Seven County...WORKING for Seniors
Pressure Mounting on HMOs and DHS
The questions and conversations about the way that $4 billion dollars in taxpayer dollars are spent every year continue to be part of day-to-day life at the MN Department of Human Services (DHS).
Those same questions are also being asked of the four (4) Minnesota HMOs who receive those dollars annually to provide coverage for people enrolled in GAMC (General Assistance Medical Care), MinnesotaCare, and Medical Assistance.
Due to the doggedness of GMHCC (Greater Minnesota Health Care Coalition), the issue of transparency and lack of accountability by the HMOs and DHS has drawn state and federal attention.
The Minnesota Department of Commerce, which oversees MN insurance company activities, released a report in December of 2012 which indicated serious problems in the HMO-DHS payment system. The report indicated that it had found “significant examples of incorrect calculations, questionable expenses, and some expenses that directly violate federal law.”
The consultant who submitted the report makes clear that their discoveries and reports do not by themselves trigger any corrective actions; therefore it is up to State regulators or legislators to decide whether or not to do anything about them.
For a complete summary of the report plus audit information from the Segal Company, plus GMHCC commentary on the process, go to the GMHCC website:
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40th Annual Convention has been rescheduled
Due to the weather, we have rescheduled our 40th Annual Convention to Thursday, May 9, 2013. Location and all other information regarding the event will remain the same.
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GMHCC Commentary on
HMO Independent Audit
Greater Minnesota Health Care Coalition ~ March, 2013
Comments on the Dec., 2012 reviews issued by the Dept. of Commerce; and the March, 2013 preliminary report by the Segal Company
Part A. Analysis of Dept. of Commerce reviews of Blue Plus, HealthPartners,
Medica, and UCare for 2011
To fulfill part of an Executive Order issued by Gov. Mark Dayton in March of 2011, the MN Dept. of Commerce (DOC) contracted with the Risk & Regulatory Consulting company to conduct limited reviews of the 2011 finances of the four HMOs that the State contracts with for the public low income health care programs. These HMOs are: Blue Plus (owned by Blue Cross/Blue Shield of MN), Medica, HealthPartners, and UCare. The reports included some auditing of administrative expenses.
The set of four reports, issued Dec. 3, 2012, found significant examples of incorrect calculations, questionable expenses, and some expenses that directly violate federal law. The consultant makes clear that their discoveries and reports do not by themselves trigger any corrective actions, and therefore it is up to State regulators or legislators to decide whether or not to do anything about them.
Here are summaries of key points raised in each of the four reports:
A.1. Blue Plus
$5.1 million and $1.3 million errors
The most glaring finding was that in calculating how much money it would need to keep to cover claims yet to be paid, known as a Premium Deficiency Reserve, Blue Plus was off by $5.14 million too much. This might have a bearing on how much profit the company is supposed to return to the state. Another error was uncovered, which was $1.372 million charged to Medical Assistance (MA) and MinnesotaCare (MnCare), for something called: “Additional Allocation for 2012 Strategic Spending.”
The report also noted “unusual fluctuations” in what Blue Plus reported year to year for reserves, expected next-year losses in the public programs, donations, and distribution of capital gains. Plus, at times the official reporting instructions of the Nat’l Assoc. of Insurance Commissioners were not followed, as are required.
$3.6 million in questionable expenses
The report identified 13 expense categories in which amounts charged to MA and MnCare have questions as to being proper. The grand total of these is $3.648 million dollars Items in this total include $1.2 million for marketing and corporate communications; $100,000 in TV?ads; and $13,000 for a Twins ballpark sponsorship.
Prohibited costs: $99 K
Very noteworthy is that the report identified certain costs that are absolutely prohibited, by federal law, to be paid by the Medicaid program. These are $88,000 in lobbying expenses, and $10,000 to help pay for an audit of Medicare expenses. While not huge, there are clear-cut unallowable items.
$10 million donation
One more striking expense is a $10 million donation to the Blue Cross/ Blue Shield of MN Foundation.This is not allocated on Blue Plus’ books to the public low income programs, and so Blue Plus was apparently not trying to pay for this donation out of the State program revenue.
Allocation of $10.3 million of realized capital gains
Blue Plus received income of $10.3 million from realized capital gains (sale of some assets). What is odd is that all of this income was assigned to a category of businesses services for Blue Cross programs, and not just in Minnesota, but in six other states as well. None of the money was assigned to either the public programs or the commercial insurance policies. This raises the question as to whether a portion of these capital gains proceeds should have been listed as income for the public programs. In contrast, for example, Medica allocated some of its 2011 realized capital gains to its public programs. MORE...
CLICK to READ the complete GMHCC Commentary Audit >
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Audit Raises Concerns Over DHS-HMO Payments
$162 million discrepancy identified in preliminary report...
The four HMOs that run the state's Medicaid program were overpaid according to a preliminary state audit, paid for by the Minnesota Department of Human Services.
The audit, conducted by the Georgia-based Segal Co., says Blue Cross and Blue Shield of Minnesota, Medica, HealthPartners and U-Care, collectively, were overpaid at least $162-million dollars over the past eight years. That overpayment was funded by Minnesota taxpayers. The audit also says the overpayment was invested and gave the four insurance companies an additional $150-million dollars. The audit concludes that's a $312-million dollar benefit the HMOs should not have received.
State Senator Sean Nienow of Cambridge, who sits on the Health and Human Services Committee, told reporters that he thinks the HMOs should pay back the entire $312-million dollars. He says the preliminary audit focuses on just a fraction of the Medicaid costs and that the overpayments and investments paid to the four HMOs could exceed $500-million dollars. The final audit was due out at the end of March.
