Abercrombie betrays public trust by pandering to big business health insurers

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My first career as a social anthropologist taught me a lesson that has stayed with me for almost forty years: what people do tells you a lot more than what people tell you they do. It is the difference between perception and reality, something that can be grotesquely distorted when enough money is spent.

Governor Abercrombie's action in signing SB 1274 yesterday is a good example of how this lesson applies to real life. Governor Abercrombie was elected, simply put, for his verbiage about helping Hawaii's children and most vulnerable citizens.

Questions began to arise in the disability community when the Governor's office released an ad for respite care that frivolized its purpose.

A swipe of the pen yesterday stripped 270,000 people of their right to an external appeal when their insurance carrier denies treatment ordered by a doctor. Last week's federally published regulation removed the entire purpose of SB 1274, which was to meet a July 1 deadine. The deadline was extended to the end of the year, with the feds saying they would let states know by the end of July if their current state programs needed any tweaking.

The action says more about the Governor than his words, because the only possible reason left for him to sign the bill was plain old pandering to big health insurance companies. They are tired of wasting corporate profits on lawyers defending the indefensible: cutting medical services just to cut costs. The fact it's the companies that keep losing these appeals is why Governor Abercrombie signed SB 1274.

It is the same sort of pandering to the same ten for-profit "pure-play and multiproduct plans" going on now in New Jersey, Florida, Texas, Georgia, New York, and thirty-five or so other states.

The Commonwealth Fund recently published an issue brief "Assessing the Financial Health of Medicaid Managed Care and Quality of Patient Care They Provide."

While the number of Medicaid members in publicly traded plans is still lower than the number in non–publicly traded plans, the total number in publicly traded plans has been increasing. From 2004 to 2009, the total Medicaid members enrolled in publicly traded plans rose from 5.6 million (32 percent of total Medicaid population) to 9.8 million members (41 percent of the total Medicaid members).

According to figures submitted to the SEC by the ten companies included in the Commonwealth study, that figure has grown fifty-one percent to 14.8 million as of March 31, 2011. All in all, about 40 million Americans with Medicaid, Medicare or Trinet (US military) are receiving their healthcare from publicly traded companies.

The rate at which Americans are being herded unknowingly into for-profit Medicaid managed care plans is growing faster than Medicaid membership itself. The DHHS 2010 Actuarial Report predicted a 5.6 increase in Medicaid membership between 2009 and 2010. Just in the six months between September 30, 2010 and March 30, 2011, Medicaid membership in for-profit companies grew ten percent. That ten percent growth in enrollment resulted in a thirty percent growth in Medicaid revenues to the same companies.

Couple that increase with the newly emerging White House position supporting the restriction of appeals rights for everyone on Medicaid, and the Republicans won't need to life a finger to destroy and privatize Medicaid. President Obama and compliant pro-big-business governors like Neil Abercrombie are doing the job for them.

The oddest part of all is that Nero is fiddling, Rome is burning, and the major media aren't noticing. Perhaps the very loud and boisterous Republican attack on Medicare has distracted them from the guerilla warfare launched against Medicaid.

Once more, it is an issue of perception versus reality.

Please sign our petition to stop this destruction of human rights.

Abercrombie signs SB 1274

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My apologies. Governor Abercrombie did not sign SB 1274 until the last possible day in July. This post was based on a phone conversation.

Governor Abercrombie today signed SB 1274 into law.

I will have more information to report tomorrow.

This is disastrous for the 270,000 people in Hawaii on Medicaid.

New federal ruling means SB 1274 can be vetoed now

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The July 1 deadline that supporters of SB 1274 have been using as the excuse for passing the bill quickly, yesterday was extended to January 1, 2012.

There is no reason now for Governor Abercrombie not to veto SB 1274 immediately. His health policy expert admitted on Tuesday that the state had yet to seek any federal guidance on whether the bill was even necessary.

Here is the news from Rafael del Castillo:

Yesterday, the Federal government released new “technical guidance” relating to state external review processes and what was alleged by our Legislature to be preemption. SB1274 has an effective date savings clause extending its effective date to no later than 1/1/2012 if the feds postpone the deadline. Note that this is due to pressure from the insurers at the national level because they don’t want any external review at all. Note also that the title is “working with states” which has never happened so far with Hawaii.

I have a cadre of lawyers and law professors analyzing it and will get back to you as to that analysis. Here is the release from the DHHS Center for Consumer Information and Insurance Oversight discussing the technical guidance:

Affordable Care Act: Working with States to Protect Consumers

The Affordable Care Act establishes common-sense consumer protections and requires insurers to operate in a more transparent manner. Fair rules and transparency help create a more level playing field between consumers and insurers. The law also empowers States by putting them in the driver’s seat in implementing many of these new consumer protections.

On July 23, 2010, the Departments of Health and Human Services, Labor, and the Treasury issued an interim final rule regarding internal claims and appeals and external review processes for group health plans and health insurance issuers offering coverage in the group and individual markets. This rule works to give people in most plans better information about what their rights are and why their claims were denied or coverage rescinded. Under the rule, consumers have the:

*Right to information about why a claim or coverage has been denied. Health plans and insurance companies have to tell you why they’ve decided to deny a claim or chosen to end your coverage – and how you can appeal that decision.

