Disability Mom

Hawaii leads in national attack against people with disabilities

2011-09-28T09:27:00.002-10:00

The first argument the Supreme Court will hear when it begins its new term on October 3 could determine if this country’s entire disability population will be denied the protections of federal law.

We have until then to let our government know we do not support selling off "the 'social contract' that provides a decent, functioning society" to Wall Street so shareholders can make bigger profits.

Families like mine stand to lose the right to stay together, even when a child’s disabilities are so extensive the only alternative is a cage crib in a hospital somewhere. It was the Bush Administration that supported extending the social contract to children with disabilities by granting them legal rights to medical care in 1989.

Giving Wall Street corporations already caught embezzling hundreds of millions of federal dollars the ability to embezzle hundreds of billions more is insanity. But removing federal oversight now gives states the ability to restrict rights granted under federal law. The state can then legislate away the ability to appeal these corporation’s decisions, for instance, saving the companies money on legal fees while supporting increasing corporate earnings.

That is what has been happening in Hawaii, where Unitedhealth and Wellcare control two-thirds of the state’s Medicaid budget.

Last month Governor Neil Abercrombie admitted the purpose of Act 230 (formerly SB 1274) was to save Hawaii's private Medicaid contractors money on legal fees.

Act 230 goes into effect on January 1, 2012. At that time everyone enrolled in Medicaid loses the right to legal help in fighting life-threatening denials of medical services.

Last month he admitted the purpose of Act 230 (formerly SB 1274) was to save Hawaii's private Medicaid contractors money on legal fees.

Act 230 goes into effect on January 1, 2012. At that time everyone enrolled in Medicaid loses the right to legal help in fighting life-threatening denials of medical services.

With legal decisions coming down against the state only two days after the governor's "I am failing" speech, Unitedhealth continues until then to wrack up significant legal bills.

Now Abercrombie has found a way to save Unitedhealth money before January 1: by denying reimbursement for expert witnesses that testified on that child's behalf. The state has abruptly reversed a ten year old policy upheld by two previous administrations.

Honolulu attorney Rafael del Castillo represents my daughter Hannah, and five other families of my personal acquaintance. We are all fighting Unitedhealth's on-going denials of medically necessary services on behalf of our children with disabilities, services the state is paying them to provide.

The company is refusing to provide these services because they would cost too much money and that would have a negative impact on shareholder earnings. The services in all cases have been prescribed by our children's doctors.

Del Castillo asks for no money from his clients, even to pay advance costs for expert witnesses. H.R.S. 432E-6 is the state law that makes health insurance companies in Hawaii responsible for the fees incurred by the patient in appealing medical care denials, regardless of who wins the case. Del Castillo takes the chance he he will win in order to get paid. He is up to over 90% wins the last I heard.

Act 230 repeals H.R.S. 432E-6. Del Castillo says last week's move to prohibit reimbursement for expert witnesses goes "as far as the Administration could possibly go to repeal the law before the repeal takes effect on January 1."

When sister legislation to SB 1274 was introduced earlier this year, it turned out to have been drafted by attorneys for Wellcare, the other contractor for the state's disability services program. Interestingly, it would have made enrollees responsible for the legal fees of the insurance company, even when the insurance company lost.

Later the state legislature tried to make SB 1274 retroactive to January 1. Since there were twelve appeals cases pending, it was estimated at the time the measure would save Unitedhealth alone about $500,000.

Del Castillo is representing the person with disabilities in all twelve of these cases.

According to Del Castillo, "the Abercrombie Administration knows that it is making pending patient rights cases ... virtually impossible to win unless one of two things happens: The patient pays for any experts who cannot afford to work for free, or I pay for them. The Abercrombie Administration knows ... that I will have to pay for the experts out of my own pocket or lose the cases. "

It is more than beginning to look a lot like retaliation and harassment, both of which are prohibited by the Americans with Disabilities Act.

One of the questions that has to be asked now is whether Abercrombie's anti-Medicaid actions have become sufficiently blatant that our major Honolulu media will break their years-old black-out on news concerning Rafael.

Years ago he was told the insurance companies threatened to pull their media advertising if any story involving Rafael was run. When Rafael ran for Congress in 2010, neither major newspaper nor any of the TV stations mentioned it when he came in third.

The Honolulu media ran a single story in seven months concerning SB 1274. It was a television piece that aired late at night, and was a major embarrassment for Unitedhealth (their attorney told the reporter Unitedhealth was spending too much money on legal fees).

As a result, more than a quarter million people are unaware they are losing major civil rights on January 1.

What is happening now in Hawaii is symptomatic of the political power wielded by these publicly traded Medicaid contractors. The state first "disables itself", in del Castillo's words, by decimating the employment infrastructure that supported the previous fee-for-service Medicaid program. The contractors are being paid public funds to provide "managed care", so state employees become redundant.

The Medicaid contractors eventually become "too big" to fail; or more accurately, "too big to take down for criminal activity." That can be the only explanation for why companies caught stealing children's Medicaid money not only get new contracts, but get premium raises in the states from which they have embezzled funds.

State contracts to provide Medicaid services to the local disability community are extremely lucrative. They are calculated on a monthly per person basis, depending on the "risk" of the company incurring significant charges for that individual. Unitedhealth is likely receiving somewhere between $12,000 and $27,000 per month for each of Rafael's clients.

These so called "abd" contracts ("aged, blind and disabled") have an enormous impact on shareholder profits. In just under three years, Unitedhealth's Medicaid membership increased about 50%, while Medicaid revenues were up 135%, and net quarterly earnings up 318% (that is not a typo).

At least six Federal civil rights investigations have been opened in Hawaii since February 2010. The four children represented were all facing cuts in home nursing services. Between the ages of four and ten, all are medically fragile, to varying degrees technology dependent, none can eat by mouth, one is completely immobile, none of the others can walk by themselves, and three are too medically fragile to attend school with other children.

You see, our nation has a most enlightened policy towards children with disabilities. Medicaid law gives children (under 21) a legal right to services prescribed as "medically necessary" by their doctor or other provider. These become civil rights when those services involve ensuring that children can live at home with their families.

These legal and civil rights are a mandated part of any state's Medicaid program. They are expensive and they are comprehensive. The disability population may only represent twenty-eight percent of all Medicaid beneficiaries, but are allocated two-thirds of the national budget. Less than fourteen percent of the budget is spent on healthy, working age adults.

It is called the Early Periodic Screening, Detection & Treatment program, or EPSDT. While federal Medicaid regulations also mandate family education about EPSDT, the unfortunate truth is that most states are violating those regulations. Few families know what is available to them.

It is relatively easy to embezzle public money intended to provide services for children with disabilities. The kids themselves are frequently not in a position to speak up on their own behalf, and parents are often in a state of "shell shock" from caring for a child in danger of dying 24/7.

Unitedhealth, Wellcare and the state of Hawaii Department of Human Services Medicaid division have been under some sort of federal scrutiny for violating the rights of people with disabilities almost continuously since September 2009. That is less than six months after they started their $100 million per month contract with the state. In March 2010, legislative leaders were caught on tape reacting to sworn testimony that the death rate among enrollees jumped 36% in the first twelve months.

The public in Hawaii has heard nothing of any investigation into that horrendous assertion. Far more interesting, the relatively unknown governor of Hawaii is accomplishing "a de facto move toward the block-granting of Medicaid", exactly as predicted by Simon Lazarus of the National Senior Citizen Law enter three months ago.

Block-granting Medicaid, according to the Kaiser Foundation, means "that the federal government
gives states a fixed amount of money and each state decides who to cover and what services to pay for."
Sixty percent of respondents to a Kaiser poll rejected block-granting in favor of leaving the current system unchanged, whereby it is the "federal government guaranteeing coverage and setting minimum standards for benefits and eligibility."

Reagan tried to block-grant Medicaid in 1981 and failed. Clinton vetoed similar legislation that Congress had passed in 1995. Nobody has had to vote on anything to accomplish block-granting of Medicaid in Hawaii.

Even now, Hawaii is accepting bids for new state Medicaid contracts, and Wellcare and Unitedhealth are expected to be bidding. The Governor acknowledged last month knowing of the mounting list of complaints filed with federal regulators (CMS, the Centers for Medicare & Medicaid Services) against the State as well as Unitedhealth. He blamed the contract, which he inherited (true), while turning the entire Medicaid appeals process over to the same state bureaucrats already caught lying to federal regulators.

This is not over-dramatizing. CMS has caught DHS lying to them about my daughter at least twice. Rumors have it that Unitedhealth even lied to the state about losing a circuit court appeal that was actually won by one of the medically fragile children.

At the beginning of the year, CMS investigated DHS and Unitedhealth for Medicare fraud in Hawaii. The company was targeting what are called "dual eligibles", adults with disabilities who qualify for both Medicaid and Medicare. Every time the company signs up a new individual for Medicare, they are paid a bonus. A company employee made an appointment to see a severely disabled young man on Kauai, as a representative of Unitedhealth Medicaid. He was actually from Unitedhealth Medicare, and never explained to the family the purpose of the paperwork he had them sign. They only discovered it when prescriptions and services began to be denied, leading to such a severe deterioration in his condition he now requires dialysis three times a week.

It is not just Hawaii. Florida has passed legislation mandating the state's entire Medicaid population enroll into the same publicly traded companies already found embezzling from the state. Texas is also on the verge of mandating everyone on Medicaid join a managed care organization, among which will be the top publicly traded corporations.

Parents of children with disabilities in New Jersey recently received letters requiring them to sign up for Medicaid from one of four companies. Two of them were Unitedhealth (they also do business as Health Net of New Jersey), and a third was Amerigroup, another publicly traded company caught stealing from children.

The companies themselves make it difficult to track membership and revenues. Several companies do business under different names, with Unitedhealth needing thirteen pages in their year end SEC filing to list all the company aliases. I found the same publicly traded companies reporting themselves to CMS under two different categories (commercial or non-commercial), making official Medicaid statistics somewhat unreliable.

In last week's $150 million Medicaid fraud settlement, Tony West, assistant attorney general of the civil division of the U.S. Department of Justice, stated “This type of fraud uses patients as pawns in a game of corporate greed that puts cash over care, running up the bills on the very people our public health care programs are supposed to benefit."

Wellcare's $137 million Medicaid fraud settlement announced in May has not yet warranted a DOJ press release, let alone such passionate rhetoric.

In June, 29 Republican governors signed a letter to Congress asking for increased control over Medicaid budgets, supposedly to help balance local state spending.

An August letter from CMS to State Medicaid Directors contained the White House response. The governors had demanded a way to get out from under Medicaid access and participation ("maintenance of effort") requirements established first under the Recovery Act and then under the Affordable Care Act. The CMS response provided detailed instructions in how states could ignore these inconvenient regulations, removing one of the last obstacles to block-granting Medicaid out to publicly traded corporations.

Should these companies be considered "too big to fail"? How do you weigh shareholder profits against how I felt after waiting ten years for Hannah to give me my first hug?

Please sign our petition, take our poll, send a letter to your newspaper and congressional representatives. This enslaving of our country's most medically vulnerable people to corporate profits needs to end.

When Medicaid is big business, people suffer

2011-09-07T16:02:00.004-10:00

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Hawaii’s governor, the first Democrat elected in eight years, has publicly defended his decision to segregate the state’s Medicaid population as second class citizens.

Like Obama, Neil Abercrombie rode to victory last November on a great tide of hope for the future. And like Obama, he has apparently decided to side with Big Business against the civil rights of his voters.

There is something called “Federal Supremacy.” Federal law is the “supreme law of the land”, and states cannot limit legal rights defined by federal law.

One practical result is that children as well as adults with disabilities have the ability to appeal life-threatening denials of medically necessary services by their Medicaid plan. The majority of cases that reach this level involve children of all ages with disabilities, fighting for the right to live at home rather than in institutions. These home medical services are expensive, although less than what the state would pay for institutionalization.

In May, the White House unexpectedly pushed through an amicus (“friend of the court”) brief with the Supreme Court, taking the position that the protections of Federal law do not extend to Medicaid beneficiaries.

Disability law experts like Sara Rosenbaum and Simon Lazarus immediately warned of the potential “spill-over effect” if beneficiaries of the country’s “safety net programs” like Medicaid were suddenly denied the protections of the court.

Governor Abercrombie’s comments were made during an August 22 meeting called to explain why he signed a piece of legislation eerily similar to that amicus brief.

Hawaii’s S.B. 1274, signed by the Governor in July, accomplishes exactly what Lazarus warned of: it carves out the state’s entire Medicaid population (270,000) and denies them access to the protections of federal law.

The Governor openly admitted the purpose of SB 1274 was saving the state’s Medicaid contractors money on legal fees. Patterns of Medicaid providers violating federal regulations (and civil rights) he dismissed as mere “glitches”. (More information about SB 1274 as well as a link to a recording of the Governor's comments can be found here.)

The crux of SB 1274 was to repeal a state law enabling patients to challenge health insurers’ denials of care, and to be represented by an attorney in the process. The law required health insurers to pay the legal costs of the patient’s appeal when the company refused to approve medical treatments ordered by a doctor.

Seventy percent of Hawaii’s Medicaid budget is paid out to two publicly traded contractors, Unitedhealth and Wellcare. The two share a lucrative $1.2 billion a year contract to provide services to 40,000 children and adults with disabilities. Premiums are calculated individually, and because these contracts are specifically to cover home services for people with disabilities, monthly premiums can range as high as $27,000 for, say, a medically fragile child.

Publicly traded Medicaid (and Medicare) HMOs make shareholder profits by not spending premium money on medical expenses. Since the size of the Medicaid pie is the same it was before they bought the contract, services have to be cut twenty to fifty percent to support corporate profits.

State contracts with Medicaid providers like Unitedhealth and Wellcare must be approved federally (through CMS, the Centers for Medicare & Medicaid Services, part of DHHS). They mandate compliance with all state laws. Unitedhealth and Wellcare knew about Hawaii’s healthcare laws when they signed the contract, but apparently did not realize what they would cost them.

Only one thing is accomplished by deleting a state law requiring insurance companies to reimburse patients’ legal bills in disputes over medical care. It allows the company to slash services in order to increase profits, without worrying that patients have the ability to challenge them effectively.

In Hawaii, it got the publicly traded companies out from under the mounting legal bills incurred defending against life-threatening cuts in services, most of them victimizing children and seniors.

In April, Unitedhealth’s Hawaii attorney openly told a TV reporter that SB 1274 needed to be passed because the state’s "existing process is expensive, time-consuming and burdensome... just adds to the cost of healthcare when we [Unitedhealth] can ill-afford it."

What she failed to add was that her client, Unitedhealth had over a dozen cases pending against it at the time. As of this writing, she and Unitedhealth have lost every case ever filed against it under the same patient rights law she said needed to be repealed.

What is happening here in Hawaii is only the tip of the iceburg.

By the end of this year, publicly traded companies will own about 30% of Medicaid, up from 19.6% two years earlier.

Remember when Congress had to approve TARP giving the banks $700 billion back in 2008? In the end the price tag was $245 billion, almost all of which has been paid back by now.

The privatization of Medicaid and Medicare has gone from $105.3 billion in 2009, to $113.7 billion in 2010, and already stands at $65 billion for the first half of 2011. Not a penny of that $284 billion needs to be repaid.

The political hot potato neither Republicans nor Democrats are talking about is who determines how much of that money actually needs to be spent. Or even if any of this nice federal and state funding has actually been spent on real medical care for people who need it.

The amicus brief and state laws like SB 1274 clear the way for these publicly traded companies to increase profits without worrying about federal regulatory interference. Unitedhealth and Wellcare are only two of about ten publicly traded health companies together splitting about $11 billion every month in federal and state revenues for Medicaid and Medicare.

The morning after last November’s elections, Public Citizen published a study of the link between “party-shifting contests” and “unregulated third-party spending.” Twenty-two of fifty-eight new Republicans were in seven of the eight states that just settled with Wellcare for criminal Medicaid fraud claims. Unregulated third party spending in those seven states came to $11 million, of the $54 million tracked.

Eighty-five percent of the total was spent in states where six publicly traded corporations (Unitedhealth, Wellcare, Wellpoint, Centene, Amerigroup and Molina) own Medicaid contracts. Unitedhealth alone operated either Medicaid or Medicare HMOs in 28 of the 33 states where Republicans beat Democrats, and was bidding on new contracts with a 29th state at the time.

On August 5, the White House took another swipe at federal protections for people on Medicaid, and particularly those with disabilities. CMS sent a letter out telling states how to auction off their Medicaid contracts without worrying about inconvenient federal safeguards. The legal work-arounds that CMS proposes specifically target what is called “maintenance of effort.” New Medicaid contracts/programs cannot restrict existing access to program benefits.

Now they can.

The politics of Medicaid/Medicare corruption override party membership. Greed trumps ideology, apparently.

You see it as far back as 2002. That’s the year a group of Wall Street financiers bought Florida’s biggest Medicaid HMO, a little known company named Wellcare. George Soros, head of the group, was known for donating to Democrats. The financiers’ hand-picked CEO was a Bush fundraiser.
Between taking the company public in 2004 and selling out before the very public FBI raid in October 2007 (the last shares were sold only weeks earlier), the original investors turned $70 million into almost $900 million.

The whistleblower complaint that led to a dawn raid by 200 FBI agents was not unsealed until last summer, almost three years later. Reading it, however, makes it very clear that the criminally fraudulent practices that generated such excessive profits traced back to the change of ownership in 2002.

Wellcare almost appears to have been structured from the get-go as a financial experiment in how to get rich from Medicaid and Medicare.

One of the last Board Members whose involvement could be traced back to 2002 only stepped down in early 2010. It took until the fall for the company to finish getting around to suing former executives whom, it claimed, had hid their criminal actions from the Board.

In October, it was learned the company had become one of Florida’s largest political contributors between 2004 and 2007, reporting a total of $2.6 million to the state Republican Party as well as individual Republican candidates. According to a report in Health News Florida, “Tampa attorney Barry Cohen …said today the contributions were pennies on the dollar compared to the money the HMO saved in Medicaid fines -- and the profits it made.”

In November, industry analysts were predicting that “WellCare’s strong Medicaid HMO position in multiple states will enable it to grow the upcoming Medicaid expansion that is part of the new health law.”

In late April, the White House apparently backed a federal settlement with Wellcare letting the company off the hook forever. The final settlement was for about $137 million, of up to $600 million estimated embezzled from federal and state funds.

Since January, Wellcare has been outperforming the S&P 500 by up to 35%. Quarterly net earnings reported in June are 7.64% of gross premium revenue, up from 1.62% in June 2008. Quarterly gross premiums are down $160 million (from $1.64 billion to $1.49 billion) while net earnings have grown from $26.6 to $113.5 million.

There’s an old saying that you can’t know where you’re going unless you know where you’ve been. Wellcare’s first financial success was defeated because they got caught stealing. The emerging federal “hands-off” policy towards Medicaid means they, and all the other publicly traded companies feeding off the backs of our most vulnerable citizens, will no longer have to worry about getting caught. Nobody will be looking.

Families to Hawaii's governor: Yes, you have failed

2011-09-04T13:43:00.000-10:00

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Families of children with disabilities have reacted strongly to the August 22 meeting with Governor Abercrombie. The letter below was written the day following the meeting.

Dear Governor Abercrombie:

We are families whose lives have benefited from Hawaii’s Insurance Commission external review system.
The format of yesterday’s conference did not enable all of us to speak. Many of us made the extraordinary effort to meet you in June, but you did not attend.

You said yesterday that:

“I think it’s fair to say that people felt that the review panel process in place kept the insurance companies in check, and on the whole they were able to get services that they wanted to have.

The two avenues available, the Department of Human Services hearing process or the 3-person panel, and I think most people went for the 3-person panel, and felt that was satisfactory. Nobody was arguing with that, least of all Suzie or Roz or myself or for that matter the professionals at DHS, that is to say those that were left after the ranks had been decimated over the last years.”

Please explain to us: if this is so, why did you sign a bill that deprives everyone on Medicaid of this process? The U.S. Dept. of Health and Human Services did not disapprove our existing process for Medicaid members, which is not an issue with the ACA. In fact, it expressly approved the inclusion of the 3-member panel option in the RFPs for QUEST and QExA (and we have not seen anything showing that DHHS approved revoking this option).

You said the denials of services that threaten the lives of our families are just “glitches.” You said the on-going regulatory violations we are experiencing are to do with the contractor. You said that if we needed a lawyer to dispute a denial, that means you are failing.

I regret to inform you that you are failing. Based on Insurance Division statistics, the number of cases filed since you took office nearly equals the number filed in the last 10 years. In fact, since you took office, over 20 cases have been filed in the external review and won by QUEST or QExA members against Evercare and HMSA QUEST. Some of those cases were previously denied by the Administrative Appeal and even had Legal Aid assistance. Apologies for failing, promises to do better, and an uncertain plan of assistance, will not help those more than twenty families as certainly as the external review did. The health plans are the only winners under SB1274.

