Hawaii leads in national attack against people with disabilities

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

They have taken away from us the right of choice.

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

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

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

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

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

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

White House clears path for Ryanizing Medicaid

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Not only has the Administration given states the go-ahead to Ryanize their Medicaid programs, the White House has sent a clear message to private managed care companies that Medicaid fraud is OK.

Actions taken by the Administration on April 26, 2011, May 6, 2011 and May 26, 2011 combine to paint a chilling picture of a newly-emerging White House policy towards Medicaid.

On April 26, the government signed a settlement agreement with for-profit Medicaid managed care provider Wellcare and nine states. In exchange for a payment of $137 million against all claims for criminal Medicaid fraud, the government agreed never to call Wellcare a crook and not to hold this information against them in any future contract awards.

On May 6, the government published a proposed new Medicaid access rule in the Federal Register. The underlying message is that the federal government will not intervene in state Medicaid matters. National health policy expert Sara Rosenbaum called the rule "a model of inaction...[that will] establish what might charitably be characterized as an information-gathering exercise." The rule exempts everyone receiving managed care medicaid from even this poorly-defined five year study, a figure Rosenbaum estimates at 70%. About one-third of that are enrolled with for-profit health insurers, and that number grew 21% just in the last three months of 2010.

May 26 was the date the Administration's friend of the court brief was submitted to the Supreme Court. In it, "the Obama administration ... has entered the case on the side of the state, arguing that the courts are closed to private individuals where Medicaid-access litigation is concerned." It was a concession as well to the big business health insurers like Wellcare, Unitedhealthcare, Amerigroup and six other major players they wouldn't need to worry about federal oversight of how state and federal money was being spent. The savings in potential legal fees defending medically indefensible denials of medical treatment is enormous, if our recent experience in Hawaii is any indication.

The Administration has given states the power to Ryanize (block grant) Medicaid, and apparently agreed not to interfere in paltry civil rights issues.

On June 9, Igor Volsky published an article whose title says it all: "Texas Follows in Paul Ryans Footsteps: House passes measure to block grant medicaid, privatize medicare."

Texas would enter a compact that would exempt the state from the federal eligibility and benefit rules in the Medicaid program and from all Medicare rules, allowing lawmakers to “possibly sweep Texas seniors on Medicare into private health insurance policies.”

New Jersey has imposed mandatory managed care on the state's disabled children and families. Two of the four private contractors are Unitedhealthcare and Amerigroup, both of which have been accused in the past of stealing money from children's Medicaid programs.

The Florida legislature accomplished the same thing recently. Wellcare told the SEC in May that new contract opportunities were opening up in Louisiana, Texas and Kentucky, while "Florida and Hawaii are also considering expansions of their Medicaid managed care programs." [This could be news to many people in Hawaii, although a state press conference held on May 10 implied this was coming.]

On June 13, twenty-nine Republican governors published their views on Medicaid reform, demanding greater flexibility in running state Medicaid programs. "States and territories are best able to make decisions about the design of their healthcare systems based on the respective needs, culture and values of each state" is number one on the Republican agenda for Medicaid.

Jonathan Cohn wrote in The New Republic back on April 4 that "Ryan confirmed that he and his fellow Republicans would propose to change Medicaid from an entitlement to a block grant--which, as I noted on Friday, means giving the states a lump sum of money, with much more freedom to spend the money as they choose."

Ryan also stated "private insurers are more efficient than government programs" in operating Medicare and, presumably by extension, Medicaid. One of the strongest proponents of that idea is Unitedhealthcare, which had its wholly owned research company (The Lewin Group) write reports to states informing them of that fact. Unitedhealthcare's Medicaid managed care contracts showed a five percent increase in membership between September 30, 2010 and March 31, 2011, during which same time the company's quarterly Medicaid revenues skyrocketed 23%. The company is not, perhaps, an uninterested observer.

The Center on Budget and Policy Priorities confirms that the hardest hit victims of Ryanized Medicaid will be children, adults as well as children with disabilities, families and senior citizens. The "Ryan Plan would likely eliminate most or all protections for Beneficiaries."

Ryan didn't have to do anything to get that accomplished; the White House has done it for him.

