Connecticut groups sue to find out Medicaid HMO physician pay rates

The insurers say physician reimbursement is confidential business information.

By — Posted Sept. 18, 2006

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The question of whether the rates Medicaid HMOs pay doctors is public information has fueled an ongoing legal battle in Connecticut among the four state-contracted health plans, state officials and patient advocates.

The case was sparked in 2004 when a group of New Haven-based clinics noticed that their patients had problems getting appointments with cardiology and gastroenterology specialists. The clinics suspected that one reason for the difficulties was that Anthem Blue Cross & Blue Shield, Health Net, WellCare and Community Health Network of Connecticut Inc. were paying low reimbursement rates to physicians, and as a result doctors were taking fewer Medicaid cases.

"These were patients with significant symptoms, not patients seeking a check-up," said Kari A. Hartwig, PhD, an assistant clinical professor at the Yale School of Public Health. She sought the fee information under the state Freedom of Information Act from the Connecticut Dept. of Social Services on behalf of the Greater New Haven Partnership for a Healthy Community. The coalition includes the Yale School of Public Health, the New Haven Health Dept., Yale-New Haven Hospital, the Hospital of Saint Raphael, Fair Haven Community Health Center and Hill Health Center.

When the Dept. of Social Services declined her request, Dr. Hartwig, joined by a number of other legal aid groups representing Medicaid patients, filed a Freedom of Information Act complaint.

"The Legislature needs to know if these programs need additional funding, or alternatively, if the [HMOs] are keeping too much money for themselves," said Daniel J. Klau, Dr. Hartwig's attorney.

The state pays the HMOs $740 million annually in Medicaid funds for medical care for 300,000 low-income patients.

Last December, the Connecticut Freedom of Information Commission ruled that health plans must disclose their rates and records pertaining to how they calculate the amounts. That ruling was based on a 2001 state law that requires private contractors to publicly reveal information related to government contracts exceeding $2.5 million.

The commission found that the plans are subject to the FOIA because they engage in a government function by providing "the administration or management of a program of a public agency."

The decision also ordered the Dept. of Social Services to amend its contracts with the insurers to make all records related to the contracts subject to the FOIA.

"There are serious access problems across a whole range of health services, and we want to demonstrate the link between the access issues and the low rates," said Sheldon Toubman, a lawyer for the New Haven Legal Assistance Assn. Inc. The group joined the lawsuit on behalf of the Medicaid patients it represents.

Connecticut Attorney General Richard Blumenthal intervened in the case in April in support of the Freedom of Information Commission. He said the insurers were legally accountable for their government services.

Because low Medicaid reimbursement rates are a concern for doctors, the Connecticut State Medical Society supports the patient groups' efforts to get to the bottom of how much money is going to patient care, said CSMS Director of Government Relations Ken Ferrucci.

"These plans are receiving state money and should be disclosing their rates," he said. CSMS has not formally joined the lawsuit.

The case landed in state Superior Court in New Britain after an appeal of the commission ruling by the four managed care organizations in June.

The court held an Aug. 1 hearing addressing whether the plans are performing a government function and are required to disclose publicly their rates and other related documentation. Superior Court Judge George Levine has 120 days from that date to issue a ruling.

Community Health Network of Connecticut declined to comment. Attorneys for Anthem, WellCare and Health Net did not return calls.

Plans say rates are trade secrets

According to court documents, the insurers argue that their rate information is exempt from disclosure because it constitutes proprietary trade secrets.

Disclosing their rates "fundamentally undermines competition," said Keith Stover, a lobbyist for the Connecticut Assn. of Health Plans and a spokesman for the four HMOs, which belong to the trade group.

The Medicaid managed care plans have cooperated with the Dept. of Social Services to provide a range of information about the operation and the quality of the Medicaid managed care program to improve it, Stover said.

"The problem is that the people requesting [rate documentation] are casting a net so wide that it gets into an area where we are forced to make public business-sensitive confidential information," he said.

The four insurers also contend that they are not performing a government function because they are private entities and the Dept. of Social Services alone is responsible for administering the Medicaid program, the HMOs' appeal brief states.

But legal aid attorney Toubman disagrees. "If these HMOs are getting $740 million a year from the state, then they are, under our statute, subject to the FOIA with regard to all of their documents related to the performance of that action."

Since the commission's December decision, the health plans have disclosed some of their rate information for cardiology and gastroenterology services, Toubman said. But other documentation has yet to be revealed, pending the decision by Levine.

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Case at a glance

Kari A. Hartwig, PhD, v. Commissioner, State of Connecticut, Dept. of Social Services

Venue: Connecticut Superior Court, New Britain
At issue: Whether the four HMOs contracted with the state's Medicaid program perform a government function and must publicly disclose their physician reimbursement rate information under the Freedom of Information Act.
Potential impact: Patient advocates say Medicaid patients are having problems getting specialized care because of low reimbursement rates and that health plans should have to disclose their rates because they are spending state money. Public disclosure could lead to a solution to the access problem, advocates argue. Health plans say their rate information is proprietary business information and, if shared, would undermine the competition that allows them to provide a range of benefits for patients.

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