Most of us are, right this minute, depending on a lawyer for our lives, and the lives of our children. We are in the midst of “glitches” that have spanned months, if not years. We have all experienced the failure of the DHS review system, including their failure to monitor the contractors for federal compliance.

We appreciate your intentions, but your proposals on Monday did not meet our concerns. In fact, they left us terrified for our futures and angry that you could belittle our life-and-death battles with the insurance plans as mere “glitches.” We will not rest our efforts until we have a system we can count on to prevent health plans from running over us and our children.

Son-of-a-glitch: Abercrombie defends turning state’s disabled population into second class citizens

2011-09-04T11:54:00.002-10:00

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On August 22, Governor Neil Abercrombie admitted that the purpose of SB 1274 was to save the state’s Medicaid contractors money on legal fees. He never explained how that would benefit patients.

SB 1274 deleted part of the state’s Patients Bill of Rights, depriving Hawaii’s entire Medicaid population (270,000) of access to the protections of federal law.

The Governor suggested numerous creative alternatives to legal counsel: “civilian public defenders,” “ombudspeople”, a new commission, even getting federal money to hire a patient advocate. It was clear that no work has been done on any of the ideas to replace the lawyers who have the expertise to interpret coverage contracts and to apply the law to a patient’s individual circumstances.

Just no lawyers. Unless of course the family has the money to spend on hiring one themselves.

The meeting was ostensibly to “reassure” families and advocates for the state’s disability population, in the aftermath of his signing of SB 1274. Abercrombie stated “I am failing” if anybody in Hawaii needs a lawyer to enforce their civil and legal healthcare rights.

On August 24, a Circuit Court decision was handed down against Evercare (Unitedhealth), proving even children in Hawaii need a lawyer in order to enforce civil rights under the ADA.

This is the second time since June the Circuit Court has ruled against Evercare. Both cases revolved around Unitedhealth’s cuts in benefits to medically fragile children, where percentage savings translate into thousands of dollars per month each.

Both children were fighting for the right to live at home with their families and not be put in institutions. But for their right to have a lawyer, neither child would have won.

But all this, according to Abercrombie, is just a “glitch.” No need for lawyers.

Also on August 22, Dr. Kenneth Fink, Hawaii state Medicaid Director, acknowledged in writing to the parent of one of these children that Evercare had violated federal confidentiality laws. This is the fourth such letter parents have received from Dr. Fink in less than a year.

Meanwhile the state has been unable to produce proof of Abercrombie’s statement that it was made “explicitly clear to [him] by the United States Department of Health and Human Services that the external review process we had in place did not meet the Affordable Care Act requirements.” This was a crucial ground for signing the Bill instead of vetoing it.

Supporters of the bill had tried to argue it was necessary in order to comply with an Affordable Care Act deadline of July 1. On June 21, the Governor’s office admitting to having had no contact with federal authorities on the issue, and later that week the deadline was extended to the end of the year. Nonetheless, now the Governor says there is a letter from DHHS.

Rafael del Castillo, healthcare rights attorney, asked the governor’s office following the meeting for a “copy of the DHHS correspondence explicitly stating that our existing external review is unacceptable.”

The meeting was two weeks ago, and he has received nothing to date. A recording of the meeting can be found here.

The impact of SB 1274 has been eerily similar to that of the White House-backed amicus brief submitted to the Supreme Court in May.

There is something called “Federal Sovereignty.” This means that federal law is the “supreme law of the land”, and states cannot limit legal rights allowed under federal law.

In his analysis of the amicus brief, Simon Lazarus of the National Senior Citizens Law Center explained that “the rule endorsed by the DOJ brief, [carves]… safety net laws and beneficiaries out from the protection of [the] Supremacy Clause."

That is pretty much what SB 1274 has accomplished: carving out Hawaii’s Medicaid population from the protections of federal law.

Abercrombie painted the concept of turning everyone on Medicaid into second class citizens in rosey terms. He had to sign SB 1274, he said, in order to prevent federal regulators from reducing the state’s “flexibility” and “opportunity to experiment” with people’s lives.

Why the state suddenly needs to experiment with a healthcare appeals system that has functioned appropriately for more than a decade, was not explained.

The crux of SB 1274 was to repeal a state law enabling patients to challenge health insurers’ denials of care, and to be represented by an attorney in the process. The law required health insurers to pay the legal costs of the patient’s appeal when the company refuses to approve medical treatments ordered by a doctor. Back in April, Unitedhealth’s attorney openly told a TV reporter that SB 1274 needed to be passed because this "existing process is expensive, time-consuming and burdensome... just adds to the cost of healthcare when we [Unitedhealth] can ill-afford it."

What she failed to add was that her client, Unitedhealth had over a dozen cases pending against it. As of this writing, she and Unitedhealth have lost every case ever filed against it under the patient rights law she said needed to be repealed.

By April, information surfaced that the bill was actually a way to change the federally approved contract between Hawaii and two specific Medicaid contractors, Unitedhealth and Wellcare. The current contract mandates the two companies follow state law, something they knew when the signed the contracts.

The problem with privatizing Medicaid is that, once these companies get control of the system, they can start demanding modifications in their contracts. The State is in a weak position to resist because it has gutted its social service infrastructure, essentially disabling itself. Unitedhealth and Wellcare decided they do not like being told what to do by successful patients and their attorneys, so they insist on the state finding a way to get rid of the law. That way, their Medicaid premium profits are safe from needy patients who have the power to enforce their rights because their legal fees are paid.

My daughter Hannah is another medically fragile child who has needed a lawyer to protect her from the harm caused by Unitedhealth. During the meeting on August 22, the Governor promised someone would call me about the “glitches” and “logistical problems” plaguing Hannah’s medical care.

There have been no calls. Just another glitch?

Medicare already 45% privatized, Medicaid could reach 30% by year's end

2011-08-22T11:12:00.000-10:00

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The privatization of Medicaid could hit 30% by the end of 2011. Medicare's privatization has already reached 45%.

The so-called Republican war on Medicare and Medicaid was already won a couple of years ago, and the battles waged so publicly now are, in large part, a public relations diversion.

What the Republicans, and apparently the President, don't want us to see is is the amount of government health care funds - between $2 billion and $5 billion every month - that this privatization has diverted to shareholder profits.

That money could be used instead to fund anywhere between 400,000 and 1 million full time jobs in local communities across the country. Every time one of these publicly-traded companies cuts the benefits it pays out, it means jobs have been lost as nurses, home attendants, adult day care, and a host of other local companies that provide equipment and services to the disability community. Meanwhile states have been able to cut their accounting, social work, quality control, regulation monitoring and other positions when the HMO takes over these jobs as part of its contract.

Figures published by the Commonwealth Fund, combined with Securities & Exchange Commission (SEC) filings, show the percentage of people receiving Medicaid who are signed up through publicly traded HMOs has gone from 19.6% in 2009 to 27.1% as of June 30, 2011.

New contracts coming into play this year will add at least 1.7 million new people, bringing privatization to 29.8%. The Affordable Care Act is expected to raise Medicaid enrollment by 16 million by 2019, and the Commonwealth Fund concluded that "given recent patterns in state contract awards to managed care plans, it is reasonable to anticipate that plans operated by publicly traded companies will enroll the majority of the expanded Medicaid population."

Of the 47 million signed up for Medicare, 21 million are enrolled in publicly traded HMOs. When compared against the total population of just Medicare's managed care and stand-alone drug benefit, that 21 million becomes 71% of the total number of enrollees in those programs.

We obviously cannot count on our elected officials to stop this insidious process by themselves. They aren't even telling us about it. Please sign our petition demanding legislation to take private profits out of Medicaid and Medicare.

Stopping the privatization of Medicaid and Medicare: Create jobs not profits

2011-08-19T11:52:00.004-10:00

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This country is in desperate need of legislation to halt the privatization of Medicaid and Medicare.

It is already costing taxpayers $11 billion a month in a subsidy or bailout or whatever you want to call it, that no one has voted on, and is the driving force behind a civil rights war going on right beneath our noses.

Throughout American history, every minority has won its equality through speaking up on is own behalf. The reason nobody knows about this particular civil rights war, is this time the minority cannot speak for itself.

They are our medically vulnerable of any age, those who because of time or disability would be living in institutions if not for Medicaid. Eighty-six percent of the national Medicaid budget is allocated for their care, to pay for the treatments and services to keep our loved ones at home with their families, or in the communities of their choice.

It may be budgeted for their care, but if it's paid to one of ten major for-profit HMOs, anywhere between twenty and fifty (or more) percent is taken out as a sort of middleman fee.

For our families, these cuts translate into reductions of sterile medical equipment, denials of anything from diapers to wheelchairs to communications devices, and reductions in those very services we need in order to keep our loved ones out of institutions. We sacrifice sleep, jobs, friends and the ability to multitask to try to compensate for cuts that were made to raise company profits.

Legislation imposing a 95% health benefits ratio (the percentage of the per person per month premium the HMO receives that is spent on actual health benefits) will do no good. The Administration effectively acknowledged the power of the criminal culture grown up around these HMOs when they gave Wellcare a "get out of jail free" card in April. No expenses they report themselves could ever be trusted.

The best legislation may be to outlaw capitation payments. Go back to a simple fee-for-service program; after all, it worked fine for forty years. All the county and state workers who lost their jobs when the HMO took over can be hired back. These are the people who are best capable of managing the care of someone who is medically vulnerable anyway, not employees of a for-profit HMO.

If the state goes back to writing the checks (more jobs), we eliminate the profit motive, while pumping $11 billion a month into local communities. That could translate into between 400,000 and 1 million jobs across the country. Every time a nurse is hired, a child or grandparent with disabilities is given forty hours a week of home nursing services, something that literally can mean the difference between life and death.

That could also be seen as a million jobs across the country that have been sacrificed in the past three years to keep profits up.

On my other website, I started a survey in January looking for information on how well states were adhering to federal Medicaid regulations. Not adhering means violating, right? While the sample remains small, every state represented so far is violating one federal regulation or another.

Yet the Supreme Court will soon be considering whether anyone signing up for Medicaid should forfeit the right to "federal Supremacy", turning about 50 million people immediately into second class citizens. The White House has also backed a series of proposed Medicaid regulations that implement this anti-regulation of the human and civil rights of our elderly, our adults and our children with disabilities.

Why isn't it child abuse to steal money intended to be spent on keeping children home with their families? Since when can the government abdicate regulatory control over the recipients of federal funds?

Millions like my daughter who have no ability to speak out in support of their own civil rights, are watching control over their life-and-death decisions being sold off to for-profit HMOs.

The first step to stop this insidious destruction of the human rights of the weakest members of our society is to let Congress and the President know that we know what they have been doing without the voters' permission. It is not over-dramatizing to say people have already died, and will continue to do so, until legislation takes the profit out of Medicaid and Medicare.

Please sign our petition here. With the pending Supreme Court decision, and final versions of those proposed new regulations coming up this fall, we need your voice now to help speak up for our children, those who will always be our children and those to whom we were children.

New Administration policy tells states how to auction off local Medicaid programs to for-profit HMOs without violating regulations

2011-08-12T13:19:00.000-10:00

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ADAPT, a national grassroots disability advocacy group, announced today its outrage over the Administration's latest attack against the human rights of America's medically vulnerable children, adults and senior citizens.

The policy was outlined in a letter sent to State Medicaid Directors by CMS (the Centers for Medicare & Medicaid Services, the federal regulatory agency for both Medicaid and Medicare) on Friday, August 5.

Reading between the lines, one purpose of the letter is to outline how states can sell off their Medicaid contracts to for-profit HMOs without violating any pesky federal regulations. Specifically, the letter addresses Medicaid issues only as they relate to the infamous "maintenance of effort" (MOE) regulation imposed under the Affordable Care Act.

At one point, the policy instructions are very explicit:

As detailed in our May 20, 2010 State Medicaid Director Letter, there are a variety of mechanisms available to States to rebalance their long-term support systems for persons with disabilities to achieve compliance with the ADA.

One of the points in the May 20 letter was to laud the "service delivery model" of managed care. These are the managed care contracts auctioned off to the growing for-profit HMO industry. The link to CMS' technical manual for running an honest managed care program does not appear to work any longer.

Government revenue for Medicaid and Medicare is already boosting some of these companies 23% higher for the year than the S&P 500. Unitedhealth, for instance, has successfully mislead both the Wall Street Journal and the New York Times into writing that their specular profits are related to performance in their commercial (employer) division.

Over the past three years, Unitedhealth's monthly income from commercial accounts increased by $300,000,000 while their monthly revenue from the government for Medicaid and Medicare increased by $1 billion. Which sector seems more likely to have produced a 313% increase in net earnings?

Last week's Medicaid policy statement is only the latest in a series of events evident of the Obama Administration's extreme pandering to big business HMOs.

Please help us stop this terrible mis-use of public funds.

Poll: Should Medicaid and Medicare be auctioned off to for-profit HMOs?

2011-08-12T11:24:00.002-10:00

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The disability rights, civil rights, womens rights, family rights, senior rights and healthcare rights advocates need to unite to stop Medicaid and Medicare being sold off to for-profit HMOs. Please take our poll: should Medicaid and Medicare be sold to for-profit HMOs?

Unfortunately, the process has already been underway since the Bush days, reaching almost $11 billion a month in government revenues paid to for-profit HMOS. That amount is growing, for some companies as fast as twenty percent within six months.

I'm the mother of a beautiful and loving soon-to-be 12 year old who is at 24/7 risk of death from epilepsy. Hannah's life was auctioned off to one of these companies (Unitedhealth) in February 2009 so I see every day the impact of its spectacular earnings growth on her daily life. There is a huge disability community on the internet, and I see the impacts there as well. They are intensifying as more and more states are requiring Medicaid recipients with disabilities to join these for-profit HMOs.

They have taken away from us the right of choice.

The companies aren't cutting services to our children because "the budget" has been cut. In fact, if you live in Hawaii, New York, Florida, Georgia and a few other states, your for-profit Medicaid HMO got a premium raise from your state. That's an increase to the budget, not a decrease.

What's getting cut is how much of the premium your Medicaid HMO is being paid for your child that is actually being spent on medical care. The health insurance industry calls it the "Medical loss ratio," I think of it as the "Patient loss ratio", some companies are reasonably straightforward and call it the "health benefits ratio."

If you google "medical loss ratio", you will see that this little number is playing a large role in Washington politicking. I've uploaded a number of articles about it here. The point is, it represents the amount of the premium spent on actual medical costs as a percentage of the premium. If a company reports an 80% MLR to federal regulators, it means they spent only eighty percent of the money allocated for the care of our children (for example), and saved the rest by denying medically necessary services and treatments.

A twenty percent "patient loss ratio" is what these companies brazenly report to the SEC. Federal investigations have revealed companies fraudulently inflating costs by up to 299%, and so a 50% PLR estimate could be conservative.

These companies are stealing from our children, our grandparents, and our communities' most vulnerable populations.

We can't change something we don't know about, so please help us spread the word.

Romney says corporations are people, so why aren't HMO hoodlums who steal from taxpayers in jail?

2011-08-11T11:54:00.000-10:00

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If corporations are people, as Mitt Romney told a group today, then why aren't the companies caught defrauding Medicaid and Medicare in jail?

Romney's full statement, quoted in today's Huffington Post, is:

"Corporations are people, my friend... of course they are. Everything corporations earn ultimately goes to the people. Where do you think it goes? Whose pockets? Whose pockets? People's pockets. Human beings my friend."

"Everything ultimately goes to the people." That sure isn't the case with the big HMOs caught defrauding the taxpayers of billions of dollars intended to provide medical services to children.

I've asked before: if you were an employer and caught an employee stealing from you, would you hire that person again? And if you did and they did it again, would you hire them back a second time...a third time....?

Why is this any different from the Administration continuing to award federal subsidies to corporations already caught stealing from the government?

PR for the health insurance industry has done a great job fogging the mirror on Medicaid and Medicare. They have framed the entire debate in terms of the skyrocketing cost of medical care, the undeserving nature of recipients, and how the public budgets for these programs should be cut.

The problem is reality conflicts rather substantially with this PR "spin."

First, let's get the idea that Medicaid is for the poor or unemployed out of the way. Two-thirds of the national budget goes to keeping children and adults with disabilities, along with the elderly, out of institutions. Our country actually has a wonderful set of laws and regulations designed to keep families together, by providing medically necessary services in the individual's home. When the Medicaid budget starts getting cut, it's this two-thirds that is affected the most, and carries the highest human toll in misery and death.

Second, we need to remember that just because expenses are reported by insurance companies to federal authorities, doesn't mean those figures are accurate. The whistleblower case against Wellcare unsealed last summer reported expenses inflated by up to 299%. In Florida, investigators discovered Unitedhealth had billed the state for more than $2 million of speech therapy for children with disabilities that never took place.

Ironically, the insurance companies use these same inflated costs to justify premium increases in their state Medicaid contracts. In fact, the companies have to show they are losing money on the state contracts to get the rate increase. But if they were losing money in all the states that have awarded increases, how are they continuing to report record profits?

In its first quarter 2011 filing with the SEC, Wellcare said that "Hawaii program rate increases ... we believe have improved the stability of the program." With the company's operating profit jumping from 13.1% to 19.3% just in the past nine months, how much of the raise is being applied towards costs is in serious question.

Meanwhile, when PR flacks and industry reps talk about cutting provider rates, they forget to mention that doing so just increases the corporate HMO's profit margin. The HMO is not a "provider" in this lingo; it has replaced the state accounting and quality control bureaucracies with its own employees. The providers are the nursing agencies, pharmacies, hospitals, medical supply companies, day care centers for people with disabilities and other small businesses that provide direct services to the people needing them.

The biggest myth of all is that the issue that needs to be addressed is how to cut budgets. In essence, we are being asked to make decisions about cutting budgets without knowing how those budgets are spent. It might seem logical to equate Medicaid budgets with how much is spent on medical care, but that leaves out the twenty-to-fifty percent profit the HMO is scooping off the top of every payment they get from the government. Right now that totals somewhere between $2 billion and $5 billion a month, depending on how much fraud is going on.

As quietly as the government has been auctioning off Medicaid and Medicare to for-profit HMOs, the White House has taken steps to let these corporations know that federal regulators won't be watching too closely how these funds are actually spent.

On April 26, the Administration backed an agreement between Wellcare, nine states and the federal government, settling all the Medicaid fraud cases against them for $137 million. In return, the government agreed not to consider Wellcare a criminal and not to hold this non-criminal past against them in any future contract negotiations.

On May 6, the Administration published proposed new Medicaid access regulations that dropped jaws across Washington and the health reform movement. According to Sara Rosenbaum, Chair of the health policy department at George Washington University, "rather than being a forceful implementation of the law, the proposed rule is a model of inaction." She went on to call it "the first sign of the administration’s refusal to intervene" in state Medicaid practices, including those concerned with how government money is being spent. She calls the rule "a model of inaction," the sole remaining purpose of which is "to establish what might charitably be characterized as an information-gathering exercise."

Even this extremely watered down proposed law goes further by exempting everyone enrolled in Medicaid HMOs from inclusion in the five year information study.

Just from the year of statistics I took in college, I know any study that excludes seventy percent of the affected population has dubious accuracy.

Then on May 26, the White House took an action that could end up turning everyone receiving Medicaid into second class citizens. Defying HHS Secretary Sebellius as well as a number of health advocacy groups, Obama backed a "friend of the court" document submitted to the Supreme Court that advocates denying anyone on Medicaid the protection of federal law.

Simon Lazarus of the National Senior Center Law Center wrote:

The brief charts a path for the Supreme Court to permit federal courts to continue routinely to 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, while arbitrarily withholding identical protection from the vulnerable populations served by Medicaid and other safety net laws.

Rosenbaum warned in Politico 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."

If Romney thinks corporations are people, then Obama's actions tell us he values these corporations over the rights of the individual.

The country's most medically vulnerable population has been auctioned off to a bunch of criminal hoodlums with no regulatory strings attached.

Please sign our petition to stop this enslavement.

Wall Street HMOs use fraud, government handouts to pad profits, outgrowing S&P 500 by 25%

2011-08-09T14:44:00.001-10:00

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After the S&P tumbled yesterday to a year-to-date loss of 10.3%, for-profit HMOs like Unitedhealth, Wellcare, Aetna and Humana remained showing a 13.7 -19.9% gain since January 1. The economy-immune growth of these companies is entirely fueled by government handouts currently running about $11 billion per month.

