Rick Scott Lets His Pals Run a Monopoly on State Employees' Health Care Coverage

By Matthew Hendley Thu., Aug. 4 2011 at 1:29 PM

Illustration by Miche Ratto

Earlier in the week, the state Department of Management Services announced that it was consolidating the number of HMOs offered to state employees to one per county.

In a move the DMS says was "following the governor's direction," the department predicts the change will save taxpayers $400 million in two years.

The new HMO provider for 38 counties in the state -- including Broward, Palm Beach, and Miami-Dade -- also happens to have some close ties to Gov. Rick Scott.

AvMed Health Plans, which won the bid to be the sole HMO provider in the 38 counties, happened to be very friendly to Scott on the campaign trail.

State campaign contribution records don't provide details of donors' employment, but Health News Florida reported during Scott's campaign for governor that he received $5,000 from people associated with AvMed. The company itself also shelled out $10,000 for Scott's inauguration party.

On the other hand, UnitedHealthcare of Florida -- which claims it provided HMO coverage to 66 of the state's 67 counties before it was butted out of most of them -- has no such record of contributions to the governor. In fact, the contribution records show that someone named David Lewis -- the same name of UnitedHealthcare's CEO for Central and North Florida -- and claiming to be of the medical profession donated $500 to Alex Sink, Scott's Democratic challenger.

Incidentally, UnitedHealthcare of Florida has filed a formal protest against the state's decision to nix its HMO coverage from most counties, claiming that the Department of Management Services rejected its bid to continue the HMO coverage of 47,000 people that would have been cheaper for the state.

The protest says the department heavily favored AvMed in the bidding process and claims that the state won't save $400 million. Instead, UnitedHealthcare claims that between the new contracts with AvMed and the providers for the other counties, the state's cost would actually increase $117 million.

But wait, there's more!

This is the same AvMed that claimed that personal health care information regarding nearly 1.2 million current and former state employees was "stolen" from its offices just last year.

What was claimed to be one of the largest breaches of medical records in history led to a class-action lawsuit filed in a Miami-Dade County court that has not been settled.

Lastly, there's AvMed's president and chief operating officer, Ed Hannum, who donated money to the campaigns of both Scott and Sink and also serves as an executive committee member at-large for Florida TaxWatch -- an organization that has given some high praise to the governor since he's taken office.

floridataxwatch.org

Ed Hannum (second from right), and Gov. Rick Scott (center, bald).

And wouldn't you be surprised if Florida TaxWatch had recommended this new plan to the governor and Department of Management Services?

In Florida TaxWatch's most recent health care recommendations, it advocated both a self-funding HMO model and savings from "consolidation of services both medically and geographically," which were both adopted in the new HMO policy rolled out on Monday.

The 26,000 state employees who will have a new HMO provider can either switch to the new one or opt to enroll into the state's preferred-provider organizations program.

As Gov. Scott says in his statement on the HMO choices, "This is what Floridians asked for, and I intend to make sure their government delivers it."

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Tags:

AvMed, Department of Management Services, Ed Hannum, Florida HMO, Rick Scott, UnitedHealthcare

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Donna Bird

I didn vote for it, did you? did you? i didnt think so!, so where is he getting that idea?

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matt gordon

This is why the carpetbagging unindicted sociopath has a white-collar criminal defense attorney employed as a top aide. A con-artist with his own plane and personal defense attorney is still a con-artist.

Watching

I suspect those small-dollar contributions had nothing to do with the decision.

Let's look at AvMed's executive branch lobbyists. According to the state website, they are:

AvMed, Inc. d/b/a AvMed Health PlansGarrett R. BlantonRheb H. Harbison, Jr.

Garrett Blanton used to be chief of staff at DMS, and the H&K website says that while he was at DMS, he was in charge of the state group insurance program for the department. I've never heard of the other guy and can't even figure out how to say his name, so I suspect Blanton should be credited with good lobbying.

Even so, despite any amount of good lobbying, AvMed could not have won the contract without a good track record in the program (except for the stolen data part) and being able to deliver good service for the state. They would not have won those counties if the Scott administration had reason to doubt their abilities, regardless of $15,000 worth of donations.

