Why is Hawaii not collecting all the Medicaid stimulus funds available to the state?

A three month survey of how efficiently states are claiming their Medicaid stimulus funds from the federal government shows that Hawaii has consistently been in the bottom five.

The statistics come from the federal government website www.recovery.gov.  I have isolated the figures just for Medicaid out of the totals received from the federal Department of Health and Human Services.  The survey covers all fifty states and the District of Columbia.

In December 2009, Hawaii was third from the bottom, having claimed only eighty percent of the total funds available.  In February, Hawaii was second from the bottom, having claimed only 75% of the total.  In March 2010, Hawaii was fifth from the bottom, collecting 86% of the funds available.  However, the total amount of funds available did not change from February to March, 2010 for Hawaii.

The median percentage of funds claimed in March 2010 was 97%.  Ten states managed to collect 100% of the funds available, with another twelve collecting between 98% and 99%.

Hawaii's decimation of its aged, blind and disabled population worsens

Hawaii's two gold-digging for-profit insurance companies handling Medicaid have sunk to new lows. A Mom on Oahu got a call from her medically fragile son's Medicaid for-profit company. With no written notice, the company was downgrading her son from 54 hours a week of RN level nursing to 14 hours a week of a CNA. A little boy's life will be in danger beginning November 15, while no one knows what Hawaii Governor Lingle has done with the $154 million in stimulus funds she's received that can only be spent on Medicaid. The boy's services are provided as part of a deal Governor Lingle's administration negotiated with UnitedHealth Group and WellCare Health Plans for the two out-of-state, for-profit companies to take over medical care for the state's "aged, blind and disabled" populations. More than 37,000 people on February 1 were dumped from their pay-for-service Medicaid care into the merciless grip of UnitedHealth and WellCare, with no information from the state about this essential distinction in their care. As part of the negotiations, UnitedHealth and WellCare had to agree to make no cuts in home and community services for their 37,000 new clients for 90 days. After a Kauai mom filed complaints with the federal DHHS Office for Civil Rights and Center for Medicare and Medicaid Services (CMS, the division that regulates Medicaid), a wave of new cuts in August was halted. A little boy's life will be in danger as of November 15, when the final slash of 88% of his home care services takes effect. Where are our Medicaid stimulus funds? Background information on these two for-profit Medicaid managed care companies continues to be updated. Unitedhealth has paid out over $1.3 billion in fines, penalties and settlements to 9 states and their own shareholders since January 1, 2008. Their subsidiary Evercare was fired by the state of Texas in May, 2009. Fines and settlement just in 2009 include $536,000 to Missouri in August, $750,000 to Georgia in November, $457,000 to Colorado in October, $3 million to Texas in October, $630,000 to Texas in January, $350 million and a separate settlement for $50 million to New York in February. Yet on October 20, Unitedhealth posted a 13% increase in their profit from the same quarter a year earlier. The company's private plan membership dropped by 6%, but enrollment in its Medicaid and Medicare programs had increased by 14%. I'm not an economist but it seems that the aged, disabled and blind community is not unprofitable. We already reported Wellcare has paid out over $90 million in restitution and fines since May 2009. We recently learned that in February 2009, WellCare was ordered by the CMS to stop taking enrollment in certain of their Medicare plans. A letter from CMS to WellCare noted "WellCare was one of the overall worst performers among all plans,” and “WellCare’s complaints are three times the national average.” CMS kindly released WellCare from the suspension on November 4, 2009, in time for the company to participate in the federal open enrollment period. Also on November 4, "WellCare reported higher-than-expected third-quarter earnings Wednesday, swinging to a profit of $28.7 million, or 68 cents per share, from a year-earlier loss of $18.2 million, or 44 cents a share." Hawaii desperately needs an audit done of where the state's stimulus funds for Medicaid have gone if the companies running our Medicaid can make these kind of profits, while paying the sort of fines and settlements we've described, while at the same time cutting a toddler's home nursing services by 88%.