We have a tendency to talk about Medicaid and Medicare as if budgets and people are the same. We talk about the people who will be affected by Medicaid or Medicare cuts, under the apparent assumption that the budgets are actually paid out to the people. That is what happens in every other country that runs a government health system. It is not, however, what is happening here in the US where our government public health programs - Medicaid and Medicare - are increasingly owned by big business HMOs.

Ten for-profit HMOs control the private Medicaid/Medicare market. Revenues from commercial (employer) accounts over the past three years have been stagnant at best, but Medicaid and Medicare revenues are accounting for 85% of the $2.7 billion per month increase in total premiums received.

The problem is, as the private HMO industry has grown, so has, apparently, criminal Medicaid fraud.

Unitedhealth Group, Wellcare, Amerigroup, and a fourth HMO now merged into Centene (Vista) were all found to be stealing taxpayer money in Florida that was destined for children's health care. According to the Associated Press, the companies also participated in the state's pilot privatized Medicaid HMO plan which, in spite of numerous consumer complaints, has now been expanded statewide.

It was possible to catch this criminal fraud because this specific contract between Florida and the HMOs required 85% of the taxpayer funds received to be spent on healthcare. (Few state contracts require minimum spending amounts from Medicaid contracts).

New bills were signed into Florida law earlier this year by Governor Rick Scott requiring everyone in Medicaid to join a for-profit HMO. The bills do not stipulate any minimum spending requirement, although they do require the HMOs to refund the state anything they make in profit over 5%.

Our experiences in Hawaii with Unitedhealth and Wellcare indicate the likelihood of Florida receiving any rebated profits is laughable. This type of fraud seems to require some sort of collusion between state Medicaid bureaucrats and the corporations, for the former to turn a blind eye to the latter's illegal actions. The potential for fraud is enhanced because there are no viable sanctions for violating federal Medicaid law. (The only sanction is for the feds to withhold all Medicaid payments to a state; CMS tried that in Alaska a couple of years ago and it was considered a debacle).

Unitedhealth testified in Hawaii federal court last year they were losing money on their Medicaid contract with the state. Rumors on the street are that the company is still crying crocodile tears over its purported losses, presumably laughing all the way to bank with (pre-tax) net earnings reaching 8.1% of premium revenue.

Personally, I find it ironic that Florida has accused Unitedhealth of stealing more than $2 million from children by forging speech therapy records, when the company has steadfastly refused to provide my daughter with such therapy since September 2009.

United and Wellcare also seem to have found a way, at least in Hawaii, to ensure audits are nearly impossible. Most of their payments from the state of Hawaii were made outside of the state's auditable medical IT software system.

Recent moves by the White House are increasing the power these HMOs have over people's lives. A "friend of the court" brief submitted by the Department of Justice to the Supreme Court recommends exempting Medicaid recipients from the sovereignty of the "law of the land." A new Medicaid access rule published in the Federal Register essentially guarantees a federal "hands off" policy towards state Medicaid programs and the corporate HMOs with whom they contract.

The end result of all this? Our government is currently paying about $11 billion every month to for-profit HMOs to handle Medicaid and Medicare, with a promise not to let nasty federal regulations interfere with corporate performance. If the HMOs want to skim twenty-to-fifty percent off the top towards corporate profits, no problem. If children and adults with disabilities, who account for more than two-thirds of national Medicaid expenditures, get sicker, have to be institutionalized or even die, no problem.

It's hard to imagine the Navy paying for a battleship and being satisfied with only half of one.

The latest round of SEC filings indicate another 1.7 million people will be herded into for-profit Medicaid HMOs in the next few months. Hawaii is getting ready to put its entire Medicaid program (220,000) up for bid, with both Wellcare and United expected to be bidding. Hawaii Gov. Neil Abercrombie is continuing his abject pandering to both corporations, regardless of the number of federal regulatory and civil rights investigations brought upon the state by the two within the past eighteen months.

This is a federal subsidy that must be stopped. Please sign our petition to put an end to President Obama's pandering to big business HMOs.

HMO spends $627 million in public funds defending against Federal criminal fraud charges

2011-08-08T13:03:00.001-10:00

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A company whose income derives entirely from taxpayer funds has spent $627.4 million of our money defending itself against federal criminal fraud charges. The figures are reported in Wellcare's SEC filings between January 1, 2009 and June 30, 2011.

Yet, while the S&P 500 is down 10.34% year to date, Wellcare's stock remains up 16.74% even after today's spectacular plummit.

Wellcare is not the only for-profit managed care company continuing to show significant year to date growth. Unitedhealth Group is up 16.44%, Humana up 19.93%, while Aetna, Coventry, Wellpoint, and Centene are all higher year to date.

Ironically, growth in all these companies has been fueled by federal and state tax-payer money. Total Medicare and Medicaid payouts to for-profit HMOs are running almost $11 billion per month. Life and death decisions for more than 33 million Americans, most of them medically vulnerable, have been sold off to these publicly funded HMOs, whose decision making is based more on shareholder profit than medical need.

The Affordable Care Act has tried to put in place minimum spending requirements of 80 to 85% for commercial and Medicare HMOs. Few states require any minimum spending on Medicaid contracts. Limited regulation and an absence of any effective enforcement of how taxpayer money is spent has led to fraudulent reporting of actual medical costs by up to 299%.

Somewhere between $2 billion and $6 billion a month is saved from government-paid premiums for Medicaid and Medicare by the HMOs simply refusing to authorize needed services.

Which brings us back to Wellcare's $627 million in taxpayer money spent defending itself against charges it has been stealing from us taxpayers.

Am I the only person who has a problem with this?

Obama's $1 trillion handout to big business insurers, Part 2

2011-07-25T11:34:00.000-10:00

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Once you start following the money rather than the rhetoric, you can start seeing how the Medicaid/Medicare reality has little do to with big business insurers' PR campaign.

Myth 1: We need to find a good way to reduce costs; rising costs of services is the problem.

Reality: When private insurers create HMOs for Medicaid and Medicare, the company is paid by the government a set amount per month per person. With little to no regulation let alone enforcement of minimum spending requirements, reducing costs just gives the company higher profits.

I've been puzzling for over a month now over an article by Paul Krugman. He states, "Yes, Medicare has to get serious about cost control; it has to start saying no to expensive procedures with little or no medical benefits, it has to change the way it pays doctors and hospitals, and so on." He compares US Medicare with Canadian health care, which is "less open-ended and more cost-conscious."

The Canadian public health system probably doesn't have a corporate middleman who slips twenty to fifty percent of premiums into his back pocket every month.

Myth 2: Health care companies are making money because people can't afford to spend their deductibles.

Reality: Unitedhealth sold this line to the Wall Street Journal after last year's earnings figures came out. It was apparently deemed successful enough that the PR department used it again in May with the New York Times. This time they brought out some commercial policy holders to interview who substantiated their claim.

In the past three years, Unitedhealth's commercial premiums have increased by only $334 million a month. Government revenues paid by Medicaid and Medicare are up almost $1.5 billion a month. Corporate profits from not spending government-paid premiums are up 67%, while the premium revenues themselves are up only 51%.

Unitedhealth's soaring profits are more accurately represented by the family who has been denied hospitalization, or medications, or home care services for their child or grandparent with a disability.

We don't make as good a PR statement, however.

Obama's $1 trillion handout to big business insurers

2011-07-24T11:57:00.001-10:00

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Federal hand-outs to the health insurance industry could top $1 trillion in the next five years. Between twenty and fifty percent of that will be saved off the top as net profit.

The handouts are not loans or grants or even tax breaks. They are the product of the Administration's policy supporting auctioning off state Medicaid and federal Medicare contracts to publicly traded, for profit health insurance corporations.

Based on SEC filings for the first three months of 2011, government payments to the top ten for-profit insurers were running around $10.9 billion a month, up ten percent just in the previous six months. Depending on how much fraud is going on, between $1.9 and $5.4 billion of that gets "saved" every month towards corporate profits by the company simply refusing to spend it.

Obama's willingness to concede to cuts in entitlements will probably have little influence on these payouts reaching $1 trillion in the next five years. The White House has given off too many signals in the past six months of its willingness to give private insurers a free hand in how they spend federal funds. The Administration has even gone so far as letting one company off the hook for criminal Medicaid fraud in nine states.

Just as slavery cloaked itself in the myth of the paternalistic landowner, the public war raging today over Medicaid and Medicare is using the myth of the undeserving poor to detract attention from the obscene private profits being generated with public funds.

In reality, the people whose lives are being affected the most are our country's fourteen million children and adults (including the elderly) with disabilities. Two-thirds of the nation's total Medicaid budget is allocated to paying for medical services to keep people with disabilities at home with their families, rather than shutting them up into institutions. More and more of that money is being paid out to companies more responsible to shareholders than policyholders.

What the President has auctioned off to big insurers is control over life and death of our society's most vulnerable citizens.

The new dandies of Wall Street

Ten health insurance companies control the private Medicaid/Medicare market. Four exist completely on public funding: Amerigroup, Centene, Molina and Wellcare. The other six (Aetna, Coventry, Health Net, Humana, Unitedhealth and Wellpoint) have been replacing lost corporate group business with new Medicaid and Medicare "managed care" policies.

Unitedhealth's quarterly net earnings (three-month profit before taxes) jumped from $505 million for April - June, 2008, to over $2.1 billion in the first three months of 2011. Quarterly commercial premiums were up by only $1 billion, but Medicaid/Medicare quarterly revenues were up by over $4 billion.

At Aetna, commercial revenue is down from 79% of total quarterly premiums to 74%. Its replacement with Medicaid/Medicare government funding, however, has accompanied a 22% increase in quarterly net earnings.

Among the ten, Medicaid membership is up 19%, and the mix of Medicaid and Medicare products is up 33%, from 27.7 million to 36 million policies. Both commercial membership and quarterly commercial revenues are down.

The relationship between the number of new Medicaid enrollees and the revenue they generate for the company is not a straight one to one ratio. Humana and Coventry both reported a loss in Medicaid membership at the same time as an increase in Medicaid revenue. Wellcare had a three percent increase in Medicaid membership generating a 14% increase in Medicaid revenues, and Unitedhealth and Amerigroup both showed almost a three-to-one ratio of Medicaid revenue growth to membership change.

In order to understand why Medicaid (and Medicare) contracts are so lucrative, it is best to start with what one writer has called the insurance industry's "dirty secret."

The "Patient Loss Ratio" and why it's important to Wall Street

When state Medicaid programs are carved up and auctioned off to the lowest bidder, they include a rate schedule used to determine a monthly payment per person. The insurer is paid a set amount per month per person, depending on how healthy the person is. For really healthy people, the insurer may get only $400 a month from the government; for a medically fragile child living in a rural area, the company may be getting paid $25,000 a month by the government.

For the publicly traded health insurers winning these contracts, profit derives from the simple difference between how much the government is paying to provide services for each covered individual, and how much the company spends on that person.

In the health industry, it's called the "Medical Loss Ratio": how much is actually spent per individual as a percentage of the total premium paid for that person. Since the term seems to imply that expenses are a corporate loss, the "Patient Loss Ratio" represents how much every policyholder under Medicaid and Medicare is losing of their budget to corporate profits.

For example, a medically fragile child in a rural area who is dependent on technology to breathe and eat might have a monthly budget of $25,000 to pay for equipment and care services at home. That's what the company is paid every month, and it is less than the state would pay if the child was institutionalized. When the company is reporting an MLR of 80%, it means the so-called "managed care plan" has cut twenty percent of the child's services. For instance, the child's life may now be endangered by the loss of 200 hours of home nursing services per month, and the community has lost 1.25 full-time jobs.

Minimum spending requirements for Medicaid contracts are virtually non-existent. In a single case in Florida where a contract required an 80% minimum, all eight insurers were found to have fraudulently padded medical expenses by fourteen to sixty percent (in other words, the patients were losing between 34% and 80% of their budgets to profits).

Non-profit health insurers and even for-profit corporations with US Military contracts report spending ninety-five cents out of every premium dollar on actual medical costs. Nevertheless, the Administration, in an extremely generous mood, tried to set minimum spending requirements of only 80-85% for commercial and Medicare policies through the Affordable Care Act. However, states were allowed to apply for (and are receiving) "waivers" as low as 70% on the basis the local insurance industry will be inconvenienced.

What Al Capone, the drug cartels and health insurers have in common

Money breeds crime. The more excessive the potential profits, the more pervasive is the crime. And the analogy between health insurers and the heroine trade was made two years ago.

A whistleblower complaint against Wellcare, Amerigroup, Unitedhealth, Humana and others was unsealed last summer. Sean Hellein, an executive at Wellcare, wore a wire for 18 months as part of an FBI investigation into Medicaid fraud. This is a must-read for anyone who wants to understand how pervasive criminal Medicaid fraud is within the heath insurance industry. Some of the methods revealed included:

* inflating medical costs on 161,170 claims by 218% to 299%;
* bullying terminally ill patients and the mothers of medically fragile babies into disenrolling ("cherrypicking");
* setting up a Cayman Islands reinsurance subsidiary to overpay themselves;
* cooperation between companies in false-billing practices, to reduce the chances of getting caught; and
* tricking federal regulatory computers into doublecounting expenses.

Hellein's testimony also reveals how incompetent state regulators are at catching Medicaid fraud. From mid-2005 to the date of the document, a Florida computer error awarded an estimated $16.8 million in overpayments for one program to Wellcare, Unitedhealth, Amerigroup, Humana and two other HMOs. Another error that was capitalized on was made by actuarial firm Milliman Consultants. The Milliman report mistakenly over-priced expenses for one program by $19.4 million over two years. Aware of the error, Wellcare fraudulently used the actuarial report to apply for (and receive) a rate increase.

In late April, 2011, Wellcare reached a settlement on criminal Medicaid fraud charges with nine states and the federal government. The White House apparently supported letting Wellcare off the hook by promising never to call them gangsters for what they had done, and not to hold their past gangster activities against them in future federal contract awards.

Would Fort Knox have hired Al Capone? As the mother of one of the millions of children victimized by this fraud, it feels tantamount to the President forcing me to hire a pedophile as a babysitter.

Federal and state funds diverted from medical care for children and adults with disabilities can mean the difference between living at home with family, or being institutionalized; it can mean the difference between living surrounded by loved ones, and a slow, lonely and miserable death.

We need to look beyond the rhetoric on Medicaid and Medicare and pay attention to how our tax money is being spent.

I've consolidated my document collection here.

Abercrombie betrays public trust by pandering to big business health insurers

2011-06-28T13:23:00.001-10:00

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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

2011-06-27T19:24:00.003-10:00

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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

2011-06-23T09:26:00.005-10:00

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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

2011-06-22T12:53:00.001-10:00

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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

2011-06-22T11:58:00.000-10:00

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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

2011-06-22T09:50:00.001-10:00

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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

2011-06-16T13:14:00.001-10:00

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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

2011-06-15T11:47:00.002-10:00

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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

2011-06-08T08:36:00.000-10:00

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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

2011-06-07T11:48:00.002-10:00

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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

2011-06-06T10:56:00.001-10:00

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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

2011-06-04T12:34:00.007-10:00

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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

2011-06-03T08:14:00.000-10:00

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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

2011-06-03T08:00:00.001-10:00

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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

2011-06-01T16:21:00.000-10:00

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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.

SB 1274 Action Alert: Veto demonstration re-scheduled for Friday June 3

2011-05-25T08:41:00.000-10:00

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The following update was received from Rafael del Castillo this morning.

One of the key organizations urging the Governor to VETO SB1274 has asked for more time to get together a veto demonstration, so we are looking at Friday, June 3, to make sure there is enough time and there are enough people. Please email me at countmein@we-are1.com whether you (and friends and family) can make it to the Capitol that afternoon (6/3/11). A lot of camaraderie will be had by all!

BTW, I do have a correction about the hearings I referred to in my previous post. CCIIO (Center for Consumer Information and Insurance Oversight, which has charge over compliance) is not holding hearings about individual state laws. However, I believe that CCIIO must have a formal process which involves a 2-way discussion of the points and, as I previously said, not go hunting squirrels with an elephant gun.

On that note, the promise that I would get an audience for substantive discussions with CCIIO has NOT BEEN KEPT, and it is Wednesday. Tomorrow will be a full week.

I am urging our Congressional delegation to help ensure that the promise is made good.

I have tried hard, as you know, to reach accommodations. Those efforts have thus far been met with disdain. SB1274 is a sad chapter in legislation that should never have made it out of committee. We must bring all of our resources to bear on the Governor to do the right thing.

SB 1274: Action alert for Friday

2011-05-24T08:21:00.002-10:00

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Last night, Honolulu patient rights attorney Rafael del Castillo released his first post-trip announcement on the status of SB 1274.

There are no indications that Governor Abercrombie ever sent the letter that CCIIO asked for on May 18, last Wednesday. Evercare has already slash home nursing services for a medically fragile little girl on Kauai, in anticipation of the Governor's signature, to the point where the child is threatened with re-institutionalization.

As a result, del Castillo has called for a Veto Demonstration at the State Capitol on Friday afternoon, May 27. Anyone interested in attending should email him at countmein@we-are1.com

Here is the full text of last night's release.

Great things are happening. Please forgive me for not sending out an update, but I did not want to jump the gun. Besides, I wound up spending 24 hours in LAX.

CCIIO has yet to make good on the conference it agreed to thanks to the facilitation of FamiliesUSA. I am pursuing it, and hope it was not just to get me to return to Hawaii. I did not want them to bank on my returning, so I said nothing about it. In fact, I have oral argument tomorrow and have been jamming on an opening brief in an appeal I am attempting to have expedited because Evercare is slashing services – why not when you expect the consumer protections to be repealed, right?

You ask, “What about the letter from Governor Abercrombie to the CCIIO?” We have not gotten any indication that the Governor sent a letter.

So, I owe you a report on the conversation with CCIIO. If it does not happen, I will go back to DC and camp out on their doorstep.

But great things are happening. In the last couple of days, more influential organizations in Hawaii are calling for a veto, and the organizations who recognized that SB1274 was a bad piece of legislation, and unnecessary, are increasing their efforts to persuade Governor Abercrombie to veto. It is time to join hands, link arms, and make an appearance at the Capitol where the veto will be secured:

This is a call to action for a VETO DEMONSTRATION at the State Capitol. Details are being worked out, but prepare to come to the Capitol and demonstrate with all of the people who are in this fight to preserve Hawaii’s nation-leading consumer protections and rights. Look for the date and time to be announced tomorrow after I work out details with representatives of the organizations calling for a VETO. We will also let the Governor’s office know about our plans and that only a veto will call off our demonstration (signing SB1274 will not stop us). Due to the holiday coming up, plan on Friday afternoon, May 27, but I will confirm that.

In the meantime, please email me at countmein@we-are1.com if you will be at the Capitol Friday so that I can start getting a head count (for refreshments, etc.). It is BYOS (bring your own sign). I am really looking forward to this.

I want to make sure you know that great things happened in DC too. I learned from a very good source (not CCIIO because they were declining to discuss) that the CCIIO has been holding hearings with the states whose external review laws do not meet the consumer protections. This fact is unsurprising because applying temporary federal regulations to preempt a state’s duly enacted law(s) raises substantial sovereignty issues. This news is important for two reasons, as I am sure you realize: Has Hawaii law been slated for a hearing? Not that anyone in the Administration has been told. Also, that there will be hearings also provides certain important assurances. Of course, I still have to confirm this information.

I also strengthened past connections with the most influential consumer advocacy organizations with our first face-to-face meetings, and getting assurances of support, the legal analysis I was provided strongly supported our position that the preemption argument was a straw man. I was reminded of the rule that you don’t take an elephant gun squirrel hunting. That rule applies to conflicting federal and state law.

Of course, in this case, we don’t have conflicting federal and state law, we have temporary federal regs which the Legislature alleged were preemptive. But the principle is the important thing: Even if there was a conflict, the precise provision of state law that conflict are preempted, not the entire state statute, which is what our Legislature did. Thus even if Hawaii law had a conflicting provision, repealing Hawaii’s law is OVERKILL. Of course, the overkill was carried out by a faction in the Legislature because of a particular agenda.

I also had discussions with representatives from Sen. Inouye’s and Sen. Akaka’s offices and believe they will both help at the federal level, and got further support from Colleen Hanabusa’s office. I requested assistance from Congresswoman Hirono, but received none thus far.

BTW, Ed Case broadcast an email invitation for some party he was having in DC the same time I was there, and invited emails, so I emailed him to give him a chance to provide whatever help he could get for us from the connections his email said he was renewing ties with. No response. Thought you should know.

Rejuvenated and looking forward to seeing you at the Capitol.

Rafael

Update from D.C. on SB 1274

2011-05-20T08:35:00.000-10:00

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Here is Rafael's update from last night.

