Wednesday, December 22, 2010

Hawaii Medicaid joins in Evercare's "Blame the Victim" game

Back on November 29, I published a story about a threatening letter I had received from the head of Unitedhealth Group's Hawaii operation.  In my response I had pointed out that I had been following all their procedures, it was Unitedhealth that was violating them, and in so doing, harming my daughter Hannah.

On December 6, Ken Fink, Hawaii State Medicaid Director sent me his own version of the UnitedHealth letter.  Fink, whose salary is rumored to be more than twice the $113,000 received by his predecessor, again makes it sound as if the victim is to blame.

I responded to Fink's letter on December 6. Here is the text of my letter:

This email is in response to your letter dated December 6, 2010 (attached) which was received by me on December 8, 2010.

The issue is:
When a prior authorization by my daughter's physician/provider is submitted which follows all prescribed Evercare protocols, Evercare has failed to give me proper written documentation regarding the possible denials which would include information of any adverse action and my rights to appeal, thereby violating Federal law.

According to the email I received from ... CMS, DHS MQD was going to research and resolve the issue, not simply re-state Evercare's response to me. Can someone please follow Federal law and state contract and please help me and my child? Will someone please step up? I am giving you all the academic reasons as well as the Federal laws which Evercare is violating along with the statues the State is violating for lack of oversight of the MCO (Evercare).  As a mother and caregiver of a totally dependent disabled child, all I am asking is that Evercare follows the law and do their job for which Evercare receives high compensation (tax payors money).

Your letter addresses old issues and regurgitates David Heywoods' (Evercare) prior letter in content; these issues are moot as all of us (me as her mom, the therapists and doctors) followed the required processes in filling out the Prior Authorization request forms and correctly submitted the needed documentation to support the requests.

What I am claiming is the stated issue and Evercare's continuous violation in which DHS-MEDQUEST has already cited Evercare which resulted in the corrective action plan for complaints, grievances, and appeals (in which sanctions were imposed). Evercare is not following BBA requirements regarding Complaints/Grievances/ and Appeals processes.

Evercare is claiming that the member's family or MD/provider is not following required Evercare processes. This is not a true statement and is not the issue. Evercare never brought this up during all the months since the request for prior authorization was submitted in May 2010, and in fact, they contradict themselves when they verbally admitted to receiving the request and approved less than what prescribed. So the prior authorization was successfully submitted by Hannah's physician to Evercare.
I am claiming that when a proper prior authorization (PA) for services is submitted to Evercare, a phone call (nothing in writing) is communicated to the provider that the requested services are denied (not approved) and/or that a lesser amount of service is approved (deviates from theprescription). NOTHING IS PUT INTO WRITING TO NOTIFY ME OR HANNAH'S PROVIDER OF THE ADVERSE ACTION and to inform me of our rights to appeal.

How it should work is that when my daughter's physician/provider submits the documentation required for the request of service/ medication/DME and the health plan denies and/or deviates from the request (less than what is requested) it goes into a complaints, grievance, and appeal mode as required and by failing to follow this process, the health plan is in direct violation of Federal statute, B.B.A. sections.
438.424: Grievance System
. 438.400: Statutory basis and definitions;
. 438.402: General requirements;
. 438.404: Notice of action (including timeframes of notice as
contained in Sections: 438.210(d)(1); 431.211; 431.213; 431.214);
. 438.406: Handling of grievances and appeals;
. 438.408: Resolution and notification: Grievances and appeals;
. 438.410: Expedited resolution of appeals
. 438.414: Information about the grievance system to providers and
subcontractors (important related to high number of non-participating
providers who do not have formal contracts with Evercare--therefore no
requirement to meet Federal BBA requirements/ no quality oversight from
MQD/CMS or EQRO under BBA 438. Subpart E)
. 438.416: Record-keeping and reporting requirements
. 438.420: Continuation of benefits while the MCO or PIHP appeal and
the State fair hearing are pending
. 438.424: Effectuation of reversed appeal resolutions
As further consequences of direct violation of the C/G/A processes

The current situation is in regards to a PA [Prior Authorization request form] that was successfully submitted [in May 2010] ... This [lack of any written notice] constitutes an adverse action by BBA definitions as well as violations regarding lack of written notice with appeal rights, specifically BBA reg Subpart F, and member's rights violations: Subpart C.

I am cc'ing CMS on this matter as there is still no process for Complaints, Grievances, and Appeals and I am following the processes as set forth by the BBA. I am following the PA processes of Evercare, but Evercare is not documenting in writing the denial of my prescribed services, medications, DME (nothing in writing setting forth the denial or cuts in services) and nothing is in writing by Evercare setting forth our rights to appeal their decision.

In my opinion, Evercare's letter is considered retaliatory and your response and lack of oversight of Evercare has caused continuous harm to my daughter. In fact, in the first visit by Evercare and their attorney to my home on Kauai, Evercare's attorney made it very clear that Evercare needed to put all denials and cuts in services and supplies in writing to me and give me my rights to appeal (process).  These instructions are not happening and therefore, Evercare's failure is a clear violation of Federal law. In fact, it was agreed at that meeting that all communications in the future, even with Hannah's field supervisor, would be in writing.

I want to reiterate that these Federal laws (BBA 432) and mandated oversight of these MCOs is intended to provide required mechanisms to protect patient rights and to insure that problems are tracked, trended and resolved in a nationally accepted mode of quality standards. If there are trends identified related to continuous violations, then a corrective action is taken to ensure that no member is hurt, especially the aged, blind, and disabled; hence the purpose of the law. With documentation, there would be a mechanism to insure that no harm comes to the client and that added anxiety to the member and family and caregivers is decreased.

Again the issue is:
Even though a prior authorization has been submitted by my daughter's physician/provider which follows all of Evercare's prescribed protocols for submitting a PA properly, Evercare has twice (again) failed to give me proper documentation regarding the denials or informing me of any adverse action in writing with my rights to appeal, thereby violating Federal laws (BBA).

As of today, there have still been no official Notices of Action sent out by UnitedHealth for the items brought to the attention of the head of Hawaii's Medicaid program almost two weeks ago.

It makes me wonder, if Hawaii Medicaid is so cavalier about Evercare's constant violations of federal regulations, what else are they standing back and ignoring?  The thirty-six percent increase in the death rate of our local aged and disabled population?  Threats to tear severely disabled children away from their families and throw them into institutions if the families don't back down on their requests for services?

Over 41,000 of our state's most vulnerable citizens, our elderly and children as well as adults with disabilities, are enrolled with UnitedHealth and Wellcare.  The state pays the two companies over $100 million every month without keeping track of how much of it is actually spent on medical services.

Governor Abercrombie announced the state has a $410 million shortfall for fiscal year 2012.  It seems to me that turning our Medicaid system back into one that only pays for actual services delivered could knock what, twenty percent, off that total?  Then the state could hire back the three-hundred odd people at DHS whose jobs were transferred to employees of UnitedHealth and Wellcare.  Then our federal funding could actually to to helping the people of Hawaii, rather than just lining the pockets of two out-of-state for-profit corporations.

Tuesday, December 7, 2010

Hollyrod's fundraising campaign to give away iPads to people on the autism spectrum is a great idea

I reprinted a press release over on the CDREA news page, that the Hollyrod Foundation is taking applications to give away iPads to qualifying individuals on the autism spectrum.

The other side of this is the fundraising campaign to pay for the hardware as well as the special applications that will be needed.

The more money the Hollyrod Foundation can raise, the more iPads they will be able to give away.

My daughter Hannah has just started with using a Dynavox, but I got her an iPad to see what else it could add to her learning experience.  I have been absolutely amazed at the variety of games, stories, puzzles, and other activities that are available for children like Hannah.  If you've never met a child who is physically incapable of communicating with you verbally, it can be hard to imagine the pure joy they get on their faces when they start to "get it". 

This is a great idea, and I hope it catches on.  From the standpoint of a mom, I don't think there's ever been a greater gift I could give my daughter than the ability to communicate with us.

According to the Hollyrod Foundation's website,

Inspired by a father and son, actress, author, philanthropist and co-host of "The Talk", Holly Robinson Peete and retired NFL quarterback, Rodney Peete founded the HollyRod Foundation in 1997. The HollyRod Foundation provides medical, physical and emotional support for those living with Parkinson's Disease and Autism.

Monday, December 6, 2010

Hawaii DD Division apparently admits to defrauding federal government and state taxpayers

According to a November 16 letter from the Hawaii Department of Health's Developmental Disabilities Division, the program has apparently been caught by federal authorities defrauding Medicaid.  The DD division established new reporting guidelines that went into effect on December 1, and the letter emphatically tells recipients to comply with ongoing federal and state audits.

The news was quietly inserted into a letter that went out to DD waiver participants and providers with a headline of "documentation requirements" that was a bit misleading.

