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

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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.

What can you buy with $1.1 billion a month?

Six insurance carriers are profiting $1.1 billion a month from their state and federal contracts for Medicaid and Medicare.

If that money wasn't going for company profits, what else could it pay for?

For one thing, it would provide somewhere between 142 to 228 hours a month of personal assistance services to every one of the 370,000 people currently on waiting lists for Medicaid home services.

As of October 1, 2010, the Affordable Care Act has given states the ability to do away with their waiting lists completely for Medicaid services by implementing what is called a Section 1915i waiver.  The number refers to the section under Title XIX of the Social Security Act.

The problem is with corporate Medicaid taking over state contracts at an average growth rate of eleven percent in fifteen months, that $1.1 billion is just going to keep increasing, while the people on the waiting list continue waiting.

Do you think this is a good use of federal and state funds destined to help people with disabilities?  If you don't, please take our poll and let your voice be heard.

Hawaii Medicaid joins in Evercare's "Blame the Victim" game

Back on November 29, I published a story about a threatening letter I had received from the head of Unitedhealth Group's Hawaii operation.  In my response I had pointed out that I had been following all their procedures, it was Unitedhealth that was violating them, and in so doing, harming my daughter Hannah.

On December 6, Ken Fink, Hawaii State Medicaid Director sent me his own version of the UnitedHealth letter.  Fink, whose salary is rumored to be more than twice the $113,000 received by his predecessor, again makes it sound as if the victim is to blame.

I responded to Fink's letter on December 6. Here is the text of my letter:

This email is in response to your letter dated December 6, 2010 (attached) which was received by me on December 8, 2010.

The issue is:
When a prior authorization by my daughter's physician/provider is submitted which follows all prescribed Evercare protocols, Evercare has failed to give me proper written documentation regarding the possible denials which would include information of any adverse action and my rights to appeal, thereby violating Federal law.

According to the email I received from ... CMS, DHS MQD was going to research and resolve the issue, not simply re-state Evercare's response to me. Can someone please follow Federal law and state contract and please help me and my child? Will someone please step up? I am giving you all the academic reasons as well as the Federal laws which Evercare is violating along with the statues the State is violating for lack of oversight of the MCO (Evercare).  As a mother and caregiver of a totally dependent disabled child, all I am asking is that Evercare follows the law and do their job for which Evercare receives high compensation (tax payors money).

Your letter addresses old issues and regurgitates David Heywoods' (Evercare) prior letter in content; these issues are moot as all of us (me as her mom, the therapists and doctors) followed the required processes in filling out the Prior Authorization request forms and correctly submitted the needed documentation to support the requests.

What I am claiming is the stated issue and Evercare's continuous violation in which DHS-MEDQUEST has already cited Evercare which resulted in the corrective action plan for complaints, grievances, and appeals (in which sanctions were imposed). Evercare is not following BBA requirements regarding Complaints/Grievances/ and Appeals processes.

Evercare is claiming that the member's family or MD/provider is not following required Evercare processes. This is not a true statement and is not the issue. Evercare never brought this up during all the months since the request for prior authorization was submitted in May 2010, and in fact, they contradict themselves when they verbally admitted to receiving the request and approved less than what prescribed. So the prior authorization was successfully submitted by Hannah's physician to Evercare.

I am claiming that when a proper prior authorization (PA) for services is submitted to Evercare, a phone call (nothing in writing) is communicated to the provider that the requested services are denied (not approved) and/or that a lesser amount of service is approved (deviates from theprescription). NOTHING IS PUT INTO WRITING TO NOTIFY ME OR HANNAH'S PROVIDER OF THE ADVERSE ACTION and to inform me of our rights to appeal.

How it should work is that when my daughter's physician/provider submits the documentation required for the request of service/ medication/DME and the health plan denies and/or deviates from the request (less than what is requested) it goes into a complaints, grievance, and appeal mode as required and by failing to follow this process, the health plan is in direct violation of Federal statute, B.B.A. sections.
438.424: Grievance System
. 438.400: Statutory basis and definitions;
. 438.402: General requirements;
. 438.404: Notice of action (including timeframes of notice as
contained in Sections: 438.210(d)(1); 431.211; 431.213; 431.214);
. 438.406: Handling of grievances and appeals;
. 438.408: Resolution and notification: Grievances and appeals;
. 438.410: Expedited resolution of appeals
. 438.414: Information about the grievance system to providers and
subcontractors (important related to high number of non-participating
providers who do not have formal contracts with Evercare--therefore no
requirement to meet Federal BBA requirements/ no quality oversight from
MQD/CMS or EQRO under BBA 438. Subpart E)
. 438.416: Record-keeping and reporting requirements
. 438.420: Continuation of benefits while the MCO or PIHP appeal and
the State fair hearing are pending
. 438.424: Effectuation of reversed appeal resolutions
As further consequences of direct violation of the C/G/A processes

The current situation is in regards to a PA [Prior Authorization request form] that was successfully submitted [in May 2010] ... This [lack of any written notice] constitutes an adverse action by BBA definitions as well as violations regarding lack of written notice with appeal rights, specifically BBA reg Subpart F, and member's rights violations: Subpart C.
...

