“So we’re not perfect,” he said. “Did I start by saying we were perfect? Because that’s not the case. But we have not had cases of abuse, and our record is really very good.”

Dominicis also insisted that GEO Care is so distinct from GEO Group that the latter’s record is irrelevant when evaluating the former. That’s important because GEO Group has a history of human rights abuses at its facilities, including several in Texas. In 2007, the state closed a juvenile facility managed by GEO Group after discovering horrific conditions and that one guard it had hired was a convicted sex offender. In 2009, prisoners at a GEO Group-run immigrant detention center in West Texas rioted over poor medical care, setting fires and taking hostages. The violence was reportedly sparked by seeing the body a man who died of a seizure carried out in a plastic trash bag.

But even without assigning GEO Care the sins of its parent company—and even looking only at its history in Texas—GEO Care is, as Dominicis says, not perfect.

In 2011, GEO Care won the contract to run the state’s first-ever publicly funded, privately managed psychiatric facility: the brand new, 100-bed Montgomery County Mental Health Treatment Facility in Conroe. But within 16 months of opening its doors, GEO Care had racked up $53,000 in fines for serious violations like unauthorized restraint, poor monitoring, incomplete medical records and keeping patients for months too long. One patient, a state investigation found, injured himself and ate his own feces, but the staff neither reported the incidents as required nor adjusted his treatment. Another patient was forced to clean up his own urine and feces. A third was left in seclusion for four hours as he banged his head on the room’s window and walls, lacerating both eyes.

Even after Andrea Ball detailed those horrors in the Austin American-Statesman, Texas barely shrugged.

“The facility is still getting its feet on the ground and is dealing with some startup issues,” Department of State Health Services spokesperson Carrie Williams told Ball. “We continue to work with them and expect them to get it right.”

But others didn’t continue. After the articles, Montgomery County officials started pushing to sell the facility. In November 2013, they sold it to GEO Care for an initial loss of between $2 million and $4 million.

“I think that maybe I’m having second thoughts on whether we should have done this in the first place,” Montgomery County Judge Alan Sadler told Ball.

But while county officials had regrets, GEO Care did not. Its goal was to get a foot in the door. In its 2011 annual report, GEO Group wrote of Montgomery County, “The opening of this facility provides entry into Texas, which we believe may provide additional growth opportunities.” Three years later: mission accomplished.

But who left the door unlocked for GEO Care remains unclear. During the 2009 legislative session, an earmark of $7.5 million to help run the Montgomery County hospital simply appeared in the state budget, added in conference committee without having been requested by State Health Services. A few months later, lawmakers were surprised to learn that Montgomery County had already selected GEO Care for the contract, apparently without public discussion.

Two years later, GEO Care would again benefit from a mysterious legislative addition. During the 2011 session, someone slipped a rider into an appropriations bill during committee hearings twice—first during the regular session, then during the special session. The rider required state officials to solicit bids to privatize state hospitals for a savings of 10 percent. GEO Care was the only bidder, offering to take over Kerrville State Hospital, a 200-bed facility about 100 miles west of Austin, even as the state investigated the company for its management of Montgomery County.

Also in early 2011, Kerrville State Hospital superintendent Stephen Anfinson left that position to work for GEO Care. He represented the company during its bid to the state, including a tour of the facility in spring of 2012 where two Kerrville staffers told the Statesman that Anfinson freely discussed issues only a previous employee would know. Government watchdogs said this put the state at a disadvantage in negotiations, but the Department of State Health Services said he’d done nothing wrong.

After months of consideration, bad press, and growing clamor by employee unions and patients’ rights advocates, Texas rejected the bid to privatize Kerrville.

But state officials seem to have learned from that experience, too. Unlike Kerrville, the Terrell privatization process has been expedited and conducted entirely without input from outside groups.

In June, Texas announced that it had requested bids to privatize Terrell, blindsiding stakeholders who hadn’t been warned, let alone consulted.

“I have no idea why they would do it this way,” Gyl Switzer, public policy director at Mental Health America of Texas, told the Statesman. “I can’t think of one good reason.”

At the time, Health and Human Services Commissioner Kyle Janek brushed off public alarm, telling the Statesman that because the proposal was broad, inviting public input would have been premature. “There’s no harm in having someone take a look,” Janek said.

But in October, State Health Services said it had picked Correct Care Solutions from among four bidders—again without consulting employees, unions, or patients’ rights advocates.

“This RFP process has been notably less transparent than what we saw in 2012 with the attempt to privatize Kerrville State Hospital,” said Lynn Lasky Clark, president of Mental Health America of Texas, in a statement. “It raises serious concerns…”

Even now, state officials claim that, while they’ve accepted the bid, nothing is finalized. But at the town hall, Rep. Gooden all but said it was a done deal. The state is “pretty far ahead in contract negotiations with Correct Care,” he explained. “Again, if you have specific issues, if you want to bring [those] to me after the meeting or email them to Austin, they will be heard. But [state officials] are in contract negotiations, and they’re pretty much near making a decision on that.”

Rep. Gooden made this admission fully two hours into the town hall, prompting one frustrated man to speak for many as he asked, “Then what was the purpose of this meeting?”

While many present expressed concern for their patients’ safety under Correct Care management, the prevailing fear, understandably, was of lost jobs. Terrell is the largest employer in the area, and GEO Care’s plan for Kerrville had included cutting staff by 21 percent. Technically, the Terrell contract is with Correct Care Solutions, but whenever Dominicis referenced his company’s history, he talked about GEO Care, of which he was president until its merger with Correct Care.

Despite having overseen the unsuccessful job-slashing bid for Kerrville, Dominicis assured Terrell residents repeatedly that, in past mergers, “99 percent of the current employees…received job offers. … People are offered comparable jobs, typically at the same or often times higher salaries.”

He used the phrase, “received job offers,” because in a Correct Care takeover, all employees have to reapply and interview for their positions, a process Dominicis characterized as “paperwork.”

Dominicis would only speak in historical terms, but when Rep. Gooden reiterated them, they became comforting promises about the future. “Ninety-nine percent of all of the employees are going to get job offers,” said Rep. Gooden, who’ll be out of office in January. “So you’re going to be making the same or better.” In two cases, he inflated this to, “99.9 percent.”

Rep. Gooden also painted a rosy picture of Terrell’s future for his restless audience, suggesting it came from Dominicis but that the great man was prevented from sharing the good news yet. “My hope,” he said, “and [Dominicis] won’t say this—but this is my hope—because he can’t commit to it—but is that they will come and build buildings with room for expansion, and years from now we actually have more beds in Terrell, and we are now the model for the Metroplex…

“I believe that if we are the state hospital that goes private, we’ll be happy that we were the first one and not the last one. Good things are ahead for Terrell.”