Governor M. Jodi Rell today announced that she has ordered the termination of the managed care responsibilities of four contractors in the state's HUSKY program after the two largest contractors refused to fully comply with public accountability standards under the Freedom of Information Act.
Governor Rell said two managed care companies that hold contracts for HUSKY services have consistently refused to recognize jurisdiction of the state Freedom of Information law. These companies, Anthem Health Plans Inc. and Health Net, also stated their willingness to drop their HUSKY services with only 15 days’ notice if full FOI compliance is required – a tactic the Governor called “utterly deplorable.”
As a result, the Governor directed the Department of Social Services ( DSS ) to immediately terminate negotiations on extending the contractors’ managed care responsibilities and, instead, to assume direct operation of most HUSKY services. The Governor’s action essentially means that HUSKY will be operated for the near future much like the DSS Medicaid program for elders and people with disabilities – without managed care contractors setting doctor payment rates and making decisions about medical services.
Launched in 1998, the HUSKY (Healthcare for UninSured Kids & Youth) Plan provides comprehensive health care benefits to over 229,000 children and teenagers in families of all incomes, as well as over 96,000 parents, relative care givers and pregnant women with low incomes.
“These companies refuse to abide by our public disclosure law, despite being required to do so, and they were also willing to walk away from providing services to our children if they had to live up to this requirement,” Governor Rell said. “They may have been willing to walk away, but I am not. We spend over $700 million a year in taxpayer money to provide these services under the HUSKY program to children and parents in Connecticut 's working families. It is only right to fully disclose how this money is spent. That is why making them comply with the state’s Freedom of Information law is so important. The health care services provided by our HUSKY program are vital to our children and working families, and those services must not be jeopardized.
“Whether Anthem and Health Net were really willing to walk away from these contracts or were simply threatening to do so, the very threat of leaving and their unwillingness to fully comply with public accountability is utterly deplorable,” Governor Rell said. “Maintaining the health benefits of HUSKY children and family members must be our first priority. I understand that the Freedom of Information Act can be a difficult and onerous concept to the private sector; however, when hundreds of millions of taxpayer dollars and the health care of children are at stake, we cannot deviate from our basic tenet of openness and accountability, or in any way let contractors think we will accept unreasonable timeframes.”
Anthem and Health Net are the two largest managed care organizations in the HUSKY Plan, insuring 142,171 and 87,710 enrollees, respectively. The state Freedom of Information Commission has ruled that HUSKY managed care contractors are subject to the FOI Act because they perform a statutorily defined governmental function. A Superior Court judge backed up the FOI Commission. (Three of the four contractors have taken an appeal to state Appellate Court.)
After meeting Friday with Social Services Commissioner Michael P. Starkowski and Office of Policy & Management Secretary Robert L. Genuario, Governor Rell gave her instructions to resolve the situation with the HUSKY contracts, which had been on extensions since the fiscal year began July 1.
“I am directing you to terminate the current contract negotiations for a full range of services in the existing program,” the Governor wrote Commissioner Starkowski. “I am also directing you to take immediate action to relieve the four contractors of any health care decision-making responsibilities for the 325,000 children, teenagers and adults covered by the HUSKY program, effective December 1, 2007 . They should no longer have discretionary decision-making authority with respect to authorizations for coverage, payment levels for individual medical providers or other functions related to determining the level of health care provided under the program.”
Governor Rell also directed Commissioner Starkowski to put into place a substantially limited, transitional contract for the managed care organizations, beginning December 1, “where they primarily carry out membership services and other administrative duties to help ensure continuity of coverage as we move toward a new system of care through re-procurement, effective July 1, 2008 .”
DSS will take direct control of various functions traditionally done under contract by the managed care organizations, including coverage authorizations and individual doctor payment amounts. Furthering a move in this direction, the Governor also authorized pharmacy and dental services to be “carved out” of managed care services, much like behavioral health services were separated from managed care in January 2006.
The Governor emphasized that compliance with Freedom of Information will be a baseline of new procurement for her Charter Oak Health Plan. “Any full-service managed care contract for services provided on or after July 1, 2008 , should include state FOIA compliance provisions,” the Governor wrote to Commissioner Starkowski.
In a letter to the managed care contractors, Commissioner Starkowski underscored the importance of FOIA compliance. “I think you will agree that your new, limited role through June 30, 2008 , will present none of the difficulties you have identified to date with respect to contractual inclusion of adherence to provisions of the Freedom of Information Act.”
Earlier this fall, the Governor set a deadline of December 1 for FOI compliance by HUSKY managed care contractors. With the impasse continuing despite intense pressure by DSS , Governor Rell directed Commissioner Starkowski on Friday to terminate contract extension negotiations and offer instead the limited service arrangement.
“For months, DSS has been negotiating in good faith with Anthem and Health Net about our baseline requirement of accepting compliance with the Freedom of Information Act,” Governor Rell said. “And, for months, Anthem and Heath Net have been digging in their heels with various counterproposals that do not meet our standards of accountability.”
Governor Rell said the two other managed care contractors in the HUSKY Plan – WellCare Health Plans Inc. of Florida and Community Health Network of Connecticut – expressed willingness to accept FOI compliance through the fiscal 2008 contract period ending June 30. WellCare, in fact, had agreed contractually to FOI compliance last year and did not join the others’ court appeal. WellCare, doing business in Connecticut as Preferred One, covers 35,239 HUSKY enrollees, while the non-profit Community Health Network of Connecticut covers 60,410 HUSKY enrollees. WellCare and Community Health Network could not suddenly absorb the combined enrollment of Anthem and Health Net and shoulder all of the managed care responsibilities for the program.
Commissioner Starkowski is working with Secretary Genuario on revised funding estimates for the HUSKY program this fiscal year. With payments to the managed care organizations plunging due their limited role, there will be commensurate costs to DSS in other areas. Rate increases for the managed care contractors and medical providers, appropriated by the General Assembly, were also under negotiation in terms of how they would be distributed among medical providers and how much of a percentage increase contractors would receive. Now, the discussion will turn to retroactive increases from July 1 to November 30 for managed care contractors and providers – and increases for providers only from December 1 onward.
Governor Rell stressed that continuity of health care benefits is of paramount importance. “I want to be completely clear that your planning should take special care to ensure smooth maintenance of health care benefits to the children and adults in the HUSKY program,” the Governor wrote Commissioner Starkowski.