Hawaii's "sacrifice" of its children becomes a national scandal that extends to the state's elderly and disabled

Hawaii's Governor Lingle's solution to balancing the state budget by cutting the school year by 17 Fridays has now attained the level of a national scandal. An editorial in today's New York Times notes that "Hawaii has sacrificed its own schoolchildren" who are now "learning a terrible lesson in how little their government and teachers think an education is worth." A week ago, US Secretary of Education Arne Duncan wrote in an opinion piece published in the Honolulu Advertiser that Lingle's "furlough Friday" plan was "inconceivable" and went on to note that Hawaii had already received $105 million in stimulus funds for education, and is scheduled to receive a total of more than $500 million for education. Today's NYT editorial notes that Hawaii "instead used the $105 million to cut its own contribution to education, which was legal but hardly admirable." I've been asking since June what Hawaii is doing with it's additional stimulus millions received for Medicaid. As of October 23, Hawaii has received $154 million that can't be spent on anything except Medicaid. The federal requirements for receiving Medicaid funds stipulated the money couldn't be put into any reserve or rainy day account. Hawaii's state medicaid director admitted the state used part of the money to pay back bills and put the rest into the general fund, but that was about $80 million ago. Every parent, caregiver and service provider in Hawaii that has any contact at all with the state's 'aged, blind and disabled' population can tell you that while these millions of tax-payer gift funds flowed into the state's bank accounts, Hawaii has been cutting Medicaid services by as much as 88%. These budget cuts are specifically targeted at the home and community-based services that enable our elderly, as well as adults and children with special health care needs, to remain at home with their loved ones. The cuts are being implemented by the two for-profit insurance companies that took over care of Hawaii's "aged, blind and disabled" population on February 1. We have the evidence to show that those two for-profit insurance companies are cutting services by means of constantly altering the scoring tools they use to qualify people for home services. A federal judge just stopped California from implementing Medicaid home services cuts because the scoring tools were being abused to the point of violating the Americans with Disabilities Act and civil rights granted under the Olmstead Decision. Meanwhile, we've just realized that Hawaii's Department of Education may be in violation of federal Medicaid law as well. The reverse opt-out letter the department sent to parents in December 2008 does not appear to meet federal requirements for Medicaid billing. I asked my daughter's school system for an itemized accounting of what they had billed Medicaid on her behalf over the past year on Monday, October 19. I asked to receive it by Friday, October 23. As of today, I still don't have it. What's the hang-up? If records were being maintained the way federal Medicaid law requires, then it should have been a relatively simple matter of sort and print. In February of this year, the Hawaii state auditor's office "revealed an organizational culture of disregard for ...procurement laws and rules" in the DOE's procurement office. The report noted "that culture has allowed office directors, managers, and staff to believe they have the discretion to unilaterally determine whether compliance ... is in the best interest of the department." As the parent of a child with disabilities, my experience has shown that same culture of disregard for the law extends to most of the contacts I've had with employees of the Department of Education, Department of Health and Department of Human Services. I filed complaints against Hawaii with the DHHS Office for Civil Rights and the federal agency that regulates state Medicaid programs and spending (CMS) in July and August. I know that CMS has had extensive conversations with state employees, but illegal service cuts affecting children with disabilities were happening as recently as yesterday. Hawaii isn't just sacrificing it's schoolchildren, it's condemning its entire population of children and adults with special health care needs. Children's lives are, literally, being balanced against company profits while state and federal officials turn a blind eye. If federal officials like the Secretary of Education can't get the state to behave legally, who will? If the federal office that regulates Medicaid can't get the state to behave legally, who will? When regulation fails, how long before enforcement steps in? Do we really have to wait for a child to die?