It was an eventful day. I met with staff at Families USA first thing this morning and learned a surprising thing (keep in mind I have yet to confirm this directly with the CCIIO). Cheryl Fish-Parcham at FamiliesUSA believes that CCIIO has had hearings for one or more states where they had serious concerns about compliance. She also believes that DOL ESBA participates and that these hearings are operated by the OPM. As soon as I can confirm those facts, I will let you know, but it does appear that there is a formal process for 1) determining compliance, 2) notifying the state of the CCIIO’s determination (and possibly DOL), and 3) providing a hearing for the state to make its case. All of this suggests a number of things. For one, I would argue that any preemption (this is really not quite the right concept, so I am using the term because that is the label that has been used in our State) would be confined to the items of noncompliance instead of an across the board overthrow of the state’s external review law. That would be well grounded in preemption jurisprudence concerning cases in which Congress has expressly provided that State law is primary unless it fails to comply with federal law. Enough legal theory. This will be interesting to pursue.

You hopefully had time to listen to my report on The Conversation with Beth Ann Koslovich at 8 or download the podcast from http://hawaiiconversation.org.

I provided more information to Sen. Inouye’s office, including the HMA’s letter to Governor Abercrombie urging him to veto SB1274, for a hoped-for letter to the CCIIO and DOL.

I spoke with Joe Shapiro, investigative reporter at NPR thanks to facilitation by Summer Harrison. Joe has done a series on developments in Medicaid care for the aged, blind, and disabled. He will be investigating if other states have specifically excluded Medicaid managed care members from external review. Because the plans are purchased, I am considering whether the specific exclusion could be a violation of the ACA.

Then I heard from Cheryl Fish-Parcham that Ellen Kuhn at CCIIO had agreed to a conference with me and Commissioner Ito. I contacted Commr Ito and he is substituting Lloyd Lim because he will be away. We will be going through Hawaii law in detail with Ms. Kuhn. That means CCIIO has done some work on our law at least.

I also received some helpful suggestions from Rep. Della Bellati, and I hope I already told you that Rep. Karl Rhoads has been very helpful and supportive.

I connected with Erika Moritsugu at Sen. Akaka’s office, thanks to help from Mary Osorio – thank you, Mary!. She has substantial experience in health policy matters and was in Hawaii for a while during the time SB1274 was in the Legislature, but had not known its fate. I provided her with the information I had provided to Lt. Col. Maureen Charles in Sen. Inouye’s office.

Meanwhile, I received Rep. Cynthia Thielen’s compelling letter to Governor Abercrombie urging him to veto SB1274 if he is able to establish that it complies with the minimum protections. Rep. Thielen has been opposed to the repeal of Hawaii’s consumer protections since the bills were first heard in this Legislative session. Rep. Thielen concluded her letter: “With your leadership, we can continue to be a national role model in this area.” Thank you, Rep. Thielen for taking time out of your busy schedule to send a great letter!

Hope you are following my peripatetic tweets.
Thanks to all for your support and assistance. G`nite

Rafael

Action Alert on SB 1274: The feds won't see del Castillo without a letter from Abercrombie

2011-05-18T08:46:00.001-10:00

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According to Rafael del Castillo's morning report from Washington, D.C., the people who need to issue the decision that will determine the fate of SB 1274 will not do so until they get a written request from Governor Abercrombie.

I have heard nothing on my call to Sadena Thevarajah, unfortunately. Dr. Anthony Rodgers, chief of Strategic Planning for the Centers for Medicare and Medicaid Services was very helpful in trying to get me an appointment with the CCIIO. He positively identified Karen Pollitz as the person to see outside of the Director, Steve Larsen, and spoke with her, but she has declined to see me. She is insisting that CCIIO will do nothing without a letter of inquiry from Gov. Abercrombie. My email from Mike Ng – go to DC – is not enough.

Haw. Med. Assn went to see Mike yesterday and copied me on an email to him confirming their request that the Governor send such a letter. HMA also sent the Governor a lengthy letter urging him to veto SB1274.

Join HMA in urging the Governor to send a letter to Karen Pollitz requesting that the CCIIO confirm that our EXISTING law already provides the 16 minimum consumer protections, so he can VETO SB1274!

ACTION ALERT

Please contact Governor Abercrombie's office and ask him to write the letter to Karen Pollitz.

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

The subject could be:

Please send a letter to CCIIO asking for their decision now.

The message could be:

Dear Governor Abercrombie,

Please send a letter to Karen Pollitz requesting that the CCIIO confirm that our EXISTING law already provides the 16 minimum consumer protections, so you can VETO SB 1274!

Hawaii Medical Association Asks Governor to Veto SB 1274

2011-05-17T12:56:00.005-10:00

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The Hawaii Medical Association has issued a strong letter to Governor Abercrombie, asking him to veto SB 1274.

How to Follow Rafael and SB 1274 in D.C.

2011-05-17T12:06:00.001-10:00

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Follow Rafael on his Twitter page here.

Support his efforts to save Hawaii's health insurance rights by visiting President Obama's website, and sending him a message like the following:

Dear Mr. President:

Greetings from your home state of Hawaii. I am writing to urge you to avoid an ironic turn of events which is potentially very embarrassing for the Affordable Care Act.

Hawaii is poised to repeal its best-in-the-nation consumer protections because your CCIIO staffers refuse to say whether Hawaii law complies with the ACA regulations. Wouldn’t it be ironic if the ACA is reported to be responsible for the repeal of the law in the State that was a model for universal health care?

Rafael “Del” del Castillo and many others have tried for months to get an answer from the CCIIO staff, but they refuse. Hawaii’s health plans have spent tens of thousands trying to persuade lawmakers that they should repeal our law, so Del decided to fly to Washington DC this week to meet face-to-face with the CCIIO decisionmakers.

He needs your help to get an appointment. Governor Abercrombie’s office has asked Del to bring back all of the information he can obtain to prevent the unnecessary loss of our consumer protection law. It is a no-win proposition for Governor Abercrombie if he acts to destroy our consumer protections without the information he needs. What a shame it would be to stick Governor Abercrombie with responsibility for destroying our consumer protections just because the CCIIO policymakers refuse to meet with Del for a few minutes.

Your office can reach Del at 808-782-1262. Please help him get an appointment.

Thank you for your kokua!

SB 1274 on hold while del Castillo heads to DC for answers

2011-05-17T09:56:00.002-10:00

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Rafael del Castillo arrived this morning in Washington D.C. The purpose of his trip is to get the definitive answer on whether or not Hawaii has to dump its previous healthcare laws in order to meet a July 1, 2011 deadline imposed under the Affordable Care Act.

To understand this issue, I'm going to quote huge blocks from emails from del Castillo. As a healthcare rights attorney, I don't want to even try to re-write it.

Back on March 4, del Castillo reported

Having been lead counsel for all but two or three of the consumers who have requested external review under our present law during the past ten years, I consider myself one of the most knowledgeable persons in the State on this topic. I interrupted work on a letter to Steve Larsen, Director of the Center for Consumer Information and Insurance Oversight at DHHS, which has the assignment under the health care reform act (Patient Protection and Affordable Care Act) to review each state’s external review law and decide whether it meets all of the 16 minimum consumer protections in the interim federal regulations. After July 1, 2011, health insurance issuers will be required by the CCIIO to comply with the federal external review law in any state in which the CCIIO determines the law does not meet those minimum protections, effectively preempting the state law until it is brought into compliance. This is apparently not a well-understood concept in Hawaii. (CCIIO staff explained to me that this passive preemption is due to the fact that the PPACA is part of HIPAA (Health Insurance Portability and Accountability Act).) In any event, on February 17, Prof. Richard Miller and I had a lengthy conversation with the CCIIO staff about our situation, and we were invited to submit a letter to Mr. Larsen explaining why we believe that Hawaii law meets all of the 16 consumer protections (with one minor exception that requires a technical correction). The one element that will be in question is whether the federal minimum requiring that consumer complaints be sent to an independent review organization (IRO) is met by Hawaii’s hearing process before a local panel of three persons, including a physician, plan administrator from a competing plan, and a DCCA lawyer. We believe that is superior to an IRO and has proven to be so, but a minor amendment to our existing law could offer consumers a choice of going to an IRO or a hearing.

The problem is that by today, SB 1274 has been passed by the legislature and sits on the Governor's desk, without yet hearing back from the CCIIO. They have proved resistant to being rushed.

Governor Abercrombie has agreed to wait and see if del Castillo can get the necessary sign off on our current review system before deciding if he will sign SB 1274 into law.

Del Castillo has gone to Washington without having appointments to see the people he needs to see. On Sunday when he announced his trip, he asked supporters to email President Obama from his website to help get these appointments made and decisions reached.

I am not expecting open arms – they have their hands full with the pushback on the Affordable Care Act. Nonetheless, we are from the President’s home State. It will be a sad day if his push to expand Hawaii’s genius in health coverage to the nation results in substantial loss of rights in Hawaii.

You can urge the President to help us get an answer by contacting the White House using the form on this webpage: http://www.whitehouse.gov/contact

Sample message:

Dear Mr. President:
Greetings from your home state of Hawaii. I am writing to urge you to avoid an ironic turn of events which is potentially very embarrassing for the Affordable Care Act. Hawaii is poised to repeal its best-in-the-nation consumer protections because your CCIIO staffers refuse to say whether Hawaii law complies with the ACA regulations. Wouldn’t it be ironic if the ACA is reported to be responsible for the repeal of the law in the State that was a model for universal health care? Rafael “Del” del Castillo and many others have tried for months to get an answer from the CCIIO staff, but they refuse. Hawaii’s health plans have spent tens of thousands trying to persuade lawmakers that they should repeal our law, so Del decided to fly to Washington DC this week to meet face-to-face with the CCIIO decisionmakers.

He needs your help to get an appointment. Governor Abercrombie’s office has asked Del to bring back all of the information he can obtain to prevent the unnecessary loss of our consumer protection law. It is a no-win proposition for Governor Abercrombie if he acts to destroy our consumer protections without the information he needs. What a shame it would be to stick Governor Abercrombie with responsibility for destroying our consumer protections just because the CCIIO policymakers refuse to meet with Del for a few minutes.

Your office can reach Del at 808-782-1262. Please help him get an appointment.

Thank you for your kokua!

You can use the same page (and message) to ask the First Lady (except it is the President’s home state) if she will help (separate message, of course).

I will also appreciate anything you can do to encourage DHHS and DOL regulators to meet with me. You can email or call officials, but should do so Monday and Tuesday. I will let you know the shape of things Tuesday and what additional help I may need.

Hon. Kathleen Sebelius, Secretary, DHHS: Kathleen.Sebelius@hhs.gov Toll Free: 1-877-696-6775
Another person you can email in DHHS asking for help for me is Sadena Thevarajah because she is known for advocating for greater protections: sadena.thevarajah@hhs.gov

You can also contact the public affairs office for DHHS in this subject (a fax would be good):
Centers for Medicare & Medicaid Services (formerly the Health Care Financing Administration)
Phone: (202) 690-6145
Fax: (202) 690-7159

Sample message:

Dear ________________,

Greetings from our President’s home state of Hawaii. I have written the President, but I am also writing (calling) you to urge you to help Rafael “Del” del Castillo, who has flown from Hawaii to Washington DC this week solely to get a face-to-face meeting with the administrators in the CCIIO.

The Governor’s office has asked Del to bring back all of the information he can obtain to prevent wrong action on consumer protections. Del and others in Hawaii have tried for months without success to get an answer from the CCIIO, and we are distressed at their refusal to answer the question. Of course they are busy and we are only a small state, but we are the President’s home state, we were the model for the ACA, and wouldn’t it be ironic (and helpful to ACA opponents) if the ACA was responsible for destroying Hawaii’s best-in-the-nation consumer protections? Don’t you agree we are entitled to a meeting out of simple fairness?

Del can be reached at (808) 782-1262. Please call him and set up an appointment with the decisionmakers at CCIIO.

Hon. Hilda L. Solis, Secretary, DOL: solis@dol.gov Not toll free: (202) 693-6000
Another person you can contact is the Senior Advisor for Communications and Public Affairs Carl Fillichio, at (202) 693-4676 or
Public affairs Senior Managing Director Jaime Zapata, (202) 693-4676
The guy I really want to see is Deputy Assistant Secretary Michael L. Davis (202) 693-8300, Employee Benefits Security Administration (EBSA)

Public affairs offices are the way into the Federal agencies and they can be telephoned or faxed :

Office of Public Affairs
U.S. Department of Labor
200 Constitution Ave. NW, Room S-1032
Washington, D.C. 20210
(202) 693-4676

I will send a fax # when I get one Monday

Sample message:

Dear ________________,

Greetings from our President’s home state of Hawaii. I have written the President, but I am also writing (calling) you to urge you to help Rafael “Del” del Castillo, who has flown from Hawaii to Washington DC this week solely to get a face-to-face meeting with the administrators in the DOL EBSA.

The Governor’s office has asked Del to bring back all of the information he can obtain to prevent wrong action on consumer protections. Del and others in Hawaii have tried for weeks without success to get an answer from the ESBA, and we are distressed at their refusal to answer the question, or to even meet with Del. Of course they are busy and we are only a small state, but we are the President’s home state, we were the model for the ACA, and wouldn’t it be ironic (and helpful to ACA opponents) if the ACA was responsible for destroying Hawaii’s best-in-the-nation consumer protections? Don’t you agree we are entitled to a meeting out of simple fairness?

Del can be reached at (808) 782-1262. Please call him and set up an appointment with ESBA policymakers.

Aloha,
Rafael

Just after 5am local time, Rafael sent in his first email update.

I am here (Washington DC). Think POSITIVE thoughts! I intend to see the regulators at the CCIIO and DOL ESBA about preserving Hawaii’s existing external review law. Please let the Governor know that you appreciate his holding SB1274 until I can put our case to the Federal regulators.

If you think going to DC says “commitment” hold on to your seats. I signed up for twitter for this trip so you could follow me. I am a beginner, so have patience with me. Look for me at @Del4Hawaii

I arrived at O’Hare at 5:05 a.m. local time and left there at 6:25 bound for Reagan National Airport, where I arrived at 9:30 am local time. I immediately called Sadena Thevarajah of DHHS External Affairs, but had to leave a message on her answering machine – meetings, no doubt.

My shuttle took me over the bridge through the Capitol Mall. You can see the Washington Monument for miles around so you would have to work at it to lose your bearings in DC. With the Monument to my left, I looked up the Mall to the right, and saw the Capitol Building less than a mile away. The route to the Henley Park on Massachusetts Ave. took me across Pennsylvania at the 1400 block, but I did not see the White House. A few blocks from the Mall, less than 15 minutes from Reagan, I was dropped off at the Henley Park, my headquarters while I am staying here. I am glad I have a GPS in my phone to help me make get around quickly.

No time to spare. Follow me on Twitter (I hope) and listen to “The Conversation” with Beth Ann Koslovich on Hawaii public radio.

I just received an email from Anthony Rodgers, M.D., head of Strategic Planning for CMS. He understands the reason I am here and asked me to call. Good beginning!

Please support Rafael's efforts. I admit that I am biased and he has helped my daughter. But he also helped every other family I know of that has gone to him.

You can follow him on Twitter here.

SB 1274 and the Governor's attitude towards insurance companies

2011-05-16T08:37:00.000-10:00

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Civil Beat this morning published an interview they did with Governor Abercrombie on Friday. Abercrombie is somewhat fixated on AARP, and threatens to "roll over" them if they try to oppose his pension tax proposal next time. His biggest beef with the association is that they are just a front for insurance companies.

I responded, and since it has to do with SB 1274, I want to put my questions out to the public.

I'm floored by the incredible irony of Abercrombie's statement about AARP, that "This is when your special interest becomes a private interest at the expense of the public interest." AARP is bad because they are an insurance company, but that attitude apparently doesn't spare him from playing nicey-nice with actual insurance companies like Unitedhealth and Wellcare.

The governor is putting business with crooks ahead of the public interest. Florida is trying to recover millions in stolen Medicaid funds destined for children's programs from both companies.

But SB 1974 will accomplish nothing other than saving these two corporations potentially millions of dollars in legal fees. With no outside challenges to their medical decisions, they save the money on the services as well as the fees. When it looked like SB 1274 was going to be made retroactive, Rafael del Castillo calculated it would save Unitedhealth about $500,000 in legal fees, just for five months of case work.

The Office for Civil Rights at DHHS just opened at least its fifth investigation in Hawaii since February 2010. All five have been over Medicaid cuts in services to children with disabilities, cuts that put these children at risk of institutionalization. Two cases were closed with decisions in favor the children last summer. All of the cases involved either Evercare/Unitedhealth or Ohana/Wellcare.

Of course, the way Hawaii's contracts with Evercare and Ohana are written, they get a bigger capitation payment every month if the child is institutionalized.

Given Hawaii's role in the recent federal Medicaid fraud settlement with Wellcare, the Governor owes the public an explanation of how his office could support legislation that helps companies that hurt children. That, too, seems to exemplify "when your special interest becomes a private interest at the expense of the public interest."

Would you hire a pedophile as a babysitter? Why do we hire companies who hurt children and their families to provide them with this kind of care?

Hawaii's role in federal fraud settlement reveals possible double-dealing behind SB 1274

2011-05-14T10:57:00.002-10:00

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On April 26, 2011, Hawaii was one of nine states signing a settlement agreement between Wellcare Health Plans and the Office of Inspector General of DHHS, Civil Divisions of the US Attorney's office, and every state where Wellcare currently does business.

According to the company's first quarter SEC filing, Wellcare gets their federal slate wiped clean in exchange for the $137 million settlement.

The United States and the Settling States agree to release us from any civil or administrative monetary claim under the False Claims Act and certain other legal theories for certain conduct that was at issue in their inquiries and the qui tam complaints. Likewise, in consideration of the obligations in the Federal Settlement Agreement and the Corporate Integrity Agreement (as described below under United States Department of Health and Human Services), OIG-HHS agrees to release and refrain from instituting, directing or maintaining any administrative action seeking to exclude us from Medicare, Medicaid and other federal health care programs.

When did anyone plan on telling the people in Hawaii that their Medicaid health insurer, the same one that benefits from segregating everyone on Medicaid into a guinea pig herd with no access to outside second opinions, is paying the state millions in exchange for not being convicted of criminal Medicaid fraud?

In practical terms, this means that Hawaii Governor Abercrombie has been negotiating silently for the past several months for Hawaii's share of a settlement deriving from accusations of criminal Medicaid fraud. SB 1274 came out of his office unexpectedly in January. At one time, Wellcare lawyers admitted to state legislators they had personally drafted a silent companion bill.

How much of a fraud settlement is Hawaii getting? An article out of Florida expects that state to receive $23 million.

While Wellcare reported their percentage rate increases in Florida and Georgia, they did not disclose the figure for Hawaii and New York premium increases.

The nine states that settled with Wellcare over criminal Medicaid fraud allegations are Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Missouri, New York and Ohio. Wellcare currently operates Medicaid programs in all but two of those states, Connecticut and Indiana.

Also announced in the quarterly report,

On May 4, 2011, the Federal Court entered an order (the “Approval Order”) approving the Stipulation Agreement. As required by the Stipulation Agreement, in March 2011 the Company paid $52,500 into an escrow account for the benefit of the class. The Stipulation Agreement also provides, among other things, that the Company will make an additional cash payment to the class of $35,000 by July 31, 2011 (the “July 2011 Payment”). It also requires, among other things, that the Company issue to the class tradable unsecured subordinated notes having an aggregate face value of $112,500, with a fixed coupon of 6% and a maturity date of December 31, 2016. Additionally, the Company will be required to pay to the class an additional $25,000 if the Company experiences a change in control at a share price of $30 or more within three years of the date of the Stipulation Agreement.

Meanwhile, Wellcare's premium income in the first quarter (almost $1.5 billion, all of it federal/state Medicaid or Medicare funding) was up nine percent over the first quarter of 2010.

Yesterday's Hawaii Medicaid briefing featured wrong information about SB 1274

2011-05-11T11:25:00.000-10:00

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During yesterday's state wide hearing on upcoming changes in Hawaii's Medicaid program, a question was asked regarding Senate Bill 1274, which was passed by our legislature and currently sits on the governor's desk awaiting signature. The bill is strongly opposed by healthcare advocates, and has only been pushed by healthcare industry lobbyists.

Dr. Kenneth Fink, Hawaii state Medicaid director, responded to the question. He stated, extremely clearly, that "to the best of his knowledge" there was only one case that had made its way through the external review process and been found against the health insurer. "Only one" was stated more than once.

