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‘Taxpayer rip-off’ predicted for Medicaid

Turning over Florida’s Medicaid program to private managed-care companies statewide will result in a “taxpayer rip-off of epic proportions,” opponents warn in a new report. A protest is scheduled at lunchtime today in front of WellCare.

The report lists published incidents of fraud or overcharging by HMOs that treat Medicaid patients – mostly low-income children, the elderly and disabled.

It also lists political contributions insurers in Florida made during the 2010 election cycle. The 2011 Legislature voted to require virtually all Florida Medicaid patients to enroll in managed-care plans run by corporations or regional networks of doctors and hospitals, with the state paying premiums.

“Without changes to greater protect against fraud and abuse…this proposal could funnel billions from Florida’s citizens to big HMO corporations,” says the report by Brad Ashwell, director of Florida Public Interest Research Group (FPIRG).

But Michael Garner, president of the Florida Association of Health Plans, said the report is "absolutely full of reprehensible allegations." He said, "It's clear they are trying to misrepresent the facts. We'll deal with it accordingly."

The report was published by FPIRG’s Education Fund, a non-profit organized to “protect consumers and promote good government.” It was financed by Community Catalyst, a Boston-based advocacy group that promotes “affordable health care for all.”

Entitled “Is Medicaid Reform Good for Taxpayers?” the report calls on federal health officials to put safeguards in place before allowing Florida’s statewide Medicaid overhaul to begin.

The Centers for Medicare and Medicaid Services must approve Florida’s request for a waiver of federal rules to expand the managed-care program from its current five counties to the entire state. CMS’ permission is required because federal dollars pay a majority of the cost.

Evidence of savings uncertain?

The report cites studies that indicate a lack of hard evidence that the five-county pilot program, created under Gov. Jeb Bush, has saved money for the state. While a University of Florida study did find savings, Ashwell notes, it did not count some expenses or evaluate quality of care.

“For-profit Medicaid managed care plans also have a horrific track record of defrauding the state and denying care in order to increase profits,” Ashwell wrote.

At the top of his list is WellCare Health Plans’ massive fraud, reported by a whistleblower and exposed by an FBI raid on the Tampa headquarters in 2007. The corporation avoided criminal prosecution by paying federal and state penalties. Its civil fraud penalties have yet to be determined.

Three former executives of the company await trial.

WellCare spokeswoman Amy Knapp said via e-mail today that the FPIRG report “is really about a political organization’s opposition to the governor’s and legislature’s redesign of the Medicaid program.”

That redesign “will be beneficial to Medicaid recipients, allowing the state to avoid undesirable cuts to program eligibility, benefits or provider fee schedules,” she wrote.

She called the allegations about WellCare “old news,” adding, “We are a transformed company and look forward to continuing to serve the Florida Medicaid program.”

More recent alleged abuses

In addition to the WellCare case, Ashwell listed:

--Fines of almost $4 million imposed on Amerigroup Community Care and United Healthcare in January for improper reduction of speech therapy for poor children in Medicaid.

--The discovery earlier this year that four insurers – AmeriGroup Florida Inc, Vista Health Plan, United Healthcare and WellCare – shortchanged Florida KidCare by $3.1 million between 2003 and 2007. KidCare is the state’s version of a federal Children’s Health Insurance Program for low-income working families.

--Last month’s $3.3 million fine of Humana for failing to promptly report Medicaid fraud and abuse it uncovered to state authorities.

--Total Medicaid HMO fines over the last five years of nearly $6.2 million by the Agency for Health Care Administration.

Political donations from HMOs

Ashwell also gathered data on HMOs' political contributions to candidates, parties and committees and spending on lobbyists. During the 2010 election cycle, he reported, they spent at least $6.1 million.

The single largest contributor by far was Blue Cross and Blue Shield of Florida, at $3.8 million. At the time, the company was not a Medicaid contractor, but has changed its policy since the Legislature's decision to overhaul the program.

"It is clear how eager HMO’s are to enrich themselves on the taxpayers’ dime by all the money they are throwing into lobbying and campaign contributions," Ashwell wrote. "These companies are looking to make billions by investing millions in the political process."

--Health News Florida is an independent online publication dedicated to journalism in the public interest. Questions and comments should go to Editor Carol Gentry at 727-410-3266 or by e-mail.

Carol Gentry, founder and special correspondent of Health News Florida, has four decades of experience covering health finance and policy, with an emphasis on consumer education and protection.