The Fray letter states "as a result of the recent Payment Error Rate Measurement audit conducted by CMS, the Med-QUEST Division is implementing new documentation requirements for PAB services."

Last April I reported that CMS was unable to deny rumors that Hawaii's Payment Error Rate Measurement could be as high as fifty percent (it's legally supposed to be between three and five percent).  

(paraphrased from then)  What would a 50% Medicaid payment error rate mean?  It could mean that half of all Medicaid claims are paid twice:  once by either Evercare or Ohana through their capitation payments, and the second time by Medicaid's fee for service program.

Here is how it might happen:

1.  ACS, as the fiscal agent for Hawaii's fee-for-service Medicaid program, charges a fee for every claim they submit.

2.  Hawaii receives matching funds from the federal government to pay these fees for ACS's services, just as they do for the state's aged and disabled program operated by Evercare and Ohana.

3.  ACS could be billing the state for claims incurred by patients served by Evercare and Ohana.

4.  ACS would then be receiving federal (and state) funds for claims that are the responsibility of Evercare and Ohana and which are included in the calculations for the monthly per person payments (capitation payment) they receive.  Evercare (UnitedHealth) and Ohana (Wellcare) are retaining their full capitation payments, hence the double payments.

What that means for Hawaii is that suddenly our Medicaid budget could be half of what it should be.  For example, since the state's total Medicaid budget for FY2010 is about $1.4 billion, then suddenly the state might have only $700 million to spend.

Out of that comes the fifteen-to-twenty percent net operating profit UnitedHealth and Wellcare skim off the top of their state capitation fee payments.  That's at least another $92,000,000. 

So from the original annual budget of about $1.4 billion,  only about $608 million is left to spend on actual services for Hawaii's Medicaid population.

When services are cut, the Medicaid profits aren't cut, and the capitation fees not only are not reduced, at least here in Hawaii they've been increased several times by means of "contract amendments".    The Medicaid company cries poor and that it is a victim of rising medical costs, to justify increases in the capitation fees paid by the states.

This is why Hawaii's Medicaid waiver program for our aged and disabled population experienced a thirty-six percent increase in the death rate of participants within its first year of operation.

Friday, December 3, 2010

NPR series starts today on "the new civil right" for people with disabilities

 Copied from an email forwarded to a group I belong to:

NPR will run stories that look at the new civil right, after the Olmstead decision, to get care at home.

The first story-about that right--runs today, Thursday, December 2nd (4:30 and 6:30 Eastern time) on All Things Considered on your NPR station. (Or you can find it by going to . You can listen to the radio story there. Also at our Web site, you'll find additional stories, a data base of every nursing home in America and the levels of independence in each one, a map t hat shows how much each state spends of its long-term care dollars on home and community based care, photos, and a chance for you to comment on the stories.

A second story runs tomorrow, looking at federal enforcement since the Olmstead decision. Also on All Things Considered, probably at the same time.

Next week, two more stories will run. The first-which has just been moved from Monday to Thursday-will run on Morning Edition, December 9th. It looks at the surprising group that is a growing percentage of the nursing home population: 31 to 64 year olds. This is built around the story of Michelle Fridley, at an ADAPT action in Washington in the spring.

That night on All Things Considered, we'll run a story on the Children's Freedom Initiative, an attempt to find alternatives to nursing homes for young people with disabilities.


Tuesday, November 30, 2010

Hawaii Medicaid office takes responsibility for coordinating interdepartmental services, including DOE, for children covered by Medicaid

On November 23, Dr. Kenneth Fink, State Medicaid Director for Hawaii, sent me a letter.  The letter began:

The Department of Human Services/Med-QUEST Division (MQD) is committed to assuring that your daughter, Hannah, has coordination of medically necessary Medicaid services that are being provided through multiple State agencies......To facilitate this, we are requesting your consent to allow the Department of Education (DOE) to release to us a copy of Hannah's most recent Individualized Education Plan (IEP).

I haven't heard whether any of the other hundred-thousand children receiving Medicaid, or even the twenty-thousand some kids in Special Education, have received the same letter.

This letter, while addressed only to my daughter, opens up a tremendous opportunity for all Hawaii's children with special health needs.  The DOE no longer has the final say in the services provided to your child enrolled in Medicaid.  The state Medicaid office is essentially assuming responsibility for ensuring your child's medically necessary services are provided, if not through the school, then through either Evercare or Ohana.

For instance, if your child's doctor prescribes five hours a week of occupational therapy and the school is only willing to provide two, you can count on Medicaid to handle providing the other three.

It inadvertently brings up the related question of why Hawaii DOE doesn't appear to be actively enrolling kids in special ed into Medicaid.  Once they do, the federal Medicaid budget (administered out of Dr. Fink's division) picks up 75% of the cost of all that kids' services that are provided by the school.  The budget savings that could be realized by transferring that 75% from state coffers to federal ones are enormous, and why it's being ignored by our local school district is beyond my comprehension.

Whether that issue is related to the fact that Evercare and Ohana are becoming aware of  requirements that EPSDT funds be paid out of the capitation fees they receive, I can't say.  Paying for school therapy services could dig into the $15 million profit they make off the monthly $100 million or so in capitation fees Hawaii pays them.

For parents and advocates, MQD admitting this responsibility for service coordination opens an alternative for receiving services DOE either can't or won't provide.  Federal Medicaid EPSDT regulations and laws provide more protection and additional means for winning disputes than can happen with IDEA alone.

Monday, November 29, 2010

Was threatening letter from Evercare retaliation for blog stories?

The last time I posted on here was November 4.  I wrote two articles that day, one of them on how UnitedHealth Group in Hawaii had been under a "Corrective Action Plan" since April for violating grievance and appeals rights.

On November 6, I received a threatening letter from David Heywood, Executive Director of UnitedHealth's Evercare for Hawaii.   The letter had been sent out by certified mail on November 5.

They wanted me to stop emailing federal officials, and to push all the care services I've been fighting for since September 2009 under the rug.  Let's just start over again from scratch.

Here is the letter from Heywood.
110510 Cert Letter f Heywood                                                            

Here is the email I sent him in response on November 21.
My Email to Evercare Re Hannah                                                            

Thursday, November 4, 2010

Hawaii Medicaid, UnitedHealth, and the Election

With the elections over, some interesting coincidences have arisen involving unregulated donations to Republicans successfully running against Democratic incumbents,  and states that have turned over parts or all of their publicly funded programs (i.e., Medicaid and Medicare) to profit-making corporations such as UnitedHealth and Wellcare.

On November 3, Public Citizen published a report of the congressional races where unregulated third-party contributions played a role.  They found that in 58 of the 74 congressional elections where power changed hands, outside spending from unregulated sources ranged as high as $8.7 million for the new Republican senator from Illinois.

The report reminded me of something I read earlier this summer.  On July 26, The Center for Public Integrity reported that the five top profit making insurance companies were talking about forming a non-profit.  The purpose was to funnel about $20 million towards candidates who would protect their interests when the time comes to write the actual regulations for health care reform.  According to the article, one of the new association's biggest targets was going to be health reform's insistence that the companies actually spend eighty percent of the premiums collected on medical care and services.
Insurers are concerned about the new regulations because the new law mandates consumer refunds if the companies’ administrative costs are excessive.

Health Care for America Now, a coalition of consumer groups that backs the new law, last week issued a study which indicated that if the six biggest for-profit insurers were required to meet the new legal standards in 2009, they would have been obligated to pay a total refund of $1.9 billion.
CPI identifies 71 candidates in 34 states where winning Republicans who received unregulated campaign contributions overturned incumbent Democrats.

Coincidentally, Medicaid and/or Medicare services in 33 of those states are administered by for profit health companies.  UnitedHealth alone operates Medicaid or Medicare programs in 31 of the 34 states.  The other two companies are Wellcare and Wellpoint.

Thirty of the 71 candidates were concentrated in the ten states (of 34 total) where both UnitedHealth and Wellcare operate Medicaid and Medicare programs.  These are the same two companies that have been in charge of Hawaii's Medicaid programs since February 2009.

Twenty-nine of them were in eleven states where federal Medicaid, DOJ or Civil Rights authorities have intervened since February 2009 to prevent civil rights violations stemming from Medicaid budget cuts.

UnitedHealth operates a Medicaid or Medicare program in thirteen of the total of fifteen states where federal regulators have intervened to stop civil rights violations against people with disabilities.

Hawaii's Medicaid debacle could be a view into the future if for-profit health insurance companies are allowed to continue taking over Medicaid and Medicare.

In the first year after UnitedHealth and Wellcare took over the state's $1.2 billion annual Medicaid budget to help the elderly and people with disabilities stay in their homes, the death rate in that group rose 36%.

UnitedHealth and Wellcare report fairly consistently to the SEC that their Medical Benefits Ratio (the percent spent on actual services out of the monthly premium) is in the 80-85% range.  With Hawaii's annual budget ranging from $1.2 billion to $1.3 billion, that means the two companies are whisking somewhere between $15 million and $25 million a month away to their out of state corporate headquarters.

