Romney says corporations are people, so why aren't HMO hoodlums who steal from taxpayers in jail?

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If corporations are people, as Mitt Romney told a group today, then why aren't the companies caught defrauding Medicaid and Medicare in jail?

Romney's full statement, quoted in today's Huffington Post, is:

"Corporations are people, my friend... of course they are. Everything corporations earn ultimately goes to the people. Where do you think it goes? Whose pockets? Whose pockets? People's pockets. Human beings my friend."

"Everything ultimately goes to the people." That sure isn't the case with the big HMOs caught defrauding the taxpayers of billions of dollars intended to provide medical services to children.

I've asked before: if you were an employer and caught an employee stealing from you, would you hire that person again? And if you did and they did it again, would you hire them back a second time...a third time....?

Why is this any different from the Administration continuing to award federal subsidies to corporations already caught stealing from the government?

PR for the health insurance industry has done a great job fogging the mirror on Medicaid and Medicare. They have framed the entire debate in terms of the skyrocketing cost of medical care, the undeserving nature of recipients, and how the public budgets for these programs should be cut.

The problem is reality conflicts rather substantially with this PR "spin."

First, let's get the idea that Medicaid is for the poor or unemployed out of the way. Two-thirds of the national budget goes to keeping children and adults with disabilities, along with the elderly, out of institutions. Our country actually has a wonderful set of laws and regulations designed to keep families together, by providing medically necessary services in the individual's home. When the Medicaid budget starts getting cut, it's this two-thirds that is affected the most, and carries the highest human toll in misery and death.

Second, we need to remember that just because expenses are reported by insurance companies to federal authorities, doesn't mean those figures are accurate. The whistleblower case against Wellcare unsealed last summer reported expenses inflated by up to 299%. In Florida, investigators discovered Unitedhealth had billed the state for more than $2 million of speech therapy for children with disabilities that never took place.

Ironically, the insurance companies use these same inflated costs to justify premium increases in their state Medicaid contracts. In fact, the companies have to show they are losing money on the state contracts to get the rate increase. But if they were losing money in all the states that have awarded increases, how are they continuing to report record profits?

In its first quarter 2011 filing with the SEC, Wellcare said that "Hawaii program rate increases ... we believe have improved the stability of the program." With the company's operating profit jumping from 13.1% to 19.3% just in the past nine months, how much of the raise is being applied towards costs is in serious question.

Meanwhile, when PR flacks and industry reps talk about cutting provider rates, they forget to mention that doing so just increases the corporate HMO's profit margin. The HMO is not a "provider" in this lingo; it has replaced the state accounting and quality control bureaucracies with its own employees. The providers are the nursing agencies, pharmacies, hospitals, medical supply companies, day care centers for people with disabilities and other small businesses that provide direct services to the people needing them.

The biggest myth of all is that the issue that needs to be addressed is how to cut budgets. In essence, we are being asked to make decisions about cutting budgets without knowing how those budgets are spent. It might seem logical to equate Medicaid budgets with how much is spent on medical care, but that leaves out the twenty-to-fifty percent profit the HMO is scooping off the top of every payment they get from the government. Right now that totals somewhere between $2 billion and $5 billion a month, depending on how much fraud is going on.

As quietly as the government has been auctioning off Medicaid and Medicare to for-profit HMOs, the White House has taken steps to let these corporations know that federal regulators won't be watching too closely how these funds are actually spent.

On April 26, the Administration backed an agreement between Wellcare, nine states and the federal government, settling all the Medicaid fraud cases against them for $137 million. In return, the government agreed not to consider Wellcare a criminal and not to hold this non-criminal past against them in any future contract negotiations.

On May 6, the Administration published proposed new Medicaid access regulations that dropped jaws across Washington and the health reform movement. According to Sara Rosenbaum, Chair of the health policy department at George Washington University, "rather than being a forceful implementation of the law, the proposed rule is a model of inaction." She went on to call it "the first sign of the administration’s refusal to intervene" in state Medicaid practices, including those concerned with how government money is being spent. She calls the rule "a model of inaction," the sole remaining purpose of which is "to establish what might charitably be characterized as an information-gathering exercise."

Even this extremely watered down proposed law goes further by exempting everyone enrolled in Medicaid HMOs from inclusion in the five year information study.

Just from the year of statistics I took in college, I know any study that excludes seventy percent of the affected population has dubious accuracy.

Then on May 26, the White House took an action that could end up turning everyone receiving Medicaid into second class citizens. Defying HHS Secretary Sebellius as well as a number of health advocacy groups, Obama backed a "friend of the court" document submitted to the Supreme Court that advocates denying anyone on Medicaid the protection of federal law.