I am cc'ing CMS on this matter as there is still no process for Complaints, Grievances, and Appeals and I am following the processes as set forth by the BBA. I am following the PA processes of Evercare, but Evercare is not documenting in writing the denial of my prescribed services, medications, DME (nothing in writing setting forth the denial or cuts in services) and nothing is in writing by Evercare setting forth our rights to appeal their decision.

In my opinion, Evercare's letter is considered retaliatory and your response and lack of oversight of Evercare has caused continuous harm to my daughter. In fact, in the first visit by Evercare and their attorney to my home on Kauai, Evercare's attorney made it very clear that Evercare needed to put all denials and cuts in services and supplies in writing to me and give me my rights to appeal (process).  These instructions are not happening and therefore, Evercare's failure is a clear violation of Federal law. In fact, it was agreed at that meeting that all communications in the future, even with Hannah's field supervisor, would be in writing.

I want to reiterate that these Federal laws (BBA 432) and mandated oversight of these MCOs is intended to provide required mechanisms to protect patient rights and to insure that problems are tracked, trended and resolved in a nationally accepted mode of quality standards. If there are trends identified related to continuous violations, then a corrective action is taken to ensure that no member is hurt, especially the aged, blind, and disabled; hence the purpose of the law. With documentation, there would be a mechanism to insure that no harm comes to the client and that added anxiety to the member and family and caregivers is decreased.

Again the issue is:
Even though a prior authorization has been submitted by my daughter's physician/provider which follows all of Evercare's prescribed protocols for submitting a PA properly, Evercare has twice (again) failed to give me proper documentation regarding the denials or informing me of any adverse action in writing with my rights to appeal, thereby violating Federal laws (BBA).

As of today, there have still been no official Notices of Action sent out by UnitedHealth for the items brought to the attention of the head of Hawaii's Medicaid program almost two weeks ago.

It makes me wonder, if Hawaii Medicaid is so cavalier about Evercare's constant violations of federal regulations, what else are they standing back and ignoring?  The thirty-six percent increase in the death rate of our local aged and disabled population?  Threats to tear severely disabled children away from their families and throw them into institutions if the families don't back down on their requests for services?

Over 41,000 of our state's most vulnerable citizens, our elderly and children as well as adults with disabilities, are enrolled with UnitedHealth and Wellcare.  The state pays the two companies over $100 million every month without keeping track of how much of it is actually spent on medical services.

Governor Abercrombie announced the state has a $410 million shortfall for fiscal year 2012.  It seems to me that turning our Medicaid system back into one that only pays for actual services delivered could knock what, twenty percent, off that total?  Then the state could hire back the three-hundred odd people at DHS whose jobs were transferred to employees of UnitedHealth and Wellcare.  Then our federal funding could actually to to helping the people of Hawaii, rather than just lining the pockets of two out-of-state for-profit corporations.

Feds Acknowledge Civil Rights Status of "Medical Necessity" for Children with Disabilities

Letters issued by the federal DHHS Office for Civil Rights to two Hawaii mothers acknowledge children with disabilities have a civil right to medical services that are "virtually unlimited in terms of funding ...  as long as services are medically necessary."

In both cases, OCR gave priority to the children's treating physicians' recommendations for "medical necessity" over those imposed by state or private Medicaid providers.  This action is in keeping with three federal court decisions made late last year, all of which ruled state Medicaid officials or private providers could not deny or limit what a child's treating practitioner said was "medically necessary."

The letters were in response to complaints filed with OCR by the mothers about nine months ago, alleging that threatened cuts in home skilled nursing services violated their daughters' civil rights under EPSDT.  In December, OCR acknowledged that the office's oversight of Olmstead violations extended to rights under EPSDT.  In February, the office opened formal investigations into both girls' cases.

The letters were formal notifications the cases are being closed at this time.  Federal regulators from the Center for Medicare and Medicaid Services have apparently assured OCR that both girls are currently receiving 24/7 skilled nursing from a combination of sources, and therefore at this time the girls are not at risk of institutionalization. 

OCR investigates "covered entities" which can include a state developmental disability program, but not the privately owned, for profit insurance companies also responsible for providing services. However both letters quote CMS stipulating an apparently agreed-upon service coverage by UnitedHealth, the particular company providing Medicaid services to both girls.

Should this situation change for either girl, OCR can immediately re-open the cases.

As of April 30, 2010, both girls are covered by a new federal definition of medically frail children.  42 CFR 440.315(f) states:  

" ...the State's definition of individuals who are medically frail or otherwise have special medical needs must at least include those individuals described in §438.50(d)(3) of this chapter, children with serious emotional disturbances, individuals with disabling mental disorders, individuals with serious and complex medical conditions, and individuals with physical and/or mental disabilities that significantly impair their ability to perform one or more activities of daily living."