*Right to appeal to the insurance company. If you’ve had a claim denied or had your coverage rescinded, you have the right to an internal appeals process, a process in which you ask your insurance company to conduct a full and fair review of its decision. If the case is urgent, your insurance company must speed up this process.

*Right to an independent review. Often, insurers and their policyholders can resolve disputes during the internal appeals process. If you can’t work it out through the internal appeals process, you now have the right to take your appeal to an independent third-party for review of the insurer’s decision. This is called “external review.” This way, the insurance company no longer gets the final say regarding your benefits, and patients and doctors get a greater measure of control over health care.

These protections and standards are an important step forward in reforming the health care system to make sure it works for consumers, not just insurance companies.

Amended IFR: State Flexibility and Transition to 2014

Today the Departments are amending the July 23, 2010 Interim Final Rule. Amendments to the IFR maintain the unprecedented consumer protections provided in the Affordable Care Act while reflecting comments from stakeholders and give States the flexibility they need to implement the law.

The July 2010 IFR set forth 16 minimum consumer protections based on the Uniform Health Carrier External Review Model Act written by the National Association of Insurance Commissioners (NAIC) that, if provided by a State external review process, will result in the States’ process applying in lieu of a Federal external review process.

Many States have made progress in meeting the minimum standards laid out in the July 23, 2010 IFR. To give States a reasonable opportunity to continue to implement these important consumer protections the amended IFR extends the transition period for State external review processes to January 1, 2012.

During the transition period (until January 1, 2012), at a minimum, plans and issuers are expected to follow their State laws and processes for external review in the States in which they are operating. Plans and issuers in States and territories where the HHS-administered Federal external review process already applies as of the date of this guidance are expected to continue their participation in the Federally-administered external review process until HHS determines otherwise.

In addition, separate guidance being issued contemporaneously with the publication of this amendment announces standards under which, until January 1, 2014, a State may operate an external review process under Federal standards similar to the required consumer protections outlined in the July 23, 2010 IFR. Under this guidance, if HHS determines that a State has neither implemented the required consumer protections nor implemented a process that meets the Federal standards that are similar to the required consumer protections, issuers in the State will have the choice of participating in either the HHS-administered external review process or contracting with accredited Independent Review Organizations. This guidance also phases in the use of multiple Independent Review Organizations for the plans that use them starting next year as a way of ensuring that the external review is unbiased.
HHS is adopting this approach to permit States to operate their external processes under standards established by the Secretary until January 1, 2014 to avoid unnecessary disruption while States work to adopt the consumer protections set forth in the July 2010 regulations. Starting in 2014, the appeals process will be more closely aligned across all types of plans.

Additional Amendments to the IFR:

The amended IFR released today includes details of all of the changes made from the original IFR. You can find the text of this amended IFR here.

Additional guidance issued contemporaneously with the publication of the amended IFR can be found here.

The filing in its entirety is here.

A second letter from a mom to Governor Abercrombie about S.B. 1274

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This is the letter that Hannah M.'s mom brought yesterday for the Governor:

I am here today on behalf of my daughter—and, indeed, my entire family—to respectfully request that you veto Senate Bill 1274. If you allow Senate Bill 1274 to take effect, it will be devastating to Hawaii families with disabled persons. I am begging you, please, don’t take away the only rights we have to help our disabled children and community. I ask you to look into your heart—not just at budgets-- for the implications of this proposed bill. Please take the wise and humane course of action.


If SB 1274 is not vetoed, it will have a profound impact on my entire family. By allowing SB 1274 to pass, you will be endangering my daughter’s life as well as the lives of many others like her in the state. Vetoing SB1274 will harm no one whatsoever. Allowing it to become law most certainly will. We--our daughter included--are being stripped of our current rights--this from an insurance division and a Legislature that are supposed to be responsible for overseeing the safety of the Hawaii citizens they are sworn to protect.

Please allow me to tell you about my daughter, Hannah. She is a five -year old girl who has a life-threatening seizure disorder known as Lennox Gastaut Syndrome. There are some days that she has had over 1,000 seizures per day. Despite these inhuman challenges, she struggles with all her might every day to learn to walk and to communicate, and she is unfailingly appreciative of the help she receives. Our daughter has numerous physicians who have provided her health care plan with prescriptions and letters of explanations for why she needs 24/7 skilled nursing care. Her health care plan was reviewed by a physician on the health plan’s staff and denied. The part of this that is so concerning is that the health care plan’s physician who provided the denial is not even a neurologist; nor has he ever seen our daughter as a patient; nor is this physician familiar with her care plan.

The health plans told us that, if our daughter needed 24/7 care, then the most “cost effective” place for her would be placement in an institutional setting. We feel strongly that such a move would be the most inhumane choice for a five -year old child; it would amount to banning her to an institution away from her family forever, and depriving her once and for all of the hope of a meaningful and fulfilling life. We worry that such a move would send a horrible message to her brother—a message that family does not matter and that children can be thrown out like used Dixie cups.