I asked Rafael del Castillo about Fink's statement, since he is one of the people in the best position to know how accurate Fink's number is. Here is his response:

I was unable to attend yesterday's conference concerning the future of Medicaid. I understand that Administrator Fink responded to questions concerning SB1274 and the exclusion of Medicaid members from the protections of Hawaii's external review statute that, to the best of his knowledge, there had been only one case by a Medicaid member decided in the external review, and it was decided against the patient.

As usual, intentional or not, Fink's statement is patently false and constitutes an abuse of his office in light of the fact that he is a public servant believed to be knowledgeable about the facts, whose comments are given extraordinary weight. I have no doubt that Fink provided similar false information to legislators in lobbying for SB1274 to the detriment of the people he is charged with protecting. In fact, although he has told officials he wants to know about cases involving problems with Evercare, he also declines to discuss or assist in cases and his people are actively engaged in holding services over the heads of members to persuade them to dismiss their cases.

The facts are these: There have been an unprecedented number of cases in the external review by Medicaid members, more than against any other provider, many decided, and many pending. The score is as follows:

Decisions:
Patients 3, HMSA QUEST 0. 1 case pending, heard this month.

Patients 1, Alohacare 0 - settled when filed.

Patients 1, Kaiser QUEST 0 - resolved without a hearing

Patients 2, Ohana 0 - one decided, one settled, none presently pending but several resolved before request for review filed.

Patients 1, Evercare 2 - both on appeal (1 split decision with hearing officer voting against Evercare, one failure to heed expert opinion); two cases resolved without a hearing; two will be dismissed, one because DHS immediately reversed Evercare's ridiculous decision, one because patient pre-deceased hearing; several cases filed, will be heard before June 30.

These are verifiable facts. I can provide details about each and every case, and the Medicaid members involved will be only too happy to confirm those facts.

Rafael del Castillo

After the insurance celebrating is over.....

2011-05-01T10:11:00.000-10:00

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Insurance lobbyists celebrate passed version of SB 1274

2011-04-30T09:16:00.000-10:00

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Rafael del Castillo reported yesterday that "the health insurance lobbyists burst into applause and were high fiving and slapping each other on the back in the overcrowded conference room for several minutes" after the committee passed SB 1274.

While del Castillo was denied a copy of the bill, he writes that the jubulent reception by the health insurance lobbyists means "that the Baker bill that is going to the floor of each house for a vote repeals our consumer protections and segregates the health care consumer populations for experimentation."

Why are we allowing health insurance company lawyers anywhere near state legislation, let alone legislation that restricts civil rights by benefiting shareholders at the expense of policyholders? Evercare and Ohana get paid about $100 million a month by Hawaii. If the current state law is costing them millions of dollars in legal fees, they make a better profit if they can find a way to eliminate those costs.

How much of their monthly capitation income is being spent on legal fees? How much on actual services? Has anybody considered that if the companies would stop violating federal Medicaid regulations, their legal fees could be reduced substantially?

SB 1274 is literally going to be giving the insurance companies a license to kill.

How much of a raise did Hawaii give Evercare and Ohana?

2011-04-29T10:09:00.001-10:00

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Wellcare reported in their 2010 year-end SEC filing that the "Hawaii program rate increases, which we believe have improved the stability of the program, also were effective July 1, 2010."

The "also" referred to "net increases of approximately 2.5% to 3.0% in Florida effective September 1, 2010 and 1.5% to 2.0% in Georgia effective July 1, 2010."

The company directly blames its $254.3 million in litigation-related costs for 2010's net annual loss.

For the year ended December 31, 2010, the net loss was $53.4 million compared to $39.9 million of net income for the same period in 2009. Excluding investigation-related and litigation-resolution costs of $167.6 million and $86.7 million, net of tax, net income would have been $114.2 million and $126.6 million for the years ended December 31, 2010 and 2009, respectively.

Hawaii Senate Bill 1274, which is openly back by health insurance companies like Wellcare, UnitedHealthcare, HMSA and others, will help get Wellcare out from under some of those exhorbitant legal expenses.

My question is why are we allowing a state/federal contractor to divert $254,300,000 in taxpayer funds away from medical care to fighting federal allegations that the company is stealing from those same taxpayer funds?

It's taken since October 2007, but in March Florida finally issued federal indictments for Medicaid fraud against five former Wellcare employees. The investigation and indictments cover criminal fraudulent scheming and theft between 2003 and 2007.

According to the March 3, 2011 story from Associated Press in Florida, Wellcare, "which is one of the state's largest Medicaid providers, spent $2.4 million on political contributions in the 2004 and 2006 elections."

More than 95 percent of it went to Republicans, who pushed forward a nationally watched plan that funnels more state and federal Medicaid spending than ever through private companies, which profit most by providing the least care.

The fact the company still has legal expenses in the $254 million range would seem to imply other investigations are ongoing. Somewhere.

SB 1274 just keeps getting better for the health insurance companies

2011-04-29T08:04:00.000-10:00

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New amendments added to SB 1274 yesterday benefit the health insurance companies while segregating everyone currently receiving Medicaid into an experiment in civil rights.

According to Rafael del Castillo, who attended Thursday's brief meeting, "Senators Baker and Green have sent amendments to the House committee members proposing to segregate Medicaid members from the external review population with the supposed purpose of “studying” whether your welfare suffers if you are limited to the DHS process, in which you have to pay for the services you receive if you lose your case, and you will not get legal help unless you pay for it or qualify for legal aid."

As someone who has had personal experience with the "DHS process", I can say this logic is based on the mistaken assumption that DHS provides some sort of oversight over the health insurance companies.

CMS has been reviewing complaints for months that DHS is providing any sort of oversight at all. Twice I'm aware of State Medicaid Director Ken Fink has responded to these federally-filed complaints by writing the enrollee the insurance company has done no wrong.

The state has never acknowledged publicly that they had to place Evercare/UnitedHealthcare under a corrective action plan a year ago for on-going violations of federal Medicaid law. The families who were victimized were never notified.

The state has never acknowledged publicly that federal regulators recently began looking into potential Medicare fraud involving Evercare.

Evercare regularly refuses to authorize medications for my daughter, either new ones or ones that she has been taking for years. Complaints filed with Patti Bazin go nowhere. Every time, the only way I've been able to get Hannah's medications filled is by emailing CMS.

From my experience, DHS provides no oversight and in fact appears to collude in the health care insurance companies' strategy of essentially meaningless terrorism against families. The state gave the companies a premium increase last summer, so it is not for lack of funds.

I am one of so many families right now where a child or loved one is alive because of our current external review law.

SB 1274 needs to be killed. Please email the following representatives now to let them know they have to stand up against the insurance companies.

repmizuno@capitol.hawaii.gov
repkeithagaran@capitol.hawaii.gov
repyamane@capitol.hawaii.gov
replee@capitol.hawaii.gov
repherkes@capitol.hawaii.gov

State is sweetening contracts with Evercare and Ohana with SB 1274

2011-04-22T15:25:00.000-10:00

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SB 1274 is the only way that Hawaii's Medicaid bureaucracy can help their insurance buddies get rid of a lot of nasty legal costs from people appealing their decisions.

Hawaii's external medical decision review panels are a mandated part of Hawaii's contract with CMS (the Centers for Medicare & Medicaid) for the 1115 waiver. As a result, they are also a mandated part of Hawaii's contracts with both UnitedHealth and Wellcare, the only companies who hold provider contracts under that waiver.

Presumably, the feds would never give Hawaii written permission to delete an entire section of the contract dealing with consumer appeal rights. The only way to get UnitedHealth and Wellcare out from under that burden would be a law that repeals the law creating the reviews in the first place:

S.B. 1274 is repealing H.R.S. 432E-6, the law that defines the external review process.

Rafael del Castillo has had thirty cases go through the insurance commission reviews over the past decade, and has eleven cases sitting there now. Ten of them are appeals against UnitedHealth. That seems to imply that the problem isn't the review system, it's UnitedHealth's medical decision making process.

There was a funny rumor going around in January that state employees were working on how to make the contracts with Evercare and Ohana "above federal law." Specific sections of the contract, dealing with appeals and grievances, were being focused on. I provided the information to CMS in mid-January.

Checking my notes, the rumor had to do with the same part of the contract that will be invalidated once SB 1274 goes through.

What a coincidence?

In fact, Evercare was put under a Corrective Action Plan by the state a year ago, for ongoing violations of federal regulations. By and large, these were federal regulations related to mandated procedures for appeals of insurance decisions, grievances, and complaints.

CMS has been receiving documentation of Evercare's ongoing violations of multiple federal regulations for months. CMS has also been receiving documentation of the state's failure to provide the required oversight of Evercare's operations. Letters from Dr. Ken Fink, Hawaii state Medicaid Director, just echo UnitedHealth's corporate line. I reported earlier that Fink's salary is more than twice that of his predecessor, and have not heard that Governor Abercrombie has taken any steps to reduce it.

The agreement between the state and CMS clearly gives federal regulators the ability to step in if the waiver program is no longer in the public interest or there is on-going non-compliance.

Both conditions seem met, which means only federal regulators or attorneys can step in to help us if SB 1274 is passed.

Del Castillo says health plans gaining greater control over future of SB 1274

2011-04-21T09:18:00.000-10:00

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Insurance company meddling in Hawaii state law has worsened, according to patient rights attorney Rafael del Castillo. Castillo says he is "concerned because Sen. Roz Baker is doing the drafting and I believe she will enlist the assistance of the health plans lawyer, Ellen Carson, as she did once before on SB1274. Carson is going to see to it that our consumer protections are repealed. The health plans are ADAMANT that we shall lose those protections and rights."

We need to ask ourselves who benefits if SB 1274 is passed. The obvious answer is all the health insurers in Hawaii who provide Medicaid coverage to 264,000 people.

But who has the most to gain from the passage of SB 1274? The answer to that is the two for-profit companies that between them gobble up almost seventy percent of the state's Medicaid budget.

Passage of SB 1274 will allow Evercare (UnitedHealth Group) and Ohana (Wellcare) unfettered permission to make life and death medical decisions based on profit margin rather than medical need. The current "retroactive" clause in the bill will save UnitedHealth up to $500,000 by dismissing all the currently pending review cases. Speaking to the media on behalf of the bill, UnitedHealth attorney Dianne Brookins openly admitted these legal costs "just adds to the cost of healthcare."

Companies like UnitedHealth and Wellcare keep shareholders happy by keeping something called the MLR, or Medical Loss Ratio, as low as possible. When the government is paying them a guaranteed monthly fee for every Medicaid or Medicare enrollee, the MLR is kept low by not spending as much of that fee as possible. Across the country, over 13.5 million people are having their Medicaid decisions made by for-profit health insurers.

This video has been released by the opponents of SB 1274, to show the human toll when for-profit health insurers have life and death power over the families of Hawaii's disabled population.

For Uncle Neil and Uncle Barak on SB 1274

2011-04-20T12:11:00.000-10:00

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UnitedHealth's News Comment on SB 1274

2011-04-19T11:47:00.005-10:00

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The local reporters here tried to break the embargo on Rafael del Castillo; he was interviewed on a piece that aired Friday night at 10pm on KITV.

I cannot find the story on their website, but luckily we were able to get a copy of it. The quote from UnitedHealth's attorney spokesperson, Dianne Brookins, is the most interesting part.

Ms. Brookins states the "existing process is expensive, time-consuming and burdensome... just adds to the cost of healthcare when we can ill-afford it."

Who is we? Is she speaking on behalf of Governor Abercrombie, whose office originated SB 1274? If so, then her referral to ill-affording the added cost would refer to the state.

Or is she talking about UnitedHealth? The same company that showed a net earnings increase between 2009 and 2010 of 21%? The same company that lowered its Medical Loss Ratio by two percent, to less than 80% in the fourth quarter of 2010?

If this corporation can "ill afford" the legal cost of these reviews, and considering Rafael del Castillo's comment that he wins about eighty percent of his cases, then perhaps UnitedHealth should stop putting their shareholders before their enrollees when making decisions about medical necessity.

I have met Ms. Brookins personally. She attended, on UnitedHealth's behalf, the "hit squad" attack at my home on February 18. If the company can "ill-afford" to fly her so many times to Kauai then perhaps it should stop violating federal regulations governing denials, appeals and grievances.

Arizona joins Florida and Hawaii in battles against patient rights

2011-04-19T11:13:00.000-10:00

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According to Disability Scoop, Arizona is considering state legislation that "would strip all of the state’s 32 health insurance requirements, including one mandating autism coverage."

Earlier this month, Governor Jan Brewer signed the state's 2012 budget, lauding its "reform" of Medicaid. "The reductions equal the amount cut over the previous two years. Many of those cuts make permanent changes to state law, meaning the programs they support will not return when state coffers are again flush with cash."

In Hawaii, for-profit Medicaid HMOs are openly supporting state legislation that would slash the patient rights of 264,000 people on Medicaid. In Florida, the state legislature is trying to completely rewrite Medicaid and force everyone into for-profit HMOs.

Action Alert for Opponents of SB 1274

2011-04-19T08:56:00.001-10:00

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Rafael del Castillo sent out an action alert this morning for opponents of SB 1274. People are being asked to email Congresswoman Colleen Hanabusa, who was a Hawaii State Senator when the current consumer protection law was enacted.

Del Castillo is suggesting the following text be included in your email:

Please help us stop Senate Bill 1274 HD3 which repeals longstanding and highly effective consumer protections against health insurance abuses.

Our Legislature and Governor Abercrombie have been unable to get assurances from the DHHS Center for Consumer Information and Insurance Oversight (CCIIO) that federal regulations do not require us to throw out our very successful consumer protection law, enacted while you served in the Hawaii Senate.

I ask you to intercede on our behalf with the CCIIO. If the CCIIO cannot give us an answer in the next 10 days while SB1274 is in conference committee, then we need a 1 year extension on the July 1, 2011 due date to resolve this issue without harming Hawaii consumers. The federal government has no legitimate interest in requiring us to repeal a law consumers strongly support and replacing it with one we strongly oppose.

Only the health insurers in Hawaii support SB1274, and that is because in its present form, it will destroy the considerable power Hawaii consumers now have to avoid and, when necessary, reverse bad and even selfish decisions by health plans in denying life-saving medical care, thank to the wisdom of your legislature in 1998.

Health insurers are using our $ and taxpayer subsidies to fight to repeal our rights and protections. Please help us defeat that effort.

Mahalo!

I added some personal information into my email to the Congresswoman. If you are uncomfortable with her secure email system you can also fax her at (202) 225-0688.

You need to know the four-digit extension of your zip code to sign in on Congresswoman Hanabusa's website.

DHS backing "separate but equal" rights for Medicaid enrollees

2011-04-18T09:35:00.000-10:00

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With no apparent regard for the change in political party at the governor's level, Hawaii's Department of Human Services is openly backing the health plans' attack on patient rights via S.B. 1274.

According to the latest news released by Rafael del Castillo, "The Dept. of Human Services and the health plans, particularly Evercare and Ohana, are arguing that the Medicaid members will have equal rights even if they are separate. Those of you who are young may not remember, but many of your parents were opposed to the concept of “separate but equal” a generation ago, and the US Supreme Court finally realized that in a just society, if it was supposedly equal, there was no justification for it being separate."

So far, Speaker Calvin Say has assigned House members to the conference committee on SB1274, with Senate members not yet named. Opponents of SB 1274 are asked to please call or fax everyone on this list to let them know you want the bill killed.

Co-Chairs:
Ryan Yamane (D), Phone 808-586-6150 Fax 808-586-6151
Robert Herkes (D), Phone 808-586-8400 Fax 808-586-8404
Gilbert Keith-Agaran (D), Phone 808-586-6210 Fax 808-586-6211
Marilyn B. Lee (D), Phone 808-586-9460 Fax 808-586-9466

Members:
John Mizuno (D), Phone 808-586-6050 Fax 808-586-6051
Dee Morikawa (D), Phone 808-586-6280 Fax 808-586-6281
Kymberly Marcos Pine (R), Phone 808-586-9730 Fax 808-586-9738

Transparency in government: UnitedHealth and S.B. 1274

2011-04-18T06:57:00.000-10:00

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Corporate health plan backing for S.B. 1274 became crystal clear on Friday. When the media needed a spokesperson on behalf of the bill, UnitedHealth offered up its local Honolulu lawyer.

UnitedHealth (or Evercare as they are known in Hawaii) could not have made their interest in the passage of S.B. 1274 clearer. The attorney they used is the same one who defends Evercare whenever a patient appeals to the external review panel the company's denial of medically necessary medications, treatments or services.

S.B. 1274 was recently amended to be retroactive to January 1, automatically dismissing all current cases. UnitedHealth is the defendant in eleven of twelve pending cases, so this amendment alone could be saving the company as much as $500,000.

The plaintiffs' attorney in all those cases is Honolulu lawyer Rafael del Castillo. Del Castillo only takes cases "on a contingency basis." That means he accepts no money from clients up front, even when actual hard costs are incurred for expert testimony. Del Castillo is only paid or reimbursed for the expert fees and other costs to the extent the Insurance Commissioner orders the health plan administrators to pay them.

Alston Hunt does not have to depend on the Insurance Commissioner for its fees. It gets paid no matter what, with our money. I wonder how many legal hours Alston Hunt got to bill UnitedHealth for strategizing how to be the best spokesperson for the bill?

State bills pending in Florida and Hawaii to increase for-profit Medicaid penetration while reducing patient rights

2011-04-15T14:26:00.000-10:00

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The state legislature in Florida has apparently decided to completely scrap the state's Medicaid program. Considering Medicaid fraud has been called the state sport, this is obviously necessary.

The problem is that the "new Medicaid" that Florida is trying to shape will essentially amount to giving more and more money to the same companies already caught or suspected in federal Medicaid fraud. A recent article calls it "the scariest part of scary Medicaid overhauls.

Isn't that like hiring Bonnie and Clyde as bank tellers?

On April 13, the Florida Tribune reported that "The House and Senate also have both agreed to use managed care as the main vehicle to lower costs and include requirements that long term care patients use managed care."

Back in June 2009, at least 56% of Florida's Medicaid enrollees were receiving their services through for-profit HMOs. In the summer of 2010, it was revealed that all eight for-profit subcontractors to one state Medicaid contract were cheating on the MLR (medical loss ratio, the percentage of each capitation payment spent on services for that specific individual). Amerigroup alone had to refund over $2 million to the state. Also last summer, there was talk of extending a minimum MLR to the state's other Medicaid contracts.

There's a battle going on in the Florida state legislature now between those in favor of establishing a 90% MLR, and those who want no MLR at all. Nobody is questioning turning the kitchen sink, water main and all, over to for-profit insurers.

If everyone ends up comprising on some "reasonable" MLR, it will still mean that state and federal funds are being diverted away from health services and into shareholder profits. Sean Hellein's whistleblower report demonstrated how casually insurance companies like Wellcare, Amerigroup and UnitedHealth (all named in the suit) treat the issue of committing Medicaid fraud, especially when it comes to falsifying MLR figures.

Between last summer's enthusiasm and the current Medicaid battle was the November election. Florida elected a new Governor who had been the CEO of a healthcare company holding the record for the country's biggest criminal Medicare fraud case. In Public Citizen's post-election night report on unregulated third party spending (subsequent to Citizens United v. Election Commission), Florida ranked second highest, with four congressional candidates splitting almost $2.9 million. One of those newly elected Congressmen dismisses any compassionate element of Medicaid (including, presumably, for children) as being evidence of a "bureaucratic nanny state" that can only be fixed with a "free enterprise solution."

Florida and Hawaii make two states where local legislative wars are being fought that have major repercussions for the future of Medicaid. These wars all have to do with the way states get their Medicaid money from the feds, and who they then give it to. Money for Health reform and stimulus funds is all channeled through different accounts. For instance, the federal DHHS report on stimulus funds paid out to states reported on March 31 2010 that the state of Florida had received $3 billion into thirty-seven different accounts. Each account is a possible contract to be bid out.

Every contract represents another opportunity to clear twenty percent in operating profit. With forty states reportedly considering (or in the process of) turning their ABD populations over to for-profit HMOs, the financial impact on the disability community could be overwhelming.

From our experience in Hawaii, when an ABD population is turned over to a for-profit HMO, that means the HMO now covers everything, including home attendants, medications, skilled nursing, home medical supplies, behavioral programs, durable medical equipment, even the cost of institutionalization. Hawaii's contracts with UnitedHealth and Wellcare clearly showed they received higher capitation payments for an individual if they were in institutional care than home care. Institutionalization therefore increases the premium while at the same time giving the insurer more power over how much of it has to be spent.

This is how the news of Florida Governor Scott's recently proposed cut in provider service reimbursement rates can relate to the MLR. Florida was already bidding out its ABD program to private HMOs like Amerigroup in early 2010. If ABD services are being channeled through new HMO providers, as they are done here, then reducing provider rates can be a back-door way of increasing corporate profit.

