PIRG report says expect more fraud if Florida privatizes Medicaid

10/05/11 Janelle Irwin
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The Florida Public Interest Research Group, or PIRG, released a report that outs many healthcare companies for their fraudulent business practices. A group of advocates protested in front of WellCare in Tampa because they were recently sued by the state.

WellCare is a private company that manages state-funded healthcare. But they aren’t the only game in town. Florida is seeking a waiver that would completely privatize Medicaid. Florida PIRG’s Brad Ashwell spearheaded an investigation of private health insurance companies that showed a history of profiteering.

“They’ll be entrusted with billions of dollars and allocating that to different service providers. And what Florida PIRG looked at in our new report was, you know, can we trust them? And clearly not is the answer. There’s a huge pattern of fraud. The logical place to start was Well Care because they were the subject of a large whistleblower suit that led to numerous settlements with the SEC, the state, the federal government. They’ve settled for probably far lower than they actually cost the state in their fraudulent schemes.”

The settlement from WellCare came because one employee decided to blow the whistle on the company’s unethical moves. Tatiana Denson was a staff member when the suit was filed. She said she left because the company was only interested in their bottom line.

“We were told to enter things into the system to make sure the numbers matched so we got money from the state. So, when you’re working for a company, you basically have no choice but to do what they say. There’s a lot of times when you have to have a conscience call. It comes to the point where you have to say, you know what this is not right and I can’t do it. And I experienced that on several occasions where I had to make a right decision whether it was wrong as far as the company was concerned, but I had to make the right decision as far as a conscience person.”

Denson was referring to charges that the company was fixing their numbers to receive extra cash from the state. But fudging the books wasn’t even the worst of the allegations. Ashwell said the company protected their profits by dropping costly clients.

“Things like developing strategies and teams that would systematically deny certain people care. Basically convince people to remove themselves from the roles. Prenatal babies, elderly disabled people, they would actually set up teams that would set out and compete against each other to remove these people from their roles. And they would actually have awards dinners and give people promotions based on how well they did on removing people from their roles because they were high cost, because they needed things.”

And Denson said there were even times the company dropped clients for no particular reason at all.

“A lot of times there were different authorizations that would not be approved, not for reasons that they weren’t medically necessary but for reasons that were implemented by the company. I think that there are a lot of things going on in the healthcare industry with health insurance companies that are not right, but until they are exposed – and that’s why not just because I’m a former employee of Well Care – but it’s very important that we voice what is going on, whether we work for the companies or not, we voice the wrong-doing.”

The study released by PIRG is doing just that. The study calls statewide managed healthcare “a recipe for a massive taxpayer rip-off.” Debbie King says her family depends on Medicaid even though she has a college education and a job. Her employment provides health insurance for her, but not for her young daughter. She hopes elected officials will keep people like her in mind before forcing them into a flawed system.

“A lot of people aren’t aware that they’ve done pilot studies of just this managed care, private HMO practice in five counties in Florida. They failed. They did not show that they decreased cost. In fact, evidence pointed to the fact that it increased fraud and decreased access to healthcare. So, the only reason that I can see that any legislature would vote for this is a kick back to campaign to contributors rather than looking out for our voters and our tax payer dollars.”

The report also tallied the amount of political contributions made by private health insurance companies: more than 6 million dollars. Ashwell said some corporate HMO’s such as Blue Cross and Blue Shield have showed an interest in entering the Medicaid market if the waiver is granted.

After this story aired, Amy Knapp, spokesperson for WellCare, sent us this statement:

"This is really about a political organization’s opposition to the governor’s and legislature’s redesign of the Medicaid program. The redesign will be beneficial to Medicaid recipients, allowing the state to avoid undesirable cuts to program eligibility, benefits or provider fee schedules.

"The allegations about WellCare in the report are old news and relate to investigations from 2007. We are a transformed company and look forward to continuing to serve the Florida Medicaid program."

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