On May 16th, a federal judge in the Southern District of New York temporarily enjoined the United States government from enforcing the military detention provisions of the 2012 NDAA. Congress included the controversial detention provisions in last year’s defense authorization bill as a way to codify Bush-era case law that flowed from the Supreme Court’s Hamdi opinion, and from the related Jose Padilla litigation.

The 2012 NDAA includes language that purports to limit the scope of the NDAA’s detention provisions to existing military detention authorities. (These authorities – it should be noted – are far from settled, despite what Congress has indicated in the NDAA.)

Plaintiffs in the case (who included journalist Chris Hedges and professor Noam Chompsky) contended that the NDAA’s ill-defined detention powers were broad enough to chill their First Amendment rights.

According to Judge Forrest’s opinion, the reluctance of government lawyers to articulate any limits on the scope of the state’s powers under the NDAA proved critical to her decision.

Earlier this year, PRM submitted a FOIA request to the Justice Department’s Office of Legal Counsel, seeking legal opinions that described the OLC’s views on the powers authorized by the 2012 NDAA. In March, we received a letter denying our request in its entirety, based largely upon FOIA exemption five. We have since submitted a revised request that seeks similar information – but only information contained in opinions that constitute “final determinations of policy.” Such documents are far more difficult to withhold under exemption five.

PRM also recently recorded a conversation about the NDAA with former FBI agent Coleen Rowley and Peter Erlinder of William Mitchell College of Law. The video will be available on our site soon.

As part of U.S. Senator Chuck Grassley’s investigation into the use of federal Medicaid dollars, the Senator’s staff sought documents from the Minnesota Department of Human Services through a data practices request.
PRM has obtained the results of Grassley’s request, and has posted the resulting cache of e-mail correspondence. Select messages are summarized below.

NOTE – Hand-written redactions to the printed e-mails were made before we obtained them. All other redactions were made by PRM to obscure personal e-mails or telephone numbers, as is our general practice. When PRM redacts such information, it leaves other personal identifying information, so that the chain of communication is clear.

E-mails begin after 2011 UCare meeting
The e-mail chain begins on March 9, 2011, shortly after UCare executives met with DHS officials about the possibility of giving monies from public health care programs back to the state. In a March 9th message, state Medicaid director David Godfrey updated other DHS officials about the content of the first UCare meeting.

Document notes lack of Medicaid connection
On March 15, Ghita Worcester of UCare sent background information on UCare’s donation to Scott Leitz of DHS. The attachment to Worcester’s e-mail contains several points:

• UCare arrived at the $30 million contribution figure “because it falls within a 2-3 percent range of revenue over expenses” that allows for a “reasonable level of financial reserves.”

• Along with its contribution, UCare planned to bring forward a proposal to “minimize volatility in gains and losses” in the state’s public programs contracts.

• According to UCare, “none of this contribution involved Medicaid dollars.”

This last point comports with the position held by DHS for many months – that the UCare donation did not involve federal funds.

“It must be characterized as a donation”
Several rounds of e-mail messages were exchanged on March 15th, as press release language regarding the UCare donation was finalized. In one message, DHS commissioner Jesson noted that the UCare contribution would need to be characterized as a donation – rather than as a refund – otherwise the federal government would “clearly get half.”

Later on in the e-mail chain, Dan Pollock of DHS made reference to the interest in managed care contracts that was stirring among legislators at the time. Pollock noted that the UCare donation was “likely to generate FAR more questions about our PMAP contracts.”

“UCare did the right thing”
On March 16, Scott Leitz of DHS sent an e-mail to various DHS officials, including Commissioner Cindy Jesson, and noted his support for UCare’s action. “UCare did the right thing here,” said Leitz, “and we should put the other plans on notice of our expectations of them.”

Press release issued
On March 16, the governor’s office issued a press release that announced the UCare cotribution, which was characterized as “voluntary” and “one-time.” The release noted that the Governor asked Commissioner Jesson to “reach out to all health plans providing public health insurance and request comparable contributions.”