We exercised our right to appeal what we think is a medically and morally bad decision, and so far, our daughter has the care she needs to remain with her family, school, and community. Evercare seems so sure that you won’t veto SB1274 that they have decided again to cut my daughter’s life-saving nursing. They have conveniently chosen the date of July 1 to start the reduction, and that just happens to be the first day that we will lose our consumer rights. They know that we won’t have any recourse after June 30. Do you believe that Evercare is looking out for my daughter’s best interests by doing this or looking out for their pocket books? I need you, Mr. Governor, to help me to look out for my daughter’s—and other sons’ and daughters’--interests.


Does institutionalizing a little girl who tries so hard to get better sound like something that constituents would support? The impossible part about this scenario is there is no facility in Hawaii to accomplish this “institutionalization.” Where do they want to send my medically fragile daughter? Were they thinking about taking our daughter from us and placing her on another island or, worse yet, sending her to another state? If my daughter is placed in an institution, she won’t have her family or her right to a Free Appropriate Public Education. They will put her in a crib bed that is caged and not allow her to live her life. In essence, they would be putting her in a jail because of her disabilities. We treat our criminals better. What crime has my five year-old child committed that she deserves this fate?


Senate Bill 1274 will unjustifiably and irreversibly damage health care consumer protection in Hawaii. Our external review law, H.R.S. § 432E-6, has served health care consumers well for over a decade. It gives health care consumers a more level playing field against powerful insurance companies. Consumers have access to experienced advocates to assist them with preparing and presenting their cases in a manner consistent with Hawaii’s medical necessity law. Decisions are made by a local expert panel, and consumers are able to present expert testimony and other evidence in a fair, but efficient, hearing process.

While Hannah has severe disabilities, she is a lovely and loving child. She works hard every day to master new skills. She is learning against great odds, and her quality of life is very high. So is the joy that she gives to us, her caretakers, and our friends. Don't eliminate Hannah's rights and extinguish her joy. Please Veto SB1274.

My letter to the Governor why he needs to veto S.B. 1274

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Five children with multiple disabilities, along with their parents, siblings and nurses, attended yesterday's policy briefing on SB 1274. Many other parents came without their children. We did it because our children have no voices of their own, and we wanted Governor Abercrombie to see the faces of those who will be hardest hit if he does not veto this bill.

The governor was not concerned enough to show up. Instead he sent his health policy analyst, who stunned everyone by admitting the state still has not bothered to check with the feds if S.B. 1274 is even necessary. The bill says it is to meet requirements of the Affordable Care Act, but in six months nobody has bothered to find out from the source if that is true.

The parents and nurses I've spoken with since yesterday's meeting have been unanimous in their incredulity that the Governor's office is so unaware, and apparently uncaring, of the impact this bill will have on his state's most vulnerable citizens.

Parents who spoke of the bill's impact on the lives of their children were mocked twice for being overdramatic.

I can promise that none of us were. All five children had been the victims of life-threatening cuts in services by their Medicaid plans which were subsequently overturned directly (or indirectly in one case) thanks to the independent insurance appeals process.

I had prepared a letter to the Governor, and read it yesterday. I'm including it here.

To Governor Abercrombie:
Hawaii’s current insurance division appeals law is the only thing standing between my daughter’s life and the decisions her Medicaid provider makes on the basis of profit rather than what Hannah needs. No harm will come to anyone if you veto SB 1274.

If you do not veto SB 1274, Hannah’s only ability to challenge these decisions will be an Administrative Hearing at the Department of Human Services. The problem is DHS has no interest in protecting the rights of vulnerable children like our two Hannahs, or any of the other 260,000 people on Medicaid. If they did, Kenny Fink and Patti Bazin would not have sat back and allowed the state to get hit with a second wave of federal civil rights investigations, over the same cuts in the same services to the same two little girls by the same provider within fifteen months.

In April 2010, DHS acknowledged the health plans were committing federal regulatory violations when they instituted a so-called “corrective action plan” against at least one plan.

Since then, different families have been keeping CMS informed of ongoing regulatory violations. I’ve brought with me copies of my emails to CMS from the past six months documenting ongoing regulatory violations, and the emails back from CMS acknowledging a wide array of infractions.

As long as DHS continues to be unable or unwilling to provide oversight to the health plans, to make them comply with federal regulations, H.R.S. 432E-6 is the only thing that gives our families a level playing field when we’re trying to appeal life or death decisions made by our health plans. Going up against a multimillion dollar corporation is already making us David versus Goliath, but thanks to HRS 432E-6, we go into those battles over our children’s lives with professional advice, letters from our doctors, and the other evidence we wouldn’t know to get on our own. Our children’s doctors and therapists have a chance to testify on their behalf, supporting the prescriptions that have been denied, the necessary medical equipment like catheters and feeding tube extensions that have been denied, and the nursing services that keep our kids out of institutions denied.

If the insurance plans want to complain these appeals cases are costing too much, maybe the fact these bad medical decisions are bringing federal investigations down upon the state means the problem is with whoever is making those decisions. Not with our kids, and certainly not the law itself.

One of our families got chilling news from CMS. The bottom line is, we can all continue reporting the health plans’ violations of federal law, but as long as the state of Hawaii continues to refuse to do anything about it, CMS can’t protect our legal rights.