That's why services are being cut.  Not because the state is running out of money, or the economy is terrible.  But because profit-making health insurance companies have to keep their profit lines going just like the banks do, regardless of the human cost.

Ironically, UnitedHealth has just released a study trying to prove the US will save $3.5 trillion in the next twenty-five years if only every state would turn it's Medicaid and Medicare programs over to them (or companies like them).  What they don't tell you is that is after they take their fifteen-twenty percent cut off the top of what they project will be a $63 trillion business over the next 25 years.

Do the math.  Does the country save more money by turning Medicaid over to these profit-making companies or by using the almost $10 trillion they'd take in profit to restore services to our elderly and disabled citizens, along with all the jobs that sector creates.

UnitedHealth's Hawaii operation under monitored "Corrective Action Plan" since April 2010

UnitedHealth Group's Hawaii operation has been under a DHS-imposed and monitored "Corrective Action Plan" (CAP) since April 2010.  The following was contained in an email I received from CMS on October 20, responding to a complaint I had filed earlier.
CMS and DHS reviewed your September 9, 2010 complaint about Evercare and the lack of oversight by DHS‐Med‐Quest (MQD) Division. You have reported that Evercare is out of compliance with CFR 438, subpart F: Sec 438.400.438.410 in meeting the needs of your daughter, Hannah Harrison. In reviewing your complaint the Med‐QUEST Division (MQD) found that Evercare is out of compliance with some of the required timeframes for both Notice of Adverse Action (NOA) and processing of appeals. MQD identified on April 5, 2010 that Evercare was not consistently compliant with both timeframe and required information for NOA as well as grievance and appeal regulations. MQD placed Evercare under a Corrective Action Plan (CAP) in April 2010 to assure they are meeting the required timeframes. CMS has assurance that MDQ continues to monitor Evercare in its CAP to assure they are meeting the required timeframes.
Apparently, at some point in time prior to April, federal Medicaid regulators and Hawaii DHS agreed that Evercare (UnitedHealth) had violated my daughter's legal rights.

The obvious question is how many of the other twenty thousand or so medically needy people enrolled under Evercare also had their rights violated? 

And why haven't any of us been notified officially?

In a related issue, CMS told me on May 24 that MedQuest told them Evercare had not denied any services for Hannah, and there were no outstanding complaints.  

All I could do was respond that I had a record of 33 complaint emails I had sent to Evercare over denied services and sixteen emails directly to Patti Bazin.  One of the biggest outstanding issues, I said in my email to CMS, was Evercare's refusal to follow medical recommendations for how to teach Hannah to talk with us using assistive technology.

I didn't have a chance to respond to the October 20 news that Medquest once again was telling federal regulators there were no outstanding complaints for Hannah until November 1. I reported to CMS that it appeared the reports they were receiving from DHS regarding Evercare's adherence to the specified timeframes could be in error.  I had emailed Patti Bazin on June 30 that Evercare had never responded to prescriptions received for medically necessary services received on May 21.  Emails I received from Bazin as recently as October 12 consistently ignored Evercare's failure to approve therapy that would teach my daughter how to talk.

The public deserves to know about this so-called Corrective Action Plan.  The elderly and disabled adults as well as children who have had their rights violated deserve to know.  If the state manages to keep losing my complaints, knowing I blog about it, who else's complaints have disappeared?

Sunday, August 8, 2010

Feds Acknowledge Civil Rights Status of "Medical Necessity" for Children with Disabilities

Letters issued by the federal DHHS Office for Civil Rights to two Hawaii mothers acknowledge children with disabilities have a civil right to medical services that are "virtually unlimited in terms of funding ...  as long as services are medically necessary."

In both cases, OCR gave priority to the children's treating physicians' recommendations for "medical necessity" over those imposed by state or private Medicaid providers.  This action is in keeping with three federal court decisions made late last year, all of which ruled state Medicaid officials or private providers could not deny or limit what a child's treating practitioner said was "medically necessary."

The letters were in response to complaints filed with OCR by the mothers about nine months ago, alleging that threatened cuts in home skilled nursing services violated their daughters' civil rights under EPSDT.  In December, OCR acknowledged that the office's oversight of Olmstead violations extended to rights under EPSDT.  In February, the office opened formal investigations into both girls' cases.

The letters were formal notifications the cases are being closed at this time.  Federal regulators from the Center for Medicare and Medicaid Services have apparently assured OCR that both girls are currently receiving 24/7 skilled nursing from a combination of sources, and therefore at this time the girls are not at risk of institutionalization. 

OCR investigates "covered entities" which can include a state developmental disability program, but not the privately owned, for profit insurance companies also responsible for providing services. However both letters quote CMS stipulating an apparently agreed-upon service coverage by UnitedHealth, the particular company providing Medicaid services to both girls.

Should this situation change for either girl, OCR can immediately re-open the cases.

As of April 30, 2010, both girls are covered by a new federal definition of medically frail children.  42 CFR 440.315(f) states:  
" ...the State's definition of individuals who are medically frail or otherwise have special medical needs must at least include those individuals described in §438.50(d)(3) of this chapter, children with serious emotional disturbances, individuals with disabling mental disorders, individuals with serious and complex medical conditions, and individuals with physical and/or mental disabilities that significantly impair their ability to perform one or more activities of daily living."

 Since one of the two girls is my own daughter, I am publishing the letter we received from OCR.

Tuesday, July 6, 2010

DHS, DOH and Conflicts of Interest in Hawaii

On June 23, Larry Geller reported in Disappeared News about a class action suit filed against Hawaii's Department of Health.  The general point of the suit is that DOH has been decimating its adult mental health medical services without the state regulatory authority to do so.

The suit was filed by the Hawaii Disability Rights Center and Alston Hunt Floyd & Ing, a Honolulu law firm just honored in February by the American Civil Liberties Union of Hawaii.

A state employee has provided me with the following information on the regulatory oversight required of the Department of Human Services.  The document is technical enough that I am presenting it in its entirety as I received it, without trying to rewrite it.

The point of the email is that it is inevitable that DHS will have to be drawn into the suit.  Once they are, it will be impossible to continue to disregard the fact that AHFI is the law firm representing UnitedHealth/Evercare in the company's fight to cut services to children with disabilities like Audrey, H.M. and my own ten year old daughter.

This is the second time AHFI were involved in a case against the Department of Health.  In January 2009 they were part of the legal team planning a class action suit against the Developmental Disability Division.  Around January 27, the company discovered they had a "glitch" because they represented UnitedHealth.  When the suit was filed on February 2 (the day after UnitedHealth took over the Medicaid services for the disability population) it did not include AFCI.


Monday, July 5, 2010

Wellcare says "We prefer them to die because it's cheaper": Federal complaint includes Hawaii

According to a recently unsealed federal whistleblower complaint, those were the words of Dr. Vince Kunz, Medical Director for Wellcare's Heath Services Area.  They're quoted on page 35.

The case was filed in Florida on June 21 under seal.  When Wellcare announced on June 25 they were settling a potential federal suit with Florida for perhaps less than a quarter of the amount due, the complaint was unsealed  the following Monday, June 28.  It was followed shortly by two more whistleblower suits on June 29.

The June 21 False Claims Complaint included not just Wellcare, but also UnitedHealth (along with other for profit health insurance companies like Humana and Amerigroup).  It accuses these companies of violating the Hawaii False Claims Act, 36 Hawaii Revised Statutes 661-21(f), which essentially makes it illegal to steal money from the State (page 8).

Hawaii Attorney General Mark Bennett has been served with this complaint, but there has been no word of any local investigation. 

The June 21 complaint is a sixty page document packed with details of the many different accounting schemes used to steal federal and state Medicaid funds.  (The Tampa Tribune did a great summary article).  It is the result of an eighteen-month FBI investigation where a high-placed Wellcare executive wore hidden cameras to meetings and found documents sitting in the printer.  It also accuses other companies such as UnitedHealth with knowing collusion in some of these schemes.

Estimates are that the actual theft could be as high as $600 million. With damages, the total amount Wellcare could be in the hole for could be as much as a billtion dollars.

Hawaii is apparently due a share of that.  Are we going after it, or is this another source of federal funding our state leaders are apparently willing to forego in deference to Wellcare and Unitedhealth?

Thursday, June 24, 2010

Letters show Hawaii out of compliance with ARRA and CHIPRA since April 2009

On April 8, 2009, Lillian Koller sent a letter to Governor Lingle asking approval for 41 positions needed for Hawaii Medicaid to "effectively implement" new federal Recovery Act and Children's Health Insurance Act regulations.  A virtually identical letter, asking for the same positions, was sent today by Hawaii Medquest Administrator Kenneth Fink to Lillian Koller.

