Yesterday's Hawaii Medicaid briefing featured wrong information about SB 1274

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During yesterday's state wide hearing on upcoming changes in Hawaii's Medicaid program, a question was asked regarding Senate Bill 1274, which was passed by our legislature and currently sits on the governor's desk awaiting signature. The bill is strongly opposed by healthcare advocates, and has only been pushed by healthcare industry lobbyists.

Dr. Kenneth Fink, Hawaii state Medicaid director, responded to the question. He stated, extremely clearly, that "to the best of his knowledge" there was only one case that had made its way through the external review process and been found against the health insurer. "Only one" was stated more than once.

I asked Rafael del Castillo about Fink's statement, since he is one of the people in the best position to know how accurate Fink's number is. Here is his response:

I was unable to attend yesterday's conference concerning the future of Medicaid. I understand that Administrator Fink responded to questions concerning SB1274 and the exclusion of Medicaid members from the protections of Hawaii's external review statute that, to the best of his knowledge, there had been only one case by a Medicaid member decided in the external review, and it was decided against the patient.

As usual, intentional or not, Fink's statement is patently false and constitutes an abuse of his office in light of the fact that he is a public servant believed to be knowledgeable about the facts, whose comments are given extraordinary weight. I have no doubt that Fink provided similar false information to legislators in lobbying for SB1274 to the detriment of the people he is charged with protecting. In fact, although he has told officials he wants to know about cases involving problems with Evercare, he also declines to discuss or assist in cases and his people are actively engaged in holding services over the heads of members to persuade them to dismiss their cases.

The facts are these: There have been an unprecedented number of cases in the external review by Medicaid members, more than against any other provider, many decided, and many pending. The score is as follows:

Decisions:
Patients 3, HMSA QUEST 0. 1 case pending, heard this month.

Patients 1, Alohacare 0 - settled when filed.

Patients 1, Kaiser QUEST 0 - resolved without a hearing

Patients 2, Ohana 0 - one decided, one settled, none presently pending but several resolved before request for review filed.

Patients 1, Evercare 2 - both on appeal (1 split decision with hearing officer voting against Evercare, one failure to heed expert opinion); two cases resolved without a hearing; two will be dismissed, one because DHS immediately reversed Evercare's ridiculous decision, one because patient pre-deceased hearing; several cases filed, will be heard before June 30.

These are verifiable facts. I can provide details about each and every case, and the Medicaid members involved will be only too happy to confirm those facts.

Rafael del Castillo

State bills pending in Florida and Hawaii to increase for-profit Medicaid penetration while reducing patient rights

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The state legislature in Florida has apparently decided to completely scrap the state's Medicaid program. Considering Medicaid fraud has been called the state sport, this is obviously necessary.

The problem is that the "new Medicaid" that Florida is trying to shape will essentially amount to giving more and more money to the same companies already caught or suspected in federal Medicaid fraud. A recent article calls it "the scariest part of scary Medicaid overhauls.

Isn't that like hiring Bonnie and Clyde as bank tellers?

On April 13, the Florida Tribune reported that "The House and Senate also have both agreed to use managed care as the main vehicle to lower costs and include requirements that long term care patients use managed care."

Back in June 2009, at least 56% of Florida's Medicaid enrollees were receiving their services through for-profit HMOs. In the summer of 2010, it was revealed that all eight for-profit subcontractors to one state Medicaid contract were cheating on the MLR (medical loss ratio, the percentage of each capitation payment spent on services for that specific individual). Amerigroup alone had to refund over $2 million to the state. Also last summer, there was talk of extending a minimum MLR to the state's other Medicaid contracts.

There's a battle going on in the Florida state legislature now between those in favor of establishing a 90% MLR, and those who want no MLR at all. Nobody is questioning turning the kitchen sink, water main and all, over to for-profit insurers.

If everyone ends up comprising on some "reasonable" MLR, it will still mean that state and federal funds are being diverted away from health services and into shareholder profits. Sean Hellein's whistleblower report demonstrated how casually insurance companies like Wellcare, Amerigroup and UnitedHealth (all named in the suit) treat the issue of committing Medicaid fraud, especially when it comes to falsifying MLR figures.

Between last summer's enthusiasm and the current Medicaid battle was the November election. Florida elected a new Governor who had been the CEO of a healthcare company holding the record for the country's biggest criminal Medicare fraud case. In Public Citizen's post-election night report on unregulated third party spending (subsequent to Citizens United v. Election Commission), Florida ranked second highest, with four congressional candidates splitting almost $2.9 million. One of those newly elected Congressmen dismisses any compassionate element of Medicaid (including, presumably, for children) as being evidence of a "bureaucratic nanny state" that can only be fixed with a "free enterprise solution."