The only person right now who can is you, Governor. When you campaigned, you promised to protect our most vulnerable people. They are the people who will be hurt the deepest if you don’t veto SB 1274. Don’t take a chance with their lives. Do no harm. Please veto it for them.

Sincerely,
Summer Harrison

Hawaii Governor unaware or unconcerned of federal investigations of DHS

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Governor Abercrombie's health policy analyst Michael Ng admitted yesterday the governor is unaware of any of the ongoing federal investigations targeting DHS and its administration of Medicaid and Medicare.

One of two things has happened: either the state's Medicaid bureaucrats have hidden the information from the governor; or the governor has adopted an ostrich position of what he doesn't know about he doesn't have to do anything about.

Specific federal investigations Ng denied knowledge of included the following:

* six investigations by the Office for Civil Rights, including two opened in May;

* CMS investigation of potential Medicare fraud at DHS;

* on-going personal visits and phone calls from federal regulatory officials;

* on-going federal regulatory violations by the health plans about which DHS is doing nothing.

Documentation was provided to Ng. It will be interesting to see if that gets to the Governor's desk.

The information came out at a meeting yesterday between Ng and a group composed of lawyers, social workers, nurses, and the children with disabilities and their families who will be hardest hit if the governor does not veto SB 1274. Parents were literally pleading for their children's lives if access to the state's independent insurance division appeals process is denied them.

Abercrombie's campaign website is still up, and his campaign promises for healthcare, civil rights and human services are there. The difference between what he said and the message of his failure to veto SB 1274 is striking.

Monday is the deadline and the state still has not asked the feds if they really need to repeal H.R.S. 432E-6 in order to meet federal Affordable Care Act requirements.

White House clears path for Ryanizing Medicaid

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Not only has the Administration given states the go-ahead to Ryanize their Medicaid programs, the White House has sent a clear message to private managed care companies that Medicaid fraud is OK.

Actions taken by the Administration on April 26, 2011, May 6, 2011 and May 26, 2011 combine to paint a chilling picture of a newly-emerging White House policy towards Medicaid.

On April 26, the government signed a settlement agreement with for-profit Medicaid managed care provider Wellcare and nine states. In exchange for a payment of $137 million against all claims for criminal Medicaid fraud, the government agreed never to call Wellcare a crook and not to hold this information against them in any future contract awards.

On May 6, the government published a proposed new Medicaid access rule in the Federal Register. The underlying message is that the federal government will not intervene in state Medicaid matters. National health policy expert Sara Rosenbaum called the rule "a model of inaction...[that will] establish what might charitably be characterized as an information-gathering exercise." The rule exempts everyone receiving managed care medicaid from even this poorly-defined five year study, a figure Rosenbaum estimates at 70%. About one-third of that are enrolled with for-profit health insurers, and that number grew 21% just in the last three months of 2010.

May 26 was the date the Administration's friend of the court brief was submitted to the Supreme Court. In it, "the Obama administration ... has entered the case on the side of the state, arguing that the courts are closed to private individuals where Medicaid-access litigation is concerned." It was a concession as well to the big business health insurers like Wellcare, Unitedhealthcare, Amerigroup and six other major players they wouldn't need to worry about federal oversight of how state and federal money was being spent. The savings in potential legal fees defending medically indefensible denials of medical treatment is enormous, if our recent experience in Hawaii is any indication.

The Administration has given states the power to Ryanize (block grant) Medicaid, and apparently agreed not to interfere in paltry civil rights issues.

On June 9, Igor Volsky published an article whose title says it all: "Texas Follows in Paul Ryans Footsteps: House passes measure to block grant medicaid, privatize medicare."

Texas would enter a compact that would exempt the state from the federal eligibility and benefit rules in the Medicaid program and from all Medicare rules, allowing lawmakers to “possibly sweep Texas seniors on Medicare into private health insurance policies.”

New Jersey has imposed mandatory managed care on the state's disabled children and families. Two of the four private contractors are Unitedhealthcare and Amerigroup, both of which have been accused in the past of stealing money from children's Medicaid programs.

The Florida legislature accomplished the same thing recently. Wellcare told the SEC in May that new contract opportunities were opening up in Louisiana, Texas and Kentucky, while "Florida and Hawaii are also considering expansions of their Medicaid managed care programs." [This could be news to many people in Hawaii, although a state press conference held on May 10 implied this was coming.]

On June 13, twenty-nine Republican governors published their views on Medicaid reform, demanding greater flexibility in running state Medicaid programs. "States and territories are best able to make decisions about the design of their healthcare systems based on the respective needs, culture and values of each state" is number one on the Republican agenda for Medicaid.

Jonathan Cohn wrote in The New Republic back on April 4 that "Ryan confirmed that he and his fellow Republicans would propose to change Medicaid from an entitlement to a block grant--which, as I noted on Friday, means giving the states a lump sum of money, with much more freedom to spend the money as they choose."

Ryan also stated "private insurers are more efficient than government programs" in operating Medicare and, presumably by extension, Medicaid. One of the strongest proponents of that idea is Unitedhealthcare, which had its wholly owned research company (The Lewin Group) write reports to states informing them of that fact. Unitedhealthcare's Medicaid managed care contracts showed a five percent increase in membership between September 30, 2010 and March 31, 2011, during which same time the company's quarterly Medicaid revenues skyrocketed 23%. The company is not, perhaps, an uninterested observer.