The implication appears to be that Hawaii has knowingly been out of compliance with the new Medicaid regulations for the past fifteen months.

Both letters state that "these programs can generate in excess of $327 million in new Federal funds for the State if we meet all the requirements".

In our current economic situation, it is difficult to understand why the State would knowingly forego $327 million in funds to benefit children and adults with disabilities as well as the elderly and blind.

Both letters cite the immediate need "to expedite State Plan Amendments and Hawaii Administrative Rules....Both of these bills generate millions of Federal dollars for Hawaii, but we need to be able to do the work in order to be able to access thyese funds.  Due to two vacancies, staff will not be able to execute the provisions of the ARRA and CHIPRA."

Both letters cite possible violation of federal regulations for Medicaid agency personnel training. "Federal financial participation (FFP) is being claimed for training costs at 50%. This office currently has a 43% vacancy rate...If the funding for this position is not approved, the State will not be able to provide the required level of training for existing andnew employees and will not be able to claim the federal funds for its training costs."

Both letters cite a 56% vacancy rate in the Customer Service Branch.  "The average number of monthly calls has dramatically increased due to QUEST Expanded Access (QExA) [QExA is omitted in June 2010 version], and is expected to only further increase as a result of the ARRA."

A recent article noted that DHS had received only 62 phone calls in April 2010 with complaints from UnitedHealth and Wellcare members.  I recently discovered, however, that DHS had no record of my complaints regarding my daughter's services, nor that anything for her had been denied, which casts some doubt on the figure quoted in the Advertiser.

The article also noted that UnitedHealth and Wellcare receive about 15,000 phone calls a month, not all of which are about "problems".  Enrollment in the two companies is only about 40,000.  These numbers may be more representative of the dramatic increase in calls to Medquest's Customer Service about the program run by UnitedHealth and Wellcare that is referred to in both letters.

The letters do not state what the cumulative cost to the state will be for the 41 positions.  I would assume, however, that it is significantly less than either the $327 million to be gained, or even the $15 million a month that UnitedHealth and Wellcare are making in net profit from premiums.

Wednesday, June 23, 2010

National disability fellowship awarded to Hawaii doctor linked to federal investigations into Olmstead violations

The Honolulu pediatrician who has received a prestigious Kennedy Foundation Fellowship has links to two on-going Federal inquiries into whether cuts in home services provided to people with disabilities violate the Americans with Disabilities Act.

Dr. Jeffrey Okamoto has been the Medical Director of Hawaii's Developmental Disability Division of the Department of Health.  In December 2008, the Division announced an across-the board fifteen percent cut in home services for people with developmental disabilities.

Federal Medicaid regulators from CMS have been flying into Honolulu regularly since last fall, meeting with state officials to discuss the appropriateness of these cuts.  Discussions and personal meetings have expanded in scope.  I was asked by CMS to provide additional evidence as recently as last month.

In February, the Office for Civil Rights of DHHS opened their own formal investigation into whether the Developmental Disability Division's across-the-board service cuts violate the Americans with Disabilities Act.

Dr. Okamoto intervened directly in my daughter's formal Department of Health appeal against the 15% cut in her nursing services, testifying unexpectedly at the hearing.  Because of that involvement, I have written testimony from Dr. Okamoto that I am willing to share with the public, even though it contains private medical information about my daughter.

He disputed Hannah's neurologist's evaluation and prescription for 24/7 skilled nursing in the home.  In written testimony presented to the Hearing Officer, Okamoto wrote: 
24/7 nursing as being requested by Dr. Griffiths should indicate that Hannah is not safe at home.  This even exceeds the hospital level of nursing provided.  If Hannah is safe at home, then 24/7 nursing should not be necessary.
The written decision of the Department of Health Hearing Officer rejected explicitly all of Dr. Okamoto's arguments.  This included Dr. Okamoto's attempt to link parental training to whether or not a child is safe living at home.

In spite of that written decision, Dr. Okamoto's concept that the safety of a disabled person in their home can be linked to the level of parental training has been expanded upon.  Honolulu civil rights attorney Rafael Del Castillo says he has seen the issue brought up in at least one other case, but by the Department of Human Services.

Earlier today I reported that these threats are being made to families even now, but by representatives from the two for-profit insurance companies that operate Hawaii Medicaid's special programs for people with disabilities.

These issues and complaints remain outstanding. 

The Joseph P. Kennedy Jr. Foundation, which has awarded Okamoto a Public Policy Fellowship, is devoted to furthering the rights of people with disabilities.  One has to wonder if anybody bothered to tell them that Hawaii's entire program of home and community services for the disabled is under a combination of formal, informal and criminal investigations by CMS, OCR and DOJ?

Should UnitedHealth and Wellcare have the right to call for investigations by CPS or APS?

According to an employee of the Hawaii Department of Human Services, the two for-profit insurance companies running the state's Medicaid program are now able to call in complaints directly to Child Protective Services (CPS) and Adult Protective Services (APS).

Calls are coming in to DHS, according to the employee, with complaints that UnitedHealth and Wellcare are using the threat of calling CPS or APS to intimidate families into decreasing their requests for home services.

According to my source, the general threat is that if the person receiving care needs as many hours as the family is requesting, then it is not safe for them to be in their homes.

It's now no longer a threat to institutionalize their child, but a threat to take them away forever.

Tuesday, June 22, 2010

CDREA publishes 11th Anniversary webzine on the failure of the Olmstead Decision

A year ago, both the President and DHHS made a big public hoopla about the June 22, 2009 tenth anniversary of the Olmstead Decision.  That was the Supreme Court ruling that gave people with disabilities a civil right to not be institutionalized.

This year there is a small article on the government's Disability Blog.  Considering that at least twenty-two states have come under some sort of regulatory attack for violating the civil rights protected by Olmstead, it may not be too surprising.

The Children's Disability Rights Education Association has published a three page webzine on the failure of the Olmstead Decision.  We have had some success advocating here in Hawaii and legal documents are linked.

The point was also to put a face on the people who are actually being targeted for state Medicaid budget cuts across the state.

There are three sections:
The Failure of Olmstead
The Victims when Olmstead Fails
Successful Advocacy in Hawaii

Monday, June 7, 2010

Hawaii's Medicaid Death List Weighted Towards Native Hawaiians

Sources tell me that the infamous "death list" of Medicaid-care related fatalities is "more than fifty percent Native Hawaiian."

There are approximately 25 names on the list.  These are individuals with disabilities and special health care needs that require home health care from Medicaid to keep from being institutionalized. 

Reportedly the list is under investigation by the FBI and several of the families have confirmed they were interviewed. 

The death rate among this group rose 36% in the first year after Medicaid care was turned over to two for-profit health insurance companies, UnitedHealth and Wellcare.

Sunday, June 6, 2010

Washington Post reports increased activity by DOJ Civil Rights Division

An article in the June 4, 2010 Washington Post reported on the vast change that has occurred in the Department of Justice's Civil Rights Division.

While mention is made of several different avenues that DOJ is currently investigating, the story omitted mention of the five states where DOJ has actively intervened on behalf of people with disabilities since December.

The following is the comment I posted in response to The Post's article:

disabilitymom wrote:
The disability community has seen a significant increase in the Division's attention to ADA issues. DOJ has intervened directly in five states since December on behalf of people with disabilities whose Medicaid home services are being cut below the level of medical necessity.

OCR at DHHS has opened two investigations in Hawaii into whether cuts in Medicaid home services violated the civil rights of two little girls (one of them mine).

The Division's Criminal Investigation unit has been looking into deaths from lack of care by Hawaii Medicaid providers UnitedHealth and Wellcare. Hawaii has seen a 36% increase in deaths among the elderly and disabled tied to lack of care issues in the first year since they entered this market.

This story links to the attention being paid to the fact that states are cutting Medicaid budgets to the disabled community because that's where they get the biggest bang for their buck.

One of the holdovers from the Bush era has been the privatization of Medicaid. Social and medical services that enable disabled children, adults and elderly to live with their families instead of in institutions are being put in the corporate hands of insurance companies like UnitedHealth, WellPoint, and Wellcare.

UnitedHealth and Wellcare together are taking home about $15 million a month from the Hawaii Medicaid program. Sixty-seven percent of that is federal money.

Nobody would ever propose putting Wall Street bankers in charge of our schools; why would anybody put disability services into the hands of companies that treat billions of dollars in fines as a cost of doing business?
6/5/2010 3:35:05 PM

Saturday, June 5, 2010

Taped State Senate testimony reveals 36% increase in Medicaid-care related deaths

On March 16, sworn testimony presented at a Hawaii legislative informational hearing stated the death rate among the state's disability community had risen 36% in the year following privatization of the state's Medicaid services to the disabled and elderly. 

Larry Geller of Disappeared News attended the hearing and posted a videotape on his blog two days later.  There was never any response from the state regarding the startling news.