 Since one of the two girls is my own daughter, I am publishing the letter we received from OCR.

Letters show Hawaii out of compliance with ARRA and CHIPRA since April 2009

On April 8, 2009, Lillian Koller sent a letter to Governor Lingle asking approval for 41 positions needed for Hawaii Medicaid to "effectively implement" new federal Recovery Act and Children's Health Insurance Act regulations.  A virtually identical letter, asking for the same positions, was sent today by Hawaii Medquest Administrator Kenneth Fink to Lillian Koller.

The implication appears to be that Hawaii has knowingly been out of compliance with the new Medicaid regulations for the past fifteen months.

Both letters state that "these programs can generate in excess of $327 million in new Federal funds for the State if we meet all the requirements".

In our current economic situation, it is difficult to understand why the State would knowingly forego $327 million in funds to benefit children and adults with disabilities as well as the elderly and blind.

Both letters cite the immediate need "to expedite State Plan Amendments and Hawaii Administrative Rules....Both of these bills generate millions of Federal dollars for Hawaii, but we need to be able to do the work in order to be able to access thyese funds.  Due to two vacancies, staff will not be able to execute the provisions of the ARRA and CHIPRA."

Both letters cite possible violation of federal regulations for Medicaid agency personnel training. "Federal financial participation (FFP) is being claimed for training costs at 50%. This office currently has a 43% vacancy rate...If the funding for this position is not approved, the State will not be able to provide the required level of training for existing andnew employees and will not be able to claim the federal funds for its training costs."

Both letters cite a 56% vacancy rate in the Customer Service Branch.  "The average number of monthly calls has dramatically increased due to QUEST Expanded Access (QExA) [QExA is omitted in June 2010 version], and is expected to only further increase as a result of the ARRA."

A recent article noted that DHS had received only 62 phone calls in April 2010 with complaints from UnitedHealth and Wellcare members.  I recently discovered, however, that DHS had no record of my complaints regarding my daughter's services, nor that anything for her had been denied, which casts some doubt on the figure quoted in the Advertiser.

The article also noted that UnitedHealth and Wellcare receive about 15,000 phone calls a month, not all of which are about "problems".  Enrollment in the two companies is only about 40,000.  These numbers may be more representative of the dramatic increase in calls to Medquest's Customer Service about the program run by UnitedHealth and Wellcare that is referred to in both letters.

The letters do not state what the cumulative cost to the state will be for the 41 positions.  I would assume, however, that it is significantly less than either the $327 million to be gained, or even the $15 million a month that UnitedHealth and Wellcare are making in net profit from premiums.

Should UnitedHealth and Wellcare have the right to call for investigations by CPS or APS?

According to an employee of the Hawaii Department of Human Services, the two for-profit insurance companies running the state's Medicaid program are now able to call in complaints directly to Child Protective Services (CPS) and Adult Protective Services (APS).

Calls are coming in to DHS, according to the employee, with complaints that UnitedHealth and Wellcare are using the threat of calling CPS or APS to intimidate families into decreasing their requests for home services.

According to my source, the general threat is that if the person receiving care needs as many hours as the family is requesting, then it is not safe for them to be in their homes.

It's now no longer a threat to institutionalize their child, but a threat to take them away forever.

CDREA publishes 11th Anniversary webzine on the failure of the Olmstead Decision

A year ago, both the President and DHHS made a big public hoopla about the June 22, 2009 tenth anniversary of the Olmstead Decision.  That was the Supreme Court ruling that gave people with disabilities a civil right to not be institutionalized.

This year there is a small article on the government's Disability Blog.  Considering that at least twenty-two states have come under some sort of regulatory attack for violating the civil rights protected by Olmstead, it may not be too surprising.

The Children's Disability Rights Education Association has published a three page webzine on the failure of the Olmstead Decision.  We have had some success advocating here in Hawaii and legal documents are linked.

The point was also to put a face on the people who are actually being targeted for state Medicaid budget cuts across the state.

There are three sections:
The Failure of Olmstead
The Victims when Olmstead Fails
Successful Advocacy in Hawaii

Washington Post reports increased activity by DOJ Civil Rights Division

An article in the June 4, 2010 Washington Post reported on the vast change that has occurred in the Department of Justice's Civil Rights Division.

While mention is made of several different avenues that DOJ is currently investigating, the story omitted mention of the five states where DOJ has actively intervened on behalf of people with disabilities since December.

The following is the comment I posted in response to The Post's article:

disabilitymom wrote:
The disability community has seen a significant increase in the Division's attention to ADA issues. DOJ has intervened directly in five states since December on behalf of people with disabilities whose Medicaid home services are being cut below the level of medical necessity.

OCR at DHHS has opened two investigations in Hawaii into whether cuts in Medicaid home services violated the civil rights of two little girls (one of them mine).