“Fuel to the fire?”
After the press release was issued, Pam Parker and Karen Peed of DHS corresponded about the substance of the release. “Does this help,” Parker asked Peed via e-mail, “or add fuel to the fire?”

2003 Medica give-back
Later on March 16th, several e-mails circulated within DHS that related to an earlier give-back of public health care funds. Steve Snook of DHS sent a “talking points” memo from a 2003 give-back by the Medica HMO to several DHS employees, including Karen Peed. The “Medica Talking Points” memo noted that:

• In 2003, Medica returned $80 million to its customers, including $19 million to the state for its public health care programs;

• Medica was retaining 4.4% of its earning from public program business, while other plans were retaining roughly 1%;

• A portion of the Medica contribution went to the State General Fund, but a portion was also shared with the federal government;

• At the time, DHS was “interested to learn if the reduction in Medica’s cost-trend” would be experienced by other HMO providers.

Once the Medica talking points was in circulation, Vicki Kunerth e-mailed Karen Peed with the following message – “Interesting precedent … not sure this is wise”

Legislature categorized contribution as “authorized expense”
On July 28, 2011, Abigail Read of Minnesota Management and Budget e-mailed the Minnesota Department of Health to update the agency about the status of the donated UCare funds. Read’s e-mail referenced statutory language passed by the legislature in 2011, which classified the UCare contribution as an “authorized” expense under Minnesota Statutes 62D.12, subd. 9a. 62D.12, subd. 9 prohibits HMOs from paying portions of their net income to persons or institutions in the form of dividends or rebates. Subd, 9a categorizes certain payments to organizations or individuals as “authorized expenses” allowable under HMO regulatory practices.

UCare check arrives
On November 7, 2011, Ann Berg of DHS notified Christopher Ricker of DHS that the department “has received the check from UCare.”

Legislative auditor asks questions
On February 8th, 2012, Martin Cammack of DHS e-mailed several DHS personnel to relate that Deputy Legislative Auditor Cecile Ferkul “voiced concerns about the UCare donation at a meeting I had with her today.” Ferkul’s concerns related to (unspecified) wording contained in a letter that UCare sent to the state.

On February 13, 2012, Cecile Ferkul e-mailed Ann Berg of DHS to inquire about Berg’s “assessment of how the donation satisfied federal requirements for provider-related donations.”

On February 14, 2012, Ann Berg e-mailed Scott Leitz of DHS to summarize her meeting with the Deputy Legislative Auditor, and noted that “She says that the only thing outstanding at this point is the planned letter to CMS regarding the UCare donation, and that she feels that the process should run its course.”

UCare contribution timeline
On February 16, 2012, Ann Berg of DHS e-mailed a document entitled “Timeline for UCare Donation” to Scott Leitz. The document highlighted relevant events in the chronology of the UCare contribution, including the date of the announcement, its receipt and deposit, and major correspondence. One piece of correspondence was described as:

• July 19, 2011 – Letter from Cindy Mann to David Godfrey received

This letter was not attached to the e-mail, but it is clear from subsequent correspondence that the referenced letter was written by Cindy Mann on July 1, 2011. Cindy Mann is the director of Medicaid services within CMS, the Centers for Medicare and Medicaid Services – the agency that administers federal Medicaid dollars to the states.

For context, the July 1st letter from Cindy Mann indicated that the federal government questioned the nature of the UCare contribution less than four months after it was made. Mann’s letter states that CMS considered “any such contribution from UCare … a refund of Medicaid payments or an applicable credit” that would result in a portion of the payment being refunded to the federal government, unless it was a “bona fide” donation.

DHS donation rationale presented to CMS
The chain of e-mail correspondence includes a February 17, 2012 letter from David Godfrey of DHS to Cindy Mann of CMS, which set out the DHS position for categorizing the UCare contribution as a donation, rather than as a refund.

Godfrey cited federal Medicaid law, and characterized the UCare contribution as a “bona fide” donation that had no “direct or indirect relationship to Medicaid payments,” and was thus not returnable to the federal government.