CDREA calls for Hawaii state audit of DOE spending of Medicaid funds

Children's Disability Rights Education Association President Summer Harrison and Vice President Linda Nuland-Ames on Thursday called for a full state audit of Medicaid spending by the Hawaii Department of Education. Harrison and Nuland-Ames were at the annual Kauai DD Committee Legislative Forum, presenting the results of their past several months of research into Hawaii's Medicaid programs. The subject of the DOE furlough Fridays, the first of which was due to happen the next day, came up. Harrison pointed out that DOE services that were paid for by Medicaid could still take place on Fridays. Harrison had established that her daughter's paraprofessional service through Nursefinders was likely a Medicaid financed service since it was to continue on the furlough Fridays. Nuland-Ames asked how many parents at the meeting knew that DOE could bill Medicaid directly on behalf of their children. No one was. A few years ago, Medicaid told inquisitive parents that it wasn't any of their business, Nuland-Ames noted. Within the past week, Harrison had contacted her daughter's school to demand an accounting of all services and items billed to Medicaid by DOE on Hannah's behalf. She asked for the accounting by Friday, October 23. Her district office emailed to say she would be hearing from someone, but as of the writing of this post, still hasn't responded. Some but not all parents remembered the letter they had received from DOE in December 2008 stating that failure to return the letter would be permission for DOE to bill Medicaid on their children's behalf. According to research done by CDREA and published on their website, it would appear that the Hawaii DOE letter meets none of the federal requirements for parental notification of and permission for DOE billing of Medicaid on their child's behalf. Harrison reminded the state legislators in attendance of the Hawaii auditor's report on DOE's procurement office, published in February 2009. The auditor's office

revealed an organizational culture of disregard for procurement rules in the Office of School Facilities and Support Services (formerly known as the Office of Business Services and referred to herein as the “Office of School Facilities”). That culture has allowed office directors, managers, and staff to believe they have the discretion to unilaterally determine whether compliance with procurement laws and rules is in the best interest of the department.

She pointed out that while she didn't know if any Medicaid billing went through the procurement office, or if that was done someplace else in DOE, the fact that the schools couldn't give a parent an accounting within five days raised concerns. Given the current economy, the public furor over furlough Fridays which are intended to help the governor balance the state budget, and the issues raised about Hawaii's two for-profit Medicaid companies, CDREA's request for a state audit of DOE use of Medicaid funding was met favorably.

More Details Emerge in Kentucky Civil Rights Case

A Kentucky blog today contains more details of the federal Office of Civil Rights investigation into medicaid-related civil rights violations. This case has tremendous impact for national advocates for health reform, disability rights and senior long term care issues. The case focuses on whether Kentucky cuts in medicaid provided home support services violate the 1999 Supreme Court Olmstead Decision. The Olmstead decision determined that individuals with disabilities had a civil right to care in their homes and communities and this care was provided through medicaid. Civil cases alleging Olmstead violations for similar state directed medicaid cuts are underway in six other states: Washington, Pennsylvania, Hawaii, Idaho, Tennessee and New Jersey. The Kentucky investigation has set a precedent. Meanwhile, the question arises what are these states doing with the additional American Recover Act funds that they have already received that must be dedicated to medicaid. While the GAO calls for full transparency in the disbursement of funds from ARRA, the requirement for transparency apparently stops at the state level. The states that have announced medicaid home service cuts have already received over $2.5 billion dollars that is required to be spent on Medicaid. Where has it been spent?

New lawsuit filed in Pennsylvania alleging Olmstead violations

Pennsylvania has now become the sixth state I've learned about that has a pending court case based on violations of the civil rights of individuals with disabilities.