The Division's Criminal Investigation unit has been looking into deaths from lack of care by Hawaii Medicaid providers UnitedHealth and Wellcare. Hawaii has seen a 36% increase in deaths among the elderly and disabled tied to lack of care issues in the first year since they entered this market.

This story links to the attention being paid to the fact that states are cutting Medicaid budgets to the disabled community because that's where they get the biggest bang for their buck.

One of the holdovers from the Bush era has been the privatization of Medicaid. Social and medical services that enable disabled children, adults and elderly to live with their families instead of in institutions are being put in the corporate hands of insurance companies like UnitedHealth, WellPoint, and Wellcare.

UnitedHealth and Wellcare together are taking home about $15 million a month from the Hawaii Medicaid program. Sixty-seven percent of that is federal money.

Nobody would ever propose putting Wall Street bankers in charge of our schools; why would anybody put disability services into the hands of companies that treat billions of dollars in fines as a cost of doing business?
6/5/2010 3:35:05 PM

Taped State Senate testimony reveals 36% increase in Medicaid-care related deaths

On March 16, sworn testimony presented at a Hawaii legislative informational hearing stated the death rate among the state's disability community had risen 36% in the year following privatization of the state's Medicaid services to the disabled and elderly. 

Larry Geller of Disappeared News attended the hearing and posted a videotape on his blog two days later.  There was never any response from the state regarding the startling news.

The sworn testimony is being given by Dr. Tina McLaughlin, Chief Executive Officer of CARE Hawaii.  The hearing is being held by State Senators Suzanne Chun Oakland, chair of the senate DHS committee, and David Ige, chair of the senate health committee.  The comments about the increased death rate come at about 5:40 on the video.

More on the financial side of a for-profit Medicaid company

It can be interesting what pops up in a company's reports to the SEC.

Wellcare's first quarter 2010 report noted their legal battle over the missing Florida Medicaid funds cost the company about $169.7 million between 2007 and the first quarter of 2010.  Mention was also made that the company is responding to subpoenas issued by the Connecticut Attorney General's office relating to "transactions between us and our affiliates and their potential impact on the costs of Connecticut's Medicaid program."

This could be a complicated way of saying that Connecticut suspects they have been inflating prices and claims submitted or payable by the state's Medicaid department.

Wellcare is currently in what is known as a "Deferred Prosecution Agreement" with the US government.  They are supposed to not commit any crimes for three years.

For all of 2009 (and the Hawaii contract was only in effect for eleven of those months), Wellcare's Medicaid segment revenue went up 8.9% to $265.6 million.  The report states "the increase in Medicaid segment revenue is primarily due to the inclusion of operations for the Hawaii ABD program" which made up only two percent of Wellcare's total Medicaid membership.  Since the company at the same time lost enrollees in two large states (Florida and Ohio), the contribution of the little Hawaii membership to company revenues seems extremely out of balance.

UnitedHealth's first quarter filing includes $20.8 billion in "goodwill".  What is goodwill?  Political contributions?

UnitedHealth introduces a wonderful "fog the mirror" phrase for cutting costs:  "net favorable medical cost development." 

For the three months ended March 31, 2010 and 2009, there was $490 million and $200 million, respectively, of net favorable medical cost development related to prior fiscal years. The 2010 favorable development was primarily driven by changes in previous estimates related to more efficient claims handling and processing, resulting in higher completion factors, lower than expected health system utilization levels, the H1N1 influenza outbreak being less costly than had been estimated and the mix effect of longer duration state Medicaid members who have a more favorable health status (my emphasis).

UnitedHealth has also recently published a research document that shows that if the states move all the new Medicaid enrollees they will gain from the Affordable Care Act, plus all their current Medicaid enrolles, into managed care, the states will save $366 billion over 10 years.

UnitedHealth, of course, is happy to offer such medicaid managed care programs to the states to handle this influx, and has already figured out how to save the states money on their long-term care expenses.

The underlying assumption is that managed care provides coordinated care which produces better care.  The logic breaks down with the first assumption, and as our experiences here in Hawaii are teaching us, the last assumption is pure fantasy.

The Huffington Post ran a story in April about how health care reform is going to encourage all the for-profit health insurance companies to inflate the possibly already inflated medical direct costs column on their spreadsheets.  The new law will require health insurers to spend at least eight-five cents of every premium dollar received in the large state Medicaid programs on actual medical benefits.  Companies like UnitedHealth are well below that figure currently, and when the law goes into effect next January, the insurers will be expected to refund consumers the difference.

The day that for-profit health insurers refund money to their enrolles is not likely to occur, since all the companies have to do is start re-classifying expenses as medical in order to pass.  Wellpoint has apparently already been caught "reclassifying" more than half a billion dollars in other expenses as "medical" ones.

Hawaii is 2% of Wellcare membership but generates 9-12 % of company revenues

According to Wellcare Health's 10-K report to the SEC, nine percent of the company's gross revenue in 2009 was generated by the two percent of its members who live in Hawaii.

