The top Republicans in the Vermont House and Senate on Wednesday called for a federal investigation into anonymous allegations of fraud allegedly perpetrated by the state’s health exchange vendor.
In a letter to U.S. Attorney Tristram Coffin, Rep. Don Turner (R-Milton) and Sen. Joe Benning (R-Caledonia) wrote that there was “sufficient legal and factual predicate to begin a federal investigation” into whether CGI Technologies and Solutions had defrauded the state.
The allegations relate to a demonstration CGI officials conducted for state workers last summer to showcase their progress building Vermont Health Connect, the state’s version of a federally mandated, online insurance marketplace. While billed as a live demonstration of the site’s connection to the Federal Data Services Hub, an anonymous source quoted in a recent Newsweek story alleged that “the system was in no way operable” at the time.
In their letter to Coffin, Turner and Benning cited as evidence the Newsweek story and an unsigned letter they attached from a person claiming to be a “Vermont Health Connect team member.”
“As minority leaders of the Vermont House and Senate, we hereby formally request a federal investigation into whistleblower allegations alleging a fraudulent software demonstration on July 26, 2013, by [CGI] to Vermont officials charged with overseeing and monitoring the company’s state contract,” Turner and Benning wrote.
A spokeswoman for CGI quickly disputed the allegations Wednesday.
“CGI confirms that the demonstration on July 26, 2013, included a live interface to the Federal Data Services Hub, with the real time sending and receiving of data,” said Linda Odorisio, the company’s vice president for communications.
Members of Gov. Peter Shumlin’s administration have previously pushed back on the Newsweek story and called into question the magazine’s reporting. They produced documentation showing that Vermont Health Connect had, in fact, connected to the data hub just two days before the demonstration.
Citing that documentation and CGI’s statement, Department of Vermont Health Access Commissioner Mark Larson disputed the substance of the Republicans’ letter Wednesday and accused the legislators of “stoking fear.”
“We think it’s unwarranted to seek a federal investigation based on an anonymous allegation that does not match the facts,” Larson said in a written statement. “Those who are calling for this are stoking fear, diverting resources and wasting time, when what we really need is access to quality health care. That is exactly what Vermont Health Connect is providing to thousands of Vermonters.”
Coffin said Wednesday he had received the letter, but he declined to say whether he would take action on it.
“We don’t comment on the initiation or pendency of investigations and we won’t confirm or deny the existence of any investigation,” he said.
The two Republican leaders noted that former state auditor and 2012 Republican gubernatorial candidate Randy Brock had raised similar concerns in a September op-ed. But, they said, “To our knowledge, Vermont Governor Peter Shumlin’s administration has not investigated the alleged fraudulent demonstration.”
Vermont Health Connect has experienced extensive delays in functionality. It still cannot process payments online or enroll small businesses and their employees.
“We believe the unexplained and extensive delay, coupled with evidence suggesting the company in charge of designing the system may have duped Vermont officials into incorrectly thinking that the software system was working and on schedule, constitutes sufficient legal and factual predicate to begin a federal investigation,” Turner and Benning wrote. “If true, such a fraud prevented state officials from performing proper contractual oversight, prevented corrective measures, and helped CGI retain its multi-million dollar contract with the state.”
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Devastating Diagnosis – Green Mountain Care 2017
a prognosis by H. Brooke Paige
Vermont (January 2017) – Peter Shumlin’s socialist dreams of “universal, single payer healthcare” have mutated into a nightmare over the past five years. The utopian dream of healthcare for all was never properly explained nor fully understood by Vermonters. The working poor thought that it would be the “free care” that they saw those on welfare receiving. Most believed the promises that their healthcare providers and the level of care they were receiving would somehow continue – while the cost of care would be greatly reduced through streamlining and controls that the state and federal government would impose. Those who worked for large employers and government believed they would not be effected. None of these assumptions would prove to be correct.
Green Mountain Care (GMC) quickly acquired the resources of Vermont Blue Cross and Blue Shield (BCBS) as most of its insured became GMC clients. In the early days of the rollout, GMC and its promotional website Vermont Health Connect (VHC) failed to deliver healthcare for the small group of self-insured and the employees of small businesses targeted as the first clients of GMC. Governor Shumlin and his loyal minions on the Health Care Board, lead by a Burlington restaurateur, had no understanding of the healthcare insurance industry and were unprepared to handle even the most modest problems as they arose. While the Federal Government abandoned their hapless website contractor CGI-FEDERAL, Shumlin regrettably decided to continue with them “throwing good money after bad” eventually spending over $100 million of state and federal funds with CGI on a system that was politely described as “leaving a lot to the imagination” of the users. The plain truth was that the CGI system would never work – despite months of “tinkering” and additional monies wasted, the VHC website never reliably allowed users to: create accounts or access them, employers to edit or update their accounts (if they had been patient and creative enough to create one) nor could the system collect premiums and in the end could not pay for health care services incurred by its “insured” clients. In the end CGI was abandoned and the BCBS operating system, by default, became the GMC system.
Vermonter’s healthcare system is an unrecognizable husk of the quality network they enjoyed just a few years ago as the politician’s grand scheme, GMC, has decimated Vermont’s hospitals and healthcare practitioners – as well as the state’s economy at large. It is sad that there was no way, back in 2012, to foresee the full consequences that the progressive plans, designed by inexperienced, insistent social architects with big ideas but no understanding of the complexity of the healthcare system or the health insurance industry that financed it.