Hawaii Receives $70+ Million in Federal Medicaid Funds While Maintaining Service Cuts

According to the Federal Department of Human Services website, Hawaii received $70,573,033 in Federal Matching Funds (FMAP) for Medicaid prior to March 31, 2009. Hawaii's state medicaid Director, Dr. Ken Fink, has confirmed that Hawaii has been pulling on the funds available through the ARRA's section 5001, which will provide the state with an additional $360 million just for medicaid prior to October 2010. So why is Hawaii refusing to reinstate home and community based service cuts implemented since last July of 2008? Why are parents and caregivers being threatened with having a third round of cuts in the services that enable their children to remain at home and in their communities? Where is Hawaii spending the money? First, I want to clarify that Dr. Fink has stated I am wrong in my earlier posting suggesting Hawaii was violating the Maintenance of Effort (MOE) requirement for receiving the additional federal medicaid funds as stipulated in the American Recovery Act (ARRA) passed earlier this year. Second, I want to clarify that I continue to doubt the extent to which Hawaii's medicaid cuts are allowed under the MOE requirement. Hawaii needs to reinstate all the cuts made to home and community based services and waiver programs as soon as possible, since the deadline for compliance with the MOE is July 1. The latest word by CMS, the government agency responsible for policing and defining states' use of the 5001 federal funding, states clearly that:

several states have made or proposed changes to programs that help seniors and people with disabilities live independently; CMS guidance clarifies that any changes to such waiver programs that would result in fewer people being enrolled would violate the MOE requirement for the increased federal Medicaid funding. As a result of this guidance, states will have to reverse these cuts or rescind these proposals, at least until December 31, 2010

The state of Hawaii has eliminated all of its home and community based waiver services except for the program for the developmentally disabled, and radical service cuts in that program are placing the state in potential violation of the ADA and the rights granted under the Olmstead decision. Interesting, a Performance Report printed by the DDMR division of the Hawaii state department of health in September of 2008, showed FY 2009 expenditures dropping 65% from FY 2008, from more than $20 million annual to only $7.2 million annually. That's a $14 million cut in the services that enable adults and children with special health care needs to remain at home, with their families. On the other hand, the state seems to be requiring an additional $10 million over FY2008 for administrative positions, mostly related to what the state budget keeps referring to as the "proposed Division-wide reorganization." Do we know anything about this reorganization? Why is DDMR disappearing? Who is going to take over providing the financial supports for the home and community care our citizens with special health needs require? The only answer I can come up with is that Hawaii's two new medicaid managed care companies are supposed to be picking up the slack from the waiver programs. The only problem with that solution is that the definition of a "budget neutral program" is completely different for a medicaid program authorized under Section 1115 of the Social Security Act than it is for a medicaid program authorized under Section 1915. And that difference results in a shift in expenses from actual services to employee salaries and insurance corporation profits. Back in 2006, the UCSF National Center for Personal Assistance Services issued a simple explanation of the different budgetary ramifications for 1915(c) waivers as opposed to 1115 programs:

Like 1915(c) programs, 1115 programs must be budget neutral. However, for 1115 programs this means that the program cannot cost Medicaid any more than the state would have spent in the absence of the waiver1, 26 whereas 1915(c) programs should not cost more than providing state plan services, such as nursing home care, to the same population.

In other words, Hawaii's new 1115 Managed Care Medicaid Organizations can't spend any more funds than they would if there were no waiver participants. Excluding from the budget neutrality calculations any funds for an individual, say, with developmental disabilities on a 1915 waiver, is going to reduce precipitiously the budget compared with what would be allowed counting all those previous HCBS waiver participants back into the figures. But all of this was originally calculated before Obama was elected and the ARRA was even being dreamed about. So what is Hawaii spending the money on? It's not on the children and adults with disabilities who desperately need to remain at home with their families and communities. The CMS specifically states that:

To be in compliance with the MOE, a state cannot have done the following after July 1, 2008: ... Eliminated coverage for home- and community-based waiver care that costs more than institutional care, which could make it harder for some individuals to qualify for waiver coverage.

All of the 1915(b) waiver participants who have been switched to an 1115 program can no longer receive all the services they were entitled to previously. Which is why the insurance company giants operating Hawaii's medicaid MCOs are telling parents not to ask for more in home nursing care because if it's cheaper to throw the kid in an institution, that's what they'll do. This would seem to me to be about as blatant a violation of the MOE requirement as you can have.