Wellcare is the parent company of Ohana, one of two for-profit companies providing medical, home and community services to the state's elderly, disabled and blind population.  Ohana was recently linked to a shooting in Honolulu, when it was discovered the victim had not been able to renew his prescription medications because the company could not find him a doctor to authorize them.

Wellcare only offers Medicaid and Medicare plans, in contracts with individuals states and the Center for Medicare and Medicaid Services.  They operate Medicaid plans in seven states, and Medicare plans in twelve states (including Hawaii).

The 10-K report summarizes Wellcare's income and expenses as of December 31, 2009.  At that point in time the company had 2.3 million members, of which 1.3 million (or fifty-seven percent) were enrolled in the company's Medicaid programs.  The report makes frequent mention of the Hawaii program.

As of January, Hawaii membership in Ohana was about 22,000.  That is less than two percent of the company's total Medicaid membership (1.67%).

Page 29 of the report states that Hawaii's monthly payment to Wellcare "averages" $25 million per month.  Over a year, that comes to $300 million.  The company's total gross revenue from its Medicaid enrollees is $3.3 billion. 

In October 2009, however, Wellcare renegotiated its contract with the state of Hawaii, raising some capitation rates by as much as thirty-three percent.  Sources now tell me that the state of Hawaii Department of Services is paying Ohana closer to $1.1 million a day, which would actually come out to $33 million a month instead of $25 million.  At the rate, Hawaii's paltry two percent membership would be paying twelve percent of the company's gross revenues.

On page 27 of the report, it says the company cannot increase revenues to meet rising costs since they are locked into their contracts with the states.  Apparently this does not preclude, however, re-negotiating the contract for higher rates, as Wellcare did last October.

Page 58 of the report notes that Wellcare's revenue from state Medicaid contracts had jumped 8.9 percent from the previous year, in spite of the 8.3% decline in membership from being dropped by programs in Florida and Ohio.  The report directly attributes this significant increase in company revenues to the tiny 2% of their members in Hawaii.

Page 59 of the report blames the Hawaii enrollees for the company's drop in the profitability derived from calculating actual expenses as a percentage of the capitation fee.  For instance if direct medical costs rise from 84.8 percent of revenue from premiums, to 86.3%, then the company's profit has decreased accordingly.  These are the actual figures for Wellcare taken from the report.

We reported last week that Ohana was receiving $3,890 every month as their capitation payment for Martin Boegel, the victim of a suicide-driven shooting in Honolulu last week.  By not finding Mr. Boegel a physician, the company did not have to pay out that money for prescription medication or doctor visits.

This is how for-profit companies make more money by denying or reducing services that a doctor has said are medically necessary for an individual with disabilities to live at home rather than in an institution.

I reported earlier than the off-the-top profit Wellcare and UnitedHealth were receiving from their contracts with Hawaii was more than what the Medicaid home services cost the state for the entire year of 2008.  Those numbers were based on an eight percent profit (three percent off the top and than a 5% performance bonus) and did not take into account how much money the company was saving by simply not spending what Hawaii was paying them.

Update on potential Ohana involvement in Tantalus shooting

According to a reporter I spoke with this afternoon, Ohana is saying that Martin Boegel had his medications paid for by Medicare and therefore his lack of medications, apparently, is not their responsibility.

The contract between the state of Hawaii and Wellcare (parent of Ohana) as well as UnitedHealth clearly requires the health plans to provide each member with a primary care physician and a case service coordinator.

The health plan shall ensure that each member has selected or is
assigned to one (1) PCP who shall be an ongoing source of primary care
appropriate to his or her needs.  [section 40.180]

Each member shall be assigned a service coordinator who will assist in
planning and coordinating his/her care. The service coordinator shall
assist with coordinating QExA services with Medicare, the DOH programs
excluded from QExA, and other community services to the extent they are
available and appropriate for the member.  [section 40.260]

Without a primary care physician, Martin Boegel had no one to write his prescription, regardless of whether the medication was to be paid by Medicare or Ohana.

As a clarification:  the quotes are drawn from the Request for Proposal issued by the state of Hawaii, which was then made a part of the contracts between the state and the two private insurance companies.

Arkansas becomes eighth state where feds intervene over Medicaid service cuts

On May 6, the U.S. Department of Justice filed a lawsuit "alleging that the state of Arkansas is systemically violating the Americans with Disabilities Act of 1990 (ADA)."

This brings now to eight the number of states I've been able to identify where federal authorities have had to intervene directly to stop violations of the civil rights of Americans with disabilities.   All the violations are in conjunction with state Medicaid cuts in the type of home medical services that enable children as well as adults with disabilities to live at home rather than in institutions.

In February, Hawaii became the seventh state when the DHHS Office for Civil Rights opened two separate investigations into whether Hawaii Medicaid cuts were violating the ADA.  The state has been in discussions with CMS since last July over these same cuts.

How many states does it take before the DOJ steps in nationwide to stop these abuses?  I reported back in February that lawsuits alleging similar civil rights violations had been filed, heard or decided in at least seventeen states in the previous year.