Senator Nienow says he is not happy to see the audit point to poor management and oversight as part of the reason for the overpayment. The relationship between the HMOs and DHS has created serious doubt about the legitimacy of the payments made for the state’s low income healthcare programs.
The four HMOs and the Minnesota Department of Human Services and the state's Medicaid program are currently being audited by the Office of Inspector General (OIG) out of Washington, D.C. The OIG arrived here in early January and they have auditors, inspectors and investigators working here going over the Medicaid books at DHS and at the four HMOs. There are also two Congressional investigations into Minnesota's Medicaid program, and the Minnesota Legislative Auditor will begin a state audit late this spring.
The Mpls. Star-Tribune has weighed in on the audit’s findings in a lengthy editorial shortly after the preliminary audit was released. In it they contend that “...the state of Minnesota has overpaid some of its biggest vendors — the private, nonprofit managed-care firms who are paid nearly $4 billion a year to run taxpayer-funded medical assistance programs for the poor.” They sum up their position by saying: “The (Segal) review raised further questions about whether the higher margins on programs funded jointly by the state and federal governments may have improperly subsidized a perennially money-losing state-run health program. The Segal authors’ incredulity is also apparent over the state’s lack of concern about annual rate hikes and its timidity in pushing health plans for better data. The state is now collecting that information.”
GMHCC (Greater MN Health Care Coalition) has pushed for over seven-years for independent, outside audits of the state’s system of funding for these taxpayer funded and HMO managed programs.
Health Insurance Exchange Bill Passed Into Law
The long-awaited and much talked about Minnesota Insurance Marketplace (Exchange) has become law. Gov. Dayton signed the legislation into law on March 21st following a sometimes frenetic journey through the MN House and Senate chambers.
Dozens of states across the country are doing the same thing, setting up insurance exchanges, as part of the ACA (Affordable Care Act) which was enacted in 2010.
Promoters of the new system (to be called MNsure) say it will improve access by making it more affordable for people to acquire health insurance coverage for themselves and/or their families. The ACA is designed to allow people to shop for their healthcare insurance and provides subsidies for lower income families and individuals who cannot afford the costs. ACA supporters contend that making insurance companies compete for business on a large scale should lower the cost to the consumer.
Individuals and small businesses can start shopping for coverage on the new marketplace beginning in October of this year.
Seven County will host 8 Hour Defensive Driving class.
FirstLight Health System and the Seven County Senior Federation are proud to announce Minnesota Safety Council “mature driver” training (8 hour class) for drivers age 55+. Upon successful completion of the two-day Defensive Driving class, drivers are eligible for a discount of at least ten percent on auto insurance. The discount can be maintained by completing a 4 hour refresher class every three years thereafter.
Friday April 12, 2013 ~ 5:30 PM to
9:30 PM (1st half)
Saturday April 13, 2013 ~ 8:30AM to
12:30PM (2nd half)
First Light Health Systems
301 Highway 65 S., Mora
Reserve your spot in the next class (deadline: Friday, April 5) by calling the Seven County Senior Federation at 679-4700 or 1-866-679-4700. The cost for the 8 hour class is $20 ($15 for members of the Seven County Senior Federation).
Prepayment is required.
The Seven County Senior Federation ALSO offers a 4-hour refresher class on a monthly basis at the library in downtown Mora. The cost for the 4-hour refresher class is $12 ($9 for Seven County Senior Federation members).
7C Legislative committee assignments:
2013
Sen. Tony Lourey ~ CHAIR --- Senate Health/HumanServices Finance Cmte.
Sen. David Brown Senate Health/Human Services Finance Cmte. member:
Sen. Tony Lourey Health & Human Services Housing Cmte. member:
Sen. Michelle Benson Health & Human Services Housing Cmte. member:
Sen. Sean Nienow Health & Human Services Housing Cmte. member:
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Rep. Tim Faust ~ Vice-Chair of Ag Policy Cmte. ~ Education Policy ~ Property & Local Tax Division
Rep. Kurt Daudt ~ Rules and Legislative Administration ~ Elections
Rep. Joe Radinovich ~ Early Childhood and Youth Dev. Policy ~ Education Finance ~ Housing Finance and Policy
Rep. Sondra Erickson ~ Education Policy ~ Education Finance ~ Property and Local Tax Division
Rep. Brian Johnson ~ Civil Law ~ Elections ~ Judiciary Finance & Policy ~ Public Safety Finance & Policy
Rep. Bob Barrett ~ Early Childhood & Youth Development Policy ~ Education Policy ~ Taxes
Sen. Carrie Ruud ~ Finance E-12 Division ~ Finance-Environment Econ. Dev.& Ag. Division ~ Jobs, Ag. & Rural Dev.
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House Minority leader: Rep. Kurt Daudt (Isanti)
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Voting Law Changes Would Harm Seniors
The 2012 elections might just be a turning point for seniors, not just in Minnesota, but across the country. A number of states are attempting to implement legislation and or laws that would restrict, and certainly hinder, the ability of many seniors to vote.
In Minnesota there will be a proposed Constitutional Amendment on the ballot this fall. If passed, the law would require all voters to produce a current photo ID in order to cast a ballot. It seems simple enough until you begin to look behind the numbers and the history of voting in the state. The incidence of voter fraud (someone attempting to impersonate someone else in order to vote) is a problem that has no history.