The sworn testimony is being given by Dr. Tina McLaughlin, Chief Executive Officer of CARE Hawaii.  The hearing is being held by State Senators Suzanne Chun Oakland, chair of the senate DHS committee, and David Ige, chair of the senate health committee.  The comments about the increased death rate come at about 5:40 on the video.

Monday, May 31, 2010

More on the financial side of a for-profit Medicaid company

It can be interesting what pops up in a company's reports to the SEC.

Wellcare's first quarter 2010 report noted their legal battle over the missing Florida Medicaid funds cost the company about $169.7 million between 2007 and the first quarter of 2010.  Mention was also made that the company is responding to subpoenas issued by the Connecticut Attorney General's office relating to "transactions between us and our affiliates and their potential impact on the costs of Connecticut's Medicaid program."

This could be a complicated way of saying that Connecticut suspects they have been inflating prices and claims submitted or payable by the state's Medicaid department.

Wellcare is currently in what is known as a "Deferred Prosecution Agreement" with the US government.  They are supposed to not commit any crimes for three years.

For all of 2009 (and the Hawaii contract was only in effect for eleven of those months), Wellcare's Medicaid segment revenue went up 8.9% to $265.6 million.  The report states "the increase in Medicaid segment revenue is primarily due to the inclusion of operations for the Hawaii ABD program" which made up only two percent of Wellcare's total Medicaid membership.  Since the company at the same time lost enrollees in two large states (Florida and Ohio), the contribution of the little Hawaii membership to company revenues seems extremely out of balance.

UnitedHealth's first quarter filing includes $20.8 billion in "goodwill".  What is goodwill?  Political contributions?

UnitedHealth introduces a wonderful "fog the mirror" phrase for cutting costs:  "net favorable medical cost development." 
For the three months ended March 31, 2010 and 2009, there was $490 million and $200 million, respectively, of net favorable medical cost development related to prior fiscal years. The 2010 favorable development was primarily driven by changes in previous estimates related to more efficient claims handling and processing, resulting in higher completion factors, lower than expected health system utilization levels, the H1N1 influenza outbreak being less costly than had been estimated and the mix effect of longer duration state Medicaid members who have a more favorable health status (my emphasis).
UnitedHealth has also recently published a research document that shows that if the states move all the new Medicaid enrollees they will gain from the Affordable Care Act, plus all their current Medicaid enrolles, into managed care, the states will save $366 billion over 10 years.

UnitedHealth, of course, is happy to offer such medicaid managed care programs to the states to handle this influx, and has already figured out how to save the states money on their long-term care expenses.

The underlying assumption is that managed care provides coordinated care which produces better care.  The logic breaks down with the first assumption, and as our experiences here in Hawaii are teaching us, the last assumption is pure fantasy.

The Huffington Post ran a story in April about how health care reform is going to encourage all the for-profit health insurance companies to inflate the possibly already inflated medical direct costs column on their spreadsheets.  The new law will require health insurers to spend at least eight-five cents of every premium dollar received in the large state Medicaid programs on actual medical benefits.  Companies like UnitedHealth are well below that figure currently, and when the law goes into effect next January, the insurers will be expected to refund consumers the difference.

The day that for-profit health insurers refund money to their enrolles is not likely to occur, since all the companies have to do is start re-classifying expenses as medical in order to pass.  Wellpoint has apparently already been caught "reclassifying" more than half a billion dollars in other expenses as "medical" ones.

Medicaid managed care and the "prior authorization" game

It is almost as if UnitedHealth and Wellcare are playing a game with Hawaii's disabled population:  anything that is asked for, deny because there is no prior authorization, then delay while the family tries to navigate its way through the appeals system. 

It is a fabulous way to save money.

My ten year old daughter is a case in point.  Hannah is medically fragile and has seizure activity in her brain constantly whether she is awake or asleep.  She cannot get sick because as soon as her body temperature goes over 99 her seizures increase.

Every new prescription, every new service, and every visit to a specialist requested from Evercare since November has been denied.

The doctors do not seem ready for all the additional reams of paperwork that have been introduced into their practices.  I saw the forms one pediatrician had filled out to get a severely disabled child into the 1115 Medicaid waiver program.  There were pages upon pages of specific questions about the individual's condition, and the doctor had essentially used the comment sections to answer them. 

The new forms are so complicated that my daughter's care coordinator at UnitedHealth is helping Hannah's pediatrician by filling them out and then giving it to the doctor's office to review and sign.

It is the same game that Wellcare played with Mycal Johnston and Martin Boegel, except the stakes were so much higher.

Sunday, May 30, 2010

Hawaii's Medicaid money machine is a license to kill

Fourteen year old Mycal Johnston drowned from the fluid in his lungs on July 12 , 2009.  He had been discharged on June 24 from Oahu's Kapiolani Children's Hospital, with a prescription to fill at home for the one drug specialists had found that could control this life-threatening symptom of Mycal's cystic fibrosis.

The family lives in the Hawaiian Homelands on Molokai.  They took the prescription to the pharmacy, and Wellcare denied authorization.  The print-out received by the pharmacist on July 7 cites "prior authorization required" and "cost exceeds maximum" as the denial codes.

Prior authorization required Mycal to have a primary care physician.  Wellcare had never bothered to find him one on Molokai.  No primary physician, nobody to sign the forms that had to be submitted to Wellcare in order to get "prior authorization" for anything.  Meanwhile, Wellcare was receiving over $15,000 a month from the state for Mycal's care.

At the time of his death, Mycal's parents were trying to sell their truck in order to pay for the medication themselves.

In the first year after UnitedHealth and Wellcare took over Hawaii's Medicaid services for the elderly and disabled, the death rate rose 36%.  According to testimony presented at a hearing in March, the majority of deaths were due to the inability "to access services in time not to die."

A list of over 25 deaths in the first eight months after UnitedHealth and Wellcare took over is purportedly under investigation by the FBI. Mycal's is one of them, and the family was interviewed by the FBI only a few weeks ago.

A Mother's Day shooting in Honolulu was eventually tied to Wellcare's refusal to provide an enrollee with a doctor so that somebody could authorize his prescription medicine refills.  Sources tell me there have been at least two other similarly sourced crimes on Oahu.

While people are dying, UnitedHealth and Wellcare are taking home about $15 million a month in net revenue and profits.  That figure represents the difference between what Hawaii is paying them for taking care of our elderly and disabled, including children, and what they are actually spending on medical benefits.

The state, with the help of the media, has done a great "fog the mirror" job of deceiving the Hawaii public about the size of the contracts with UnitedHealth and Wellcare.  The phrase that was commonly used was the state was signing a $1.5 billion contract with the two companies.  In fact, the state signed one contract with UnitedHealth for about $1.3 billion and a second contract with Wellcare for another $1.2 billion.

Following the scheduled renegotiation of the capitation rates in October, the two companies are now jointly receiving about $2.3 million per day.  That comes to $840 million a year total (not the the $500 million a year figure that appeared in a recent Advertiser article).

According to their year-end financial reports, UnitedHealth typically spends about 82% of premiums on actual medical costs, and Wellcare reports paying out 86%.  On two contracts worth a total of $840 million a year, the savings realized from not spending the capitated payments they were receiving is about $117 million. This is in addition to the 3.0% guaranteed profit promised by Hawaii to Wellcare and UnitedHealth along with a five percent performance incentive.  That would be an additional $67.2 million a year in profits, or a total monthly take-home profit of over $15 million.

Since the Federal Government is currently reimbursing Hawaii for 67% of our Medicaid costs, then $10 million a month of that profit comes from federal funds, including stimulus money that could only be spent on Medicaid.

On March 25, Governor Linda Lingle asked the state legislature for an emergency $40 million in order to make the next months' Medicaid payments.  The Advertiser reported that the state spent about $100 million a month on Medicaid, and the $40 million from the state would be matched by $80 million from the federal government, and then they could pay the $100 million bill for April.

What the Advertiser did not mention was that seventy percent of that payment was going to only two of the companies:  UnitedHealth and Wellcare.

On May 6, the state called off its plan to save $8.8 million by closing welfare eligibility offices and laying off 228 public employees.

Prior to February 1, 2009, when Wellcare and UnitedHealth started their contracts with the state, the $15  million a month they take home in net income would have stayed here in Hawaii.  It would have provided medications and a doctor for Mycal, overnight care services for Erik Sorensen, and Martin Boegel's monthly prescriptions.  It would have paid for a lot of the state workers who have lost their jobs in order to make way for the "administrative" arm of the new insurance companies.

Hawaii is not the only state crying poor when it comes to making excuses for cutting Medicaid budgets.  On February 19, USA Today reported that "more than half the states are reducing Medicaid services and payments...this year as the recession propelled enrollments to record levels and sapped money from treasuries."  A May 20 article in the Wall Street Journal reported that
Across the country, budget-strapped states are focusing on Medicaid. Created in
1965, it is now a $379 billion program, including state and federal funds. State
spending grew an average 7.9% in fiscal 2009 as the economic crisis hit and more
people signed up for Medicaid.
What is being omitted from these stories is how much of that $379 billion contributed to the 56% rise in profits experienced by the health insurance industry in 2009.