Moreover, how long was the Justice Department investigating the state of Arkansas?  Was any moratorium placed on Medicaid decision-making that could have violated the rights of Arkansas individuals with disabilities while the investigation was going on?  What if children and adults with disabilities are dying while these investigations are going on, not just in Arkansas, but also in Hawaii and the other sixteen states?

Is Arizona violating the civil rights of children with disabilities?

The New York Times reported yesterday that Arizona has become the first state to eliminate its Children's Health Insurance Program.  The move by Republican Governor Jan Brewer means the state will also be passing up millions of matching federal funds, as for every $1 cut in state spending, the state will lose at least $4 worth of services, jobs, taxes. etc.

The Children's Health Insurance Program in Arizona is operated under Medicaid.  It extends Medicaid benefits, including EPSDT, to 47,000 children.  How many of those children have disabilities is not broken out, but some are bound to be included. 

I cannot even imagine the legal ramifications of deciding a child has a civil right to medical care and then eliminating that right overnight. 

Business Week reported that Arizona was eliminating $385 million from its state Medicaid budget.  Under the Recovery Act, Arizona is receiving seventy-five cents from the federal government for every twenty-five cents it spends of its own money.  Medicaid budget cuts of $385 million would therefore mean a potential loss to the state of $1.54 billion in jobs, supplies, services, and general economic benefit.

Brewer herself made the papers the day before she signed this budget by sending an anti-health reform letter to House Speaker Nancy Pelosi.  Ironically, she complained to Pilosi that "the devastating impacts of the federal legislation will rob Arizonans of their rights and pocketbooks alike."

Then she goes out the next day and tramples on the civil rights of kids with disabilities.

Three Hawaii families get their Medicaid home health services restored -- at least for now

The Office for Civil Rights at the Department of Health and Human Services (OCR) investigates complaints by individuals or groups that have anything to do with violations of the Olmstead Decision.  The vast majority of Medicaid waiver programs we have now are a result of the "Olmstead Plans" that states were required to design and implement after the June 1999 Supreme Court Decision.

In 2001, the Department of Health and Human Services released a letter to state Medicaid directors explaining how to use EPSDT and their HCBS (Home-and-Community-Based-Services Medicaid waiver groups) programs to meet Olmstead Plan requirements.  The document makes it explicity clear that the purpose of EPSDT is to keep children at home.

This is the basis that I helped four other Hawaii families file complaints with OCR over the past five months.  Four of the families have medically fragile children under the age of 21, the fifth is a young adult quadriplegic. On February 12, OCR opened official investigations of at least two of these.  By now, two families have had services restored that were cut, and a third won her year-long battle for 24/7 skilled nursing for her daughter.

Two of us are left slugging it out, one of which is my own daughter.  I've already filed a separate complaint with OCR against Hawaii and UnitedHealth for violating the ADA's ban on coercion and retaliation.
 
A second and related issue has come up, which is the fact that children covered by EPSDT cannot be put on waiting lists for any kind of "Medicaid coverable" service.

Right now, there are tens of thousands of children and adults with disabilities on waiting lists for home health services.  Initial information seems to indicate many of these may now be, or in the past have been, eligible for EPSDT services. It certainly can't be right to penalize adults who are too old for EPSDT now because someone violated their civil rights years ago.

I am continuing to work with families.  But the Children's Disability Rights Education Association has put together a petition to OCR and the DOJ asking that they put an immediate halt to this ongoing violation of the civil rights of children and adults with disabilities. 

We need to tell our federal civil rights enforcement agencies that enough is enough.  They need to step in and put a halt to the daily violations of the civil rights of one of our nation's most vulnerable populations.

Please consider signing the petition and helping get the word out.  As the parents, families and caregivers for people with disabilities, including children of all ages we so seldom have the time or opportunity to have our voices heard.  CDREA will ensure that this petition reaches the people it's intended for in our federal government.

Are DC lobbyists being paid to advise Hawaii on how to violate federal Medicaid law?

A Washington, D.C. law firm, Covington & Burling, appears to have been paid more than $3 million (as of December 2008), for consulting with the state on its Medicaid QExA program.

All of the contracts appear to have been issued with exemptions from the normal procurement process; in other words, they all appear to be no-bid contracts.

Contracts have been issued in the name of Charles Miller of Covington & Burling, making him a "Special Deputy Attorney General" for Medicaid issues.  Those were issued by the state AG's office, and total $850,000 (of which $375,000 was to be paid through Federal funding).

The remaining contracts were all issued through the Hawaii Department of Human Services.  The contracts that I've located begin in December 2003, and the final one is an extension through December 31, 2008.  Since the latter contract mentions services will likely be needed to extend for several months after the February 1 QExA implementation, I suspect there may be another additional contract that I haven't been able to find.

Part of Covington's responsibility was to "provide strategic advice, consultation, project management and technical assistance on issues and policy decision as needed."  "Covington & Burling is well-established among Medicaid programs nationwide as an expert in the area of Medicaid program structure, compliance, and federal revenue maximization."

