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

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

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

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

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

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

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

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

Hawaii's contracts with UnitedHealth and Wellcare take about $300 million off the top out of Hawaii.  That doesn't include profits generated by denying services that could be covered under the per enrollee payment the companies get every month from the state.  Nor does it include the employment lost as state workers are laid off and replaced by corporate employees, or the local jobs lost as home support services have been cut.

"Fiscal responsibility" seems to have a different definition for me than it does for Mr. Djou.  His political party has favored the rape and pillage of the state's economy by fat profit-making companies for the past eight years.  It's the people who suffer when the state's budget for things like education and medical care has been gutted in order to make way for corporate profit.  The windfall profits these companies had to get by accessing the state's federal stimulus funds is incalculable.  Money that was supposed to help people has gone to make profits.

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

What a 50% Medicaid payment error rate could mean for Hawaii

On April 7, I emailed CMS asking to confirm a rumor I had heard.  Part of the rumor had to do with a possible 50% error rate on Hawaii's Medicaid program.

UPDATE:  April 20, 2010
I heard today from CMS that they have confirmed that the two for-profit health insurance companies will continue to operate the state's Medicaid program.  This is good news for enrollees who are in the appeals process from denials of services, medications, etc.

She was not able to confirm, however, anything about the rumor of the 50% payment error rate.

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

Here is how it might happen:

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

2.  Hawaii receives matching funds from the federal government for ACS's services, just as they do for the state's QExA program operated by Evercare and Ohana.

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

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

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

A national report by CMS published last year found that the payment error rate nationwide for managed care Medicaid organizations was one tenth of one percent.  Nationwide, CMS found a payment error rate of 8.72%.  These figures, which include Hawaii, are for FY2008, before Evercare and Ohana began their Hawaii contracts.

In March, Hawaii Governor Linda Lingle blamed the state's "Cadillac" Medicaid program for 75% of the state's budget deficit by 2014.  As far as I can tell, the only "cadillacs" may be those driven by whoever is pocketing all these double payments.

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%.