The Center on Budget and Policy Priorities confirms that the hardest hit victims of Ryanized Medicaid will be children, adults as well as children with disabilities, families and senior citizens. The "Ryan Plan would likely eliminate most or all protections for Beneficiaries."

Ryan didn't have to do anything to get that accomplished; the White House has done it for him.

Please sign our petition to get this process stopped before it get codified by law and the Supreme Court.

Administration pandering to big business insurers is like hiring a pedophile as a babysitter

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A proposed Medicaid regulation published in the Federal Register on May 6 takes on new ominous overtones in light of the recent Administration-backed policy brief submitted to the Supreme Court.

Sara Rosenbaum, head of the Health Policy Department at George Washington University, calls the rule "a model of inaction," a purpose of which is "to establish what might charitably be characterized as an information-gathering exercise." Writing in the New England Journal of Medicine, Rosenbaum continues

Even this information-gathering exercise is wanting. The proposed rule exempts Medicaid managed care from review, despite the fact that the access statute protects all beneficiaries, including the 70% who receive their care through managed care plans. Moreover, the proposed rule gives states an inordinately long 5 years to measure access within their residual fee-for-service programs, which overwhelmingly serve the beneficiaries with the most severe physical and mental health conditions.

Why would federal policy exclude seventy percent of Medicaid beneficiaries from any evaluation of how well a state's Medicaid program is conforming to federal law? That would be like taking a census and excluding seventy percent of the population. The proposed rule explains that managed care organizations are already covered under a different section of federal law, and that is sufficient to ensure their compliance.

Managed care contracts are being farmed out across the country to provide services to children, families, the elderly and people with disabilities. These are the people who would be unrepresented in these state evaluations, allowing for-profit corporations to continue to abuse children and steal their federal funding with impunity.

Six federal civil rights investigations, a state-issued "corrective action plan", and extensive reporting to CMS of violations of federal regulations have shown, at least in Hawaii, that managed care Medicaid insurers ignore federal laws with impunity.

Of the six federal civil rights actions, at least four have targeted one company, Unitedhealthcare, which operates in Hawaii as "Evercare." The company reported a 20% increase in quarterly Medicaid/Medicare revenues between September 20, 2010 and March 31, 2011, during which Medicaid/medicare membership only increased 5%. One quarter of the company's policyholders generate 55% of the company's premium revenues.

New Jersey has recently announced they are turning all their Medicaid families over to mandatory "managed care organizations." Two of the four providers are Unitedhealthcare and Amerigroup, both with documented histories of criminal Medicaid fraud investigations.

Wellcare reached a settlement over criminal Medicaid fraud accusations in every state in which they operated in May. They apparently have retained all these contracts, and even got rate increases of up to 3% from four of the states.

The company told the SEC that in exchange for their settlement over Medicaid fraud, the federal government had agreed "to release and refrain from instituting, directing or maintaining any administrative action seeking to exclude the Company from Medicare, Medicaid and other federal healthcare programs." Quite a "get out of jail free" card, but also in keeping with the pattern of Administration pandering to big business health insurers.

CMS, the division of HHS that administers Medicaid and Medicare, is a watchdog with no teeth: they can document violations of federal law but cannot enforce them. The only action CMS can take against a state is to withhold the federal payment share. That was tried in Alaska and backfired, creating more human misery than it alleviated.

Rosenbaum cautions at the end of her article that regardless of what form the potential regulation takes in the end,

it would not even remotely amount to the type of comprehensive federal enforcement scheme that would justify a decision by the U.S. Supreme Court to overturn generations of Constitutional precedent and foreclose access to the courts by millions of beneficiaries and the health care providers who serve them.

Would any parent in their right mind hire a pedophile as a babysitter? Why is President Obama pushing a federal policy "arguing that the courts are closed to private individuals where Medicaid-access litigation is concerned" while surreptitiously shoveling millions of medically vulnerable Americans into programs run by apparently criminal companies?

It is uncannily similar to what has happened here in Hawaii, where turning over the state's Medicaid waiver program to two for-profit corporations produced a 36% rise in the death rate within the first year. State legislation sitting on our governor's desk would deprive everyone on Medicaid of external appeals of medical denials from their health insurer. That legislation has been openly supported by Unitedhealthcare and Wellcare, the latter even admitting in court to having written a sister bill. A Unitedhealthcare attorney moaned on TV that these appeals (almost all of which are finding on behalf of the children) were costing the company too much money.

If all of this comes to pass as federal Medicaid policy, there will be no record of how badly and corruptly corporations are saving money by deciding services based on profit not need.

Please sign our petition. We have to stop this from happening.

Unitedhealth loses Hawaii court appeal

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From Rafael del Castillo:

Something happened on Monday to underscore just how bad SB 1274 really is.

On September 30, 2010, the Panel in Metsch v. Evercare filed its decision. It was one of the few decisions where we knew the Panel got it wrong on the law, so we appealed to the Circuit Court. It was quite simple, really. The Panel rejected the opinion Evercare submitted by an adult epileptologist whose generic report had little to do with our child-petitioner (whom he had never seen and would not have accepted as a patient), and accepted our 2 experts’ opinions. It then turned around and decided against those opinions without grounds for doing so.