My question then is what role Covington has played in the ongoing discussions between state officials and federal Medicaid regulators.  The purpose of the discussions is to resolve potential violations of federal Medicaid law (including EPSDT).  Since Covington is a nationally known expert in Medicaid policy, it seems possible that they are advising the state on this issue.

What a waste of money, in my opinion.  Legal battles have already been fought across the country over Medicaid "policy" issues such as EPSDT, the concept of "medical necessity", and the rights of people with disabilities to remain at home with their families as opposed to institutionalization.

And as with Evercare and Ohana, presently crying poor to the state and asking for more money in their contracts, Covington & Burling overshot their estimate of $750,000 for one project by $1.25 million.  That contract had to be increased to $2 million as a result.

Is it possible that Hawaii is paying this firm to justify Hawaii's policy decision?  Just this week, Dr. Anthea Wang, Medical Director of Hawaii Med-Quest, sent me a document with the official DHS opinion on who decides "medical necessity", and says it's been signed off by the Policy folks.  Would that include anyone from Covington? 

How much money does the state of Hawaii want to waste trying to figure out how to avoid following federal Medicaid regulations?  The language is there to be followed, in recent (the past six months) regulations and official documents published by the federal Medicaid regulatory agency.  The money is probably even there, considering Hawaii's projected budget deficit through 2011 is about equal to the amount of additional stimulus funds the state is receiving.

The problem is the funds are being spent on lawyers and profits for private insurance companies, not on services to our elderly and disabled populations.

Here are links to the five contracts I found: 

http://bit.ly/8pOSqY
http://bit.ly/7CGP6G
http://bit.ly/6L47av
http://bit.ly/8V7Vib
http://bit.ly/8j9nks

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?

Please, if you're the parent of a kid with special needs, read this

For the first time in my history as the mom of a kid with disabilities, we parents have the ability to get our kids all the home and school support services, technology and therapies that their doctors think are medically necessary. We can go straight to the source, rather than wait around for our local Department of Education or Voc Rehab to get their paperwork together. All you need is a prescription, the evaluation and a letter of necessity, and you turn it over to your Medicaid case worker. Better yet, some of the corporations such as Dynavox, handle all the paperwork for you. The timing is perfect. The government has dumped over $28 billion into state coffers that can only be spent on Medicaid, with more on the way. Schools have been given more money as well, with a particular emphasis being given to using it on assistive and augmentative technology. The percentage of a state's total Medicaid budget which will actually come out of state accounts is somewhere between 10-35%. I did a rough calculation, and for a state paying the highest percentage, for every $10 million of its own money the state does NOT spend, the state loses about $28 million in immediate jobs and services. The only problem is, in too many states, nobody knows what happens to those stimulus bucks once they disappear into some new, very deep coffers. If your state is continuing to cut medicaid services for your child, if your school is trying to cut service hours from the IEP, then there's a good chance there are some questions about how your stimulus tax dollars are being spent (and even if they are at all). Last week, the Government Accounting Office issued a report focusing on how states are using their stimulus funds. The report called into question the "quality and reliability" of data that the states are giving the feds about how and on what they're spending their stimulus bucks. Meanwhile, Department of Health and Human Services Kathleen Sebelius released an additional $600 in stimulus funds to the states just between September 17 and 30, 2009. Nobody in the media, nobody in the government, is paying attention to the mystery of how states are spending their stimulus dollars. CMS refers all calls on the subject to its Baltimore headquarters. Three states are under some sort of federal investigation for violating federal Medicaid law and the Americans with Disabilities Act, and 7 more have civil suits filed or in preparation alleging similar violations. A friend of mine with disability law experience and I have put together a group called Children's Disability Rights Education Association. Our role is to help parents and caregivers take greater control over their child's health and education. As CDREA we have a petition up, calling on DHHS to require complete accountability from the states, and to ensure priority is given to restoring Medicaid service budget cuts made since July 1, 2008. These cuts have unfairly targeted children as well as adults with disabilities who need skilled care to live at home with their families. Similar problems are plaguing state stimulus funding received for education. I just found this source, but the correlation between what's happening with money for both special education and medicaid home support systems is an atrocious example of discrimination against children, as well as adults, with disabilities. Please consider signing our petition, and forwarding it to your friends.

If you had a company, would you hire back an employee who had stolen $40 million from you?