CMS follows up on UCare/Medicaid correlation
Included in the document cache is a letter previously featured on PRM’s site. This letter was Cindy Mann’s March 21, 2012 follow-up to David Godfrey’s February 17th letter. In her letter of March 21, Mann asked for additional information, in order to verify the state’s contention that the UCare donation had been derived from some other source besides Medicaid funds.

Grassley letter received by Governor Dayton
E-mail correspondence of March 8th, 2012 related to the receipt by Minnesota Governor Mark Dayton of a letter from U.S. Senator Charles Grassley regarding the UCare contribution. Governor Dayton, various staffers, and Commissioner Jesson corresponded about how the administration would respond to Grassley’s letter.

The correspondence included these talking points:

• Commissioner Jesson would handle the press response;

• Jesson had communicated the pertinent details of the UCare contribution to legislators and CMS in March of 2011;

• UCare funds were a voluntary donation, since Jesson did not have statutory authority to compel repayment from Pawlenty-era 2010 DHS contracts;

• The Dayton administration was supporting legislation for independent health plan audits, and was transforming the public health care contract bidding process

On May 3rd, PRM recorded a new episode in our “Open Source” policy discussion series. The forthcoming episode will focus on recent civil liberties controversies, including the detention provisions of the 2012 NDAA, and the criminal investigation of speech-related activity. Guests were Peter Erlinder of William Mitchell College of Law, and former FBI agent Coleen Rowley.

Two years after Saint Paul attorney David Feinwachs made his initial calls for greater transparency in Minnesota’s public health programs, the state legislature passed legislation that introduced third-party auditing into Minnesota’s managed care plans. Governor Mark Dayton signed the bill into law on April 30th. The first audits will apply to managed care contracts that take effect after January 1, 2014.

We have covered the history of this issue over the course of the last few months, and have featured extensive commentary from audit proponents on our affiliated program, Capitol Conversations. Now that the legislature has acted, it is worth examining the final bill to see what it delivers.

Audit language in HHS omnibus legislation
First introduced in various stand-alone bills, managed care audit requirements were folded into the 2012 Health and Human Services Omnibus bill, which emerged from conference committee on April 23rd.

The audit provisions alter Minnesota Statutes section 256B.69, by adding another subdivision, labeled (9d.). This subdivision allows that:

• The legislative auditor will contract with an outside audit firm to conduct a bi-annual, “independent, third-party financial audit” of managed care financial data.

• Audits will focus on data that HMOs and county-based purchasers already submit to DHS – including information on administrative expenses, revenues, reserves, reinsurance, and more.

• Audits will be conducted “in accordance with generally accepted government auditing standards issued by the United States Government Accountability Office.”

• The audits will determine if managed care programs are compliant with state and federal laws, as well as with the federal Medicaid rate certification process.

• Firms retained for the audit cannot have provided services to managed care or county-based purchasers during the time period for which the audit is being conducted.

• Future managed care contracts must include provisions that allow auditors access to relevant information, and stipulate cooperation with such auditors. Contracted firms will have the same powers as those of the legislative auditor, for the purposes of completing managed care audits.

• Managed care organizations must provide DHS with bi-weekly “encounter” and “claims” data on public health care programs.

• Audit results will be circulated to the Commissioner of DHS, the state auditor, the attorney general, and various members of the legislative leadership.

In summary
The end result of these changes is one long-sought by transparency advocates. The bill adds an additional layer of oversight to the state’s managed care programs, by inserting an external auditor who is empowered by (and answerable to) Minnesota’s legislative auditor.

Previously, the oversight of managed care programs fell to DHS, and to a lesser extent, to MDH and the Department of Commerce. The underlying premise of the audit legislation clearly appears to be that an outside observer can find new perspectives on the efficacy of public health care plans, even though they will be using the same underlying data set as state agencies.

The legislation omits a key provision sought by Senator John Marty, in that audits will only extend to contracts beginning in 2014, and will not be retroactive to prior years. Senator Marty has contended that understanding what occurred in the past will be critical to managing public programs going forward – as well as discovering the scope and scale of any past improprieties.