Monday, the Hon. Karl K. Sakamoto held at the conclusion of oral argument (the one I returned from DC for a couple of weeks ago, darn it, but was continued to yesterday because Evercare’s attorney could not make it), that it was correct for the Panel to base its decision on our experts, but it could not logically do so and then go against their opinions. He VACATED the September 30 decision and REMANDED for a new hearing.

He could have reversed, but has given Evercare another bite at the apple. There followed the most incredible scene I have seen in all my years of practice: Evercare’s attorney proceeded to lecture the Judge for about 3 minutes on how he was going to be reversed on appeal. Based upon its actions the past few weeks, it is clear Evercare is banking that it has SB1274 in the bag—reversing prior denials so that it won’t be stuck with an order from a panel—and thus it can do as it pleases, including reading the riot act to a judge.

This is the same company that expanded its Medicaid enrollment last year by 5% and its Medicaid revenues by 23% (how does that work??). At least our 80%+ stats are even better now, but that is not the important thing.

The importance of the Metsch case is this: panels occasionally make mistakes in applying our medical necessity criteria. It takes a lot of care and attention to detail, which, despite having a lawyer chair the panel, does not always get properly done. We have even had a couple of cases where the lawyer chairing the panel dissented in a majority opinion. One is on appeal. In the previous one, the court reversed the panel.

Under SB1274, these decisions, which often involve life-and-death matters, will be turned over to some doctor, most likely in another state, and they will be expected to apply Hawaii law properly every time. Right. Sheer genius.

The Insurance Commissioner says there will be an appeal from the IRO decision. He is wrong. With all due respect, the Ins. Commr. is not a litigator. He does not have to explain to a judge that just because the law says the IRO decision is “binding” there is still a right of appeal. I have to do that, so I know just how small the chances are of getting the circuit court and appellate courts to agree with me. I reviewed Hawaii statutes, looking at every one that says a decision is “binding.” If there is an exception for appeals, the law always expressly says so. Why? Because that is the law.

You see, there is no right of appeal from any agency decision unless the court can find an expression of legislative intent that there be an appeal. The doors of the court are only open if the legislature has said so. Besides, who are you going to find to take your appeal? You will have to pay and you could lose.

One more thing: do you really think the health insurers will agree that you have the right to an appeal? They will fight you tooth and nail just as they fought, and spent hundreds of thousands, if not more, to dismantle Hawaii’s external review law, starting back in 2002 when they launched their attack to get ERISA plan members excluded. Bit-by-bit they have torn it down. It is especially ironic that the Administration’s chief argument is that ERISA members are excluded. The health insurers won that battle so let’s concede the whole war to them? That is indefensible public policy. Let’s just all turn our wallets over to them and let them take as much as they want.

By the way, you can strike a blow against the national attack on Medicare and Medicaid:
Reversing long-standing policy which even the Bush Administration supported, the Obama Administration has submitted a brief to the Supreme Court which can only be interpreted as relegating Medicaid beneficiaries to second-class citizen status. The amicus brief filed by Acting Solicitor General Neal K. Katyal on May 26 effectively exempts everyone receiving Medicaid - including children, the elderly and people with disabilities - from the protection of federal law by denying them access to federal courts.

Please read about the issue and consider signing our petition. If this brief is allowed to become policy, it will foreclose actions against state laws that violate Medicaid federal law. Senator Waxman has said the policy expressed in the brief is an abomination.


Also, please sit down today and send another email to the Governor and send a letter to the editor of any newspaper. People are still in the dark about SB1274 and what the Administration is poised to do with our patient protections.

Obama, the Republicans, and the silent war against Medicaid

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While the Republican-driven war on Medicare is grabbing public attention, President Obama's own war on Medicaid is going largely unnoticed.

The "friend of the court" document submitted to the Supreme Court by the Department of Justice on May 26 was strongly opposed by DHHS Secretary Kathleen Sebelius. When two arms of the Administration disagree on policy, the decision goes to the President. Congressman Henry Waxman was quoted today stating the President "evidently decided to let this brief go through, and this is a serious mistake."

The brief opens the door to the Supreme Court denying almost seventy million Americans the protections of federal Medicaid law. Children, adults with disabilities, and senior citizens will be at the mercy of state bureaucrats and, increasingly, the big business insurance companies that are gobbling up state Medicaid contracts across the country.

These are the same big corporations that stand to benefit if the Republican's "Voucher Care" concept of Medicare passes. Already accused of criminal Medicaid fraud in multiple states, these are companies growing at double digit rates thanks to the Affordable Care Act, and the biggest one was linked to the Tea Party back in 2009. Profits are made by not spending the federal and states funds they are paid on actual medical care.

George Washington University health policy expert Sara Rosenbaum warned that there’s “no stopping point … in terms of its spillover effects” if the Supreme Court broadly restricts individuals’ access to the courts over state implementation of such a federal program."

Please sign our petition to the Department of Justice to have this dangerous document withdrawn.