As unemployment rises, commercial (employer-paid) enrollment in the health insurance companies is dropping.  The Medicaid market, however, is booming.  The top six managed care for-profit health insurance companies include two of the nation's largest insurers:  UnitedHealth and Wellpoint (the other four are Molina, Centene, Amerigroup and Wellcare).  All five of the top for-profit health insurance companies (UnitedHealth, Wellpoint, Cigna, Humana and Aetna) have entered into the Medicaid market, competing for state contracts.

A study released on March 25 summarized it by saying "increasingly more companies are showing interest in the Medicaid segment as a means of growing revenues."  Another article from April states the issue more bluntly:
The share of Medicaid recipients in managed care plans has risen from 56 percent to 71 percent in the past decade. That suggests states are seeing financial benefits from Medicaid HMOs. But the real attraction to states is that managed care helps them budget their Medicaid expenditures. If that budgeting was working so well — in other words, if it meant the states could drive hard bargains with private insurers — they wouldn’t be complaining that
Medicaid is eating up more and more of their revenues. And insurance companies wouldn’t be seeing Medicaid as the goose that promises to lay golden eggs.
In the case of Hawaii, there is no evidence to show that the state is saving any money from its contracts with UnitedHealth and Wellcare.  If the actuarial data Hawaii used in calculating its per person per month rates is corrected for the October 1 payment figures (the existing figures end immediately prior to the scheduled October rate increases), the numbers show that the per person per month plan was going to cost the state fifty-one percent more than the previous fee-for-service plan would have.   The January 2009 actuarial report instead reported the managed care plan would save the state 5.9% from the fee-for-service model.

On January 1, Wellcare ceased offering any Medicaid plans where they have to reimburse for actual costs incurred.  They are only offering plans where they can get a set payment per person per month, regardless of what they spend.  Wellpoint only offers Medicaid managed care plans, and I have yet to identify any UnitedHealth Medicaid plans that are not managed care.

A Medicaid system that pays the same amount per month per person regardless of actual expenditures is doomed to lead to decisions made on the basis of increasing net per person profit rather than meeting the individual's medical needs.  The Hawaii plan is cursed twice, however, by being authorized under Section 1115 of The Social Security Act rather than Section 1915.

Section 1115 and Section 1915(c) of The Social Security Act both give states the regulatory framework to provide in-home services to community members who are too incapacitated or disabled to live in their homes without these supports.  Both sets of programs allow family income and assets to be "waived", so that the individual with the chronic health need or disability is qualified on the basis of their own income and assets. The most significant difference between the two is how each calculates the "cost neutrality" component that the state must meet.

A Section 1915(c) Medicaid waiver program compares the average per person cost for home services with the average per person cost for institutional services.  Individual budgets can be flexible since it would be extremely unlikely for a single person to throw the overall average off.

For a Section 1115 Medicaid waiver program, the state must show that they are spending no more money with the waiver program than they would have if it did not exist. The budgetary cap is usually calculated either per person per month or per capita.  There is no room to accommodate medical emergencies or needs that are simply greater than originally imagined.  The individual's budget is under constant scrutiny for ways to minimize expenditures.

The combination of this "individual as profit center" approach with the natural instincts of the two for-profit companies managing Hawaii's program Is the source of the rising death rate amongst Hawaii's disabled and elderly.  Similar 1115 programs are in place or under development in Arizona, Florida, Illinois and Colorado.

The irony of the situation here in Hawaii is that UnitedHealth and Wellcare, in spite of record profits, continue to cry poor.  Federal regulators from CMS and OCR have been telling me since December that the companies were trying to get more money out of the state, or reduce what they had to cover.  That's where our battle over EPSDT has arisen here, as UnitedHealth and Wellcare are clearly responsible in their contracts for any EPSDT coverage but equally clearly did not intend to pay for any wide array of services. 

What keeps getting pushed to the side, if mentioned at all, in national stories about Medicaid cuts is the issue that these cuts can represent violations of the civil rights of people with disabilities.  Civil suits have been filed, heard or decided in twenty-one states since Obama's election.  Either the Department of Justice, the DHHS Office for Civil Rights or Federal Medicaid regulators (CMS) have openly intervened in at least eleven states with a combination of formal, informal and even criminal investigations into civil rights violations related to Medicaid cuts.

Nine of those eleven states use Medicaid managed care by a for-profit insurance company for their disability population.

UnitedHealth operates a managed care Medicaid program in 19 of the 21 states where lawsuits have been filed or heard.

All these numbers are "at least" since, with the exception of Hawaii, it is usually only possible to find out about these investigations after they are concluded and documentation shows up on the internet. It is a curious fact that the Department of Justice has publicly intervened in five states since December, citing civil rights violations against people with disabilities stemming from Medicaid cuts.

The Hawaii investigations would likely be completely secret right now if I had not been involved directly with CMS and OCR.  How many other states have similar ongoing investigations is unknown.

In Hawaii the investigations are centered on our managed care Medicaid plans run for the disabled.  All but two of the states where cuts have resulted in law suits have for-profit managed care for their Medicaid populations.

The states are in trouble over Medicaid, but how much of that trouble is directly related to the obscene profits being paid out to for-profit Medicaid insurance companies is incalculable.  Certainly here in Hawaii, the profits collected by UnitedHealth and Wellcare are enough to make up for the vast majority of cuts, and return state workers and home healthcare providers to their jobs.  If the plans are not only not saving the state money, but actually cost more than paying actual medical costs incurred, then why is Hawaii not ditching these two companies and keeping the money here?

The 1115 managed care plan was the brainchild of our current Governor and her team.  It does not speak well of how lives are prioritized against corporate profits in what used to be called "the Health State."

Tuesday, May 25, 2010

Republican Charles Djou Wins House Seat In Obama's Home District

Neither the Democratic Party nor the public seem aware that Djou's election occurred following news that Hawaii's Medicaid plan for the disabled is under federal investigation by the FBI, the federal Office for Civil Rights and CMS.

The plan, which provides care for people who are so disabled they require assistance to live in their homes rather than be institutionalized, was crafted and set in place under Hawaii's Republican Governor Linda Lingle. Two for-profit companies, UnitedHealth and Wellcare, received $2.5 billion in contracts to provide medical care to the disability community.

Since UnitedHealth and Wellcare took over on February 1, 2009, the death rate in that disability community has gone up 36%.

OCR and CMS got involved in determining if UnitedHealth and Wellcare were violating the civil rights of people with disabilities last August. Once deaths from lack of services began surfacing, the FBI 's investigation started in the fall.

Rumor has it that some in the Democratic Party locally have known about the investigations, but didn't see any political capital in "Lingle-bashing" since this is her last term. Whether that apathy contributed to Djou's victory on Saturday, who can say, but it certainly did not work against him.

Meanwhile, The Honolulu Advertiser had a chance last week to interview eight families whose children or parents died from their disabilities due to lack of services from UnitedHealth and Wellcare. The opportunity was ignored, and the resulting story could have been written by the companies' PR departments.
Read the Article at HuffingtonPost

Who gets to decide medical necessity in Hawaii: NOT the insurance companies

Yesterday's story about Hawaii's Medicaid program for the elderly and disabled quoted the regional president for Hawaii at Wellcare as saying "we approve all medically necessary care to members."  A UnitedHealth spokesperson was quoted saying their health plan is "required to...assure that members receive medically necessary services."

When Erik Sorensen's home care services were cut by Wellcare, his appeal ended up at the Hawaii State Insurance Commission.  The decision, released on February 25, clearly stated that, in imposing the cuts in services, Wellcare "made a coverage decision without undertaking the required statutory medical necessity analysis."

There are currently several other cases pending at the state insurance commissioner, all alleging that cuts in services by both Wellcare and UnitedHealth have not met "the required statutory medical necessity analysis."

Yesterday's story in the Honolulu Advertiser omitted any mention of the cases pending against Wellcare and UnitedHealth at the state Insurance Commission.  It not mention the February 25 decision of the Insurance Commission against Wellcare, which directly contradicts the official company statement which was cited in the article.

In fact, the decision referred to Wellcare's concept of "medical necessity" as "an absurd statutory construction." 

Monday, May 24, 2010

Fear and Loathing in Paradise: How many people have to die before anyone pays attention

It is almost as if post-Watergate investigative journalism somehow never made it to Hawaii.

In the past couple of weeks, it has come out that the FBI has been conducting criminal investigations into the deaths of people with disabiities covered by Medicaid; that the state has had a 36% increase in deaths of people covered by Medicaid in the past year; and that a shooting in Honolulu by an off-duty FBI agent was in part due to Medicaid's refusal to provide the victim with a doctor who could authorize his medications.