According to Amerigroup's 2010 annual SEC filing, the company's contract with the Florida Department of Elderly Affairs for Long-Term Care was renewed in September, they gained a new CHIP contract with the state in 2010 plus became a Medicare Advantage provider with Florida the same year. Overall, the company's net earnings were up 83%, helped along significantly by lowering the MLR by four percent.

Involved in the Florida legislative battle is SB 1972. On April 11, it was reported that Medicaid insurers, including the private HMOs, were backing an element of SB1972 that "would name them as agents of the state and give them the full protection of Florida's sovereign immunity, no matter how much damage they cause to an innocent disabled adult or child who has been entrusted to their care." As preposterous as it sounds, it is similar to an attempt here in Hawaii to assimilate child and protective services under the Medicaid ABD program. UnitedHealth and Wellcare employees suddenly had the right to threaten to remove a child from a family for abuse, if the family did not agree to the company's recommended reductions in Medicaid services.

Now we're putting Bonnie and Clyde in charge of the bank's vault.

Please sign our petition to get for-profit HMOs out of Medicaid and Medicare.

Hawaii health insurers back state bill attacking patient rights

2011-04-13T07:37:00.000-10:00

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There is a war going on against Hawaii's middle class, and between what appears to be a virtual media black-out on the subject and a public misinformation campaign, nobody seems to know a thing about it.

At least half a million people in Hawaii who have health insurance are going to lose the right to an effective external appeal of decisions made by their health insurance providers if Hawaii Senate Bill 1274 passes. Health insurance carriers have already admitted publicly to drafting companion legislation, and are increasingly open in their support of 1274.

SB 1274 will repeal HRS 432E-6, which created a state external review process that could intervene when a health insurance company denied medically necessary treatment or medication. The state law creates a local hearing process where both sides can present expert testimony, and decisions are issued by a panel rather than a lone individual.

According to Rafael del Castillo, a Honolulu attorney who specializes in representing clients appealing insurance company decisions under HRS 432E-6, the insurance companies have lost or given up in about eighty percent of these cases.

That means that in eighty percent of the cases, the insurance company denial had nothing to do with medical necessity, just saving the company money.

The Affordable Care Act may have also extended the coverage of HRS 432E-6 to most families with employer-paid health insurance. Del Castillo is seeking confirmation from the Department of Labor.

If Hawaii Senate Bill 1274 passes in any shape or form, the middle class is also going to lose any external review rights they just gained last fall.

SB 1274 came to life very unexpectedly in January, seeming to originate out of the office of the state's newly elected Democratic governor Neil Abercrombie. People were stunned since Abercrombie was assumed to be a pro-consumer rights politician.

At first it had a silent companion bill, S.B. 658, making patients responsible for insurance company legal fees if the patient lost the appeal. Attorneys for Wellcare, a for-profit HMO that makes about $600 million a year from its contract with Hawaii, admitted at a Senate hearing to having drafted the bill. S.B. 658 has been tabled indefinitely ever since.

The latest development is a clause that has been added to S.B. 1274 making it retroactive to January 1. All cases currently in the external review process would be dismissed, which could save the insurance companies as much as $500,000 in legal fees. According to del Castillo, the big winner in the bill going retroactive is UnitedHealth Group, operating in Hawaii as Evercare.

Every health insurance carrier operating in Hawaii is going to benefit if S.B. 1274 is signed: HMSA, Kaiser, HMAA, UHA, Aloha Care, Evercare (UnitedHealth) and Ohana (Wellcare) all benefit from repealing the law that gives their policyholders an effective way to challenge denials of treatment. That gives the insurance carriers free rein in making medical decisions based on operating profit rather than the policyholder's medical needs.

The mis-information campaign is claiming HRS 432E-6 violates new federal regulations and so MUST be repealed. Del Castillo has been working with federal authorities since January on how the existing law can meet new federal regulations with nothing more than a few tweeks, rather than a sledgehammer. According to del Castillo, Hawaii's health insurers continue to push hard to get 1274 passed and are refusing to accept any compromise that preserves the consumer protections we now have. Del Castillo has even received a letter threatening to sue him on behalf of unnamed insurers if he continues providing lawmakers with information about past external review cases consumers have won.

The media blackout on this (with the notable exception of HPR) is fascinating. It is easy for them to dismiss del Castillo's information campaign on 1274 on the basis he is the one to benefit if the current law stays in place. After all, he's the only local lawyer who is willing to represent health care consumers in this external review process. Since del Castillo finances these cases himself until the decision awards him costs, the retroactivity singles him and his clients out for special financial punishment.

Del Castillo says an editor told him years ago that one of the state's big insurance companies had threatened to pull advertising if his cases against them got any media coverage. It is obviously impossible to prove, but it is interesting that all of his advocacy work on behalf of patient rights is ignored, and even when he came in second in last year's Democratic primary race for Congress, never received a word of coverage in any of the major newspapers, TV or radio outlets.

A political candidate who gets 22,000 votes and is completely ignored by all the media is practically a story by itself.

Once upon a time, long ago, Hawaii was known as "the Health State". We had a state law that established a health patient's bill of rights, all the kids had insurance, and employers were required to provide health coverage. For a very short time, even President Obama was linked to his origins from "the Health State."

But about the time Obama came into office, Hawaii's Republican governor turned over seventy percent of the state Medicaid budget to two for-profit insurance carriers, the death rate among the elderly and people with disabilities increased, children had already lost their health coverage, and so the Health State was rather abruptly dismantled.

We can't let the Abercrombie Administration and this Legislature take away our right to an independent review panel when our health insurance company denies us medically necessary coverage. We can’t let lawmakers retroactively repeal rights people relied upon in incurring substantial costs and in seeking denied medical care. It doesn't matter if the company name on your insurance card is HMSA, HMAA, UHC , Kaiser, Aloha Care, Evercare or Ohana, you lose your health patient rights if SB 1274 gets passed.

We all lose.

A mom's letter opposing Hawaii Senate Bill 1274

2011-04-12T12:25:00.000-10:00

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A Hawaii mother has written the following letter, and sent it to Governor Abercrombie and Hawaii state legislators, regarding SB 1274.

My family and I are strongly opposed to Senate Bill 1274, which 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.

If this law passes, it will have a profound impact on my entire family. In addition to endangering my daughter, it could cost my family tens of thousands in unrecoverable attorney fees. When we exercised our right to appeal with the IC, we were not informed that the law could change in the process of appeals and that we could lose all of our rights retroactively. Basically the entire playing field changed with no warning. We--our daughter included--are being stripped of our current rights--this from insurance division and a Legislature that is supposed to be responsible for overseeing the safety of the Hawaii citizens they are sworn to protect. Furthermore, it appears that the retroactive application of the law, which was added by the Senate Committee on Ways and Means, punishes struggling families and benefits one, and only one, entity – rich and powerful UnitedHealthcare Insurance Company, known as “Evercare,” which would otherwise be required to pay those costs and expenses.

Please allow me to explain. We have a four-year old daughter who has a life-threatening seizure disorder known as Lennox Gastaut Syndrome. There are some days that she had had over 1,000 seizures per day. Despite these inhuman challenges, she struggles with all her might every day to learn to walk on her own and to communicate, and she is unfailingly appreciative of the help she receives. Our daughter has numerous physicians that provided her health care plan with prescriptions and letters of explanations for why she needs 24/7 skilled nursing care. It was reviewed by a physician on the health plans staff and denied. The part of this that is so concerning is the health care plans physician that provided the denial is not even a neurologist; nor has never 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 four-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.

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 did 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? By doing this, they are putting Hannah in jail. 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 four year-old child committed that she deserves this fate?

I invite you to visit my child. While she 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.

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. 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 hearts—not just at budgets-- for the implications of these proposed bills. Please take the wise and humane course of action.

Very truly yours,
S.M.
Kilauea, HI 96754

Privatizing Medicaid and Medicare is an attack on the middle class

2011-04-12T11:55:00.000-10:00

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There seems to be a general assumption that when people talk about cuts to Medicaid and Medicare, it has to do with poor people. In fact, the cuts affect middle class working families the hardest, by targeting anyone who isn't rich enough to pay for keeping a medically needy child or grandparent at home and out of an institution.

It is normal for about two-thirds of every state's Medicaid budget to go, not for people who qualify from poverty or unemployment, but to the medical care of children and adults with disabilities, whether from birth, accident, age or illness. These are middle class American families who make too much money to qualify for Medicaid; they are trying to care at home for a child, a grandmother, a sibling who qualifies for Medicaid on the basis of disability through what are called "waiver programs" (because family income/assets are "waived" in calculating eligibility).

That sixty-six to seventy percent of every state's Medicaid budget is what is up for grabs when companies like Wellcare gloat in their year-end reports that forty states are considering turning their ABD (aged, blind and disabled) population over to private contractors.

In Florida, for instance, the ABD population could be expected to account for somewhere between $12 and $14 billion, considering the $20 billion annual budget. Private contracts for ABD services were handed out to companies like Amerigroup last year. The newly elected governor of Florida, who vowed after the election to parcel out the state's entire Medicaid population to private contractors, recently announced he was filling a $174 million budget deficit by decreasing the rates paid to caregivers by 15%. Lowering reimbursement rates helps insurance companies decrease their Medical Loss Ratio thereby increasing profits. The family can either take another job to try to supplement the medical services lost, or put their family member in a hospital or institution. Again, it's the insurance company holding the state Medicaid contract for the ABD population and/or long term care who makes out.

Meanwhile Florida's state legislature is trying to rewrite Medicaid. One proposal would change the name of the Medically Needy program to the Medicaid Nonpoverty Medical Subsidy, while eliminating coverage of hospitals and medications.

What are adults with catastrophic illnesses supposed to do without medications?

Splitting up state Medicaid populations into "risk-based health maintenance organizations" will affect people who qualify because of poverty or unemployment, yes. But with two-thirds of any state's budget spent on the much smaller aged, blind and disabled population, the biggest impact is where the companies get the biggest bang for the buck saved. Capitation contracts are hard to come by, but I published Hawaii's a long time ago, verifying that individual budgets can go as high as $29,000 a month. This is not money spent on somebody because they are poor, it is money allocated to the home nursing care for someone who is so disabled they cannot live on their own.

Wasting up to twenty percent of our federal and state budgets for Medicaid and Medicare on CEO salaries and corporate profits is hurting millions of average middle class Americans whose only fault is wanting to keep their families, including their most vulnerable members, together.

Please visit this petition to put a stop to Wall Street's pillaging of Medicaid and Medicare. Every signature sends an email to Deputy Attorney General for Civil Rights Thomas Perez, Secretary Duncan of Education and Secretary Sebelius of DHHS to stop this attack on our civil and patient rights.

SB 1274 still alive, will be retroactive to January 1

2011-04-11T11:50:00.000-10:00

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The following announcement was distributed by Rafael Del Castillo:

It is time you understood something about S.B. 1274 as it goes into conference, and why it should be KILLED. It is a cruel trick on the poor and vulnerable and it is time we expressed our outrage about that.

Not only does S.B. 1274 EXCLUDE MEDICAID MEMBERS from the external review entirely, but our Senate Committee Ways and Means made the bill RETROACTIVE TO THE BEGINNING OF 2011. (only Sen. Slom voted “No”)

That means that the TWELVE cases (11 against Evercare) that are presently on file with the Insurance Division, and the EIGHT cases in internal appeals ARE DEAD THE DAY GOVERNOR ABERCROMBIE SIGNS THE BILL.

It means that pending motions on which consumers are entitled to over $40,000 in fees and costs incurred ARE ALSO DEAD.

That means OVER $60,000 people have invested in appeals IS LOST, GONE, IF GOV. ABERCROMBIE SIGNS IT THANKS TO THE SENATE COMMITTEE ON WAYS AND MEANS’ HANDOUT TO HEALTH PLANS. WAY MEAN!

THE PEOPLE WHO HAVE APPEALS WILL NOT ONLY LOSE THEIR RIGHT TO CONTINUE THEIR APPEALS, WHICH WERE FILED UNDER THE LAW GOVERNING THEM, BUT THEY WILL NEVER RECOVER THOSE COSTS FROM THE HEALTH PLANS EVEN THOUGH THE LAW AT THE TIME THEY WERE INCURRED INDEMNIFIED THEM FOR ENFORCING THE LAW.

HOW IS THAT FOR EQUITY? HOW IS THAT FOR CONSUMER PROTECTION?

TO THOSE OF YOU WHO HAVE CASES PRESENTLY PENDING, I APOLOGIZE. I AM DOING EVERYTHING I CAN TO PROTECT YOUR RIGHTS BUT I NEED ALL THE HELP I CAN GET. YOU WILL LOSE YOUR CASES AND YOUR COSTS UNLESS YOU AND I CAN GET A LARGE NUMBER OF PEOPLE FIRED UP.

SO ARE YOU GOING TO LET YOUR LEGISLATURE AND THE NEW ADMINISTRATION YOU SENT TO WASHINGTON PLACE RUN OVER THE MOST VULNERABLE IN HAWAII FOR THE BENEFIT OF HEALTH PLANS? Or are you going to let them know you are outraged?

Now that things are getting down to hand-to-hand, HOW ABOUT A FEW LETTERS TO THE EDITOR?
HOW ABOUT A FEW PHONE CALLS TO LEGISLATORS AND THE GOVERNOR?

To get your message to the Governor, you can call Mike Ng, Governor’s Policy Analyst, at 808-586-0295 or email him at Michael.Ng.@hawaii.gov

HOW ABOUT ASKING YOUR FRIENDS AND NEIGHBORS TO DO THE SAME?

I also apologize for all of the red ink (capital letters), but red ink is what this is about. The Administration’s original bill ignored the issue of pending cases, so our SENATE Committee on Ways and Means helpfully added language the HEALTH INSURANCE PLANS lobbied for. Let them know how you feel about that.

It is time they explained to you why they voted to retroactively deprive people of rights and property.
(I am giving you email addresses, but keep in mind that emails get ignored. Calls cannot be ignored so easily. Neither can faxes.)

COMMITTEE ON WAYS AND MEANS

David Y. Ige
Phone 808-586-6230 Fax 808-586-6231
E-Mail: sendige@Capitol.hawaii.gov

Michelle Kidani
Phone 808-586-7100 Fax 808-586-7109
E-Mail: senkidani@capitol.hawaii.gov

Suzanne Chun Oakland
Phone 808-586-6130 Fax 808-586-6131
E-Mail: senchunoakland@Capitol.hawaii.gov

Donovan M. Dela Cruz
Phone 808-586-6090 Fax 808-586-6091
E-Mail: sendelacruz@capitol.hawaii.gov

J. Kalani English
Phone 808-587-7225 Fax 808-587-7230
E-Mail: senenglish@Capitol.hawaii.gov

Will Espero
Phone 808-586-6360 Fax 808-586-6361
E-Mail: senespero@Capitol.hawaii.gov

Carol Fukunaga
Phone 808-586-6890 Fax 808-586-6899
E-Mail: senfukunaga@Capitol.hawaii.gov

Gilbert Kahele
Phone 808-586-6760 Fax 808-586-6689
E-Mail: senkahele@capitol.hawaii.gov

Donna Mercado Kim
Phone 808-587-7200 Fax 808-587-7205
E-Mail: senkim@Capitol.hawaii.gov

Ronald D. Kouchi
Phone 808-586-6030 Fax 808-586-6031
E-Mail: senkouchi@Capitol.hawaii.gov

Pohai Ryan
Phone 808-587-8388 Fax 808-587-7240
E-Mail: senryan@capitol.hawaii.gov

Jill N. Tokuda
Phone 808-587-7215 Fax 808-587-7220
E-Mail: sentokuda@Capitol.hawaii.gov

Glenn Wakai
Phone 808-586-8585 Fax 808-586-8588
E-Mail: senwakai@capitol.hawaii.gov

The sole person you can send thank you’s for protecting your rights is Senator Slom, who voted “NO”
Sam Slom
Phone 808-586-8420 Fax 808-586-8426
E-Mail: senslom@Capitol.hawaii.gov

Rep. Ryan Yamane, House Health Chair, and Sen. Josh Green, Senate Health Chair, are expected to be the subject matter experts on the conference committee.

Let them hear how you feel about depriving people of health care and property RETROACTIVELY.

Sen. Green
Phone 808-586-9385 Fax 808-586-9391
E-Mail: sengreen@capitol.hawaii.gov

Rep. Yamane
Phone 808-586-6150 Fax 808-586-6151
E-Mail: repyamane@Capitol.hawaii.gov

Imua! Pass it on!
Rafael del Castillo

Death by Medicaid: the Republican dream of unbridled profit-taking at work in Florida and Hawaii

2011-04-08T14:20:00.000-10:00

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It's all about the privatization of Medicaid and Medicare. Along with CHIP, together they churned more than $887 billion in state and federal funds directly into the American economy in 2009, and private insurance companies saw a gold mine waiting to be exploited.

In 2010, just nine private health insurers reported getting their hands on more than $111 billion of it, up 35% over 2009. The companies have put together a self-serving body of research demonstrating how converting state Medicaid enrollees into privatized Medicaid contract policyholders saves the state money while proving better service. All of these plans are managed care.

The state and the insurer agree on a table of "risk" values and apply it to each policyholder. That amount, which can vary between $200 and $29,000 a month (based on individual medical needs), is called the capitation payment. Every Medicaid policyholder has an personal, individual budget that the contractor is paid monthly by the state, using a combination of local and federal funds.

How much of the capitation payment is spent on actual medical costs is called the Medical Loss Ratio (or Health Benefits Ratio). Private insurance companies make their money by not spending the money that they are paid in premiums.

If you are paying your private health insurer $250 a month for your coverage, you likely are not keeping track of how much of it is spent. If you suddenly develop a serious or life-threatening condition, you know the insurer will keep paying the costs (at least up to a point) regardless of how much it exceeds your $250 per month payment. The company is taking all the $250 per month payments from tens of millions of members, and there is always plenty left over to take care of higher needs here or there.

The perspective should be a little different, however, when the insurance company is being paid $29,000 a month to keep a medically fragile child at home with their family, anywhere from two-thirds to three-quarters of which are federal dollars.

Even if there were stringent regulations in place (which there are not) as to how much of these federal and state funds have to be spent on actual medical costs, it would make no difference. An FBI sting operation against health insurer Wellcare "videotaped a meeting of top executives in January 2007. Florida Medicaid officials had demanded an accounting of WellCare's behavioral health spending, and the company knew it was only about half of what the state believed. The solution: simply double every charge." The former Wellcare employee who wore video cameras and microphones to work every day estimated that the fraud against Florida Medicaid ranged in the $400 to $600 million range.

What somehow remained unmentioned was the fact that this type of Medicaid fraud, which Hellein's tapes show is openly shared between companies such as Wellcare, Amerigroup and UnitedHealth Group, is ongoing. Fines and Deferred Prosecution Agreements do not really seem to put a dent into it, in fact. Wellcare was paid $890 million by Florida for the same Medicaid contracts in 2010, and got a 2.5% to 3% rate increase in September. They claimed to spend 87% of that on actual medical costs, but Hellein's audiovisual evidence makes it clear these figures easily have little relation to reality.

Besides, they made around $600 million from their Hawaii contract, before getting a raise last summer. The Hawaii contract does not stipulate any minimum Medical Loss Ratio. The individual policyholders are all elderly, blind and/or disabled adults and children, so are not likely to be keeping track.

Hawaii, in fact, is an excellent example of how Republicans envision Medicaid functioning. Hawaii created two Medicaid populations: a small one of about 40,000 "aged, blind and disabled" adults and children who had special medical needs; and a bigger one for the other 267,000 people signed up for regular Medicaid. The small one gets more than seventy percent of the state's total $1.7 billion annual Medicaid budget, which is divided between two contract holders: UnitedHealth Group and Wellcare.

Former Republican Hawaii Governor Linda Lingle was responsible for moving the state's "aged, blind and disabled" population overnight from a fee-for-service system to a privatized managed care plan operated by two out-of-state for-profit corporations. Sworn testimony was videotaped last year stating this group had experienced a 36% increase in deaths within the first year after UnitedHealth and Wellcare took over.

While Wellcare's SEC filings bemoan the company's high Medical Loss Ratio, UnitedHealth celebrated its lowest rate in five years in the fourth quarter of 2010. Company wide, they got it down below 80%.

Apply that to their 2010 Medicaid premium earnings from Hawaii, also about $600,000,000, and it means $120,000,000 in operating profit was generated for the company. Wellcare would have cleared at least another $75,000,000, and there is no good reason to assume their MLR here would be as low as it is on contracts like Florida's where it has been stipulated.