Please sign our petition to get this process stopped before it get codified by law and the Supreme Court.

Evercare already counting on Abercrombie signing SB 1274

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Evercare is apparently assuming Governor Abercrombie will be signing SB 1274 into law, as the company has already started announcing slashes in services to begin July 1.

If SB 1274 is signed by Governor Abercrombie, July 1 is the date that everyone on Medicaid loses the right to any sort of independent review of their insurance provider's medical decisions.

Evercare is also involved in two federal civil rights violation investigations opened in Hawaii in the past few weeks. Both investigations are into allegations Medicaid cuts in home nursing services are violating the civil rights of medically fragile children.

It is not an issue of the money not being available.  Unitedhealth typically spends only eighty cents out of every dollar they receive, regardless of whether the bill is paid by an individual, an employer, or the federal government.  The company is paid with federal funds to provide the extraordinary level of care that medically fragile children need in order to stay home with their families. It is the company's decision then, not to spend the money, even if it means ignoring all the children's doctors.

How much of this child abuse is due to the irony that Evercare and Ohana are paid more by the feds every month if two little girls are institutionalized than if they stay home, I do not know.  It is certainly a nice inducement for the company to cut home hours to the point the child's safety is endangered.

Both Unitedhealth and Wellcare seem to lead all Medicaid managed carecontractors in violations, over billing, and billing irregularities adding up to unsavory reputations.  Wellcare filed with the SEC in April their Medicaid fraud settlement with nine states, and both companies have been accused of stealing from
children's Medicaid funding in Florida.  New indictments of Wellcare's founding board and executives have been handed down recently and that does not appear to be the end of it.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tracking Wall Street's takeover of Medicaid and Medicare

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Poll: Should private health insurance carriers be allowed to make profits from Medicaid and Medicare?

Every month, six private insurance carriers generate a $1.1 billion gross profit from government funds received on behalf of Medicaid and Medicare policyholders.

These are state and federal funds that were to be used for providing care for the elderly, children, and children as well as adults with disabilities.  The profits are made, and increased (as quarterly SEC filings show) by cutting medical care and services, whether by suddenly denying longstanding prescriptions, reducing home medical supplies, or slashing the home care services that keep our children and grandparents at home with their families and not in institutions.

What do you think?  Is this right?  There is an alternative, that providers be non-profits, or rigidly monitor and enforce an MLR in the high nineties.

Please take our poll and let us know what you think!

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.

Hawaii DD Division apparently admits to defrauding federal government and state taxpayers

According to a November 16 letter from the Hawaii Department of Health's Developmental Disabilities Division, the program has apparently been caught by federal authorities defrauding Medicaid.  The DD division established new reporting guidelines that went into effect on December 1, and the letter emphatically tells recipients to comply with ongoing federal and state audits.

The news was quietly inserted into a letter that went out to DD waiver participants and providers with a headline of "documentation requirements" that was a bit misleading.

The Fray letter states "as a result of the recent Payment Error Rate Measurement audit conducted by CMS, the Med-QUEST Division is implementing new documentation requirements for PAB services."

Last April I reported that CMS was unable to deny rumors that Hawaii's Payment Error Rate Measurement could be as high as fifty percent (it's legally supposed to be between three and five percent).  

(paraphrased from then)  What would a 50% Medicaid payment error rate mean?  It could 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 to pay these fees for ACS's services, just as they do for the state's aged and disabled program operated by Evercare and Ohana.

3.  ACS could be 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.

Out of that comes the fifteen-to-twenty percent net operating profit UnitedHealth and Wellcare skim off the top of their state capitation fee payments.  That's at least another $92,000,000. 

So from the original annual budget of about $1.4 billion,  only about $608 million is left to spend on actual services for Hawaii's Medicaid population.

When services are cut, the Medicaid profits aren't cut, and the capitation fees not only are not reduced, at least here in Hawaii they've been increased several times by means of "contract amendments".    The Medicaid company cries poor and that it is a victim of rising medical costs, to justify increases in the capitation fees paid by the states.

This is why Hawaii's Medicaid waiver program for our aged and disabled population experienced a thirty-six percent increase in the death rate of participants within its first year of operation.

