Abercrombie betrays public trust by pandering to big business health insurers

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Abercrombie signs SB 1274

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

Governor Abercrombie today signed SB 1274 into law.

I will have more information to report tomorrow.

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

New federal ruling means SB 1274 can be vetoed now

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

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

Here is the news from Rafael del Castillo:

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

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

Affordable Care Act: Working with States to Protect Consumers

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

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

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

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

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

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

Amended IFR: State Flexibility and Transition to 2014

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

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

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

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

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

Additional Amendments to the IFR:

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

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

The filing in its entirety is here.

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

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

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


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

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

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

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


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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Sincerely,
Summer Harrison