This all comes on top of the Office for Civil Rights of DHHS opening two investigations into civil rights violations of children with disabilities served by Medicaid, and the Center for Medicare and Medicaid Service (the federal Medicaid regulators) being in talks with Hawaii since August over the same potential civil rights violations.

The problems all derive from Hawaii's Republican-mastered Medicaid managed care system that is operated by insurance giants UnitedHealth and Wellcare.  According to year-end financial reports released by both companies it appears that their Hawaii membership of elderly and disabled people is generating profit four to five times greater than the percent of membership.  How?  By not spending the capitated insurance payments they are receiving from the state.

Last week, eight families with loved ones who have died or are dying from neglect and denials by Hawaii's two for-profit Medicaid providers got up the courage to come forward.  This is a big thing here in Hawaii.  Almost everyone has an aunty who has a friend who has a relative who works for the city or state government.  But these eight families were determined that no one else should have to go through what they have in the past year.

The names and phone numbers were all provided to a reporter at the main Hawaii newspaper, the Honolulu Advertiser.

The resulting story that appeared today could have been written by the PR people at UnitedHealth and Wellcare.  None of the families were ever contacted.  To say they feel betrayed, humiliated and angry is putting it mildly.  It is almost as if their children and parents had died again, with no one in the world caring.

The same Republican party machine responsible for outsourcing billions of dollars of Hawaii stimulus funds for Medicaid and education has just managed to get the first Republican in twenty years elected to the House.

The so-called "Health State" is slowly killing off its disabled population through neglect.  Obama's home state is sending a Republican to Congress.

There are problems here in Paradise, and they do not appear to be fixable from within.  All I can do is hope someone, somewhere pays attention and does something to bring this on-going tragedy to an end.

Hawaii elects Republican congressman amidst federal investigations into Republican-mastered Medicaid program

On Saturday, Hawaii elected the state's first Republican congressman to Washington in more than two decades.  In his first published comment after the election, Charles Djou said "I think we sent a clear message to Washington, D.C., that we are spending too much money and that we need more fiscal responsibility, and I look forward to going to Washington, D.C., and Congress to do exactly that."

Djou's words come in the wake of recent revelations that the state's one-year-old Medicaid managed care system may be under investigation by the FBI as well as the Office for Civil Rights of DHHS and CMS, the Medicaid regulatory arm of DHHS.  The investigations are all related to cuts in services to the state's disabled and elderly population that have reportedly, in some cases, led to injury and even death.

In fact, from last week until yesterday, eight different families who have experienced personal tragedy due to these service cuts have offered to be interviewed by the press.  The story that came out in this morning's Honolulu Advertiser made no mention of any of these families, nor of the published fact that the death rate among Medicaid enrollees in Hawaii has jumped 36% since this new managed care program went into effect.

This system was conceived under the leadership of Hawaii Governor Linda Lingle, a Republican. Since Lingle's election in 2002, the out-sourcing of Hawaii services has taken some interesting turns:

Hawaii is the only state in the country that pays another state to be its Medicaid fiscal agent.  Hawaii pays Arizona about $9 million a year for the services, which is on top of the contract the state has with ACS to handle the billing put through the Arizona-owned system.  An interesting caveat to this is that ACS cannot perform any on-site maintenance of the system.

Hawaii has been paying the University of Massachusetts Medical School since 2006 to handle federal reimbursements due the state for Medicaid expenditures made by DOE.  As of July 1, 2009, they company still had not got around to getting every potential Medicaid-covered child into the system.  Reimbursements are therefore running about $1.3 million a year, even though DOE generates at least $80 million a year in Medicaid-billable expenses.

Hawaii has paid a Washington, D.C. law firm $5.25 million to write, re-write and legally defend the state's contract between UnitedHealth and Wellcare for the Medicaid services which are bringing all the afore-mentioned federal investigators to our islands.

Hawaii's contracts with UnitedHealth and Wellcare take about $300 million off the top out of Hawaii.  That doesn't include profits generated by denying services that could be covered under the per enrollee payment the companies get every month from the state.  Nor does it include the employment lost as state workers are laid off and replaced by corporate employees, or the local jobs lost as home support services have been cut.
"Fiscal responsibility" seems to have a different definition for me than it does for Mr. Djou.  His political party has favored the rape and pillage of the state's economy by fat profit-making companies for the past eight years.  It's the people who suffer when the state's budget for things like education and medical care has been gutted in order to make way for corporate profit.  The windfall profits these companies had to get by accessing the state's federal stimulus funds is incalculable.  Money that was supposed to help people has gone to make profits.

This is not responsible government.  At least not a government that is responsible to the people who elect it.

Friday, May 21, 2010

Death by Medicaid: Turning 21 can be a killer

Erik Sorensen died because he turned 21.

An accident in 2008 left him paralyzed from the neck down.  He was completely dependent for every movement, every bodily function, on the help of others.  He was enrolled in one of Hawaii's 1915(c) Medicaid waiver programs, and in February 2009 was transferred into the state's new 1115 Medicaid program operated by UnitedHealth and Wellcare.

In June, he turned 21.  Five months later Wellcare (Ohana in Hawaii) told him they were cutting his home health services by fifty-five percent, from 17 hours a day to less than 8 hours a day.

It took more than three hours for Erik's helpers to get him out of bed, into the bathroom, showered and dressed every morning.  Meals took an hour and a half each, and he couldn't be left alone since he was in constant danger of choking to death.  It took half an hour to get him into his wheelchair van (which he could not drive), and another half hour to get him out, with a total of four transfers per trip.  With only eight hours of services, it was going to be impossible for Erik to leave the house.  (A detailed description of a day in Erik's life can be found here.  It is very graphic.)

It also meant he would have to left at home alone for hours on end.  If he needed to cough, if his catheter bag needed to be emptied, if the spasms in his legs threw him onto the floor, if the house caught fire, he could die before anyone got home.

The cuts in services would take effect in less than two weeks.  Erik's case coordinator from Wellcare told him the insurance company wouldn't pay any more for his home services than it would cost them to put him in an institution.  That, the case coordinator said, cost only $6,000 a month, while his current services were costing the company $11,000. 

What had actually happened was that when Erik turned 21 he moved from have a disability code of AM15 (19-20 year old males) to the disability code of AM16 (21-39 year old males).  Under Hawaii's capitated rate agreement with Wellcare, the company was paid $11,840.27 a month for an AM15, but only got $5,398.71 for an AM16.  The level of services he had been receiving was costing Wellcare $10,431.20 a month.

In fact, Wellcare had a financial incentive to try to get Erik into an institution.  The capitated payment they would have received for him every month was not $6,000 but somewhere between $7,000 and $16,000 (island dependent).

I worked with Erik and his family, and while the appeal process was going on his services could not be cut.  Meanwhile, Erik was finally in a position to look forward.  He planned to attend a special program for quadriplegics on the mainland that was designed to enhance independence, he got his GED, and he signed up for classes at the local community college.

In Erik's eyes, all of that would be doomed if Ohana carried through on their threat of institutionalizing him.  In January 2010, Erik signed a formal declaration that was filed in Hawaii District Court, stating he felt coerced and threatened with institutionalization by Wellcare. When Erik later had a chance to get 24/7 service coverage (so he could be covered all night), he turned it down.  As his mom says, "we were both scared to death what Ohana would do" if they took the increased schedule.  The stress on Erik from the ordeal did not stop just because the appeal was over.

Sometime during the night of March 23, Erik vomited and breathed the acid liquid into his lungs.  Aspiration pneumonia set in immediately and his lungs became so filled with fluid the oxygen supply to his brain was severely reduced.  He died on March 25 from the complications of brain death.

There is no reason that the home care of a 21 year old individual should be half of what they were at age 20.  It is as if the system is saying that the life of a 21 year old is only worth half if what is was the day before their birthday.  It is a problem happening across the country, however, and what has become known as the "aging out [of EPSDT]" issue is being tested in the courts.  Decisions have been coming in supporting the ADA rights of the plaintiffs.

In Erik's case agaust Wellcare before the Hawaii State Insurance Commission, the February 25 decision criticized Wellcare for decision to cut medically necessary services that were "unreasonable from the standpoint of procedure and statutory compliance.
Respondent [Wellcare] made a coverage decision without undertaking the required statutory medical necessity analysis.  Respondent did not consider the recommendations of the Petitioner's treating physicians.  Respondent either did not know that Petitioner might have autonomic dysreflexia or disregarded information to that effect in contradiction to notes on a medical record.  Respondent relied heavily upon Home and Community Based Services Assessment Tool which has not been validated as a prevailing standard of care in the medical community.  Respondent did not have all relevant medical records at their disposal in making their decision.  This metholody does not indicate a high degree of diligence or care.
Diligence and care just means spending money.  The lower your cost to premium ratio, the more profit you get.  This is how capitated payment systems run by for-profit health insurance companies are diverting hundreds of millions of dollars in each state away from health services for people with disabilities and into the profit margins of the health insurance companies.  I've already written about the disproportionate profits Medicaid contracts are generating for the companies. Wellcare's recent abandonment of any program where they pay actual medical costs incurred implies it must be much more profitable to receive capitated payments.