Analysis of *2,068 alleged election-fraud cases nationwide since 2000 shows that while fraud has occurred, the rate is infinitesimal, and in-person voter imperson-ation on Election Day, which is pointed to as the driving force causing thirty-seven (37) state legislatures to enact or consider tough voter ID laws, is virtually non-existent.
An extensive public records search was conducted in which thousands of requests were sent to elections officers in all 50 states. They were asked for every case of fraudulent activity, including registration fraud, absentee ballot fraud, vote buying, false election counts, campaign fraud, casting an ineligible vote, voting twice, voter impersonation fraud and intimidation.
Analysis of the resulting comprehensive information turned up 10 cases of voter impersonation. With 146 million registered voters in the United States during that time, those 10 cases represent one out of about every 15 million prospective voters.
In Minnesota, there have been 10 total cases of reported fraud and no cases of voter impersonation reported since 2000.
“Voter fraud at the polls is an insignificant aspect of American elections,” said elections expert David Schultz, professor of public policy at Hamline University School of Business in St. Paul.
“There is absolutely no evidence that (voter impersonation fraud) has affected the outcome of any election in the United States, at least any recent election in the United States,” Schultz said.
A number of states, including Minnesota, have initiatives moving forward or are already moving ahead with strict Voter ID laws. The trend alarms voting advocates like Lawrence Norden, acting director of the Brennan Center for Justice In Democracy Program, who said photo ID laws hit older people, the poor, African Americans and students the hardest. "This is the first time in decades that we have seen a reversal in what has been a steady expansion of voting rights in the United States," Norden said. "There's no question that citizens over 65 will be particularly impacted. The older you get, the more likely you won't have an ID."
**Nearly one in five citizens over 65 (about 8 million) lacks a current, government-issued photo ID, a 2006 Brennan Center study found. Most people prove their eligibility to vote with a driver's license, but people over 65 often give up their license and don't replace it with the state-issued ID that some states offer non-driving residents. People over 65 also are more likely to lack birth certificates because they were born before recording births was standard procedure.
Strict new photo ID laws could make voting this year more difficult for millions of voters, if the new laws stand, according to the Brennan Center.
Details of the investigation data can be found at:
*MinnPost & News21 http://bit.ly/OC0l3Q
**Brennan Center http://bit.ly/PzCdRF
Rep. Sondra Erickson of Princeton (c) faces off with challenger Joe Walsh (r) of Milaca in the race for MN House seat #15A. The candidates debated the issues at a forum co-sponsored by Seven County, Lakes & Pines and the Ogilvie School District and held in Ogilvie on September 13th. About one hundred people attended the event which was moderated by Scott McKinney (l) of KBEK radio.
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**Healthcare Accountability**
Press Conference
GMHCC held a press conference on Thursday, August 23rd starting at 12:00 noon in Room #125 of the State Capitol building. The focus was the release of our 20 page Healthcare Accountability/Transparency report. It covers and documents of almost 20 years of HMO mismanagement of a $4 billion dollar per year income that is funded by your tax dollars.
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Buddy Robinson explains the elements of the GMHCC Accountability Report on HMO Healthcare in MN
GMHCC Accountability Report Released to Public
The Greater Minnesota Health Care Coalition (GMHCC) held a press conference at the state capitol on to announce the release of a 20 page Accountability Report on the state’s healthcare system. Entitled “Who Was Minding The Store?”
The report details over 15 years of investigative analysis of the system and the relationship between Minnesota’s Department of Human Services and Minnesota’s HMOs. There are four HMOs in the state that are given the bulk of taxpayer dollars ($4 billion per year) to administrate and pay healthcare providers for health services delivered. MnCare, Medical Assistance (MA), and General Assistance Medical Care (GAMC) and Minnesota Senior Health Options (MSHO) are the state programs managed by UCare, Blue Cross/Blue Shield, Health Partners and Medica.
These four HMOs have administered these programs for nearly 20 years in what was supposed to be a “demonstration project.” There has never been an independent, external audit of these programs and the tax dollars they have been given since the state turned them over. The state has never evaluated whether or not they are saving money (as promised) or if the population served was receiving better care/access (as promised).
According to the GMHCC report, together these four HMOs carry more than $3 billion dollars in cash reserves (tax dollars), which represents nearly four (4) times the amount recommended by the National Association of Insurance Commiss-ioners which is the insurance industry oversight group .
A copy of the complete GMHCC Accountability report can by read or downloaded from either the Seven County or GMHCC websites
The press conference summary report from KSTP-TV can be found here:
http://bit.ly/TZ16Ij
AND you can...
CLICK HERE to view, print or download PDF report-
Who was minding the store?
A report on Minnesota’s problem with contracting out the state public health care programs to HMOs
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Accountability Provisions Weakened in Final Omnibus Bill
It appears that the intended goal of installing or creating some accountability and transparency measures for state healthcare tax dollars will be met… sort of. A significantly amended version of the original accountability bills, brought forward by Rep. Steve Gottwalt and Rep. Carolyn Laine, was included in the final House Omnibus Bill.
The independent third-party audits required under the bill’s language would be effective for the 2013 calendar year. This means that audits would begin in 2014. This is a change from the original bill as far as the effective “first audit” date goes. In its original form, as introduced by Rep. Carolyn Laine, the effective date would have been 2011 so that auditing would begin in 2012 (now).
Also, there seems to be an interpretive difference of opinion when it comes to the definition of an “independent” 3rd party audit. That language has been weakened quite a bit since the bill’s introduction.
So... after many hours of debate and legislative wrangling over the provisions of what has become generically known as the Health & Human Services (HHS) Accountability Bill, the final version’s elements can now be revealed.
