Kokua Council asks legislators to avert Hawaii Medicaid crisis

Kokua Council today asked lawmakers to act to protect the well-being of 37,000 Medicaid-eligible Aged, Blind and Disabled (ADB) citizens of Hawaii whom the Department of Human Services will involuntarily switch to two for-profit Mainland-contracted HMOs in February 2009.

Unless the Legislature intervenes, these patients will be required to give up their current doctors and switch to physicians who agree to contract with either UnitedHealth Group Inc., of Minneapolis, Minnesota or WellCare Health Plans Inc., of Tampa, Florida. It is likely that many physicians may not contract with either. All Kaiser patients will lose their physicians because Kaiser will not participate. The Waianae Coast Comprehensive Health Center has not yet agreed to participate. Many patients may not be able to find doctors near them at all.

“A bidding process that results in cutting off services to some patients and disrupts care to others while transferring business to these two out-of-state vendors is fundamentally flawed,” said Larry Geller, President of Kokua Council. “Many patients will find some of their doctors signed up with their plan but others with the other plan, or some doctors not participating with either. Particularly on Neighbor Islands, if physicians or hospitals decline to sign up with both of the two mainland HMOs, patients will be left without any care at all.”

The problem could exacerbate the already critical shortage of specialists on Neighbor Islands, placing Hawaii’s most vulnerable patients at risk.

Kokua Council is concerned that patients may be left without services if it turns out that these HMOs do not have proper authority to operate in Hawai'i. State law requires all HMOs to obtain a certificate of authority from the State insurance commissioner before they can operate in the State. Our understanding is that neither plan has obtained such a certificate.

In order to operate in Hawaii the two HMOs would have to provide medically necessary care as defined in the Hawai'i Patients’ Bill of Rights and Responsibilities. Yet it’s not clear that the HMOs’ proposed agreements with physicians meet the legal requirements. DHS may also run afoul of the law if it returns State excise taxes to the HMOs as is planned. Hawai'i law expressly exempts mutual benefit societies from paying such taxes but the exemption does not extend to these for-profit mainland companies.

Kokua Council wonders why the State agreed to huge multi-million dollar contracts to for-profit mainland corporations that do not have a clean record of dealings with the states in which they have operated. This is particularly questionable today when the State is facing enormous economic problems and when the money could much more wisely be spent in Hawai'i.

A hearing at the State Capitol on December 9 (9 a.m. – 3 p.m., Room 229) will gather information before the legislative session begins in January. The questions raised here must be answered clearly and positively or the Legislature must quickly take steps to reverse the QExA program.

Kokua Council has deep concerns about the well-being of the ADB population for the following additional reasons:

• Although the majority of patients are senior citizens, very few geriatricians have signed up. Senior citizens cannot travel long distances to find participating doctors.

· We understand that no hospitals have signed agreements yet with either HMO.

· It’s not clear that either organization will meet the requirements to be licensed in Hawaii as an HMO.

• DHS has awarded a contract to WellCare Health Plans, Inc., despite a Forbes report that it “has been under a cloud since October 2007, when federal and state agents raided the company’s Tampa headquarters” and despite the grade of F given to it by the independent rating organization, Morningstar, for stewardship.
• DHS awarded a contract to UnitedHealth Group although its subsidiaries have been reported to be assessed fines or agreed to settlements in Arizona, California, Florida, Georgia, Kansas, Missouri, Nebraska, New York, North Carolina, Oregon, Rhode Island, Texas, Washington and Wisconsin, according to the Northwest Federation of Community Organizations. In addition, multiple UNH subsidiaries entered an agreement with 39 states regarding handling of claims, complaints, explanation of benefits, accurate provider network information, and other issues. Shouldn’t DHS have considered these actions before awarding contracts to these companies?

Kokua Council’s message urged the Legislature to move quickly to preserve the quality of medical care for Hawaii’s most vulnerable citizens