How many other contributors to Scott (there were probably many who gave much more than AvMed) have been awarded big state contracts? Please let us know. Just because you make contributions doesn't mean you become disqualified from state contracting (at least not under current law).

Santiago Leon

I am an insurance broker. In general, self-funding is a good idea for a large group. Offering an HMO option is also a good thing. However, splitting a group between two carriers is not a good idea- even in a self-funded situation, each carrier is going to have to hedge its exposure to account for the possibility that it will get a disproportionate share of the high-cost employees and dependents. That means higher reinsurance premiums and higher total cost. Also, given that state employees are all over the state, and their lives might overlap county boundaries, I think that all things being equal it would be preferable to have a single statewide plan. Since AvMed does business only in a limited number of counties, AvMed could not provide that. All of that said, AvMed does a good job and is currently very competitive- for example, AvMed covers the Miami-Dade County employees. So an RFP that led to a contract with AvMed to provide an HMO option in the areas where AvMed does business would not necessarily be unreasonable.

Tdog123

I have Av-Med as my health care insuror. For YEARS they have done an excellent job for me and my family. Everyone tha wants to blast Governor Scott for trying to make medical care cost effecien,t needs to chill out. He is doing what the people of Florida elected him to do.

matt gordon

I don't remember Tricky Rick saying "I will do as much damage to FL as possible before escaping unindicted (again)" during the campaign.

Gator1

A review of your feedback history on articles pretty much runs the same screed: rabid hyperventalation. A logical thinking process does not seem to exist. Name calling is immature. Coherent communication will work a lot better in making a point.

Bob

See the first line in Angela's response above.

Tdog123

I did see the first line in her response. Governor Scott won the election. Just as owebomba did. Unfortunately, states unlike the Federal Government can't print their own money. Governor Scott is trying to keep Florida fiscally sound......unlike the community organizer-in-chief, and the "progressive" liberal con-gress that believe you dig yourself out of a hole by digging it deeper.

Cmichael258

Surely the writer isn't implying that a high level state employee would be influenced by outside money. I just hope the members of the Florida legislature don't read this article. BTW...there are 11,000 lobbyist in Washington, where we have some of the best politicians that money can buy.

Relayer

Seriously? You are claiming that a billionaire who made his money ripping off Medicare in the 1990s would be swayed by $5,000 or $10,000 in campaign contributions? Seriously? What's this, Fox News?

matt gordon

Scott is not a billionaire and is treated well by Fox network.

The Pulp Blog

I think you either missed the point or didn't read it. AvMed helps throw a bash for his inauguration, its president pals around the governor's mansion, delivers policy decisions on healthcare to the governor, then just happens to win a gigantic bid to run half the state employees' health care without competition. And yes, the company also gave him some change in-between that.

GuntherZorn

Florida is so full of non-natives and recent arrivals that I wonder if there is any general sense of connection to the place as home, or any sense of pride in simply being a Floridian. Who, after all, would invite a scammer into the family, or allow businesses to come onto our property merely to exploit the resources for their own profit and leave their shit behind for us to clean up? If we have any pride whatsoever in the place we live, we will get our asses to the polls at election time and remove Rick Scott and his ilk from Tallahassee forever.

Randy Brown

And here we have it.

Angela

You have got to admire the hubris of a man who won by less than 1% of the vote saying this is what Floridians wanted...well almost half of us didn't want this. At what point to people actually acknowledge that this guy is all about scamming them and lining his and his friends' pockets?

GuntherZorn

I acknowledge that Rick Scott is all about scamming the people of Florida and lining his and his friends' pocket

the riddler

I am NO fan of Scott, but 66 of 67 wasn't a monopoly? The donation connection is shady, but why didn't they get the other half?

The Pulp Blog

They weren't the sole provider for the 66 counties, and AvMed only provides coverage in the South Florida area.

KenEsq

He's absolutely right. Rick Scott is what Floridians asked for and we got it. Perhaps next time the Democrats will run a serious candidate AND the voters who were too lazy to make a few marks on a piece of paper will do so.Nahh, doubtful.

David

Actually, the greatest problem is that 60% of the people who may be capable of any semblance of rational thought do not vote. This leaves the field open to the election of all the nut jobs supported by the fringe element who are bent on dismantling any hope of compromise or support of what is actually required in order to revitalize our economy, and save our children from being worse off than US.