To shed light on past practices, PRM is continuing to seek MCO contracts and data from prior program years. We expect to receive a new batch of contracts from DHS soon.

Today, U.S. Congressman Darrel Issa will convene hearings on the use of Medicaid funds by state governments – including Minnesota’s. State DHS Commissioner Lucinda Jesson is slated to testify at the hearing, as is attorney David Feinwachs, the former chief counsel of the Minnesota Hospital Association.

In recent months, Commissioner Jesson has had a highly visible role in the unfolding controversy over the use of Minnesota’s Medicaid funds. In February, she announced the existence of a federal probe into the state’s use of Medicaid dollars to underwrite its public health care programs. Such programs are administered through non-proft HMOs, who receive blocks of state and federal money.

The federal government – through its Centers for Medicare and Medicaid Services (CMS) – has expressed particular interest in a $30 million dollar payment made by the HMO UCare to the State of Minnesota in 2011. The payment was made in the midst of a legislative session that featured proposals that would have submitted HMOs to additional auditing and oversight.

At the time, UCare’s CEO Nancy Feldman characterized the payment as a donation of excess “operating margin” from the public programs administered by UCare, rather than as a direct reimbursement for unused, pre-paid funds. Some federal officials have contended that a reimbursement would have entitled the federal government to half of the payment, due to the federal Medicaid match that the state’s public health care programs receive.

State officials – including Jesson – also characterized the UCare payment as a contribution up until April 23rd, when the State of Minnesota agreed to give half of the UCare payment to the federal government. Minnesota Public Radio has the story, including a link to a letter from Minnesota Medicaid Director David Godfrey to CMS.

PRM recently ran a document-based story on the history behind the Medicaid controversy.

IPAD – the Minnesota government office that handles information compliance issues – has released a new Data Practices advisory opinion. The opinion clarifies which portions of a separation agreement with a Burnsville School District executive are public, and which are not. The Star Tribune reported that the Burnsville School District released an unredacted copy of the agreement on Monday, in response to the IPAD opinion.

The District’s buy-out of the executive’s contract, and its subsequent refusal to release significant documentation related to the buy-out, sparked controversy and media coverage earlier this year.

Find the opinion here.

Capitol Conversations will devote a segment of its April 17th show to the ongoing Minnesota managed care controversy. Minnesota State Senators John Marty and Sean Nienow will provide updates on audit and oversight legislation introduced during the current legislative session.

PRM has a document-based history of this issue available in our article and commentary section.

On April 10th, former Minnesota Governor Arne Carlson appeared on Capitol Conversations to hold a wide-ranging discussion with host Marty Owings. Watch the exchange here.

The Minnesota Capitol News site provides this synopsis of the show:

Former Minnesota Governor Arne Carlson pans the GOP and DFL, calls out the failure of leadership and says the political system has to change. Governor Carlson offers a candid view of today’s political problems, media failures and why politicians need to be reminded they are servants and not masters.

Since late last year, PRM has been following developments in the ongoing debate over the transparency of Minnesota’s public health care programs. These programs bundle state and federal funds together, and disburse them through the non-profit HMOs that administer the state’s public health care programs.

The debate over how HMOs manage these public programs has raged since 2010, when former Minnesota Hospital Association attorney David Feinwachs began to raise questions about how HMOs were spending public funds, and the degree to which that spending was adequately overseen.

PRM has uncovered hundreds of documents relating to HMO “managed care” plans, which are featured in our document archive.

We also recently posted an article that charts the history of Minnesota’s Medicaid controversy as it has unfolded through documents and correspondence.

This article will be updated with new material as documents become available to PRM.

Reuters has run a story stating that Attorney General Eric Holder plans to describe the legal basis for the practice of “targeted killing” of American citizens by UAV drones. According to the article, Holder will present his comments at Northwestern University School of Law on March 5th.

In October of last year, PRM sought a legal opinion from the Office of Legal Counsel (OLC) related to drone killings. In December, we filed an administrative appeal after the OLC denied our FOIA request. In February, the ACLU filed a lawsuit seeking to challenge the denial of its own FOIA request related to the matter.