For Wall Street, this was very good news. For the forty thousand or so elderly and children, as well as adults with disabilities, it was very bad news. Their service budgets were cut by that amount. Life-saving medications they had been taking for years were suddenly denied. Home nursing services were abruptly slashed.

To look at this another way, the State of Hawaii could hand over those two Medicaid contracts to local, non-profit corporations, keep services at the current level, and cut out the middleman profit of about $195 million a year. Sure, a portion would have to be paid out to hire back 200 - 300 state workers who have lost their jobs directly or indirectly from the privatization, but that would be funds going right back into the state economy.

But even with a new Democratic Governor, Hawaii's privatized Medicaid system for the "aged, blind and disabled" population is remaining privatized. UnitedHealth and Wellcare both have numerable complaints pending against them with federal regulators, and as recently as yesterday continue brazenly to violate federal regulations. The state is looking to save $100 million from Medicaid over the next two years. Why isn't even our Democratic governor trying to cut big business profiteering out of Medicaid?

In part, that seems to be because the national winds supporting Medicaid's privatization are so subtle.

Florida's new Republican Governor was the CEO of a healthcare corporation found guilty of the biggest Medicare fraud in US history. He is a strong believer in the privatization of Medicaid. In February, Governor Rick Scott announced a plan "to transfer Florida's Medicaid recipients into privately run managed-care programs. Doing so would save the state nearly $4 billion over the next two years, he says."

As of June 2009, almost a million Floridians already received their Medicaid from "privately run managed-care programs." These programs had earned the state a reputation as the "Medicaid fraud capital of the world", and FierceHealthIT said last summer that "Medicare and Medicaid fraud might as well be the state sport of Florida." In July the Florida Attorney General's office announced it had received permission to mine Medicaid claims to find fraud. Two months ago, Florida's Medicaid and Public Assistance Fraud Strike Force "estimated Medicaid fraud costs taxpayers more than $2 billion a year. That's about 10 percent of the $20 billion Medicaid budget, which happens to be the fastest growing segment of Florida's $70 billion budget."

If Florida has a $20 billion annual Medicaid budget, and two-thirds of it goes to help children, the elderly and people with disabilities (which is an approximate national average), and 56% of the Medicaid population is enrolled in privatized managed care run by for-profit corporations, and they are averaging an 85% Medical Loss Ratio, then somewhere around $1.1 billion is being skimmed off the top of the contracts as operating profit.

Governor Scott now says the state Disability Division is $174 million in the hole, and he's making it back by cutting home services to the state's disability population. Individuals are expected to see cuts ranging between fifteen percent and forty percent.

Profits to the big providers are not being touched, because that is not the "free enterprise" way. As Florida's recently elected Republican Congressman Allen West said, free enterprise is the solution to healthcare reform and what he calls "the bureaucratic nanny state."

Apparently taking money that is given away by the bureaucratic nanny state is OK, as long as it is not spent.

Please sign our petition to stop handing federal and state Medicaid dollars over to companies who won't spend it.

Tracking Wall Street's takeover of Medicaid and Medicare

2011-04-05T14:32:00.000-10:00

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I've been tracking nine companies expansion into Medicaid and Medicare since 2009, and some as far back as June 2008. The information is taken from their quarterly and annual SEC filings.

The nine companies tracked were Aetna, Amerigroup, Centene, Coventry, Humana, Molina, Wellcare, Wellpoint and UnitedHealth Group. Federal Medicare and State Medicaid contract business generated more than $111 billion in 2010 premium revenues to these nine companies.

A health Insurance company's standing on Wall Street and with its stockholders is based on keeping an important business indicator as low as possible. Called the Medical Loss Ratio (MLR), it stands for the percentage of each monthly insurance premium received that is spent on actual medical costs. These nine companies reported MLRs between 79.4% (Coventry) and 87.5% (Aetna). That means they saved shareholders almost $20 billion in operating profit from Medicaid and Medicare premiums.

State and federal contracts pay the companies based on intricate risk levels calculated for each individual "policyholder." They may be paid $5,000 a month for a senior citizen, $12,000 a month for my daughter, or as much as $29,000 a month for someone meeting the highest risk criteria.

When a state-operated Medicaid program that pays actual bills (called fee for service) is suddenly replaced by for-profit "managed care" plans, each "policyholder's" individual budget has to be cut by that 13% to 20% margin that now goes straight to company bank accounts.

Most Medicaid contracts either do not stipulate an MLR, or when they do, companies can easily defraud Medicaid by pumping expenses. The Affordable Care Act was supposed to be imposing an 85% MLR on Medicare and 80% or 85% on employer-paid policies. An Oppenheimer analyst calculated six companies alone (UnitedHealth, Aetna, Cigna, Coventry, Wellpoint and Humana) would have owed about $1.9 billion in rebates just to commercial and individual policyholders.

The Oppenheimer study looked at state insurance records as well as SEC filings. They found that average MLRs differed widely across the country: two different Wellpoint subsidiaries in Colorado spent only 33.2 percent and 53 percent respectively on actual patient care. A UnitedHealth program had an average MLR of about 63 percent.

A Florida investigation into a single Medicaid contract that actually stipulated an 80% MLR found all eight Medicaid HMO providers (including Wellcare, Amerigroup, and Humana) owed the state refunds.

The lower the MLR, the more medical services are cut.

Back in January, the Children's Disability Rights Education Association launched two surveys to gather information on how well states are following federal Medicaid regulations specifically directed to protecting children with disabilities. While the initial survey sample is small (41), its unanimity is glaring: all 41 respondents (forty of them family and caregivers), coming from 19 states, have been the victim of one illegal Medicaid action or another.

This is what happens when profit-based companies take over Medicaid contracts and have to slash services to please stockholders and Wall Street.

CDREA's article on the survey details the impact on family life that these anonymous financial decisions can have.

If you believe that life and death medical decisions for medically fragile children, the elderly, and adults with disabilities should not be made by for-profit health insurance companies, please sign our petition.

If you believe federal and state tax dollars destined to provide care for the elderly, and children as well as adults with disabilities should not be diverted to private corporate CEO salaries and profits, please sign our petition.

UnitedHealth, Wellcare and Hawaii Senate Bill 1274: a true Wall Street romance

2011-04-05T07:45:00.001-10:00

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Hawaii SB 1274 remains alive, along with its assault on the health care rights of almost everyone with employer-paid or Medicaid insurance. Raphael Del Castillo sent out this information at 4 am today:

I just came from the decision making by the House Comm on Finance, which passed SB1274 on with amendments. It was disappointing and frustrating. Health chair Ryan Yamane came to tell the committee that they were waiting for “language” to preserve the consumer protections in our existing law, but have not received any (my language recommendations don’t count – who knows, make up your own reasons). They are waiting on the Insurance Commissioner and the Abercrombie Administration. THERE ISN’T GOING TO BE ANY LANGUAGE FROM THE COMMISSIONER. IF HE DOES NOT SUBMIT ANY, THEY WILL PASS THE BILL AS IT STANDS, SO WHY WOULD HE SUBMIT ANY?

MORE ALARMING STILL IS THE FACT THAT NO LEGISLATOR HAS YET RESPONDED TO THE OBJECTIONS TO THE EXCLUSION OF MEDICAID MEMBERS FROM THE EXTERNAL REVIEW. THEY ARE NOT LISTENING TO ME. NEVERCARE IS A LOT RICHER.

MEDICAID MEMBERS, THIS MEANS THAT IF YOU DO NOT PROTEST, YOU WILL LOSE YOUR RIGHTS NO MATTER WHAT HAPPENS (UNLESS THE BILL IS KILLED).

Del Castillo is asking for an immediate email campaign to President Obama.

sit down and send an email to the President, president@whitehouse.gov (with cc: to all of the addresses below) asking him the following two things: Why is the Obama Administration conspiring with health insurers

1. To DENY Hawaii consumers their long-established protections?
2. To DEPRIVE the poorest and most vulnerable of Hawaii’s people of the protections they now have against the richest health insurance company in the world?

Put this in the subject box: “NO ON SB 1274”

The petition distributed through change.org has also been updated to include President Obama, as well as the governor and Hawaii State Senate.

Death by Medicaid: Please sign our petition to take away Wall Street's license to kill

2011-04-02T11:49:00.000-10:00

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One death is already too many. Wall Street can no longer be allowed to make life-or-death health decisions for children, the elderly, and adults as well as children with disabilities.

Please sign our petition to stop federal Medicaid and Medicare dollars being paid to for-profit corporations.

Roughly one-seventh of the total federal outlay for Medicaid and Medicare was paid to companies that brag about spending as little as possible of each Medicaid or Medicare dollar on actual patient services. The 13.7 million Americans who now receive Medicaid through one of nine publicly trade corporations used to receive their services through state-run plans that paid the actual medical bills incurred, a system called "fee for service."

When a "fee for service" budget is handed over to a private insurer, the companies are under no legal obligation to pay out any minimum percentage in actual services. When a company such as UnitedHealth reports paying less than eighty cents out of every dollar, it means that the person with disabilities whose budget it is has had their medical costs cut by an average of twenty percent.

Long-term medications are suddenly denied payment. One young adult I know has had twenty-two medications denied payment since January and now requires dialysis.

Nursing services are abruptly cut, with no consideration to medical needs. UnitedHealth has mounted an offensive war against parents here in Hawaii, bullying and trying to coerce families into agreeing to cuts in home services. We're being accused of being bad parents somehow if we can't be professional nurses at the same time.

The $19.5 billion in off-the-top profit from Medicaid and Medicare managed care contracts received by nine companies I tracked could have been used to pay for more than just CEO salaries. For example, two companies that only offer federal Medicaid/Medicare programs, Amerigroup and Centene, paid out $5.5 million and $7.1 million respectively to their CEOs in 2009.

UnitedHealth tried to explain away 2010's skyrocketing profits by saying it was because people didn't have the money for copayments, so they weren't going to the doctor. But commercial premium revenue was up only one percent: the company's twenty-one percent increase in net earnings was tied more closely to the 24% increase in Medicaid and 12% increase in Medicare premium revenue, combined with a two percent reduction in the Medical Loss Ratio (MLR).

Every penny saved against that MLR, the percentage of the capitated fee received that is actually spent on medical services, exacts a human toll. These capitated fees are received to provide people whose special health care needs put them at risk of death or institutionalization with the services and medications they need to stay healthy and alive with their families.

The little boy that died here is not the first victim of Wall Street greed in the guise of Medicaid. Sworn testimony was presented to Hawaii State Senate leaders more than a year ago that the death rate among the elderly and disabled had gone up 36% in the first year after UnitedHealth and Wellcare took over the contracts. A list of names surfaced, and reportedly families were visited by either the FBI or DoJ.

But if he's not the first, he needs to be the last.

Please sign our petition, and forward to your friends.

News at childrensdisabilityrights.org hacked

2011-04-01T13:04:00.000-10:00

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The news and alerts pages were hacked and are down. I'm trying to figure out how to get them back up and apologize to anyone who came across the hacker's site.

Death by Medicaid: A child has died

2011-04-01T13:02:00.002-10:00

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A child has died but insurance company profits remain high.

Wall Street's pillaging of Medicaid and Medicare to the tune of over $111 billion in 2010 helped push net earnings for some companies 21% to 81% higher than 2009. Seven of the nine companies I've been tracking bragged in their 2010 SEC filings about the $19.5 billion saved off the top of federal and state Medicaid and Medicare contracts by lowering the amount of every dollar actually spent on costs.

What even The Wall Street Journal has failed to notice is that lowering costs (variously called the Medical Loss Ratio, Medical Benefits Ratio, Health Benefits Ratio, etc.) only happens when you cut services.

There is a human cost to these cuts in services. When life-saving medications are suddenly denied, thereby lowering the MLR, the company is taking a chance the patient will continue to live while the savings are realized.

A little boy has paid the price for this with his life, however, and no one is doing anything about it.

Different branches of the Federal government have been receiving complaints about Hawaii's Med-Quest program and providers UnitedHealth Group and Wellcare since August 2009. Federal Medicaid regulators from the Centers for Medicare & Medicaid Services (CMS) along with the DHHS Office for Civil Rights have been kept aware of a continuing pattern of Medicaid service cuts that persistently violate federal Medicaid regulations and civil rights.

My daughter is alive because I have learned how to play the insurance company game. They will suddenly deny one of Hannah's medications (or refuse to fill a new prescription), and I don't find out until I call to see if I can pick it up. Hannah's Medicaid provider, UnitedHealth, has told the pharmacy they won't pay for it, and then starts the back and forth over prior authorizations. New medical orders for Hannah's ketogenic diet, used to control her seizures, have still not been filled fifteen days after submission. I also have not received anything in writing from the insurance company. One prescription was finally filled on Tuesday after I emailed the president of the company and the state Medquest office.

But what about the families who don't know the insurance company is just playing a game with them?

How many federal investigations does it take before somebody sees the pattern and puts a stop to it?

A young man who is a double amputee and lost the use of both arms now requires dialysis after twenty-two different medications have been denied insurance payment. CMS and state Medicaid officials have been following the case since January. CMS has also been looking into potential Medicare fraud by UnitedHealth as a result of this case.

A five year old medically fragile child's home nursing hours were cut 33% while she was hospitalized for a worsening of her seizure condition. The cut was to go into effect immediately upon her return home, with the parents never to this day (it's been two weeks) receiving anything in writing from UnitedHealth. CMS and OCR have been following this case closely as well.

Medicaid "hit squads" have been terrorizing the families of medically fragile children here for months. A mother was verbally abused for not understanding medically technical language, and another mom was told she didn't spend enough time with her child. UnitedHealth later tried to trick a mom into agreeing with their proposed reduction in nursing hours by repeatedly asking, "it's reasonable, isn't it?" CMS, OCR and state Medicaid officials are following these cases as well.

Meanwhile, Medicaid insurance company Wellcare admitted to drafting anti-consumer state legislation in Hawaii that would have directly benefited the company as well as UnitedHealth. State legislation is still alive that will deprive everyone covered by UnitedHealth and Wellcare of any outside appeals by patients who don't agree with the companies' cuts in services to bolster stock prices. (It will also do away with the current independent review source for such profit-based decisions for people holding employer-paid health policies at HMSA, HMAA, Kaiser, UHA and other insurers).

A federal whistleblower complaint unsealed last summer, using information gathered during an eighteen-month cloak and dagger investigation, quoted Wellcare executives lauding the profitability of Medicaid contracts to provide care for the elderly and disabled. The head of "utilization management" (cost cutting from state and federal contracts) was quoted saying "we would prefer it if they would die because it's cheaper."

Our government has essentially given Wall Street a license to kill the weakest members of our society: the elderly, and children as well as adults with disabilities. The recession has ironically boosted corporate insurance profits tremendously, as states carve out new Medicaid and Medicare contracts that are put out to bid to private insurers. Between June 2008 and December 2010, UnitedHealth Group's Medicaid revenue skyrocketed by more than 640%. The company hit its lowest medical benefit ratio in five years in fourth quarter 2010, coming in at less than eighty cents on the dollar while annual after-tax profit was up 21%.

How does the life of a little boy figure into these types of calculations?

A federal employee told me yesterday that his death is not a civil rights issue, it is an issue instead for the regulators. This information has distressed me, as it belittles his life. Our children's lives should not be profit centers. Federal and state dollars spent on care for the elderly and people with disabilities should be used to pay for services, not CEO salaries (almost $9.5 million to UnitedHealth's CEO in 2009).

The practice of allowing profit making companies to pillage federal coffers under the guise of providing cost-effective "managed care" to the elderly and people with disabilities must be stopped.

No more children can be allowed to die.

Who is running the misinformation campaign on S.B.1274?

2011-03-03T13:12:00.000-10:00

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Two questions need to be answered: who is running the misinformation campaign on S.B.1274 and what's everyone's problem with Rafael Del Castillo.

I've known Rafael and Arlene for the past year and a half or so. I personally know eight families, including my own, whose children's lives have been bettered. Nobody ever has to pay anything up front because if Rafael wins, the insurance company pays his fees.

Rafael is the only attorney in Hawaii exclusively devoted to defending people's right to a local independent review when their insurance company denies treatment. For the past ten years, he has been winning his clients the medical treatments and services their doctors say they need, but the insurance company refuses to authorize. From chemotherapy to home nursing services, if it's denied by the insurer, Rafael appeals the decision to the state insurance commission. If the insurance commission decides the treatment is medically necessary, the insurer loses, pays Rafael, and you get the life-giving treatment or service you need. So if the insurance review is done away with, the only lawyer in the state who will be shut down will be Rafael.

There are obvious reasons why UnitedHealth and Evercare, not to mention HMSA and a few other companies, might not like having Rafael around. I'm sure they feel they are spending too much money on his bills.

Now, the little publicized fact is that Rafael ran for state office last fall. He got more than 22,000 votes. Nevertheless, the fact he was even running was fairly well ignored by the media.

And the media continues to do so. Why would Chad Blair write an article today on all the folks who could potentially be affected by Akaka's announced resignation and leave out somebody who actually got 22,000 votes?

At 5:00 pm today, Beth Ann's Town Square on Hawaii Public Radio will be covering the campaign against S.B. 1274. The most knowledgeable person on it has not be contacted. Senator Josh Green will be available to answer the public's questions about the bill.

Below is a letter that Del Castillo sent today to HPR that counters the terrible mis-information campaign that is being launched in favor of S.B. 1274.

Dear Beth Ann,
Someone forwarded me the information that you will be having Senator Green on the Town Square today to talk about the repeal of Hawaii’s external review law. I am happy to learn that the topic is being discussed as I have been on the radio twice on Kauai on this topic and will be again next Tuesday. I have also had town hall meetings about the repeal.

Having been lead counsel for all but two or three of the consumers who have requested external review under our present law during the past ten years, I consider myself one of the most knowledgeable persons in the State on this topic. I interrupted work on a letter to Steve Larsen, Director of the Center for Consumer Information and Insurance Oversight at DHHS, which has the assignment under the health care reform act (Patient Protection and Affordable Care Act) to review each state’s external review law and decide whether it meets all of the 16 minimum consumer protections in the interim federal regulations.

After July 1, 2011, health insurance issuers will be required by the CCIIO to comply with the federal external review law in any state in which the CCIIO determines the law does not meet those minimum protections, effectively preempting the state law until it is brought into compliance. This is apparently not a well-understood concept in Hawaii. (CCIIO staff explained to me that this passive preemption is due to the fact that the PPACA is part of HIPAA (Health Insurance Portability and Accountability Act).)

In any event, on February 17, Prof. Richard Miller and I had a lengthy conversation with the CCIIO staff about our situation, and we were invited to submit a letter to Mr. Larsen explaining why we believe that Hawaii law meets all of the 16 consumer protections (with one minor exception that requires a technical correction). The one element that will be in question is whether the federal minimum requiring that consumer complaints be sent to an independent review organization (IRO) is met by Hawaii’s hearing process before a local panel of three persons, including a physician, plan administrator from a competing plan, and a DCCA lawyer. We believe that is superior to an IRO and has proven to be so, but a minor amendment to our existing law could offer consumers a choice of going to an IRO or a hearing.

One major negative of the repeal is the loss of consumer advocacy. Acting Insurance Commissioner Gordon Ito did not apply for a federal grant to fund an independent consumer advocacy agency in Hawaii, so unlike other states that did receive some of the $30 million appropriated for that activity, Hawaii will lose all of its existing advocacy our law provides through its private attorney general section (the legislature knew in 1998 the State could not provide effective enforcement of the law, so it incorporated a provision requiring the Commissioner to award attorneys’ fees and costs to consumers who have external review hearings).

Another major negative of the repeal is the fact that 264,000 persons now covered by Medicaid will lose the right to external review. This is a major impetus of the repeal because UnitedHealthcare and Wellcare, the contractors for the 40,000 aged, blind, and disabled don’t want their “management” of the enrollees’ care challenged.

The legislators have been told that the repeal will allow the population in commercial employee plans (ERISA) to have the State review process. I questioned the CCIIO staff on that issue and the information the legislature is getting is apparently not correct. Based on what the CCIIO staff told Prof. Miller and me, ERISA plans will fall within whatever external review law Hawaii has on the books if the health coverage is purchased from HMSA or Kaiser or UHA or what have you. That has not been the case but is now going forward. Therefore, the inclusion of ERISA plans is NOT a justification for the repeal.

I would be happy to call into the show to answer questions or discuss these points further. Right now, I will go back to my letter to Steve Larsen at the CCIIO so that we can get what we really need to do, if anything, about Hawaii’s external review law from the horse’s mouth.

Aloha,
Rafael del Castillo
782-1262

I already mentioned I'm one of the families blessed by knowing Rafael. My daughter is alive today, and so are five other children, because of Rafael's tireless work on their behalf, and his professional expertise with the insurance commission.