(This information comes courtesy of a private researcher and ally of GMHCC and Seven County.)
Audit language contained in HHS omnibus legislation
First introduced in various stand-alone bills, managed care audit requirements were folded into the 2012 Health and Human Services Omnibus bill, which emerged from conference committee on April 23rd.
The audit provisions alter Minnesota Statutes section 256B.69, by adding another subdivision, labeled (9d.). This subdivision allows that:
• The legislative auditor will contract with an outside audit firm to conduct a bi-annual, “independent, third-party financial audit” of managed care financial data.
• Audits will focus on data that HMOs and county-based purchasers already submit to DHS – including information on administrative expenses, revenues, reserves, reinsurance, and more.
• Audits will be conducted “in accordance with generally accepted government auditing standards issued by the United States Government Accountability Office.”
• The audits will determine if managed care programs are compliant with state and federal laws, as well as with the federal Medicaid rate certification process.
• Firms retained for the audit cannot have provided services to managed care or county-based purchasers during the time period for which the audit is being conducted.
• Future managed care contracts must include provisions that allow auditors access to relevant information, and stipulate cooperation with such auditors. Contracted firms will have the same powers as those of the legislative auditor, for the purposes of completing managed care audits.
• Managed care organizations must provide DHS with bi-weekly “encounter” and “claims” data on public health care programs.
• Audit results will be circulated to the Commissioner of DHS, the state auditor, the attorney general, and various members of the legislative leadership.
In summary...
The end result of these changes is one long-sought by transparency advocates. The bill adds an additional layer of oversight to the state’s managed care programs, by inserting an external auditor who is empowered by (and answerable) to Minnesota’s legislative auditor.
Previously, the oversight of managed care programs fell to DHS, and to a lesser extent, to MDH and the Department of Commerce. The underlying premise of the audit legislation clearly appears to be that an outside observer can find new perspectives on the efficacy of public health care plans, even though they will be using the same underlying data set as state agencies.
The legislation omits a key provision sought by Senator John Marty, in that audits will only extend to contracts beginning in 2014, and will not be retroactive to prior years. Senator Marty has contended that understanding what occurred in the past will be critical to managing public programs going forward – as well as discovering the scope and scale of any past improprieties.
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2012 Convention Report…
President Fran Levings-Baker called the 2012 Convention to order at 9:37 a.m. and gaveled it to a close at 2:04 p.m. on April 19th.In between those times the Seven County Senior Federation conducted a wealth of annual business.
Financial reports from 2011 were delivered by Seven County Treasurer Kathy Kawalek, who highlighted the point made by Levings-Baker that the state of Seven County was “excellent.” Kathy also submitted the 2012 Budget for final review and approval, which she received.
The recommended issue resolutions from the subcommittee assigned that task, both State and Federal, were then presented to the convention crowd for consideration. Following a fairly thorough vetting of the ten resolutions (5 State and 5 Federal) they were all approved for the final ballot. Priority voting followed, results of which are posted on this page.
Elections to fill two Board seats also took place during the morning business session. Bob Skogman of Aitkin County was elected to serve as 1st Vice-President for a two-year term. The Secretary position was also on the ballot and Janet Johnson ran unopposed. She will serve for another two years.
The keynote address delivered at the beginning of the convention, by attorney David Feinwachs, had the entire crowd buzzing. His factual recounting of what happened to him personally as the 30-year general counsel to the MN Hospital association was riveting. The steps that led up to his firing in November of 2010 were the stuff of spy novels, including back room deals, secret e-mails, and unseen hands guiding the entire process. There were audible gasps in the room and lots of head shaking as Feinwachs recounted, in detail, how billions of our healthcare tax dollars have never been accounted for. “HMOs continue to dictate how they will report their expenditures” he said.
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Feinwachs Honored At Convention
As part of the activities at the 39th Annual Seven County Convention there was a special awards presentation. Special guest speaker David Feinwachs was honored by Seven County and GMHCC (Greater Minnesota Health Care Coalition) for his work in promoting healthcare reform through his focus on the issue of HMO transparency . Seven County President Fran Levings-Baker (at left) and GMHCC president Lila Skramstad (at right) honored Feinwachs (center) as their “Health Reform Advocate of the Year.” Over one hundred twenty delegates attended this year’s convention which was held on April 19th at Braham Evangelical Lutheran Church in Braham. Next year’s convention (the 40th Annual) is due to be held in Chisago County.
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Skogman Elected 1st Vice President
The new 1st Vice-President for Seven County is Bob Skogman of Aitkin County, who narrowly edged out Majal Johnson for the slot that was up for election this year. Bob has been a member since 2008 and has served as Aitkin County Vice President since that time. His goal is to increase the visibility and membership in Aitkin County as well as the entire Seven County area.
Issue Priority Voting at 2012 Convention
Convention delegates had the opportunity to vote for their organizational legislative priorities for the coming year at the Federal and State level. The results of the 2012 voting is as follows:
FEDERAL
- *Fairer Taxation Policy 67 votes
- *Campaign Finance Reform 50 votes
- Medicare Part D Reform 47 votes
- Social Security Reform 46 votes
- Arms/Defense Spending Reductions 21 votes
STATE
- *Restoration of Homestead Credit 76 votes
- *Passage of the MN Health Act 65 votes
- Restore Funding Home Health Aides 48 votes
- Voter ID Legislation Opposition 35 votes
- County Based Purchasing Expansion 9 votes
(117 total votes recorded)
*The top two issues at the State and Federal level will be the focus of our Seven County resources for the next year as voted on by our 2012 convention delegates.