As the GMC system sputtered to life in 2014, many providers chose not to participate as a result of the anemic 105% of Medicare reimbursement rates which barely covered their out of pocket costs and failed to contribute toward overhead or capital investment costs. Within a year 20% of practicing physicians and specialist had retired, moved out-of-state or decided to limit themselves to “fee for service” patients. Nearly 50% of Vermont’s Oncologist and Cardiologist declined to participate in the GMC program. To fill the void, the Vermont Legislature hastily authorized nurse practitioners and LPNs to act as primary care providers without direct supervision.
Today, Vermonters receive their healthcare treatment and pay for services in ways unimaginable just a few years ago. For GMC participants who have their treatment denied by the GMC Review Board and those who have decided to pay the penalties instead of participating have found that many providers offer deep discounts for cash payment for services rendered. There are now many “fee for service” care facilities including: MedExpress, UrgentCare, Got-A-Doc, LabCorp, and Dynamic Therapy that offer extensive portfolios of services for walk-in patients on a first-come-first-served basis. Patients pay for services when rendered by cash or credit card with financing arrangements available for more extensive and costly procedures. While these new facilities, at first blush, seem questionable; most are staffed by highly competent and experienced practitioners (many are those that chose not to participate in GMC) and provide quality care. For those on a budget or in a hurry, Doctors on Call provides internet and phone consultations on routine and minor medical concerns, allowing many to resolve their medical issue on their own. Additionally, there are “premium” service providers like Concierge Medical which handle all the details for the medical needs of the wealthy – lining up the best doctors, treatment facilities and even arrange transportation before and after treatment, truly door-to-door service.
Possibly the most destructive aspect of the Green Mountain Care program has been the state’s scheme for financing its ever escalating costs. Governor Shumlin, for several years, obfuscated and then flatly refused to reveal the amount and sources of the funds required to finance GMC’s operation until well after his reelection in the fall of 2014. That December, the Governor finally revealed the three-pronged taxation plan required to generate the $2.9 billion necessary to fund GMC – including: 1 – a 25% payroll tax with employers paying 17.5% and employees having 7.5% deducted from their paychecks (the self-employed are required to pay the entire 25%), 2 – a 10% tax on all unearned income – capped at $200,000 per year and 3 – an increased healthcare claims tax raised from 7% to 14% – this tax, formerly paid by insurance firms, is now paid by the patients receiving the care. As soon as the Governor had announced the requirements of the “GMC taxes”, employers implemented plans to “scale back” their Vermont operations or leave the state in order to remain profitable. By summer of 2016; new layoffs in Vermont totaled over 15,000, including nearly a thousand from the healthcare industry as they scaled back in anticipation of reduced revenues from GMC.
Hospitals and medical providers, desperate for additional revenues, began to increase fees for services rendered in patient categories not covered by GMC, primarily: workman’s compensation injuries, auto accident victims and personal injuries paid for by liability insurance claims. Insurance providers immediately adjusted their rates to their insured by as much as 25%, worsening Vermont’s economic and business environment.
Vermont’s healthcare subsidies encouraged many lower wage earners to quit their jobs and sign-up for the broad spectrum of available social service benefits, since the new healthcare taxes in addition to state, federal and Social Security taxes resulted in significantly lower take home pay, insufficient to cover their living expenses.
Former Governor Shumlin had narrowly won reelection in 2014, in part because the impact of his Green Mountain Care and his ultimate prize of “single payer” were not fully understood. By 2016, Shumlin had realized that he had little chance of winning another gubernatorial race and attempted to best incumbent Senator Patrick Leahy in the Democratic Primary – failing by a wide 3:1 margin.
Ever the opportunists, Shumlin and his brother, Jeffery, refocused their Putney Travel Service to take advantage of increased interest in “medical vacations” brought on by healthcare treatment delays and denials by GMC. Putney Medical Vacations will soon provide complete packages that allow their wealthy customers to avoid the delays and the reduced quality of care in Vermont by arranging treatment “stays” in exotic venues that include: Bermuda, Costa Rica, Bangkok, Mexico and Cape Town where patients can save up to 70% under the expert care of orthopedic, oncological, plastic or general practice surgeons and enjoy recovering on the sun-soaked beaches of the treatment venue.
Governor Scott and the newly elected Republican Legislature are struggling with the consequences of GMC. Vermonters who cannot afford to avail themselves of “fee for services” treatment find long waits at the “public” hospitals – the state has been required to take over the operation of most of the formerly independent institutions, closing several smaller hospitals to control costs. Appointments for non-emergency hospital procedures now require waits of three to five months once they are approved by the GMC Board.
All of this could have been easily avoided. The initial concern over 40,000 uninsured Vermonters was discovered to be a gross exaggeration. When those who wished not to be insured (primarily the wealthy and young individuals) and those who chose to find care through social services (at the taxpayer’s expense) were eliminated from the equation , the actual number of uninsured individuals who wanted insurance coverage was less than 9,000. The biggest problem was that none of those involved in the planning of GMC had a thorough understanding of healthcare insurance or the financial tightrope that these firms walked to successfully balance the costs of care and premium rates while managing to remain financially viable. The “public financed” political/government alternative has proved to be a disaster of biblical proportions – out-of-control costs and radically insufficient care.
It is a shame that there is no way to reach back in time and inform Vermonters of the healthcare troubles in their future.
H. Brooke Paige, a historian and writer, is a resident of Washington, Vermont.
Devastating Diagnosis – Green Mountain Care 2017 as published in the WORLD, March 12, 2014