Because that's what our federal government has done, awarding a national Medicare contract to a company that has just paid $80 million in restitution and penalties to Florida for defrauding their state Medicaid plan, $10 million to the SEC for something else, and even $120,000 to the Florida Election Commission for ""questionable campaign contributions." Wellcare states on its website that the company provides managed care services exclusively for government-sponsored healthcare programs, focusing on Medicaid and Medicare. Some of the states where WellCare is providing Medicaid managed care services are Hawaii, Ohio, Georgia, Florida, Arizona, New York, Louisiana, Texas, Indiana, Illinois and New Jersey. This company that has paid out over $90 million just in the past five months to various federal and state authorities also reported that second quarter 2009 net income was 236% higher than it was in second quarter 2008. That represents a jump from $11.1million in April-May-June 2008 to $37.0 million in the same three months of 2009. Another way to look at WellCare's profit is that the company spent $1.5 billion on medical benefits and receieved $1.8 billion in revenue from premiums. How much of that $300 million profit (just for 3 months) could have been directed back to Medicaid services if these services were not administered by a for-profit company? UnitedHealth Group operates public sector health care programs (i.e., Medicaid and Medicare) in 23 states, under a variety of names. UHG's revenue from premiums for the second quarter of 2009 was $19.7 billion, of which 83.6% was spent on medical services. That's a handy profit for three months of $3.23 billion. That isn't breaking out employee plans from state plans, but in this particular economy, that kind of profit isn't something to be sneezed at. Just in 2009, UnitedHealth Group has paid out over $1 billion in fines to New York, California and Missouri, plus another $62 million in the two preceding years. For profit companies such as WellCare and United Health should not be allowed to administer federally funded programs where their company profits are literally taking necessary medical services away from babies. Decisions on issues such as "medical necessity" should not be left up to a profit-driven company. I live in Hawaii, where our Medicaid program, including EPSDT, is run by WellCare and UnitedHealth Group.

Feds Investigate Hawaii Medicaid Cuts -- News for disability rights advocates

Hawaii's Medicaid program has come under federal scrutiny by one Federal department, and is pending scrutiny by another. The severe budget cuts that Hawaii has been making in its DDMR waiver program, and the way Medicaid is functioning under the new managed care (for profit) system that began February 1, are the objects of this scrutiny. On June 29, I filed a complaint with the Office for Civil Rights of the Department of Health and Human Services (OCR). On August 26, the San Francisco regional office of OCR notified the San Francisco regional office of the Centers for Medicare and Medicaid Services (CMS) of the issues involved. A lot of health and other professionals are relatively unaware of the hugely important role CMS plays in the day to day operation of our state Medicaid and Medicare programs. CMS wrote the last formal interpretation of the Maintenance of Effort (MOE) clause of the American Recovery Act which allowed the states to get away with making substantial medicaid service cuts and still receive stimulus funds. CMS decides how Medicaid and Medicare are supposed to function and issues letters to the states or rulings printed in the Federal Register, and then these items become law for states to follow. CMS isn't set up to handle individual complaints, but is now watching how the Hawaii Medicaid due process system functions, to ensure it functions the way CMS expects it to. As the parent of a child whose home services have been threatened with substantial cuts, I have the security of knowing that the state will have to follow federal law in these hearings. They're not going to be able to just "make it up as they go", as has happened so often in the past. Part of this process is ensuring that EPSDT, which entitles children with special health care needs to a much broader scope of services than normally provided under Medicaid, also functions as intended. From the standpoint of education advocates, this can provide a tremendous opportunity. DHHS has written manuals on how EPSDT and IDEA are supposed to function jointly to meet all the educational, medical and social needs of children with disabilities. They published a brochure in May 2003 with detailed instructions on how state education departments can bill EPSDT for services, and another brochure in 2004 specifically describing how EPSDT services are to be incorporated into the IEP.

Medicaid eligible children with disabilities are entitled to receive medical services in the school setting, paid for by Medicaid, if two important requirements are satisfied. First, the school/school district must be a participating Medicaid provider. Second, the services must be written into the child’s IEP/IFSP, which automatically makes them considered medically necessary.

Since the Hawaii schools are Medicaid providers, there is no reason for Hawaii's children who are eligible for Medicaid to continue to suffer from DOE denials of services. This issue of the integration of EPSDT with the IEPs will continue under federal scrutiny. Doctors can write letters of medical necessity and submit these, along with a prescription, to the child's Medicaid provider (either Evercare or Ohana). Medicaid is then supposed to provide it via the funding they are receiving from the state. That part of the system isn't functioning well right now - but that's how we can all help get things working correctly here. Linda Nuland-Ames and I have formed the Children's Disability Rights Education Association. Our first activity is an online petition to DHHS Secretary Kathleen Sebelius, calling for full transparency of how states are spending their Medicaid stimulus funds and ensuring that a priority is given to using these funds to replace Medicaid services which have been cut since July 1, 2008. According to DHHS, the states have already received over $28 billion in stimulus funds that can ONLY be spent on Medicaid. My state, Hawaii, has already received over $131 million (with more on the way). No one seems to know how it is being spent, and no one wants to answer my question why it isn't being spent restoring Medicaid service cuts. CMS tells me they are also working to have someone made responsible at the state level for communicating between families that have their services cut, and both the Hawaii Department of Health and Department of Human Services. CDREA will reach out to families whose services have been cut to ensure their concerns are heard and receive the consideration they so urgently deserve. Please join us in these actions. Summer Harrison Linda Nuland-Ames Children's Disability Rights Education Association