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HMO Accountability…
A piece of strong, bipartisan Minnesota *legislation, designed to increase the HMO’s transparency and accountability for state health programs, has been sidelined.
Questions were raised last session over the $3 billion per biennium handed over to the non-profit insurance companies that run the states healthcare programs. As a result of the discussions both bodies of the Minnesota legislature crafted legislation which aimed to remedy that situation. Lack of HMO accountability seemed to be a high priority issue in 2012 as the Health and Human Services committees in the House and Senate held hearings on various bills.
A hearing held on February 14th in the House was the centerpiece of the early discussions.
Presenters at that meeting included Human Services Commissioner Lucinda Jesson and Deputy Commissioner Scott Leitz. The hearing also featured a presentation by former MN Hospital Association general counsel David Feinwachs which shed light on the current system. It prompted some tough questioning from the Human Services Committee members during the 3 1/2 hour hearing.
Representatives from the MN Council on Health Plans, who represent the HMOs, also were on hand. They were grilled about issues relating to the transparency, or lack thereof, in the state tax-funded and HMO administered health services in Minnesota. The Health Plan’s speakers argued, not very successfully, that their auditing and accounting procedures were “very thorough” and needed no added scrutiny. Despite the Health Plan’s reps assurances that transparency was at a high level, the committee members expressed serious doubts.
Adding fuel to the questioning and discussion was the revelation earlier in the day that the Federal Government had launched an investigation of the Minnesota Medicaid program. Medicaid has oversight provided by the MN Department of Human Services, and is run by the state’s non-profit HMOs.
The ranking member of the U.S. Senate Judiciary Committee sent a letter to Gov. Mark Dayton asking why UCare, a Minnesota health plan company, repaid $30 million in Medicaid funds to the state as a gift,rather than as a refund or reimbursement.
In the letter, Sen. Chuck Grassley, R-Iowa, said he's concerned that the way the funds were returned was meant to avoid reimbursing money to the federal government.
Grassley’s reference was to emails sent by Minnesota Department of Human Services Commissioner Lucinda Jesson in March 2011, in which she described how UCare should draft its press release about returning the Medicaid funds to the state.
In order to have a good chance of keeping all of this money, it must be characterized as a donation. If a refund, feds clearly get half, Jesson wrote in an email.
The contents of that email exchange prompted some extended questioning of DHS Commissioner Jesson and her Deputy Scott Leitz. They stated that the dollars returned to the state from UCare ($30 million) was always termed as a donation, not as a refund.
A more in-depth question then arose about the nature of the relationship between DHS and the HMOs who receive $3 billion plus in state tax dollars per biennium to run healthcare programs.
According to David Feinwachs examination and interpretations, the unlimited reserves that HMOs accumulate in state tax dollars should be closely scrutinized. These reserves are created to fend off their “risk” of large claims. “The HMOs are never at risk…” Feinwachs stated when referring to massive reserves held by the HMOs. He explained that the way the system is set up now, if an HMO running one of the state health program experiences a shortfall one year, the rates are adjusted by DHS the next year to make up for the HMOs previous year’s “loss.”
Sen. Grassley also sent letters to all of the Minnesota, non-profit HMOs in charge of the state healthcare program and recipients of state tax dollars. In these letters he focuses on a number of key points, including some designed to examine potential “overpayments” received by the HMOs from Minnesota’s DHS.
Sen. Grassley’s letters and questions get at the heart of the accountability matter and, for those of you who are concerned taxpayers, they can be found at:
http://scr.bi/H0iQKH
* (HF 2412 and SF 1824)
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Feinwachs To Offer Convention Keynote
David Feinwachs
Attorney David Feinwachs will offer the keynote address at the 2012 Convention to be held in Braham on Thursday, April 19th.
Feinwachs has been a champion of healthcare transparency and accountability since his forced departure from the Minnesota Hospital Association (MHA) in late 2010. David was the general counsel for the MHA for nearly 30 years. A revealing video produced by Feinwachs helped illustrate the lack of transparency in healthcare plans funded by the state and administered by private insurance companies.
At issue in the video is the double-standard and lack of accountability that is now the rule for the non-profit HMOs in Minnesota (by law, all Minnesota HMOs are required to be organized as non-profit entities). Feinwachs describes the accountability problem as a “black box.” State “tax dollars go into the black box” of HMO accounting in the form of $3.8 billion dollars in tax money every biennium, and they are “never accounted for” in any meaningful way, according to Feinwachs.
The actions taken by Feinwachs created a flurry of legislative activity by members of both parties. Their efforts were an attempt to address the ongoing lack of oversight for tax dollars spent blindly on healthcare by private insurance companies. To date, the only apparent change has been an Executive Order from Gov. Dayton to require some enhanced reporting of expenditures by the HMOs. No meaningful legislation on transparency was produced in 2011. Legislation for 2012 remains up in the air as politics begins to trump policy. ~
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Accountability Bill now "Toothless?"
March 30, 2012
It appears that the "teeth" have been taken out of proposed pieces of HMO Accountability legislation. Amendments newly added to a once-strong bill now restore ambiguity and murkiness to a bill originally designed to give clarity about how $3.8 billion healthcare tax dollars are spent by Minnesota's HMOs. Cut and paste this link for more... http://bit.ly/H8Eld8
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HMO Accountability Now in Back Seat
March 26, 2012
A piece of strong, bipartisan Minnesota *legislation, designed to increase the HMO’s transparency and accountability for state health programs, has been temporarily sidelined.