The lives of children and adults with disabilities should not be put into the hands of companies that have such a financial inducement to base services on profits rather than medical necessity.

Monday, May 17, 2010

Why it's inevitable Hawaii's capitated Medicaid system will kill and injure the people it serves

On February 1 of 2009, Hawaii's aged, blind and disabled Medicaid population were switched from what's called a "fee for service" program to a "capitated fee" program. 

A fee for service program means the insurance provider is reimbursing your actual medical bills.

With a capitated fee program, the insurance company gets a monthly fee (the capitation fee) for each individual enrolled, ranging from $200 to $20,000 per month.  While the state pays them their capitation fee every month, the state does not tell the providers that they actually have to spend the money. 

There is a reason why Wellcare Health stopped providing fee for service Medicare programs as of January 1, 2010.  While I'm not an economist, knowing the way a for-profit company operates I have to assume that managed care programs, which all feature capitated payments, are much more profitable than paying members' actual medical bills.

United Healthcare, which does business in Hawaii as Evercare, reported that while 2009 overall company gross revenues dropped two percent from 2008, their Medicaid subsidiary's revenues were up forty percent to $8.4 billion, and their Medicare subsidiary reported revenues up 15% from 2008 to $32.1 billion.

United Healthcare doesn't report its earnings as clearly as Wellcare does -- I can't specifically say that the company's 2.9 percent of membership which are Medicaid covered is equal to the financial performance of Americhoice, UHC's Medicaid subsidiary.  However, Americhoice revenues are eleven percent of UHC's gross revenue from premiums, which gives a similar profit ratio to what I found for Wellcare.

By the first quarter of 2010, UHC has increased its profit margin based on expenses as a percentage of the premium up to 20.1%.  Page 5 of the report makes the interesting statement that "prior period
favorable development reflecting lower medical costs" is responsible for the increased profit margin.  Again, I am not an economist but that does sound, to me, a fancy way of saying cutting services regardless of whether or not they are medically necessary.

UHC's report does not mention the company's monthly capitation payment from the state of Hawaii.  Sources tell me it is slightly higher than Wellcare's even though Wellcare serves more people.  At about $1.2 million a day, UHC would be receiving $438 million dollars a year from Hawaii.   That figure represents about half of one percent of the company's total revenues from premiums.  Hawaii's membership in Evercare that is generating that income, however, is only one-tenth of a percent of the company's total health benefits membership. 

It's obvious that capitated Medicaid programs generate huge profits for the companies.  Those profits can only be realized if medical expenses are reduced as much as possible in relation to the set amount per month that each company receives for each individual enrollee.

I reported last week that deaths under Medicaid care had increased 36% since UnitedHealth and Wellcare took over the care of Hawaii's elderly, disabled and blind population. 

Cutting costs equals more profits equals more deaths. 

It's such an abhorrent concept that I am forced to wonder whose idea it was to institute such an inhumane system in the state of Hawaii.  And who, faced with multiple on-going federal investigations, is continuing to keep the capitated Medicaid system alive and kicking.

Hawaii is 2% of Wellcare membership but generates 9-12 % of company revenues

According to Wellcare Health's 10-K report to the SEC, nine percent of the company's gross revenue in 2009 was generated by the two percent of its members who live in Hawaii.

Wellcare is the parent company of Ohana, one of two for-profit companies providing medical, home and community services to the state's elderly, disabled and blind population.  Ohana was recently linked to a shooting in Honolulu, when it was discovered the victim had not been able to renew his prescription medications because the company could not find him a doctor to authorize them.

Wellcare only offers Medicaid and Medicare plans, in contracts with individuals states and the Center for Medicare and Medicaid Services.  They operate Medicaid plans in seven states, and Medicare plans in twelve states (including Hawaii).

The 10-K report summarizes Wellcare's income and expenses as of December 31, 2009.  At that point in time the company had 2.3 million members, of which 1.3 million (or fifty-seven percent) were enrolled in the company's Medicaid programs.  The report makes frequent mention of the Hawaii program.

As of January, Hawaii membership in Ohana was about 22,000.  That is less than two percent of the company's total Medicaid membership (1.67%).

Page 29 of the report states that Hawaii's monthly payment to Wellcare "averages" $25 million per month.  Over a year, that comes to $300 million.  The company's total gross revenue from its Medicaid enrollees is $3.3 billion. 

In October 2009, however, Wellcare renegotiated its contract with the state of Hawaii, raising some capitation rates by as much as thirty-three percent.  Sources now tell me that the state of Hawaii Department of Services is paying Ohana closer to $1.1 million a day, which would actually come out to $33 million a month instead of $25 million.  At the rate, Hawaii's paltry two percent membership would be paying twelve percent of the company's gross revenues.

On page 27 of the report, it says the company cannot increase revenues to meet rising costs since they are locked into their contracts with the states.  Apparently this does not preclude, however, re-negotiating the contract for higher rates, as Wellcare did last October.

Page 58 of the report notes that Wellcare's revenue from state Medicaid contracts had jumped 8.9 percent from the previous year, in spite of the 8.3% decline in membership from being dropped by programs in Florida and Ohio.  The report directly attributes this significant increase in company revenues to the tiny 2% of their members in Hawaii.

Page 59 of the report blames the Hawaii enrollees for the company's drop in the profitability derived from calculating actual expenses as a percentage of the capitation fee.  For instance if direct medical costs rise from 84.8 percent of revenue from premiums, to 86.3%, then the company's profit has decreased accordingly.  These are the actual figures for Wellcare taken from the report.

We reported last week that Ohana was receiving $3,890 every month as their capitation payment for Martin Boegel, the victim of a suicide-driven shooting in Honolulu last week.  By not finding Mr. Boegel a physician, the company did not have to pay out that money for prescription medication or doctor visits.

This is how for-profit companies make more money by denying or reducing services that a doctor has said are medically necessary for an individual with disabilities to live at home rather than in an institution.

I reported earlier than the off-the-top profit Wellcare and UnitedHealth were receiving from their contracts with Hawaii was more than what the Medicaid home services cost the state for the entire year of 2008.  Those numbers were based on an eight percent profit (three percent off the top and than a 5% performance bonus) and did not take into account how much money the company was saving by simply not spending what Hawaii was paying them.

Thursday, May 13, 2010

Hawaii Medicaid employee says FBI investigating deaths from budget cuts

According to a long-time employee of the Hawaii Department of Human Services, the FBI has been investigating almost forty deaths that have occured in the past year linked to cuts in Medicaid services enacted by UnitedHealth (Evercare) and Wellcare (Ohana).

My source says the list ranges from infants to the elderly.  This list is representative of the 36% increase in deaths of Medicaid enrollees I reported yesterday has occurred since UnitedHealth and Wellcare took over Hawaii's medicaid program on February 1, 2009.

I was also told that Martin Boegel is not the first criminal victim whose problems could possibly be linked to UnitedHealth or Wellcare not assigning a physician who could authorize their medications.

The FBI investigation was begun some time last fall, it seems.

I have emailed the FBI agents who I have been told are involved in this investigation. Here is part of the text of that email:

On Monday, the Criminal Investigation Office at DOJ did suggest that I contact the FBI directly regarding a current investigation of [name redacted] in Hawaii.

If the FBI or DOJ are already actively investigating issues related to Hawaii's QExA program, the public needs to know.  If the FBI or DOJ are already investigating the list of more than twenty people who reportedly died from care-related issues under QExA, the public needs to know.

Certainly the forty-some thousand aged, disabled and blind enrolled in Evercare or Ohana, along with their families and caregivers, deserve to be made aware that the life and death decisions currently being enacted by the two companies may not be in their best interests.

[Name redacted] avoidable death in March, and the Boegel shooting on Sunday, demonstrate that.

I look forward to receiving your response.

We all do.  

About Me

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I'm the mom of a child with disabilities. Hannah's first neurologist said she might never develop beyond the level of a 2 month old infant, and there wasn't anything I could do about it. The brain damage was just too severe. Nine years later, she walks, uses a touchscreen computer and I've just been shown she can learn to construct sentences and do simple math with the right piece of technology. Along the way, I discovered I needed to teach myself what Hannah's rights to services really were. Learning about early intervention services led to reading about IDEA and then to EPSDT. I've been waiting for the Obama administration to realize the power and potential of EPSDT for the medical rights - including the right to stay at home with their families - of children with disabilities. The health reform people talk about long term care, and the disability people talk about education and employment, but nobody is talking about EPSDT. So I am.