Simon Lazarus of the National Senior Center Law Center wrote:

The brief charts a path for the Supreme Court to permit federal courts to continue routinely to apply federal supremacy to strike down state laws protecting consumers, workers, retirees, bank depositors and others, alleged by business litigants to conflict with federal laws, while arbitrarily withholding identical protection from the vulnerable populations served by Medicaid and other safety net laws.

Rosenbaum warned in Politico that "there’s “no stopping point … in terms of its spillover effects” if the Supreme Court broadly restricts individuals’ access to the courts over state implementation of such a federal program."

If Romney thinks corporations are people, then Obama's actions tell us he values these corporations over the rights of the individual.

The country's most medically vulnerable population has been auctioned off to a bunch of criminal hoodlums with no regulatory strings attached.

Please sign our petition to stop this enslavement.

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.

Administration pandering to big business insurers is like hiring a pedophile as a babysitter

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A proposed Medicaid regulation published in the Federal Register on May 6 takes on new ominous overtones in light of the recent Administration-backed policy brief submitted to the Supreme Court.

Sara Rosenbaum, head of the Health Policy Department at George Washington University, calls the rule "a model of inaction," a purpose of which is "to establish what might charitably be characterized as an information-gathering exercise." Writing in the New England Journal of Medicine, Rosenbaum continues

Even this information-gathering exercise is wanting. The proposed rule exempts Medicaid managed care from review, despite the fact that the access statute protects all beneficiaries, including the 70% who receive their care through managed care plans. Moreover, the proposed rule gives states an inordinately long 5 years to measure access within their residual fee-for-service programs, which overwhelmingly serve the beneficiaries with the most severe physical and mental health conditions.

Why would federal policy exclude seventy percent of Medicaid beneficiaries from any evaluation of how well a state's Medicaid program is conforming to federal law? That would be like taking a census and excluding seventy percent of the population. The proposed rule explains that managed care organizations are already covered under a different section of federal law, and that is sufficient to ensure their compliance.

Managed care contracts are being farmed out across the country to provide services to children, families, the elderly and people with disabilities. These are the people who would be unrepresented in these state evaluations, allowing for-profit corporations to continue to abuse children and steal their federal funding with impunity.

Six federal civil rights investigations, a state-issued "corrective action plan", and extensive reporting to CMS of violations of federal regulations have shown, at least in Hawaii, that managed care Medicaid insurers ignore federal laws with impunity.

Of the six federal civil rights actions, at least four have targeted one company, Unitedhealthcare, which operates in Hawaii as "Evercare." The company reported a 20% increase in quarterly Medicaid/Medicare revenues between September 20, 2010 and March 31, 2011, during which Medicaid/medicare membership only increased 5%. One quarter of the company's policyholders generate 55% of the company's premium revenues.

New Jersey has recently announced they are turning all their Medicaid families over to mandatory "managed care organizations." Two of the four providers are Unitedhealthcare and Amerigroup, both with documented histories of criminal Medicaid fraud investigations.

Wellcare reached a settlement over criminal Medicaid fraud accusations in every state in which they operated in May. They apparently have retained all these contracts, and even got rate increases of up to 3% from four of the states.

The company told the SEC that in exchange for their settlement over Medicaid fraud, the federal government had agreed "to release and refrain from instituting, directing or maintaining any administrative action seeking to exclude the Company from Medicare, Medicaid and other federal healthcare programs." Quite a "get out of jail free" card, but also in keeping with the pattern of Administration pandering to big business health insurers.

CMS, the division of HHS that administers Medicaid and Medicare, is a watchdog with no teeth: they can document violations of federal law but cannot enforce them. The only action CMS can take against a state is to withhold the federal payment share. That was tried in Alaska and backfired, creating more human misery than it alleviated.

Rosenbaum cautions at the end of her article that regardless of what form the potential regulation takes in the end,

it would not even remotely amount to the type of comprehensive federal enforcement scheme that would justify a decision by the U.S. Supreme Court to overturn generations of Constitutional precedent and foreclose access to the courts by millions of beneficiaries and the health care providers who serve them.

Would any parent in their right mind hire a pedophile as a babysitter? Why is President Obama pushing a federal policy "arguing that the courts are closed to private individuals where Medicaid-access litigation is concerned" while surreptitiously shoveling millions of medically vulnerable Americans into programs run by apparently criminal companies?