Questions were raised last session over the $3.8 billion per biennium handed over to the non-profit insurance companies that run the state’s healthcare programs. As a result of the discussions both bodies of the Minnesota legislature crafted legislation which aimed to remedy that situation. Lack of HMO accountability seemed to be a high priority issue in 2012 as the Health and Human Services committees in the House and Senate held hearings on various bills.
A hearing held on February 14th in the House was the centerpiece of the early discussions.
Presenters at that meeting included Human Services Commissioner Lucinda Jesson and Deputy Commissioner Scott Leitz. The hearing also featured a presentation by former MN Hospital Association general counsel David Feinwachs, which helped shed light on the current system. It prompted tough questioning from the Human Services Committee members during the 3 1/2 hour hearing.
Representatives from the MN Council on Health Plans, who represent the HMOs, also were on hand. They were grilled about issues relating to the transparency, or lack thereof, in the state tax-funded and HMO administered health services in Minnesota. The Health Plan’s speakers argued, not very successfully, that their auditing and accounting procedures were “very thorough” and needed no added scrutiny. Despite the Health Plan’s reps assurances that transparency was at a high level, the committee members expressed serious doubts.
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At the speaker’s table left to right were: Medica’s Geoff Bartsch, David Feinwachs (former general counsel to the MN Hospital Association), DHS Commissioner Lucinda Jesson and DHS Deputy Commissioner Scott Leitz. They all fielded some probing questions during a joint Health & Human Services Committee meeting convened February 14th by Reps. Jim Abeler (Anoka) and Steve Gottwalt (St. Cloud), chairs of the Reform and Finance, committees of the MN House, in that order.
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Adding fuel to the questioning and discussion was the revelation earlier in the day that the Federal Government had launched an investigation of the Minnesota Medicaid program. Medicaid has oversight provided by the MN Department of Human Services, and is run by the state’s non-profit HMOs.
The ranking member of the U.S. Senate Judiciary Committee sent a letter to Gov. Mark Dayton asking why UCare, a Minnesota health plan company, repaid $30 million in Medicaid funds to the state as a "gift," rather than as a refund or reimbursement.
In the letter, Sen. Chuck Grassley (IA), said he's “...concerned that the way the funds were returned was meant to avoid reimbursing money to the federal government.”
Grassley’s reference was to e-mails sent by Minnesota Department of Human Services Commissioner Lucinda Jesson in March 2011, in which she described how UCare should draft its press release about returning the Medicaid funds to the state.
"In order to have a good chance of keeping all of this money, it must be characterized as a donation. If a refund, feds clearly get half," Jesson wrote in an e-mail.
The contents of that e-mail exchange prompted some extended questioning of DHS Commissioner Jesson and her Deputy, Scott Leitz. They stated that the dollars returned to the state from UCare ($30 million) was always termed as a donation, not as a refund.
A more in-depth question then arose about the nature of the relationship between DHS and the HMOs who receive $3.8 billion plus in state tax dollars per biennium to run healthcare programs.
According to David Feinwachs examination and interpretations, the unlimited reserves that HMOs accumulate in state tax dollars should be closely scrutinized. These reserves are created to fend off their “risk” of large claims. “The HMOs are never at risk…” Feinwachs stated when referring to massive reserves held by the HMOs. He explained that the way the system is set up now, if an HMO running one of the state health programs experiences a shortfall one year, the rates are adjusted by DHS the next year to make up for the HMOs previous year’s “loss.”
Sen. Grassley also sent letters to all of the Minnesota’s non-profit HMOs in charge of the state healthcare programs and recipients of state tax dollars. In these letters he focuses on a number of key points, including some designed to examine potential “overpayments” received by the HMOs from Minnesota’s DHS.
Sen. Grassley’s letters and questions get at the heart of the accountability matter and, for those of you who are concerned taxpayers, they can be found at:
http://scr.bi/H0iQKH
*(HF 2412 and SF 1824)
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HMO Accountability Now A Priority in Minnesota
February 28, 2012
A tireless effort by members of Greater Minnesota Health Care Coalition (GMHCC) is finally starting to yield a return in terms of legislative action.
Since early 2007, the GMHCC members have trumpeted the lack of legislative oversight for billions of tax dollars spent on healthcare in Minnesota. Those funds have been earmarked for the various state-funded programs like General Assistance Medical Care (GAMC), MnCare and Medical Assistance (MA).
Tax dollars assigned for those programs flow through to a number of HMOs who are designated as program administrators in almost all cases. The price tag is nearly $4 billion dollars per biennium.
A quick history shows that this system of flowing tax dollars through HMOs to do “managed care” of people enrolled in the aforementioned programs began in the early to mid 80’s in Minnesota.
Originally created as a “pilot project” to measure whether HMOs could deliver some healthcare services more cost effectively, it subsequently turned into a “permanent” program.
Numerous efforts by advocates and members of the MN Legislature to measure the HMO’s administrative effectiveness have been thwarted over the years.
Most recently, a push that was spearheaded by GMHCC in 2007 resulted in an OLA (Office of Legislative Auditor) report in 2008. The OLA report gave a partial glimpse into the lack of transparency and accountability in the program’s administration by the HMOs.
The issue of accountability was front and center as the subject of a joint Health & Human Services hearing, which combined both the Reform and Finance committees in a joint informational session.
Rep. Jim Abeler and Rep. Steve Gottwalt chairs of the HHS Reform and Finance committees respectively, recently convened a joint informational hearing. The impetus for the hearing was the information about the lack of HMO accountability brought forth by David Feinwachs. Feinwachs was general counsel to the MN Hospital Association for over 30 years. He was terminated for promoting information showing the lack of accountability by HMOs.