Florida and Hawaii make two states where local legislative wars are being fought that have major repercussions for the future of Medicaid. These wars all have to do with the way states get their Medicaid money from the feds, and who they then give it to. Money for Health reform and stimulus funds is all channeled through different accounts. For instance, the federal DHHS report on stimulus funds paid out to states reported on March 31 2010 that the state of Florida had received $3 billion into thirty-seven different accounts. Each account is a possible contract to be bid out.

Every contract represents another opportunity to clear twenty percent in operating profit. With forty states reportedly considering (or in the process of) turning their ABD populations over to for-profit HMOs, the financial impact on the disability community could be overwhelming.

From our experience in Hawaii, when an ABD population is turned over to a for-profit HMO, that means the HMO now covers everything, including home attendants, medications, skilled nursing, home medical supplies, behavioral programs, durable medical equipment, even the cost of institutionalization. Hawaii's contracts with UnitedHealth and Wellcare clearly showed they received higher capitation payments for an individual if they were in institutional care than home care. Institutionalization therefore increases the premium while at the same time giving the insurer more power over how much of it has to be spent.

This is how the news of Florida Governor Scott's recently proposed cut in provider service reimbursement rates can relate to the MLR. Florida was already bidding out its ABD program to private HMOs like Amerigroup in early 2010. If ABD services are being channeled through new HMO providers, as they are done here, then reducing provider rates can be a back-door way of increasing corporate profit.

According to Amerigroup's 2010 annual SEC filing, the company's contract with the Florida Department of Elderly Affairs for Long-Term Care was renewed in September, they gained a new CHIP contract with the state in 2010 plus became a Medicare Advantage provider with Florida the same year. Overall, the company's net earnings were up 83%, helped along significantly by lowering the MLR by four percent.

Involved in the Florida legislative battle is SB 1972. On April 11, it was reported that Medicaid insurers, including the private HMOs, were backing an element of SB1972 that "would name them as agents of the state and give them the full protection of Florida's sovereign immunity, no matter how much damage they cause to an innocent disabled adult or child who has been entrusted to their care." As preposterous as it sounds, it is similar to an attempt here in Hawaii to assimilate child and protective services under the Medicaid ABD program. UnitedHealth and Wellcare employees suddenly had the right to threaten to remove a child from a family for abuse, if the family did not agree to the company's recommended reductions in Medicaid services.

Now we're putting Bonnie and Clyde in charge of the bank's vault.

Please sign our petition to get for-profit HMOs out of Medicaid and Medicare.

Who is running the misinformation campaign on S.B.1274?

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Two questions need to be answered: who is running the misinformation campaign on S.B.1274 and what's everyone's problem with Rafael Del Castillo.

I've known Rafael and Arlene for the past year and a half or so. I personally know eight families, including my own, whose children's lives have been bettered. Nobody ever has to pay anything up front because if Rafael wins, the insurance company pays his fees.

Rafael is the only attorney in Hawaii exclusively devoted to defending people's right to a local independent review when their insurance company denies treatment. For the past ten years, he has been winning his clients the medical treatments and services their doctors say they need, but the insurance company refuses to authorize. From chemotherapy to home nursing services, if it's denied by the insurer, Rafael appeals the decision to the state insurance commission. If the insurance commission decides the treatment is medically necessary, the insurer loses, pays Rafael, and you get the life-giving treatment or service you need. So if the insurance review is done away with, the only lawyer in the state who will be shut down will be Rafael.

There are obvious reasons why UnitedHealth and Evercare, not to mention HMSA and a few other companies, might not like having Rafael around. I'm sure they feel they are spending too much money on his bills.

Now, the little publicized fact is that Rafael ran for state office last fall. He got more than 22,000 votes. Nevertheless, the fact he was even running was fairly well ignored by the media.

And the media continues to do so. Why would Chad Blair write an article today on all the folks who could potentially be affected by Akaka's announced resignation and leave out somebody who actually got 22,000 votes?

At 5:00 pm today, Beth Ann's Town Square on Hawaii Public Radio will be covering the campaign against S.B. 1274. The most knowledgeable person on it has not be contacted. Senator Josh Green will be available to answer the public's questions about the bill.

Below is a letter that Del Castillo sent today to HPR that counters the terrible mis-information campaign that is being launched in favor of S.B. 1274.

Dear Beth Ann,
Someone forwarded me the information that you will be having Senator Green on the Town Square today to talk about the repeal of Hawaii’s external review law. I am happy to learn that the topic is being discussed as I have been on the radio twice on Kauai on this topic and will be again next Tuesday. I have also had town hall meetings about the repeal.