It is uncannily similar to what has happened here in Hawaii, where turning over the state's Medicaid waiver program to two for-profit corporations produced a 36% rise in the death rate within the first year. State legislation sitting on our governor's desk would deprive everyone on Medicaid of external appeals of medical denials from their health insurer. That legislation has been openly supported by Unitedhealthcare and Wellcare, the latter even admitting in court to having written a sister bill. A Unitedhealthcare attorney moaned on TV that these appeals (almost all of which are finding on behalf of the children) were costing the company too much money.

If all of this comes to pass as federal Medicaid policy, there will be no record of how badly and corruptly corporations are saving money by deciding services based on profit not need.

Please sign our petition. We have to stop this from happening.

Unitedhealth loses Hawaii court appeal

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From Rafael del Castillo:

Something happened on Monday to underscore just how bad SB 1274 really is.

On September 30, 2010, the Panel in Metsch v. Evercare filed its decision. It was one of the few decisions where we knew the Panel got it wrong on the law, so we appealed to the Circuit Court. It was quite simple, really. The Panel rejected the opinion Evercare submitted by an adult epileptologist whose generic report had little to do with our child-petitioner (whom he had never seen and would not have accepted as a patient), and accepted our 2 experts’ opinions. It then turned around and decided against those opinions without grounds for doing so.

Monday, the Hon. Karl K. Sakamoto held at the conclusion of oral argument (the one I returned from DC for a couple of weeks ago, darn it, but was continued to yesterday because Evercare’s attorney could not make it), that it was correct for the Panel to base its decision on our experts, but it could not logically do so and then go against their opinions. He VACATED the September 30 decision and REMANDED for a new hearing.

He could have reversed, but has given Evercare another bite at the apple. There followed the most incredible scene I have seen in all my years of practice: Evercare’s attorney proceeded to lecture the Judge for about 3 minutes on how he was going to be reversed on appeal. Based upon its actions the past few weeks, it is clear Evercare is banking that it has SB1274 in the bag—reversing prior denials so that it won’t be stuck with an order from a panel—and thus it can do as it pleases, including reading the riot act to a judge.

This is the same company that expanded its Medicaid enrollment last year by 5% and its Medicaid revenues by 23% (how does that work??). At least our 80%+ stats are even better now, but that is not the important thing.

The importance of the Metsch case is this: panels occasionally make mistakes in applying our medical necessity criteria. It takes a lot of care and attention to detail, which, despite having a lawyer chair the panel, does not always get properly done. We have even had a couple of cases where the lawyer chairing the panel dissented in a majority opinion. One is on appeal. In the previous one, the court reversed the panel.

Under SB1274, these decisions, which often involve life-and-death matters, will be turned over to some doctor, most likely in another state, and they will be expected to apply Hawaii law properly every time. Right. Sheer genius.

The Insurance Commissioner says there will be an appeal from the IRO decision. He is wrong. With all due respect, the Ins. Commr. is not a litigator. He does not have to explain to a judge that just because the law says the IRO decision is “binding” there is still a right of appeal. I have to do that, so I know just how small the chances are of getting the circuit court and appellate courts to agree with me. I reviewed Hawaii statutes, looking at every one that says a decision is “binding.” If there is an exception for appeals, the law always expressly says so. Why? Because that is the law.

You see, there is no right of appeal from any agency decision unless the court can find an expression of legislative intent that there be an appeal. The doors of the court are only open if the legislature has said so. Besides, who are you going to find to take your appeal? You will have to pay and you could lose.

One more thing: do you really think the health insurers will agree that you have the right to an appeal? They will fight you tooth and nail just as they fought, and spent hundreds of thousands, if not more, to dismantle Hawaii’s external review law, starting back in 2002 when they launched their attack to get ERISA plan members excluded. Bit-by-bit they have torn it down. It is especially ironic that the Administration’s chief argument is that ERISA members are excluded. The health insurers won that battle so let’s concede the whole war to them? That is indefensible public policy. Let’s just all turn our wallets over to them and let them take as much as they want.

By the way, you can strike a blow against the national attack on Medicare and Medicaid:
Reversing long-standing policy which even the Bush Administration supported, the Obama Administration has submitted a brief to the Supreme Court which can only be interpreted as relegating Medicaid beneficiaries to second-class citizen status. The amicus brief filed by Acting Solicitor General Neal K. Katyal on May 26 effectively exempts everyone receiving Medicaid - including children, the elderly and people with disabilities - from the protection of federal law by denying them access to federal courts.

Please read about the issue and consider signing our petition. If this brief is allowed to become policy, it will foreclose actions against state laws that violate Medicaid federal law. Senator Waxman has said the policy expressed in the brief is an abomination.


Also, please sit down today and send another email to the Governor and send a letter to the editor of any newspaper. People are still in the dark about SB1274 and what the Administration is poised to do with our patient protections.