Hawaii Medicaid office takes responsibility for coordinating interdepartmental services, including DOE, for children covered by Medicaid

On November 23, Dr. Kenneth Fink, State Medicaid Director for Hawaii, sent me a letter.  The letter began:

The Department of Human Services/Med-QUEST Division (MQD) is committed to assuring that your daughter, Hannah, has coordination of medically necessary Medicaid services that are being provided through multiple State agencies......To facilitate this, we are requesting your consent to allow the Department of Education (DOE) to release to us a copy of Hannah's most recent Individualized Education Plan (IEP).

I haven't heard whether any of the other hundred-thousand children receiving Medicaid, or even the twenty-thousand some kids in Special Education, have received the same letter.

This letter, while addressed only to my daughter, opens up a tremendous opportunity for all Hawaii's children with special health needs.  The DOE no longer has the final say in the services provided to your child enrolled in Medicaid.  The state Medicaid office is essentially assuming responsibility for ensuring your child's medically necessary services are provided, if not through the school, then through either Evercare or Ohana.

For instance, if your child's doctor prescribes five hours a week of occupational therapy and the school is only willing to provide two, you can count on Medicaid to handle providing the other three.

It inadvertently brings up the related question of why Hawaii DOE doesn't appear to be actively enrolling kids in special ed into Medicaid.  Once they do, the federal Medicaid budget (administered out of Dr. Fink's division) picks up 75% of the cost of all that kids' services that are provided by the school.  The budget savings that could be realized by transferring that 75% from state coffers to federal ones are enormous, and why it's being ignored by our local school district is beyond my comprehension.

Whether that issue is related to the fact that Evercare and Ohana are becoming aware of  requirements that EPSDT funds be paid out of the capitation fees they receive, I can't say.  Paying for school therapy services could dig into the $15 million profit they make off the monthly $100 million or so in capitation fees Hawaii pays them.

For parents and advocates, MQD admitting this responsibility for service coordination opens an alternative for receiving services DOE either can't or won't provide.  Federal Medicaid EPSDT regulations and laws provide more protection and additional means for winning disputes than can happen with IDEA alone.

Was threatening letter from Evercare retaliation for blog stories?

The last time I posted on here was November 4.  I wrote two articles that day, one of them on how UnitedHealth Group in Hawaii had been under a "Corrective Action Plan" since April for violating grievance and appeals rights.

On November 6, I received a threatening letter from David Heywood, Executive Director of UnitedHealth's Evercare for Hawaii.   The letter had been sent out by certified mail on November 5.

They wanted me to stop emailing federal officials, and to push all the care services I've been fighting for since September 2009 under the rug.  Let's just start over again from scratch.

Here is the letter from Heywood.
110510 Cert Letter f Heywood

Here is the email I sent him in response on November 21.
My Email to Evercare Re Hannah

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.

DHS, DOH and Conflicts of Interest in Hawaii

On June 23, Larry Geller reported in Disappeared News about a class action suit filed against Hawaii's Department of Health.  The general point of the suit is that DOH has been decimating its adult mental health medical services without the state regulatory authority to do so.

The suit was filed by the Hawaii Disability Rights Center and Alston Hunt Floyd & Ing, a Honolulu law firm just honored in February by the American Civil Liberties Union of Hawaii.

A state employee has provided me with the following information on the regulatory oversight required of the Department of Human Services.  The document is technical enough that I am presenting it in its entirety as I received it, without trying to rewrite it.

The point of the email is that it is inevitable that DHS will have to be drawn into the suit.  Once they are, it will be impossible to continue to disregard the fact that AHFI is the law firm representing UnitedHealth/Evercare in the company's fight to cut services to children with disabilities like Audrey, H.M. and my own ten year old daughter.

This is the second time AHFI were involved in a case against the Department of Health.  In January 2009 they were part of the legal team planning a class action suit against the Developmental Disability Division.  Around January 27, the company discovered they had a "glitch" because they represented UnitedHealth.  When the suit was filed on February 2 (the day after UnitedHealth took over the Medicaid services for the disability population) it did not include AFCI.