Legislation to help address the issue of HMO accountability has been offered up by Rep. Carolyn Laine and Rep. Steve Gottwalt in the MN House. The House bill is a companion to a similar measure authored by Senator Sean Nienow of Cambridge. At the heart of both bills is a call for independent and comprehensive audits of the HMOs accounting records for the state-funded healthcare programs.
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Occupy Movement Comes To Minnesota
The number of protests now known as the “Occupy” movement grows a little more each day around the country and, at last count, listed over 100 sites nationwide.
In Minnesota the OccupyMN protest has developed in downtown Minneapolis near the Hennepin County Government Center.
A variety of interests/concerns are represented at the site including spots for campaign finance reform, environmental protection, bank regulation and oversight, and, of course, healthcare reform.
100+ people were on hand (in the rain) for an October 25th Healthcare Reform Rally at Occupy MN.A healthcare reform rally was called for the evening of October 25th at the plaza and representatives from at least a half dozen groups turned out to take part in the action. Physicians for a National Health Plan (PNHP-MN), MN Universal Health Care Coalition (MUHCC), Greater Minnesota Health Care Coalition (GMHCC), Universal Health Care Action Network (UHCAN-MN), Minnesota Nurses Association (MNA), Service Employees International Union (SEIU), and the Minnesota Green Party made up the bulk of the rally contingent.
After a 20-25 minute gathering rally the group took to the street and marched three blocks away to the front of the U.S. Court of Appeals plaza (also known as Bankruptcy Court). The gathering spot was chosen because of the preponderance of bank foreclosures attributable every year to overwhelming personal medical expenses.
According to PNHP-MN spokesperson Dr. Elizabeth Frost, over 60% of all bankruptcies filed in the United States are medical expense related and, of those, almost 70% had health insurance. “This is obscene (foreclosures due to medical costs) and it’s wrong…” Frost said, “we really need to change our broken system to something that works for everyone, not just the very wealthy.”
Cravaack Attempts To Answer Medicare Questions
Congressman Chip Cravaack (CD8) has convened a handful of town hall forums in the district recently to give people the opportunity to hear from their elected representative.
His most recent forum was in downtown Mora at Freddie’s Restaurant on South Highway 65. A packed room greeted the Congressman as he spent the better part of an hour giving updates on a couple of topics, with heavy emphasis on the “overwhelming debt load” that the United States faces.
Cravaack’s presentation of charts and graphic illustrations lasted almost 40 minutes. He then opened the floor up to questions from a very polite and unusually supportive audience. The questions were mostly covered by the substance of his video presentation but he politely referred back to his charts or graphs for additional support.
One of the last questions had to do with Medicare and the proposed revamping of the entire structure. The questioner (from Seven County) asked why the proposed changes leaned heavily towards Medicare privatization through the use of a “voucher system.” To support the validity of the question an illustration was given by the questioner of the “disaster that was Part D.” He cited the small number of people that received substantial-to-moderate help and the disproportionate cost of the Medicare Part D Drug program, relative to that assistance.
Representative Cravaack stated that the Medicare changes that are being proposed under the Rep. Paul Ryan Budget plan will actually save Medicare almost “38% in overall costs.” He went on to say that the changes were “originally proposed during the Clinton administration by Alice Rivlin.” Cravaack went on to correct the terminology being used to describe the Medicare revamping, preferring to call the changes “premium support/subsidies” and not “vouchers.”
According to reports and an interview in the Washington Post* earlier this year, the referenced Alice Rivlin Medicare proposals (1993) were substantially different than the Ryan Medicare proposals (2011).
The biggest difference had to do with adjusting the amount of the support/voucher annually to the cost of inflation. If the cost of healthcare went up substantially, as has been the case for the past decade, the value of the support/voucher would drop dramatically. That shortfall would mean that the Medicare recipients would then be liable for more and more out-of-pocket expense.
At earlier town halls in Mountain Iron and at the Duluth Airport a number of questions regarding the reported savings of Medicare Part D went unanswered. Cravaack’s aides promised to “do research and get back” to the questioners shortly. As of November 14th there has been no follow-up from Rep. Cravaack's office for answers/responses to those requests.
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HMO's Reporting Requirements Under Scrutiny -
Will They Change?
A group of healthcare reform advocates, accompanied by some current legislators, received confirmation that Minnesota’s privately run system is lacking normal oversight and likely is wasting significant amounts of tax dollars.
A representative from a national accounting firm that specializes in the auditing of Managed Care Organizations (MCO) was asked to examine the practices used in monitoring the state-funded and privately administered healthcare programs in Minnesota. In his words, he was “shocked” by what he found. He called the lack of accountability “simply amazing” and indicated that the fact that this has been allowed to go on for so long “even more amazing.”
The visit and the subsequent look at the state’s healthcare practices were prompted in large part by the efforts of David Feinwachs. A video (created by Feinwachs) which pointed out the secretive nature of tax dollars handled by HMOs and insurance companies created quite a stir in the Minnesota legislature this past session. For his efforts Feinwachs was “released” from his duties as MHA (MN Hospital Association) General Counsel.
The attention to Feinwachs’ video and his accompanying report brought bipartisan support from the legislature. Republican Senator Sean Nienow (Cambridge) authored a number of bills aimed at improving transparency and increasing accountability. Likewise, Democratic Senator John Marty (Roseville) put forth similar bills with the same intent.