The unspoken link between the Republican war on Medicare and the privatization of Medicaid

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There is a strong link between the Republican war on Medicare, and the progressive privatization of Medicaid, and that is the primary beneficiaries of each: the Wall Street darlings of the health insurance industry.

Paul Krugman's piece yesterday in The New York Times describes the Republican vision of Medicare as Vouchercare, where private health insurers are paid a set fee every month per person. It would function similarly to the capitation contracts for Medicaid that these same private health insurers are gobbling up quietly across the country.

About $30 billion in Medicare and Medicaid funding was paid to nine corporate insurance companies in the first quarter of 2011, already well on the way to topping the 2010 total of $113 billion. According to published Medical Loss Ratios, more than $5 billion of that was skimmed off the top as operating profit: the difference between what the company is paid per person per month and what they actually spend on that person. With seven of the nine reporting lowered MLRs for 2010, that quarterly figure is also on the way to besting the 2010 published total of about $19.5 billion.

Unitedhealth is the leader of the pack financially. A five percent increase in Medicaid membership generated a twenty-three percent increase in Medicaid revenues just in the past six months.

Meanwhile, criminal fraud investigations have found several of these companies - Amerigroup, Humana, Wellcare and Unitedhealth in particular - artificially inflating MLRs. Florida is asking for millions of dollars to be returned, just from investigations that are already four or five years old. Wellcare, whose Medicaid/Medicare income grew nine percent in 1Q 2011 over the previous year, submitted a settlement agreement with nine states over Medicaid fraud in late April. A few days later they scooped up a new contract with one of the nine, Georgia.

The selling of Medicaid and Medicare to the private sector becomes particularly frightening in light of a recent amicus brief the Administration has submitted to the Supreme Court. Barring Medicaid beneficiaries access to the protections of federal civil rights laws can only produce an exponential growth in criminal Medicaid and Medicare fraud.

Why Medicaid is creating demonic glee on Wall Street

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The Obama Administration has told the Supreme Court that Medicaid turns beneficiaries into second-class citizens. The amicus brief filed by Acting Solicitor General Neal K. Katyal on May 26 effectively exempts everyone receiving Medicaid - including children, the elderly and people with disabilities - from the protection of federal law.

The Affordable Care Act has already been driving a double-digit boost to the privatization of Medicaid and Medicare, by spawning new contracts going out to bid across the country. Katyal's brief will allow corporate insurers, many already with reputations for criminal Medicaid fraud, to continue receiving federal and state funding with no federal controls over how, or even if, it is spent.

As official Administration policy, the brief also seems to grant these health insurers immunity from anyone appealing their decisions successfully ever again. It may also raise interesting questions about the content of meetings between the President and some of these same health insurance companies that took place prior to passage of the ACA.

Corporations are already reporting to the SEC with demonic glee the profits to be reaped by refusing to spend the money they get paid every month for state Medicaid and federal Medicare contracts. First quarter 2011 Medicaid/Medicare income to Wall Street-driven private insurers was about $30 billion, already well on the way to surpassing the 2010 total of $114 billion. Companies like UnitedHealth have reported federal revenue increases of over twenty percent just in the past six months.

Many of the companies gobbling up these new state and federal contracts are already developing unsavory reputations for criminal Medicaid fraud. Private insurers like Amerigroup, Unitedhealth, Wellcare and Humana have all either been charged with criminal fraud, or are fighting/have already reached repayment agreements to avoid criminal prosecution for stealing state Medicaid funds.

If this amicus brief is allowed to stand, civil rights earned over the past sixty years will be decimated. These companies are already creating a corporate criminal culture out of Medicaid and Medicare, which can only expand if they are allowed to violate federal laws with impunity.

This is what is already happening in states like Hawaii, where at least six different federal civil rights investigations have been initiated in the past fifteen months. The investigations have all been on behalf of medically fragile children and target one of two for-profit health insurance companies, Unitedhealth or Wellcare. Together, the two collect about seventy percent of the state's annual $1.75 billion Medicaid budget, in exchange for providing Medicaid services to the elderly, blind and children as well as adults with disabilities.

Florida's legislature recently voted to force its entire Medicaid population into managed care programs operated by for-profit insurers. Hawaii's former Republican governor Linda Lingle started that process locally, and recent announcements by state officials open the door for greater for-profit corporate intrusion into Medicaid and further violations of federal civil and legal rights.

Legislation is currently sitting on the desk of Hawaii Governor Neil Abercrombie that would exempt the state's entire Medicaid population from equal access to state appeals procedures. S.B. 1274 has been heavily lobbied for by the state's Medicaid insurers, who claim they are spending too much money defending their medical decisions in current state insurance division appeals.

These medical decisions they are defending are some of the same ones targeted by the federal civil rights investigations, two of which have been opened just in the past month. Two cases that were closed last summer both found in favor of the medically fragile children who filed the appeals.


More on the amicus brief itself

The New York Times reported on May 28 that Representative Henry A. Waxman of California called the brief “wrong on the law and bad policy.”

I am bitterly disappointed that President Obama would accept the position of the acting solicitor general to file a brief that is contrary to the decades-long practice of giving Medicaid beneficiaries and providers the ability to turn to the courts to enforce their rights under federal law,” Mr. Waxman said. He said that he and other Democratic lawmakers planned to file a brief opposing the administration’s view.