Email    

Wellcare says "We prefer them to die because it's cheaper": Federal complaint includes Hawaii

According to a recently unsealed federal whistleblower complaint, those were the words of Dr. Vince Kunz, Medical Director for Wellcare's Heath Services Area.  They're quoted on page 35.


The case was filed in Florida on June 21 under seal.  When Wellcare announced on June 25 they were settling a potential federal suit with Florida for perhaps less than a quarter of the amount due, the complaint was unsealed  the following Monday, June 28.  It was followed shortly by two more whistleblower suits on June 29.


The June 21 False Claims Complaint included not just Wellcare, but also UnitedHealth (along with other for profit health insurance companies like Humana and Amerigroup).  It accuses these companies of violating the Hawaii False Claims Act, 36 Hawaii Revised Statutes 661-21(f), which essentially makes it illegal to steal money from the State (page 8).



Hawaii Attorney General Mark Bennett has been served with this complaint, but there has been no word of any local investigation. 



The June 21 complaint is a sixty page document packed with details of the many different accounting schemes used to steal federal and state Medicaid funds.  (The Tampa Tribune did a great summary article).  It is the result of an eighteen-month FBI investigation where a high-placed Wellcare executive wore hidden cameras to meetings and found documents sitting in the printer.  It also accuses other companies such as UnitedHealth with knowing collusion in some of these schemes.

Estimates are that the actual theft could be as high as $600 million. With damages, the total amount Wellcare could be in the hole for could be as much as a billtion dollars.

Hawaii is apparently due a share of that.  Are we going after it, or is this another source of federal funding our state leaders are apparently willing to forego in deference to Wellcare and Unitedhealth?

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.

National disability fellowship awarded to Hawaii doctor linked to federal investigations into Olmstead violations

The Honolulu pediatrician who has received a prestigious Kennedy Foundation Fellowship has links to two on-going Federal inquiries into whether cuts in home services provided to people with disabilities violate the Americans with Disabilities Act.

Dr. Jeffrey Okamoto has been the Medical Director of Hawaii's Developmental Disability Division of the Department of Health.  In December 2008, the Division announced an across-the board fifteen percent cut in home services for people with developmental disabilities.

Federal Medicaid regulators from CMS have been flying into Honolulu regularly since last fall, meeting with state officials to discuss the appropriateness of these cuts.  Discussions and personal meetings have expanded in scope.  I was asked by CMS to provide additional evidence as recently as last month.

In February, the Office for Civil Rights of DHHS opened their own formal investigation into whether the Developmental Disability Division's across-the-board service cuts violate the Americans with Disabilities Act.

Dr. Okamoto intervened directly in my daughter's formal Department of Health appeal against the 15% cut in her nursing services, testifying unexpectedly at the hearing.  Because of that involvement, I have written testimony from Dr. Okamoto that I am willing to share with the public, even though it contains private medical information about my daughter.

He disputed Hannah's neurologist's evaluation and prescription for 24/7 skilled nursing in the home.  In written testimony presented to the Hearing Officer, Okamoto wrote: 

24/7 nursing as being requested by Dr. Griffiths should indicate that Hannah is not safe at home.  This even exceeds the hospital level of nursing provided.  If Hannah is safe at home, then 24/7 nursing should not be necessary.

The written decision of the Department of Health Hearing Officer rejected explicitly all of Dr. Okamoto's arguments.  This included Dr. Okamoto's attempt to link parental training to whether or not a child is safe living at home.

In spite of that written decision, Dr. Okamoto's concept that the safety of a disabled person in their home can be linked to the level of parental training has been expanded upon.  Honolulu civil rights attorney Rafael Del Castillo says he has seen the issue brought up in at least one other case, but by the Department of Human Services.

Earlier today I reported that these threats are being made to families even now, but by representatives from the two for-profit insurance companies that operate Hawaii Medicaid's special programs for people with disabilities.

These issues and complaints remain outstanding. 

The Joseph P. Kennedy Jr. Foundation, which has awarded Okamoto a Public Policy Fellowship, is devoted to furthering the rights of people with disabilities.  One has to wonder if anybody bothered to tell them that Hawaii's entire program of home and community services for the disabled is under a combination of formal, informal and criminal investigations by CMS, OCR and DOJ?

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