[Congressional Record (Bound Edition), Volume 145 (1999), Part 17]
[Extensions of Remarks]
[Page 24292]
[From the U.S. Government Publishing Office, www.gpo.gov]



    FAIR CARE FOUNDATION CALLS ATTENTION TO DANGERS OF HMO TAKEOVERS

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Tuesday, October 5, 1999

  Mr. STARK. Mr. Speaker, as the conglomeration and monopolization of 
American health care continues, State Insurance regulators must do a 
better job of questioning the quality of plans entering their states.
  I thought the following article from the September 18, 1999 issue of 
the Delaware News Journal by former utilization review nurse Mary Ellen 
Gaspard and A.G. Newmyer, head of the Fair Care Foundation (an HMO 
watchdog group), made some excellent points about the ``quality 
danger'' facing Delaware.

                [From the News Journal, Sept. 18, 1999]

                Blue Cross Takeover Needs Skeptic's Eye

              (By Mary Ellen Gaspard and A.B. Newmyer III)

       Few Americans can name their state insurance regulator. The 
     majority of regulators are appointed and remain largely 
     invisible. By reputation, they care more about the health of 
     insurers than the health of the public.
       Delaware may be different. We've never met Insurance 
     Commissioner Donna Lee Williams. But like the minority of 
     regulators who are elected rather than appointed, she has a 
     reputation for caring about consumers rather than for 
     genuflecting before insurance executives. Now she has a real 
     opportunity.
       Hearings begin Tuesday on the plan by CareFirst--a Blue 
     Cross plan based in Maryland--to take over the Delaware plan. 
     The commissioner must determine, among other things, whether 
     the deal would hurt Delaware policyholders.
       In our view, CareFirst has redefined predatory behavior by 
     health insurers. Perhaps the company's claims handlers were 
     trained to echo the mantra, ``Just say no.'' Cases handled by 
     volunteers at the Fair Care Foundation, in helping patients 
     in CareFirst's market, suggest that the delays and denials 
     don't even pass the laugh test. Sadly, there is a mean-
     spiritedness evident in the treatment of the sick and their 
     families that CareFirst management has taken to new heights.
       We can't imagine why Donna Lee Williams would want to put 
     Delaware's 200,000 Blues subscribers under CareFirst's heel. 
     Like their claims handlers, she should just say no.
       CareFirst, of course, disagrees. With a sensible regulatory 
     structure in CareFirst's back yard, the facts would be 
     apparent to Delaware regulators. But Steve Larsen, the 
     appointed insurance commissioner in Maryland, has a 
     reputation among consumer groups as being affable and 
     ineffective. When CareFirst took over the Blue Cross plan in 
     Washington, questions arose concerning whether Larsen had 
     evaluated the Maryland plan's treatment of policyholders. His 
     so-called market conduct study was reduced to one 
     sentence.
       That's one more sentence of oversight than the D.C. 
     regulator could muster. At hearings on the proposed merger, 
     it became clear that the Washington insurance commissioner 
     had never conducted a market study of the Blues during all 
     the years that his office had jurisdiction.
       Delaware should just say no pending an investigation that 
     is truly independent and thorough. We've seen no indication 
     that Maryland or Washington regulators are capable of either. 
     Their pre-merger hearings were a pro-forma joke. After 
     consumers sued an appeals court ruled that the Blues had 
     cozied up to the regulator in illegal ex-parte sessions, 
     where they re-wrote conditions of the merger.
       The proposed Blues merger in Delaware is complicated. 
     CareFirst has to call the merger an ``affiliation'' because 
     under the law, a merger would be a ``conversion'' of the non-
     profit assets of the Delaware plan. That would require that 
     the Delaware assets be set aside for health care of residents 
     in the state. But CareFirst wants the money. So the 
     architecture of the deal is intentionally opaque. Delaware 
     will effectively lose all local control of its Blue Cross 
     plan. We suspect the results won't be pretty.
       Donna Lee Williams has a vital opportunity. If the state 
     chooses to wink at the predatory practices of CareFirst, then 
     our hearts go out to the 200,000 Blue Cross subscribers in 
     Delaware.

     

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