February 2012 has proven to be a landmark month in the campaign for accountability and transparency over the private HMOs that run Minnesota’s low income health care programs.

The problems that the Citizens Federation and its statewide Greater MN Health Care Coalition have been citing, for five years, are finally getting the attention needed.

The problem amounts to hundreds of millions of taxpayer dollars, earmarked for health care, wasted instead on HMO profits. It also may include deliberate fraud in the taking of federal Medicaid dollars.

On Feb. 14, it was revealed that the federal government had been investigating Minnesota since last summer regarding overpayment of the HMOs that the state contracts with for its Medicaid (Medical Assistance) program./p>

Last June 17, the Citizens Federation/GMHCC participated with Minnesota health care provider groups and two legislators in a conference call with federal Medicaid officials in Baltimore. In follow-up, GMHCC sent them, the next day, our research on the overpayments and excess profits and reserves of the HMOs. It’s very likely that our information helped spark the federal investigation.

Also on Feb. 14, Dave Feinwachs (the Hospital Assoc. attorney fired at the behest of the HMOs) posted documents he obtained in his lawsuit against the HMOs, showing how they colluded with state officials to improperly get extra federal money out of the Medicaid program.

That same day, a hearing was held in the Minnesota House on this subject, to a packed hearing room. Citizens Fed, GMHCC and other consumer advocates wore clear plastic sheets to symbolize “transparency.”

Some important things were zeroed in on at the hearing: When the U Care HMO gave $30 million back to the state in early 2011, their financial windfall was partly due to being overpaid by the state for Medical Assistance, to make up for losses in a state-money-only program, General Assistance Medical Care (GAMC).

GAMC was ended by Gov. Pawlenty in 2010, and the extra subsidy was kept in place, causing the windfall not just for U Care, but for the other HMOs as well — who did not give anything back to the state.

However, it is illegal for the state to pad its Medical Assistance payments – which is 50% federal money – to the HMOs. So, the breaking of federal law might be involved, by the prior Republican administrations.

Auditing bill advances

Another hearing was held on Feb. 28, for a bill (HF 2412) that would require the state to hire an outside audit firm, that performs work only for government agencies, not any insurance companies. GMHCC Co-Coordinator and Citizens Fed Staff Director Buddy Robinson was one of the testifiers, along with health care provider groups.

Robinson gave the committee members GMHCC’s research showing how the HMOs took about a half-billion dollars in excess profits from 1995 to 2010 off of the public programs.

The bill was approved by the House Health & Human Services Reform Committee, and will go next to the Finance Committee. It is unclear how well a companion bill will fare in the State Senate.