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Cullen Blue Cross

Cullen Blue Cross

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Published by Cory Liebmann

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Published by: Cory Liebmann on Jul 25, 2012
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AccessWorldNews
STATE,BLUECROSSOFTENCROSSSWORDS
WisconsinStateJournal(Madison,WI)-
Sunday,May26,1991
Author:
ScottLautenschlagerBusinessreporter
Fouryearslater,thestateDepartmentofHealthandSocialServicesaccepted$150,000tosettleBlueCross' liaolhtyfonne1981-85
ReJiad.--'
Staterecordsandinterviewswithmorethan20stateandcorporateofficialsshowthestate-BlueCross relationshiptobefilledwithcontention,fruitlessbargainingoverdebts,tremendousimpassesand questionabledecision-making.Allraisequestionsaboutthehandlingofmillionsofdollarsintaxpayers' money.Amongthem: Whyarestateofficialsstillworkingonaproblemthatwasmadea"veryhighpriority"bythen-DHSS SecretaryDonaldPercyin1979? WhtiY;".i:.:s~M:::i::lw.:.:a::.:u::.k::e:.::::e...:-b::::a::::s~e~d...::B::.:.:'u:::.:e::.:;c~ro~s::::S:...!t:!.!h.:::,e.;::,o:.:.:n:.1,ly.....:i.:.:.n:::::su::.:r..:::a~n;::;••...•.•••<.::b:.:.::'emsorthe sae.
-...
DHSSsaidlastmonththatitintendedtogivethecontracttoEDSFederalCorp.thecurrentprocesser, basedonitsbidof$39.8millionforthreeyears.BlueCrossandanotherbidderappealedbecausetheirbids werelowerbymillionsofdollars.Thecontractaward,however,isbased40percentoncostand60percent ontechnicalfactors,andEDScameoutontopinthelattercategory.DHSSdeniedtheappeallastweek. Cullen,aregionalviceresidentforBIrossbasedinEvansvillesaidhisinvolve ,5eemenwasImitedtoreviewingandapprovingtheproposedagreementthat
bad
beennegotiatedby
a
subordinate."IhadnoideaatthetimethisthingwassettledIwouldbeworkinforBlueCross"idCullwhowas stateSenatemajorityeaerICegislatorfromJanesvillebeforebeingappointedDHSS
~rnm.-
ThomasHeresidentofBlueidhehiredCullendesiteh'slackofexperienceintheinsurance uSlnessbecauseheisagoodgOlf-coursesalesman.". HeftydescribedBlueCrossas"agoodWisconsincompany"thatagreedtoa"gooddeal"forthestatewhen theMedicaidsettlementwasreachedin1988. Thedispute,whichdraggedonformostofthe1980s,hadtodowith"third-partyliability"intheMedicaid
http://O-infoweb.newsbank.com.countycat.mcfls.org/iw-searchlwellnfoWeb
916/2011
 