Having been lead counsel for all but two or three of the consumers who have requested external review under our present law during the past ten years, I consider myself one of the most knowledgeable persons in the State on this topic. I interrupted work on a letter to Steve Larsen, Director of the Center for Consumer Information and Insurance Oversight at DHHS, which has the assignment under the health care reform act (Patient Protection and Affordable Care Act) to review each state’s external review law and decide whether it meets all of the 16 minimum consumer protections in the interim federal regulations.

After July 1, 2011, health insurance issuers will be required by the CCIIO to comply with the federal external review law in any state in which the CCIIO determines the law does not meet those minimum protections, effectively preempting the state law until it is brought into compliance. This is apparently not a well-understood concept in Hawaii. (CCIIO staff explained to me that this passive preemption is due to the fact that the PPACA is part of HIPAA (Health Insurance Portability and Accountability Act).)

In any event, on February 17, Prof. Richard Miller and I had a lengthy conversation with the CCIIO staff about our situation, and we were invited to submit a letter to Mr. Larsen explaining why we believe that Hawaii law meets all of the 16 consumer protections (with one minor exception that requires a technical correction). The one element that will be in question is whether the federal minimum requiring that consumer complaints be sent to an independent review organization (IRO) is met by Hawaii’s hearing process before a local panel of three persons, including a physician, plan administrator from a competing plan, and a DCCA lawyer. We believe that is superior to an IRO and has proven to be so, but a minor amendment to our existing law could offer consumers a choice of going to an IRO or a hearing.

One major negative of the repeal is the loss of consumer advocacy. Acting Insurance Commissioner Gordon Ito did not apply for a federal grant to fund an independent consumer advocacy agency in Hawaii, so unlike other states that did receive some of the $30 million appropriated for that activity, Hawaii will lose all of its existing advocacy our law provides through its private attorney general section (the legislature knew in 1998 the State could not provide effective enforcement of the law, so it incorporated a provision requiring the Commissioner to award attorneys’ fees and costs to consumers who have external review hearings).

Another major negative of the repeal is the fact that 264,000 persons now covered by Medicaid will lose the right to external review. This is a major impetus of the repeal because UnitedHealthcare and Wellcare, the contractors for the 40,000 aged, blind, and disabled don’t want their “management” of the enrollees’ care challenged.

The legislators have been told that the repeal will allow the population in commercial employee plans (ERISA) to have the State review process. I questioned the CCIIO staff on that issue and the information the legislature is getting is apparently not correct. Based on what the CCIIO staff told Prof. Miller and me, ERISA plans will fall within whatever external review law Hawaii has on the books if the health coverage is purchased from HMSA or Kaiser or UHA or what have you. That has not been the case but is now going forward. Therefore, the inclusion of ERISA plans is NOT a justification for the repeal.

I would be happy to call into the show to answer questions or discuss these points further. Right now, I will go back to my letter to Steve Larsen at the CCIIO so that we can get what we really need to do, if anything, about Hawaii’s external review law from the horse’s mouth.

Aloha,
Rafael del Castillo
782-1262

I already mentioned I'm one of the families blessed by knowing Rafael. My daughter is alive today, and so are five other children, because of Rafael's tireless work on their behalf, and his professional expertise with the insurance commission.

Castillo has also issued the following alert for anyone interesting in calling in to Beth Ann's show this afternoon.

HERE ARE SOME QUESTIONS YOU COULD POSE TO SENATOR GREEN:
There are a number of cases pending before the Insurance Division (at least 8). All the Insurance Commissioner has to do is delay them until after July 1 if our law is repealed.

1. What will happen to those cases if they are not heard before July 1? Will the consumers have to re-file under the new law?

2. What about the work that their attorneys’ and experts have done on those cases? Will the Commissioner be able to award their fees and costs?

3. How are people going to get help with their cases after our law is repealed? Hawaii has no consumer advocate and Acting Commissioner Gordon Ito did not apply for one of the federal grants to fund an independent consumer advocate like the Hawaii Coalition for Health.

There are MedQUEST consumers who are reporting that the new hearing officer at the Insurance Division is telling them they should not file their case in the Insurance Division because they will lose; that the Insurance Division is just going to go with what the plan tells them about the case because they will not have information.

4. Isn’t the new Acting Insurance Commissioner supposed to be a consumer advocate like his predecessors? Is he working to help us or the health insurers? Why would he try to get rid of consumer advocates?

The show’s website at http://www.hawaiipublicradio.org/townsquare invites calls: “Your phone calls are always welcome at 941-3689; toll free from the neighbor islands at 1-877-941-3689”
Please forward this information to help us continue the opposition to SB 1274

There is an online petition if you want to have your voice heard in opposition to S.B. 1275. You can find it at:
http://www.change.org/petitions/stop-the-attack-on-our-health-care-rights-2?share_id=vhOenUUUGR&pe=pce