Crist Veto Pulls Plug On HMO Proposals

By CATHERINE DOLINSKI and CAROL GENTRY The Tampa Tribune

Published: May 26, 2007

TALLAHASSEE - Millions of dollars that HMOs plowed into lobbying and political contributions over the past year may have won them a series of last-minute gifts from the Legislature, but not from Gov. Charlie Crist.

On Thursday night, Crist axed legislation that would have boosted state payments to Medicaid health-maintenance organizations and ripped out existing protections for mentally ill patients.

Not only were such proposals anticonsumer, Crist said in his veto letter, "even more disturbing is the fact that many of these provider-driven provisions were not discussed in an open forum but were, instead, added to the bill at the last minute, without a proper public hearing."

Mental health advocate Karen Koch said she was "overwhelmed."

"It's what we've been saying all along," said Koch, policy director for Florida Community Mental Health Centers. "It's not about the providers; it's not about the HMOs - it's about the people who receive the service.

"It's nice to have a governor who seems have an appreciation for the people and not just the special interests."

A Gift To HMOs

The controversial bill provisions arose during last-minute budget dealings on Medicaid by top legislative leaders, out of public view.

Specifically, the bill would have granted HMOs serving Medicaid patients a new rate increase, amounting to $5 million next fiscal year, $25 million the following year and about $43 million the following year.

Meanwhile, the bill would have freed HMOs from having to spend 80 percent of the Medicaid money they receive to care for mentally ill patients on services for those patients.

This month, Amerigroup Florida paid a $5.3 million settlement for failing to comply with the 80/20 spending rule for HMOs. Tampa-based WellCare Health Plans, and UnitedHealthcare each have had to pay back more than $1 million for failing to spend enough in 2006.

When the Medicaid bill emerged April 30, mental health advocates and some lawmakers complained it was a gift to HMOs and consumers would pay the price. No legislator took credit for erasing the 80/20 rule.

But because the bill was a companion to the state budget, containing lawmakers' directives for spending Medicaid dollars, few had hope that either the Legislature or Crist would jettison it.

Vetoing the bill, Koch said, "took a lot of courage."

At The Heart Is Money

Throughout the legislative session, advocates for patients, children, public employees and seniors complained of the influence that the state's HMOs were wielding to score wins at their expense.

Money, the advocates said, lay at the heart of the imbalance.

Since Jan. 1, 2006, major HMO companies that contract with the state poured more than $2.3 million into political campaign contributions statewide, campaign finance records show. That includes more than $1 million for the Florida Republican Party and more than $288,000 for the Florida Democratic Party.

Lawmakers who received the most include Senate President Ken Pruitt, who received at least $19,000. Crist, by contrast, received less than $5,000 from the same companies.

Among the biggest contributors: WellCare, which, along with subsidiaries HealthEase and Harmony Health Plans, doled out more than $1.1 million in political contributions, including more than $478,000 to the Republican Party.

Meanwhile, HMOs contract a legion of high-priced lobbyists to push their agenda. During the first quarter of 2007, WellCare paid five influential lobbying firms to represent it in Tallahassee. United HealthCare employed three, including that of Ronald Book, one of the state's most powerful corporate lobbyists.

Some of those lobbyists were campaign contributors, too. Amerigroup lobbyist Larry Overton, for example, has paid out $10,000 in political contributions since Jan. 1, 2006; Book has contributed more than $80,000.

Anticipating Cooperation

But if the HMOs were disappointed by Crist's veto, they were keeping it to themselves Friday. Bob Wychulis, executive director of the Florida Association of Health Plans, did not return messages.

WellCare, which stood to gain the most from the legislation, declined a request for comment.

HMO officials may have thought they would get as much cooperation from the executive branch as they had received from the legislative. After all, Andrew C. Agwunobi, the secretary of the Agency for Health Care Administration, which houses the state's Medicaid program, is a former WellCare board member.

An examination of e-mails between WellCare and AHCA over several months shows that WellCare was behind two mental-health funding changes that the governor ultimately vetoed. In a position paper e-mailed to top Medicaid officials Feb. 9, WellCare proposed repealing the 80/20 rule for HMO spending on mental health services.

Marc Ryan, a vice president for WellCare, also made frequent trips to Tallahassee while the Legislature was in session. Despite all the visits, phone calls and e-mails, Medicaid Director Tom Arnold said his agency's officials told Crist the HMOs didn't need pay beyond the $218 million the Legislature passed in the Medicaid budget.

Though Medicaid officials did support dropping the 80/20 rule for HMO spending on mental health, all in all, "we're comfortable with the governor's veto," Arnold said.

'Health Care Needs Change'

Though some are cheering Crist's veto, not everyone thinks the HMO provisions would have been bad for consumers.

Forcing HMOs to spend 80 percent of their mental health money on patient services makes little sense when the state makes no such stipulation about other areas of health care, said bill sponsor Durell Peaden, chairman of Senate health appropriations. Doing so, he said, can rob resources from other pressing health care needs such as diabetes, obesity and heart disease.

"It's almost unfair to the other patients," said Peaden, R-Crestview. "Health care needs change."

The vetoed bill would have affected other areas of policy, too, including nursing home rates and hospice services for seniors.

American Health Care Association officials said Friday that Crist's veto would not disrupt the Medicaid program to the point of requiring additional action by the Legislature this year. But Friday afternoon, House leaders were still weighing their options.

It's possible, Healthcare Council Chairman Aaron Bean said, that lawmakers could revisit the legislation during the June special session on property taxes.

"The timing is good to come back and look at everything," said Bean, R-Fernandina Beach. On the other hand, he said, "there's nothing in there that can't wait until next year."

A spokeswoman for Pruitt said Friday that the Senate president was focusing squarely on property taxes now.

"It's time to move on," she said.

Reporter Catherine Dolinski can be reached at (850) 222-8382 or cdolinski@tampatrib.com. Reporter Carol Gentry can be reached at (813) 259-7624 or cgentry@tampatrib.com.