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program.ThelawmakesMedicaid,alsocalledMedicalAssistance,the"payeroflastresort."Thismeanstheprogramislegallyboundtocollectreimbursementfrom"thirdparties"suchasinsurancecompanieswhenMedicaidpaysforserviceswhileotherinsuranceisinforce.Thestatecollected$3.8millionfromallthirdpartiesthroughtheseeffortsinfiscal1990,accordingtoKevinPiper,headoftheBureauofHealthCareFinancinginDHSS.Asecondsubjectoflengthyandongoingdisputeisthe"parentalliabilityissue."Since1981,insurancecompanieshavebeenrequiredtocovercareofminorsinstateinstitutionsuptothefullextentoftheirpolicies.Parents,ontheotherhand,areliableonlyfor$6adaywhenoneoftheirchildrenisinastatecenterforthementallyillordevelopmentallydisabled.Whenparentsofminorsinthoseinstitutionshaveapolicywithaprivateinsurer,theinsurancecompanyisliabletocoverservicesjustasifthechildwereinaregularhospital,accordingtostateattomeys.ButBlueCrosshasrefusedtodothisfromthebeginning,withitsattorneysreadingthelawdifferentlyandsayingthecompanymustpayonlytheparentalliabilityof$6aday.
gl::lss
recentlyrenewedeffortstocollectBlueCross'debtintheparental-liabilityissuewhichthestatesay~couldbeasmuchas$2.86million.-r:!)iswasanothermatterrelatedtoBlueCrossthatstateofficialsrecogni~edasasignificantprobl~myearsago-atleastasearlyas1983whenDHSSsoughtlegalhelpfrosticeDepartment-butnever.... resove.§J:ate...o.ffi.cialslameBlueCrossformanyoftheproblems,sayingitwasuncooperativetothepointofheing obstructioni~"heirositionIthinkwastostonewall"onthethird-partyliabilityissue,saidTorphy,whowasdeputy secretaryofDHSSinthemid-ndnowworksin...,iori. KenMela'lghlin,whoworkedintheDHSSCollectionsBureaufrom1970to1990,said,"BlueCross.Q[IdBlueShieldwasalwaysabattlegroundfromyearone." "Inallclaimstheyweredifficulttodealwith,"hesaid."Theywouldfindmorecockamamieexcuses"fornot
---...
.
paying.ButDHSSofficialshavecomeinforstrongcriticismaswell.Ina1985report,theLegislativeAuditBureaucastigatedDHSSforlackofassertiveness,saying,"ThedepartmentshouldhavebeenmoreaggressiveinitsenforcementofBlueCross'obligationtoadjudicateclaims."FormerandcurrentemployeesofDHSSsaycorporateinfluenceandpoliticalpatronagehelpexplainthestate'sproblemswithBlueCross,whichoncewasthelargesthealthinsurerinWisconsinbuthadsevereproblemsinthe1980sandlostmarketshare.pr.J~ffre.Kunz,VIIhowasdeu.secretaofDHSSformostof17,saidthedepartment'shandlingofthe third-partylia
II
issueraisedquestionsinhismindabouttheintegrityofthegovernmentalprocess."BlueCrossowedmillionsofdollarsandhadnotbeenstronglypressedtopaythatback,"saidKunz,who~asfiredbySecretaryCulleninlate1987.CullensaysKunzwanietentadministrator.Kunzwhonowheadsamedi~clinicinMonona,sayshewasKicK~ecausehewastooindependentforCullen.) Itis"verycurious"thatCullenwashiredby"theverycompanyweletoffthehook,"Kunzsaid.Atissueis
http://O-infoweb.newsbank.com.countycat.mcfls.org/iw-searchlwelInfoWeb
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whetherabibusiness"canusdoliticalmuscletorenonoblitate...andcontroltheprocessInawayatanindividualorsmallbusiness~'hesaid:McLaughlin,whowascoordinatorofcollectionsforDHSSwhenheretiredlastyear,saidthestatebureaucracyhasbeenseverelyweakenedbythespreadofpoliticalpatronage."Alotoftheproblemcomesoutofthefactthatwenowhavepracticallyeverymanagementposition...filledbypoliticalappointments,"hesaid.Acaseinpoint,accordingtoMcLaughlin,wasPatriciaGoodrich,whowentfrombeingastaterepresentativeintheAssemblytoheadofDHSS'sDivisionofManagementServicesin1987.Cullenappointedhertotake chargeofresolvingthedisputewithBlueCrossovertheMedicaidreimbursements,andshewasmainlyresponsiblefornegotiatingthe1988settlement.Goodrich,whoeventuallywaspromotedtodeputysecretaryandsecretaryofDHSS,"mayhavebeenwayunder-qualifiedforanyjobshehadinthedepartment,"McLaughlinsaid.AsimilaropinionofGoodrichwasofferedbyStephenSanborn,aDHSSpersonnelspecialistwhoonceheadedtheCollectionsBureau,whichisintheDivisionofManagementServices."Ithinkshewasoverherheadinafewissues,"includingthethird-partyliabilitymatter,hesaid.SanborncreditedGoodrichforbeing"agoodpeopleperson."Butheadded,"It'shelpfultohavesomebodythat'sknowledgeableintheservicesprovided.PR(publicrelations)isnottheonlything."SanbornsaidexpertiseisespeciallyimportantinanagencyliketheDivisionofManagementServices,whichadministersfinances,providesdataprocessingservicesandconductsmanagementanalysis.Goodrich,whowasreplacedasDHSSsecretaryearlythisyear,saidtaxpayerswerewellservedbyherhandlingofthethird-partyliabilityproblem"inthefactitwasfinallysolved"bythe1988settlement.Sheacknowledgedthat"perhaps,thetaxpayerwasnotwellserved"byherlackofexperienceinDHSSaffairswhenshenegotiatedtheagreement."Iwasjusttryingtogetitsettled,"shesaid."Ihatetoseelooseends." owamount,feeling3-Torphysaidinarecentinterviewthathecouldnotrememberthespecificsofthe1984negotiations.Hesaidthebiggestroadblockwassettlingonpastclaims,forwhichBlueCrosswasreluctanttoassumeresponsibility,asopposedtoagreeingonhowtoprocessfutureclaims.Torphyadmitted:"Wedidn'thave greatrecords."DuringhisinvolvementwiththeBlueCrossissues,Torphysaid,"therewasnopoliticalpressureonewayortheother."Butheadded,"~learly,TomHefty(whoservedasadeputy.stateins.urancecommissionerbefore goingtoworkforBlueCross)isaninfluentiatpersonandso
are
people
ontheBlueCrossboa~'.HeftysaidDHSSsimplydidn'thavethedOCIJmentationtoprovethatBI~l.eCrossowedseveralmiHiondollarstoMedicaidunderthethird-partyliabilityprovision."Thestateneecould,iventheirlimitedinformation"hesaid."ItcouldbethatBlueCrossowedmoremoney,itmaybethatBlueCrossowedlessmoney"thanthe$150,000actuaypaid~settleallclaims
fQr
the1981-85period,Heftyadded..--- StateAuditorDaleCattanach,whoheapedcriticismonDHSSinthe1985legislativeauditreport,expressedasimilarviewpointrecently."Giventhetimethathadelapsedfromtheauditin1985untiltheagreementwasreached,Ithinkthetaxpayerswereservedaswellascouldbeexpected,"Cattanachsaid.
http://O-infoweb.newsbank.com.countycat.mcfls.org/iw-search/welInfoWeb
9/6/2011

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