Hawaii Medicaid, UnitedHealth, and the Election

With the elections over, some interesting coincidences have arisen involving unregulated donations to Republicans successfully running against Democratic incumbents,  and states that have turned over parts or all of their publicly funded programs (i.e., Medicaid and Medicare) to profit-making corporations such as UnitedHealth and Wellcare.

On November 3, Public Citizen published a report of the congressional races where unregulated third-party contributions played a role.  They found that in 58 of the 74 congressional elections where power changed hands, outside spending from unregulated sources ranged as high as $8.7 million for the new Republican senator from Illinois.

The report reminded me of something I read earlier this summer.  On July 26, The Center for Public Integrity reported that the five top profit making insurance companies were talking about forming a non-profit.  The purpose was to funnel about $20 million towards candidates who would protect their interests when the time comes to write the actual regulations for health care reform.  According to the article, one of the new association's biggest targets was going to be health reform's insistence that the companies actually spend eighty percent of the premiums collected on medical care and services.

Insurers are concerned about the new regulations because the new law mandates consumer refunds if the companies’ administrative costs are excessive.

Health Care for America Now, a coalition of consumer groups that backs the new law, last week issued a study which indicated that if the six biggest for-profit insurers were required to meet the new legal standards in 2009, they would have been obligated to pay a total refund of $1.9 billion.

CPI identifies 71 candidates in 34 states where winning Republicans who received unregulated campaign contributions overturned incumbent Democrats.

Coincidentally, Medicaid and/or Medicare services in 33 of those states are administered by for profit health companies.  UnitedHealth alone operates Medicaid or Medicare programs in 31 of the 34 states.  The other two companies are Wellcare and Wellpoint.

Thirty of the 71 candidates were concentrated in the ten states (of 34 total) where both UnitedHealth and Wellcare operate Medicaid and Medicare programs.  These are the same two companies that have been in charge of Hawaii's Medicaid programs since February 2009.

Twenty-nine of them were in eleven states where federal Medicaid, DOJ or Civil Rights authorities have intervened since February 2009 to prevent civil rights violations stemming from Medicaid budget cuts.


UnitedHealth operates a Medicaid or Medicare program in thirteen of the total of fifteen states where federal regulators have intervened to stop civil rights violations against people with disabilities.

Hawaii's Medicaid debacle could be a view into the future if for-profit health insurance companies are allowed to continue taking over Medicaid and Medicare.

In the first year after UnitedHealth and Wellcare took over the state's $1.2 billion annual Medicaid budget to help the elderly and people with disabilities stay in their homes, the death rate in that group rose 36%.

UnitedHealth and Wellcare report fairly consistently to the SEC that their Medical Benefits Ratio (the percent spent on actual services out of the monthly premium) is in the 80-85% range.  With Hawaii's annual budget ranging from $1.2 billion to $1.3 billion, that means the two companies are whisking somewhere between $15 million and $25 million a month away to their out of state corporate headquarters.

That's why services are being cut.  Not because the state is running out of money, or the economy is terrible.  But because profit-making health insurance companies have to keep their profit lines going just like the banks do, regardless of the human cost.

Ironically, UnitedHealth has just released a study trying to prove the US will save $3.5 trillion in the next twenty-five years if only every state would turn it's Medicaid and Medicare programs over to them (or companies like them).  What they don't tell you is that is after they take their fifteen-twenty percent cut off the top of what they project will be a $63 trillion business over the next 25 years.

Do the math.  Does the country save more money by turning Medicaid over to these profit-making companies or by using the almost $10 trillion they'd take in profit to restore services to our elderly and disabled citizens, along with all the jobs that sector creates.

UnitedHealth's Hawaii operation under monitored "Corrective Action Plan" since April 2010

UnitedHealth Group's Hawaii operation has been under a DHS-imposed and monitored "Corrective Action Plan" (CAP) since April 2010.  The following was contained in an email I received from CMS on October 20, responding to a complaint I had filed earlier.

CMS and DHS reviewed your September 9, 2010 complaint about Evercare and the lack of oversight by DHS‐Med‐Quest (MQD) Division. You have reported that Evercare is out of compliance with CFR 438, subpart F: Sec 438.400.438.410 in meeting the needs of your daughter, Hannah Harrison. In reviewing your complaint the Med‐QUEST Division (MQD) found that Evercare is out of compliance with some of the required timeframes for both Notice of Adverse Action (NOA) and processing of appeals. MQD identified on April 5, 2010 that Evercare was not consistently compliant with both timeframe and required information for NOA as well as grievance and appeal regulations. MQD placed Evercare under a Corrective Action Plan (CAP) in April 2010 to assure they are meeting the required timeframes. CMS has assurance that MDQ continues to monitor Evercare in its CAP to assure they are meeting the required timeframes.

Apparently, at some point in time prior to April, federal Medicaid regulators and Hawaii DHS agreed that Evercare (UnitedHealth) had violated my daughter's legal rights.

The obvious question is how many of the other twenty thousand or so medically needy people enrolled under Evercare also had their rights violated? 

And why haven't any of us been notified officially?

In a related issue, CMS told me on May 24 that MedQuest told them Evercare had not denied any services for Hannah, and there were no outstanding complaints.  

All I could do was respond that I had a record of 33 complaint emails I had sent to Evercare over denied services and sixteen emails directly to Patti Bazin.  One of the biggest outstanding issues, I said in my email to CMS, was Evercare's refusal to follow medical recommendations for how to teach Hannah to talk with us using assistive technology.

I didn't have a chance to respond to the October 20 news that Medquest once again was telling federal regulators there were no outstanding complaints for Hannah until November 1. I reported to CMS that it appeared the reports they were receiving from DHS regarding Evercare's adherence to the specified timeframes could be in error.  I had emailed Patti Bazin on June 30 that Evercare had never responded to prescriptions received for medically necessary services received on May 21.  Emails I received from Bazin as recently as October 12 consistently ignored Evercare's failure to approve therapy that would teach my daughter how to talk.

The public deserves to know about this so-called Corrective Action Plan.  The elderly and disabled adults as well as children who have had their rights violated deserve to know.  If the state manages to keep losing my complaints, knowing I blog about it, who else's complaints have disappeared?

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.


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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?