Castillo has also issued the following alert for anyone interesting in calling in to Beth Ann's show this afternoon.

HERE ARE SOME QUESTIONS YOU COULD POSE TO SENATOR GREEN:
There are a number of cases pending before the Insurance Division (at least 8). All the Insurance Commissioner has to do is delay them until after July 1 if our law is repealed.

1. What will happen to those cases if they are not heard before July 1? Will the consumers have to re-file under the new law?

2. What about the work that their attorneys’ and experts have done on those cases? Will the Commissioner be able to award their fees and costs?

3. How are people going to get help with their cases after our law is repealed? Hawaii has no consumer advocate and Acting Commissioner Gordon Ito did not apply for one of the federal grants to fund an independent consumer advocate like the Hawaii Coalition for Health.

There are MedQUEST consumers who are reporting that the new hearing officer at the Insurance Division is telling them they should not file their case in the Insurance Division because they will lose; that the Insurance Division is just going to go with what the plan tells them about the case because they will not have information.

4. Isn’t the new Acting Insurance Commissioner supposed to be a consumer advocate like his predecessors? Is he working to help us or the health insurers? Why would he try to get rid of consumer advocates?

The show’s website at http://www.hawaiipublicradio.org/townsquare invites calls: “Your phone calls are always welcome at 941-3689; toll free from the neighbor islands at 1-877-941-3689”
Please forward this information to help us continue the opposition to SB 1274

There is an online petition if you want to have your voice heard in opposition to S.B. 1275. You can find it at:
http://www.change.org/petitions/stop-the-attack-on-our-health-care-rights-2?share_id=vhOenUUUGR&pe=pce

Hawaii Senate Bill 1274 is an attack on our health care rights

2011-02-28T14:15:00.000-10:00

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The health care rights of almost everyone in Hawaii with health insurance are under attack.

For anyone with employer-paid or Medicaid health insurance through Kaiser, HMSA, HMAA, Aloha Care, Evercare or Ohana, if you get cancer or some other serious disease and your insurance company denies coverage, you have the right to appeal that decision with an independent local hearing, with expert witnesses and attorneys on your side.

If Hawaii State Senate Bill 1274 is passed on March 10, we will all lose that right.

Please sign our petition to stop this bill from passing.

Here is the text of the email that will be sent to Governor Abercrombie as well as all our state Senators.

Aloha,

My health care rights are under attack and I need your help to stop it.

Right now, if my health insurance company refuses to pay for treatment that my doctor says is necessary, I have the right to appeal that decision at an independent, local hearing. I am entitled to a lawyer, and the insurance company will be required to pay for my lawyer and any expert testimony I need to prove my case.

S.B. 1274 will repeal HRS 432E-6.

HRS 432E-6 gives everyone with HMSA, HMAA, Aloha Care, Kaiser, Evercare or Ohana health insurance, whether paid for by their employer or Medicaid, the legal right to those independent local hearings. If you allow S.B. 1274 to pass, that right will be taken away. Insurance company decisions on life or death treatment will be reviewed somewhere on the mainland depriving me of the right to attend, let alone present expert testimony that could save my life.

You need to put a stop to allowing state legislation to be drafted by companies that can pay their top executives almost $2 million in bonuses for 2010.

You also need to put a stop to allowing life and death health care decisions for our most vulnerable citizens to be made by a company that paid its CEO over $9.4 million in direct compensation in 2009. Why are you allowing valuable federal funding to be spent supporting these outrageous profits?

Please protect our rights, and vote no to S.B. 1274.

Please help us spread the word!

UnitedHealth under federal scrutiny in Hawaii over possible Medicare scam

2011-02-27T10:55:00.000-10:00

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I reported on January 23 that a Kauai family claimed to have been duped by an employee of UnitedHealth into changing to the company's Medicare plan.

By February 8, federal Medicaid regulators from CMS were involved in the investigation.

This is only the latest in a long line of federal formal and informal audits, oversight and investigations plaguing Hawaii's Medicaid program since the fall of 2009. In addition to CMS, the DHHS Office for Civil Rights, the FBI/DOJ and even the federal Office for Civil Rights of the Department of Education have all been involved.

I could understand why Lingle and Koller kept all this from the public. They had built here in Hawaii a perfect Republican dream of how Medicaid should function under privatization, and small problems like deaths, let alone violations of federal laws, were just pesky details.

But where does our new Democratic governor stand with all this? He seemed to promise an end to privatized Medicaid, but now is letting privatized Medicaid draft state legislation.

Meanwhile, life and death decisions continue to be made daily by people motivated more by profit than medical need.

Governor Abercrombie, respectfully, you need to step in and put a stop to this before anyone else can be hurt. Only you and the Feds can do that right now. And you need to come clean with your voters about the state's dirty laundry and what you're going to do to wash it.

When the Medicaid Hit Squad comes calling

2011-02-26T14:23:00.000-10:00

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UnitedHealth is sending "hit squads" out to the homes of medically fragile children. Their job is to bully and intimidate parents into agreeing to a reduction in the home medical services that keep their children alive. We are the families of children and adults whose disabilities are so complex and severe that the only alternative to institutionalization is for Medicaid to pay for providing nursing and care services in our homes.

Hawaii entered into its 2009 Medicaid contracts with UnitedHealth and Wellcare granting individual per person per month budgets ranging from $2,000 to $30,000. The purpose of the contract, and the higher monthly rates, is to pay for the nurses, personal aides, CNAs and other help that is medically necessary to keep each individual at home. Institutionalization costs more, not to mention the benefits of keeping someone home with their family, so the money is there to spend, so to speak, at least two-thirds of it federal in origin, without taking money from other programs.

Last summer, Evercare (UnitedHealth) and Ohana (Wellcare) once more got Hawaii to agree to raise the capitation fees. Did more money mean more medical services? No, not when the insurance company's profit depends on spending as little of that monthly per person fee as possible.

I had been hearing of these "hit squads" for several months but didn't experience one for myself until February 18. It's taken me since then to sort through the experience enough to isolate why it was so deeply disturbing. Under the guise of a standard quarterly nursing evaluation of Hannah's medical needs, my ability to be a good mom to my daughter was attacked. I was a bad mom if I couldn't provide the same level of professional medical care to my daughter that she gets from her nurses. The point was to get me to agree to taking over some of Hannah's nursing shift hours, thereby lowering UnitedHealth's "medical loss ratio" for my daughter and thus increasing company profits.

Unless you "live the life" so to speak, it can be hard to understand the daily stress of living with the potential your child could die at any minute, while surrounded by medical technology and treatments that you may or may not completely understand. Studies released in November 2009 showed the parents of kids with disabilities are prone to "shell shock", "battle fatigue", or PTSD as it's now known.

My daughter has seizures ninety percent of the time she is sleeping, and almost continuously when she is awake. She is at constant risk of death from something called SUDEP - Sudden Death in Epilepsy. Nurses are with her so that if any of those seizures start to escalate, it can be stopped before we reach the point of calling an ambulance. Every time her seizures have reached the point she needed to be flown to Kapiolani, it was when there wasn't a nurse home with her.

I've sat next to my little girl in an ambulance when she stopped breathing. There is a panic that sets in now if I'm alone with her and she starts seizing, to ensure she keeps breathing. That panic doesn't allow me to do the five other things that need to be going on simultaneously when she starts seizing: get the pulse oximeter hooked up, get the oxygen out and set up, get the diastat out and ready, cool her down if her body temp has gone over 99, all while keeping her in a position to minimize gagging since she's stopped swallowing.

Yet the rude, belligerent attack I experienced on February 18 was designed to make me feel I was a bad mom if I couldn't handle all this with the same skill and detachment as a professional nurse.

I am not the only one who has come away with similar impressions after visits from one of these "hit squads". Another mom was attacked with the accusation that she wasn't spending enough time with her child or she would know how to take care of her. A third family, for whom English was a second language, was belittled and intimidated for not understanding the technical medical terms for all their daughter's care. Even taping the so-called evaluations did not inhibit the viciousness of these attacks on parents.

There is no doubt these attacks are designed to provide a justification for cutting home services. In December, UnitedHealth cut home services for a young man by sixty percent, on the basis he could use his hands and arms to move himself. The UnitedHealth employee who did the "evaluation" and recommended the cuts in services had spent the previous six years signing off on medical care reports for her previous employer, acknowledging he had no use of arms or hands. His medical situation had not changed overnight, only her employer had.

This is the same UnitedHealth that experienced a ten percent increase in earnings in fourth quarter 2010, "as the health insurer continued to benefit from people's relatively lighter use of medical services." That Wall Street Journal article goes on to say

UnitedHealth's medical claims in relation to its revenue, a key statistic called the medical-loss ratio, were lower than financial analysts' views, and, according to analysts Leerink Swann, were the lowest in five years. The lower medical-loss ratio helped to boost per-share earnings beyond analysts' expectations.

For a company deriving forty-six percent of its $87.14 billion annual income from federal Medicare and state Medicaid "capitation" contracts, a lower medical loss ratio means the company has more likely cut services than mysteriously benefitted from "people's relatively lighter use of medical services." A simple read of UnitedHealth's SEC filings, along with the unsealed federal whistleblower complaint which includes taped conversations where Wellcare executives openly discuss strategies for committing Medicaid fraud, makes it clear these lower medical loss ratios are no accident.

It's what I've called "the new Medicaid Math", where sixteen to forty percent of state payments to private health insurers are being skimmed off the top by means of these lower "medical loss ratios". The Affordable Care Act tried to make health insurance companies responsible to their policy holders for how much of each monthly premium is spent on actual care. For private enrollees (i.e., non Medicaid or Medicare policyholders), the Act was trying to set a maximum twenty percent profit, and the insurer would have to rebate any difference to the policyholder at the end of the year. A financial analyst with Oppenheimer found that if that limit had been in place for 2009, private health insurance companies would have had to rebate over $1.9 billion back to policy holders.

But these limits do not apply to state Medicaid contracts. Florida recently found that all eight contractors for one specific Medicaid program were out of compliance with a required 80% medical loss ratio, with actual MLRs as low as 60%.

And so we've come back full circle to the Medicaid Hit Squads, whose ultimate purpose is to lower the company's "medical loss ratio" for adults and children like my daughter. They are targeting families where loved ones require what's called "total care" because we are where they get the biggest financial bang for the buck cut. If they're getting paid, say, $15,000 per month from the state to provide home medical services for a particular person, slashing those services by sixty percent puts more money into company coffers than cutting services to folks they get paid only a few hundred dollars a month for from the state.

I do not understand why neither state governments with health care deficits nor the disability rights community nor even the media have looked at the billions of federal Medicaid and Medicare dollars wasted on private corporate profits. The resulting levels of human misery being created in our caregiving families to support these outrageous profits isn't even being recognized.

Wellcare attorneys drafted Hawaii health care legislation

2011-02-26T09:34:00.000-10:00

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In a State hearing yesterday, attorneys for Wellcare's Hawaii operation admitted to drafting S.B. 658. This is the proposed new law that would make consumers filing appeals against their health insurers responsible for insurance company legal fees even when the consumer wins the appeal.

S.B. 658 was deferred indefinitely yesterday, but the question remains why our new governor is sending out legislation written by health insurance company lawyers?

The story gets better. After the Ohana/Wellcare lawyers admitted writing the bill, they proposed an amendment that would had made it apply only to people insured under Medicaid. In other words, it would only have applied to their own members.

In my post on Thursday, I asked why Abercrombie was supporting legislation so blatantly anti-consumer. The question has now become why is he letting health insurance company lawyers write proposed legislation.

If you google "wellcare medicaid fraud", you may decide to share my incredulity that Abercrombie is even associating himself with these people.

Why did Hawaii's Governor introduce anti-health consumer legislation?

2011-02-24T10:01:00.001-10:00

Right now in Hawaii, almost everyone with health insurance has a right to a local hearing process if their health insurance company doesn't agree with their doctor on what is "medically necessary." Whether you've got insurance through your employer or getting Medicaid through companies like UnitedHealth (Evercare) and Wellcare (Ohana), in most cases HRS 432E-6 gives you the right to a local hearing, complete with attorneys and witnesses, when your health insurer refuses to pay for something your doctor says you need. (Exceptions include federal health plan members, self-insured companies like Hawaiian Tel, Hawaii Pacific Health and a few others.)

The Hawaii Senate Ways and Means Committee is discussing today Senate bill (S.B. 1274) that would deprive all of us of that right. Its silent "companion" bill, S.B. 658, will effectively prohibit anyone from filing any sort of appeal against the decisions made by health insurers by making patients responsible for both their own legal fees and those of the insurance company, even if they win.

Last fall's federal case where Rafael Del Castillo was on one side of the aisle, lined up against fifteen or more lawyers (and staff) from the insurance companies on the other side, is a clear example of why no one will dare file for an appeal if HRS 432E-6 gets repealed. Who but the very richest could comprehend assuming financial responsibility for a $4,000 per day legal case, knowing they have to pay even if the insurance company is found wrong?

These bills, which came out of our new administration, are about as anti-health consumer as you can get. The only folks who are going to benefit are the insurance companies, particularly the two that get guaranteed monthly checks from DHS for $50 million or so, regardless of how much they actually spend on medical services.

Why would the new administration propose legislation that favors health insurance companies so blatantly? Or has no one else recently searched Ho'ohiki for Evercare, United Health and Wellcare?

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Urgent legislative alert: proposed Hawaii bills put medical decisions in the hands of those who profit from them

2011-02-02T09:50:00.001-10:00

The attorney who wrote the letter I am attaching has represented my daughter Hannah, and several of the other children who I have helped to advocate for home medical care. Governor Abercrombie seems to be trying to get this legislation, which appears very anti-consumer, through quickly and silently.

Dear all:
I apologize for this lengthy correspondence. THIS IS A VERY CRITICAL ISSUE. I am asking you to submit testimony opposing a bill in the Legislature that is being heard by the House Committee on Health Friday at 9:00 a.m.

Please forward the attached to anyone you like. Inexplicably, the Abercrombie Administration has introduced bills in both houses to repeal the part of the Patients Bill of Rights known as the “external review.” Simply put, we have a law that provides for a hearing on a pretty level playing field if your health plan denies care your doctor is recommending, or refuses to pay for emergency or other care you have already received. The review is local and the patient can afford to retain legal counsel and experts to help present the case because the Commissioner can award the fees and costs incurred in the case (in other words, patients don’t have to pay fees and costs to get benefits rightfully due them, and if they lose, they still don’t have to pay).

Feel free to use the draft testimony attached. The deadline for submitting testimony is Thursday at 4:00 p.m. It would be great if you could be there in person. (We will have additional opportunities to put on more testimony.) Feel free to personalize the testimony with your external review story. I have just given you a skeleton that has information about the bills and the external review process we now enjoy.

Over the past 10 years, Arleen and I have won many cases, often with life threatening issues, for patients through the external review. These days, many cases do not go to the review process because we are able to settle them with the plan and get the care. That is one of the very positive effects the law has had (it has taken years, but is now very effective).

This year the health plans have come forward with legislation to get repeal the external review and also a bill to make patients pay attorneys’ fees and costs (more about that bill later).

This bill, HB 1047, proposes to outsource reviews to the mainland under a complex 67-page process. Patients will not have an advocate supporting them as they do in the external review. They will be on their own. They will also have no right to appeal a decision (not sure that is even constitutional). Do you think the health plans want this bill passed?
HB 1047, the first of these bills to come up, is being heard Friday morning at 9:00 a.m. by the House Committee on Health. I have attached two things: the hearing notice and a draft testimony that you can use for the form and also for the email and fax address.
I plan to present testimony from across the state and am traveling to the neighbor islands to collect video stories, but because the Legislature moves fast these bills come up for first hearing quickly, Petitions are being gathered and I will present them. Nonetheless, the Committee needs to hear from a broad base of consumers that this bill is a bad idea.
I have not attached a copy of the bill. You can get it online and I encourage you to do so. It is 76 pages.

Full disclosure: the external review comprises part of my practice. Arleen and I have funded our patient advocacy for the past 10 years in part with the fees the Commissioner has awarded. On the other side of the coin, I will not be able to continue advocating for patients against benefit denials if the external review is repealed.

I hope you will help me oppose this really damaging legislation. As I said, I have not discerned a reason for the Abercrombie Administration’s instigation of this legislation. The justification it is offering is that it will create a uniform process but that is simply patently false. One quarter of a million people who have the right now will be excluded. Half a million will have to submit to various other processes. Uniformity is not the reason.
Aloha,
Rafael del Castillo
808-782-1262

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New proposed Hawaii legislation is anti-health consumer

2011-02-02T09:02:00.000-10:00

This bill will be discussed on KKCR at about 9:15 this morning.

Hawaii House bill 1047 (and the companion Senate bill 1274) will strip away fundamental health care consumer rights.

Right now if your managed care company doesn't agree with your doctor, you can file an appeal with the state's Insurance commissioner. They do what is called an "external review." If you win, your lawyer's fees are paid, so there is no financial pressure against people filing for their medical rights.

The new bills will do away with this. People will have to pay their lawyers up front because the law forbids the looser from paying the consumer's attorney bills.

It will do away with the ability to go to court if you still don't like the insurance commission's review.

It puts all the responsibility for medical care decisions on to the people who are profiting from our privatized Medicaid system.

Who will step up to say our "less than perfect" children have any less a right to life than their "more normal" peers?

2011-01-30T13:52:00.000-10:00

This is what is implied every time a politician says they have to cut Medicaid services. Read the individual stories -- the biggest cuts are not affecting people who are poor or unemployed but the families caring for their children (of any age) with disabilities.

Our federal laws happen to give children and adults with disabilities the right not to be institutionalized. It is hard to imagine any set of laws more supportive of the basic values of the American family than one which ensures our children and our grandparents can continue to live at home. It's a set of laws that recognizes that the government has a responsibility to keep families together, since none but the very richest could ever afford to pay for what it takes on their own.

When politicians start talking about cutting services to these children and grandparents, they are ripping apart the very core of the family, forcing agonizing decisions between the heightened risk of death versus institutionalization.

The unnecessary pain, delays in medically necessary treatment, stress and basic indignities that are forced upon families caring for their children or grandparents with disabilities is inhumane. At the lowest level it involves an annual savings of $1500 in exchange for creating a bloody wound in a child's stomach twice a year.

At the highest level, children and, particularly, young adults with disabilities are being irretrievably harmed, and in some cases, killed. Death can come from a lack of transportation to dialysis treatments, sepsis from a lack of dental care, or a simple refusal to fill a doctor-ordered prescription. The worst deaths are the ones that come because families have tried so hard to avoid institutionalization, but simply can't match the intensity and type of care that has been taken away due to "budget cuts."

Too many of these "budget cuts" are resulting from the sixteen percent annual expansion in the privatization of Medicaid (and Medicare). That's the rate at which states are turning over their Medicaid services to private contractors like UnitedHealth, Wellcare, Wellpoint, Aetna, Humana and others. Instead of paying bills for actual services incurred, these plans make their profits off of getting paid a per capita rate from the state for every enrollee, and spending as little of it as possible.

In my opinion, the government waste of giving private Medicaid insurance companies more than $1.1 billion a month in profit is substantial and should be eliminated. Shareholders are benefiting while children are harmed.

Within the vast online community of parents caring for their children with disabilities, is is not uncommon to hear a mom talk of her child as a "blessing." Our children teach us lessons in patience and the importance of the little things in life on a daily basis, and many of us celebrate the fact our children will never come to learn jealousy, hatred, greed or envy.

So for all you politicians and health insurance executives who keep trying to cut Medicaid home services for my little girl and all the others like her: why won't you come out and tell me why you value their lives so little? Are we a culture that "throws away" those who are too old to contribute financially, or whose disabilities, whether from birth or accident, prevent them from living alone?

Abercrombie wants to cut Medicaid services??????

2011-01-25T08:24:00.000-10:00

I just posted this on Civil Beat, but wanted to share it here as well. I posted it in response to their article covering Governor Abercrombie's "State of the State" speech.

I am completely floored that Abercrombie would say "the rising cost of health care also requires that we cut back on benefits provided to Medicaid patients."

Why don't we stop paying out around $15 million a month in profits to UnitedHealth and Wellcare? Cutting budgets doesn't have to mean cutting services, when the middlemen are only spending eighty-four cents of every federal and state dollar they get, keeping the other sixteen for themselves.

Part of "the rising cost" is because both companies received another increase in their capitation rates in July.

When is Abercrombie going to notice any of the federal investigations going on over at Med-Quest? The DD Division of DOH already admitted a federal audit caught them at a form of Medicaid fraud.

And as long as state salaries are public, has the new DHS director thought about reducing Fink's salary back to that of his predecessor? On the other hand, I hear she was on one of his selection committees, so maybe not.