Health Care Watchdog Our SALUD Testifies, Raises Questions About DMHC’s Budget and Ability to Enforce

SACRAMENTO, Calif.--(BUSINESS WIRE)--Advocates for the Latino community of Southeast and East Los Angeles region appeared at the April 4 Budget and Fiscal Review Subcommittee Hearing and raised serious questions, and prompted more questions from the Subcommittee, about the Department of Managed Health Care’s (DMHC) ability to provide oversight and enforcement of health plans in California.

“Budget committee hearings are the forums for stakeholder input, and the best place for citizens to communicate their concerns about wasteful budgets”

While Our SALUD posed many crucial questions into DMHC’s activities, the inquiries began even before the group’s testimony. Committee member Senator Bill Emmerson referenced a letter Senator Bob Huff sent to the DMHC on February 28, 2013 which questioned the DMHC’s enforcement and highlighted Our SALUD’s efforts. Senator Emmerson asked the DMHC when they planned to respond to this important inquiry.

DMHC Chief Deputy Director Shelley Rouillard explained that they are working on a response but their director, Brent Barnhart, has been out of the country on vacation and assured the committee they would have a response back to Senator Huff by early next week.

After hearing Our SALUD’s testimony, Committee Chair Bill Monning raised a question of his own, asking the DMHC to explain why fines have decreased so drastically (from $34 million to less than $2 million) in the recent cycle. Rouillard explained that fines simply fluctuate, and urged committee members to recall that she and Director Brent Barnhart have only been with the Department since 2011, adding that they are “doing the best we can.”

Chairman Monning inquired further, asking if staffing was an issue. Rouillard quickly responded that staffing was sufficient and that it is not a contributor.

“It is clear that this state agency is not using its resources properly,” Elba Romo said after the hearing. “Fines tied to enforcement have dropped just under 95 percent to $1.87 million. This is a $32 million loss to the state and would have covered over 60 percent of the department’s budget. I am not satisfied with the DMHC’s response today. Again they seem to be ignoring what is a true public health issue. Patients have been affected and will continue to suffer if the appropriate actions are not taken.”

Providing public comment on the DMHC’s request for a budget augmentation to administer the Coordinated Care Initiative, Elba Romo, community advocate for Our SALUD, questioned why the extra taxpayer funding was necessary when the DMHC’s enforcement actions are at an all-time low and staff have time to moonlight while on the taxpayer dime.

“State agencies that oversee veterinarians and manicurists do a better job at enforcement than the DMHC,” said Elba Romo, community advocate for Our SALUD. “They have allowed a rogue medical group in my community to operate as an HMO without a license for more than a decade, putting the health and well-being of more than 750,000 people at risk.”

Romo asked the committee to consider suspending the budget of the DMHC until it takes action against medical group HealthCare Partners (HCP), a Torrance-based medical group and one of the nation’s pioneer Accountable Care Organizations (ACO).

“Budget committee hearings are the forums for stakeholder input, and the best place for citizens to communicate their concerns about wasteful budgets,” Romo said. “We can only hope they take action.”

PREPARED TESTIMONY FROM OUR SALUD COMMUNITY ADVOCATE ELBA ROMO

Good morning Chairman Monning and members.

My name is Elba Romo and I am here today representing Our SALUD, a healthcare watchdog organization serving the nearly half a million residents of the East and South East Los Angeles Region. We are very concerned with the Department of Managed Health Care’s ability to manage the Coordinated Care Initiative because they aren’t regulating the existing programs under their jurisdiction. And they are asking for additional resources?

The Department has allowed HealthCare Partners to amass a fortune while providing shoddy care to the Latino community we serve. It’s no secret that HCP is operating as an HMO without a Knox-Keene License, taking hospital risk and playing a sophisticated shell game while avoiding paying for medically necessary care. The Department has allowed HCP to butcher our people – young men like Juan Carlos Jandres who will never have the American Dream because of a rogue medical group operating as an unlicensed HMO.

HealthCare Partners is a pioneer ACO and will be assigned more lives under the Affordable Care Act. They will likely be providers under the Coordinated Care Initiative. Are we so willing to usher in universal healthcare that we turn away from the ugly truth that the state isn’t prepared and can’t, or worse, won’t regulate those providers to ensure the health and safety of our people? And what about the following:

The Orange County Grand Jury is preparing to indict Cal-Optima for mismanaging public dollars. Our review of the Department shows no actions taken against public health plans.
This isn’t the first time we have raised these concerns to shed light on the DMHC’s oversight. We even met with Director Barnhart in December of 2012 and still nothing has happened. Even Senate President Steinberg and Senator Huff have requested answers in writing from Director Barnhart. They were rebuffed.
In the last 2 years, under Governor Brown's Secretary Dooley’s and Director Barnhart's watch, DMHC has used a larger than ever budget to prosecute a medical group and a plastic surgeon. That might be an argument for awarding the Medical Board more money, but it's not a reason to hand an impotent agency run by a former health plan lobbyist incapable of stopping even unlicensed HMO operators higher appropriations. Budgets demand accountability.

Fines in the Managed Care Fines and Penalties Fund have fallen from $34 million in years 2010-2011 to just $1.877 million in the current cycle. Yet employee overhead increased from $18 million to $25.5 million over the same time period. Where is the money going? Obviously not to enforcement actions.

We wonder whether the lack of enforcement stems from the department’s leadership – the director is a former health plan lobbyist, and the director of enforcement apparently has enough time from his cushy state job to hold down additional private sector gigs as a professor and a government consultant. Maybe he should focus on his job as Chief of Enforcement.

The Board of Veterinary Medicine stops unlicensed veterinarians AND doesn't reward them with a license after they break the law. It charges them with criminal action. Yet HMOs and medical groups like HCP are allowed to operate unlicensed and face no repercussions when that wrongdoing is brought to light. I love my dog, but I love my family more. Why aren’t our parents, grandparents, brothers, sisters, and children entitled to the same protections as my dog?

As the primary government watchdog overseeing managed health care in California, the DMHC has failed. Because of the DMHC’s lack of oversight, human beings like Juan Carlos Jandres have become collateral damage. We demand that you suspend the budget of the DMHC until they take action against HCP, penalizing them for operating without a Knox-Keene license for more than a decade.

About Our SALUD

Our SALUD (Somos Aliados Latinos Unidos por la Dignidad - Latino Allies United for Dignity), is a grassroots coalition and healthcare watchdog representing civic, community and business leaders from the Southern California Latino communities. We believe that our low-income, minority communities deserve quality healthcare access equal to other communities. We believe our communities are not unlike other communities in California that are yearning for best practices and quality health care. With the new Affordable Care Act, we believe legislators should practice transparency and good government in implementing new health care delivery models, which should include exceptional, free of conflict-of-interest, community-patient focused decision makers at every level.