The amicus brief was apparently the opposite of that requested in a letter by twelve national organizations on March 21. The letter stated that "the federal government has an interest in assuring that ... federal laws are not undermined by conflicting state laws." The letter went on to say that the right of Medicaid beneficiaries and providers "to vindicate federal Medicaid requirements further[s] the federal government's interest in ensuring that the Medicaid program provides meaningful benefits to Medicaid recipients."

On June 3 by the National Senior Citizens Law Center released an evaluation of the brief, saying it "will eliminate what is often the only practical corrective mechanism for ensuring that federal Medicaid funds actually provide the treatments and services prescribed by Congress."

The Acting Solicitor General’s argument arbitrarily carves safety net laws out from the protections of the Constitution’s supremacy clause. The brief charts a path for the Supreme Court to permit federal courts to continue routinely apply federal supremacy to strike down state laws protecting consumers, workers, retirees, bank depositors and others, alleged by business litigants to conflict with federal laws. This result hardly fits the administration’s often-proclaimed goal of promoting courts responsive to the needs of ordinary people rather than powerful interests.

If you think this amicus brief is a bad idea, you can let President Obama know by going to the White House website and emailing a comment. Your message can be as simple as:

Dear President Obama:

Please do not allow Medicaid beneficiaries to be made into second-class US citizens. The amicus brief filed on May 26 by the office of the Solicitor General needs to be withdrawn.

How to let Governor Abercrombie know you want him to veto SB 1274 if you can't attend today's rally

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 If you are on another island, or can't make today's rally, you can still let Governor Abercrombie know directly that you want him to veto SB 1274.

You can call him at (808) 586-0034. Or you can go to his online contact form here.

Your message subject and content can simply be:

Please veto SB 1274.

Veto demonstration today for SB 1274

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Please show your support for the Governor's veto of SB 1274, by attending a rally today at 3:30 at the Capitol.

Parking is under the Capitol Building.  The entry is off of Punchbowl, mauka of South Beretania ½ block, across the street from The Queen’s Medical Center, past the DOE parking entry to a street you can see takes you down underneath South Beretania.  Parking takes quarters. There is a change machine at the building entrance.  Take the elevators to your right up to the 1st floor.

The update from Rafael del Castillo on June 1:

Meanwhile, we are getting some strong support from some dedicated folks working behind the scenes.  I hand carried a letter to the Governor’s office yesterday which uses the technical guidance issued by the CCIIO (Center for Consumer Information and Insurance Oversight which has responsibility for reviewing state laws) that gives assurances they will “work with” states before issuing any compliance lists prior to July 1 in the case of any state where they have concerns about the state external review law.  As you know, CCIIO has never made any move to “work with” Hawaii.  Quite the contrary.

I also drafted a suggested letter for the Governor to send to Asst. Secretary Phyllis Borzi, who is in charge of the Employment Benefits Security Administration at the Dept. of Labor, requesting a determination whether most of Hawaii’s now-excluded ERISA plans will no longer be excluded from our external review after the Affordable Care Act. The reason the Governor needs to ask that question is no one knows the answer for sure.  Even so, the legislators who voted for SB1274 ASSUMED (and everyone knows what the letters stand for) ERISA would continue to be excluded.  With all due respect to our legislators, I question whether their aggregate knowledge of ERISA adds up to 1% of what Phyllis Borzi knows, but none of them consulted her or anyone else at DOL (nor had our Insurance Commissioner before them).  I at least hope that our Governor will go to the trouble of doing so instead of accepting an assumption about a highly technical legal issue.

For more information, email countmein@we-are1.com

Evercare already counting on Abercrombie signing SB 1274

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Evercare is apparently assuming Governor Abercrombie will be signing SB 1274 into law, as the company has already started announcing slashes in services to begin July 1.

If SB 1274 is signed by Governor Abercrombie, July 1 is the date that everyone on Medicaid loses the right to any sort of independent review of their insurance provider's medical decisions.

Evercare is also involved in two federal civil rights violation investigations opened in Hawaii in the past few weeks. Both investigations are into allegations Medicaid cuts in home nursing services are violating the civil rights of medically fragile children.

It is not an issue of the money not being available.  Unitedhealth typically spends only eighty cents out of every dollar they receive, regardless of whether the bill is paid by an individual, an employer, or the federal government.  The company is paid with federal funds to provide the extraordinary level of care that medically fragile children need in order to stay home with their families. It is the company's decision then, not to spend the money, even if it means ignoring all the children's doctors.

How much of this child abuse is due to the irony that Evercare and Ohana are paid more by the feds every month if two little girls are institutionalized than if they stay home, I do not know.  It is certainly a nice inducement for the company to cut home hours to the point the child's safety is endangered.

Both Unitedhealth and Wellcare seem to lead all Medicaid managed carecontractors in violations, over billing, and billing irregularities adding up to unsavory reputations.  Wellcare filed with the SEC in April their Medicaid fraud settlement with nine states, and both companies have been accused of stealing from
children's Medicaid funding in Florida.  New indictments of Wellcare's founding board and executives have been handed down recently and that does not appear to be the end of it.