Inside Baseball: How Roy Williams’ Son Got a Sweetheart Deal at SRHS Part I

When the Affordable Care Act passed, full implementation of the plan wouldn’t occur for a few years. In order to immediately address the problem of people with pre-existing conditions who were unable to purchase insurance, the government set up a temporary plan call the “Pre-existing Condition Insurance Plan” or PCIP.  The government put billions of dollars into PCIP to pay for medical treatment of participants. Since the government would be funding the plan, they chose an administrator to handle the claims and payments.  That administrator already had a contract providing the same services to government employees: GEHA.

This created a lucrative incentive for Singing River to sign patients up to the new plan. SRHS and GEHA had a contract that GEHA would pay 75% of Singing River’s billed charge – much higher than the industry average. For instance, if a patient came in for a surgery where the billed charge was $100,000, GEHA would pay SRHS $75,000.  Blue Cross might only pay $12,000.  The gravy train was coming to town and SRHS needed to get on board.

The problem was that many patients couldn’t afford the premiums of PCIP. Instead, the hospital would pay those monthly premiums of $400-$500 on behalf of the patient. The hospital would come out ahead when the insurance paid the bill.  Due to state laws, SRHS was unable to pay the patients directly, so they hired a middleman to make the payments.  For these services the middleman was paid a percentage of what the hospital initially collected.  Singing River already had an existing contractor in place to do this, called “The Outsource Group” (TOG).

Instead of using the incumbent contractor, SRHS’ newly promoted Financial Services Manager Josh Cole took an idea to Jon Reynolds. Reynolds was a financial advisor working with Charter Bank. Reynolds is well known around Pascagoula for his involvement in youth baseball – which is how Cole came to know Reynolds.  Indeed, it is through youth baseball that Cole even got a job at SRHS.  Cole had no degree and no prior healthcare or business experience, yet was promoted to lead the financial services department under Wayne Smith, the Director of Financial Services.  In fact, a competent and experienced female manager was demoted to make room for the inexperienced Cole in the good ol’ boys club.

Cole and Reynolds cooked up the idea of forming a new company to which SRHS would award a contract to sign up patients for the PCIP.  Cole would direct his employees to identify patients who were uninsured and would require major surgery or ongoing treatments such as chemotherapy. Those employees would then refer the case to Reynolds who would fill out the paperwork, cut a check for the insurance, and then collect 11% of whatever Singing River was paid.

Just a dozen chronically ill patients requiring surgery and further treatments could easily yield $1 million in revenue to Reynolds.

Reynolds teamed up with Gentry Williams to assist in providing funding and connections. Williams’ father, Roy, was the attorney for the SRHS Board of Trustees.  He was also a business partner with board member Morris Strickland in different investments, including the Pascagoula Hilton Garden Inn. That hotel was one which Cole was trying to get a landscaping contract for a family member – a business in which Cole was interested.

Editor’s note: This is part one of a multi-part series on Gentry Williams and the Jackson County Outsource Group.