With the state facing a $5 billion budget shortfall, sharp scrutiny of the HMOs, which receive $3 billion bi-annually to provide health care for more than 500,000 individuals – looked inevitable early in the session. Reports that the HMOs’ financial reserves have ballooned to $2.5 billion only increased the calls for reform.
For some reason, none of the proposed bills for accountability ever got a hearing. “Bipartisan interest and no hearings – when’s the last time you saw that?” asked Feinwachs, a persistent critic of the state’s nonprofit health plans before, during and after his 30 year tenure as MHA General Counsel.
It is difficult to determine exactly why the impetus for overhauling the state’s rules for regulating HMOs, principally Blue Cross & Blue Shield, HealthPartners, Medica and UCare, dissipated and then disappeared. Capitol observers believe that a full-court press lobbying effort by the health plans effectively sidelined the issue. Together those four health plans have 27 registered lobbyists on the books.
An Executive Order issued by Gov. Mark Dayton in March may have had something to do with stalling the accountability efforts. One of the items in Dayton’s order was to cap HMO profits at 1%.
Under the directive, excess revenue would be returned to the state’s general fund. Critics of HMO accountability were unimpressed by the 1 percent cap on profits. That’s because there are no limits or definitions of what health plans can charge off as administrative overhead; the arrangement provides for no independent, outside audits of their books; and the cap is only in place for one year.
Nienow argued that the health plans can simply finesse their books to shield any profits. “The 1 percent cap is absolutely meaningless…” he said, “on paper it looks good… it’s something that makes everybody feel good, but doesn’t really do anything.”
Vermont Edges Closer to Single-Payer
Vermont has moved ahead of Minnesota and become the first state to lay the groundwork for single-payer health care when its governor signed an ambitious bill aimed at establishing universal insurance coverage for all residents.
"This law recognizes an economic and fiscal imperative," Vermont Governor Peter Shumlin said as he signed the bill into law. “We must control the growth in health care costs that are putting families at economic risk and making it harder for small employers to do business."
Legislators say the plan, approved by the Democratic controlled House and Senate this spring, aims to extend coverage to all 620,000 residents while containing soaring health care costs.
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The chief architect of the Vermont bill is Dr. William Hsiao, Harvard Professor of Economics and healthcare expert. Dr. Hsiao leads a new program in health systems studies at Harvard University. He received his Ph.D. in Economics from Harvard and is also a fully qualified actuary with extensive experience in private and social insurance. His work was the foundation for the successful single-payer healthcare system operating in Taiwan since 1995.
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In Vermont a key component of that legislation establishes a state health benefits exchange, as mandated by the new federal health care law. That exchange will then offer coverage from private insurers, state-sponsored and multi-state plans. It also will include tax credits to make premiums affordable for uninsured Vermonters.
Green Mountain Care (name given to the program in Vermont) will be managed by a five-member board; will set reimbursement rates for health care providers and streamline administration into a single, unified system.
Residents and small employers will be able to compare rates from the various plans and enroll for coverage of their choosing.
As designed, the goal is an eventual state-funded and operated single-payer system.
But its sponsors say that outcome is far from certain. The plan will be phased in over several years, with an evolving financial structure that mandates a number of conditions.
Among criteria are adoption of a financing plan by 2014; ensuring the new system costs less than the current fee-for-service one; and obtaining federal permission via a waiver to allow Vermont to proceed with the single-payer option, in around 2017.
Advocates of change say the current fee-for-service care in Vermont has a financial incentive to deliver more care, such as tests, with little attention to quality or better outcomes.
Vermont’s health care spending runs about $5 billion annually, with costs rising between 6.5 percent and 8.5 percent in recent years.
Some experts say a revised system would save an estimated $580 million annually and $1.9 billion by 2019, while creating several thousand jobs.
Reports:
Reuters and Burlington Free Press
Healthcare Education Session with Dr. William Hsiao
Seven County and GMHCC were well represented for a presentation by Dr. William Hsiao, well known healthcare expert and Professor of Economics at Harvard University. He spoke to a crowd of about 175 people on Sunday September 25th in St. Paul. Shown above are (l to r): Char Fisher (Central Senior Federation), Dr. William Hsiao, Tim Burkhardt (Executive Director 7 County, GMHCC Co-coordinator), Lila Skramstad (President – GMHCC), Mary Mayer (Treasurer - GMHCC, Central Senior Federation), and Jerry Challman (Vice President—GMHCC, N.E. Citizens Federation).
T.R. Reid ~ MUHCC Fundraiser
T.R. Reid
Seven County Attends Healthcare Fundraiser
Renowned Journalist and author T.R. Reid was the featured guest speaker at the Annual Summer Fundraiser sponsored by the Minnesota Universal Health Care Coalition (MUHCC) and the Physicians for a National Health Program (PNHP MN) Minnesota chapter. Seven County and its GMHCC partners are working closely with these groups, and more, to promote meaningful healthcare change.
Hundreds of people gathered at Macalester College in St. Paul in June to help support the cause of advancing the Minnesota Health Plan closer to passage into law in this state. Seven County had the privilege of attending this outstanding event and were represented by staff members Tim Burkhardt (Executive Director), Lisa Krahn (Outreach Coordinator), and Shannon Jackson (Communications Coordinator).
Reid spoke about the need to realistically assess reforms that have been proposed in order to find a ‘uniquely Minnesotan’ healthcare solution and he spoke glowingly about the concerted efforts underway in Minnesota to improve the delivery of healthcare for all citizens.
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Shown above: Lisa Krahn (7 County), T.R. Reid and Shannon Jackson (7 County).
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