Monday, March 8, 2010
Fighting Corruption in Medicine: How about Looking Into EmblemHealth?
NY. Fighting Corruption in Healthcare – We Thought Spitzer Had Left The Building
More corruption at very high levels of government in NY…
Can you say NY’s corruption is like a bottomless cesspool. It stinks so bad, no one wants to clean it.
This story written by a Member of an Association of Retired Police Officers:
This is a story of how disgraced former NYS Gov. Eliot Spitzer “fast-tracked” legislation through the New York State legislature that authorized his hand-picked Insurance Superintendent, Eric Dinallo, (pictured at right) to approve the merger and conversion of non-profit health insurers HIP and GHI into a for-profit corporation.
So far, the conversion has been prevented with Mr. Spitzer resigning as Governor after being involved in a prostitution scandal, and Insurance Superintendent Eric Dinallo resigning on July 2, 2009. Mr. Dinallo was replaced by James Wrynn on August 20, 2009.
After being confirmed by the NYS Senate, Mr. Wrynn agreed to meet with myself and a group of NYPD/FDNY retirees on October 26, 2009 to discuss our concerns regarding former governor Spitzer [a/k/a client number 9, resigned for getting caught with a prostitute with only his socks on] creating a public corporation where he, former Senator Joseph Bruno, who also resigned after being convicted of corruption, and Assembly Speaker Sheldon Silver [another crook] would have control of the anticipated $3 to $5 billion proceeds from the initial sale of EmblemHealth stock if HIP/GHI was converted from a non-profit to a for-profit corporation under EmblemHealth.
Since Emblemhealth is a “shell” corporation formed by the board of directors of HIP and GHI, we filed a “Freedom of Information” request for the Independent Audit reports of HIP, GHI and EmblemHealth.
This FOIL request was recently denied by the NYS Insurance Department based on the objections of the Board of Directors of HIP and GHI[not grounds for denial as NYS FOIL law controls what documents by law need to be disclosed, not any board of directors] stating that since EmblemHealth, the “shell” corporation formed by the HIP/GHI boards was a “holding company”, EmblemHealth was not subject to NYS’s “Freedom of Information Laws”. [We'd love to know the actual NYS law the FOIL people sited for this.]
We now advise that this merger is corrupt and in need of investigation:
1. According to NYC records, in 2006, HIP had cash reserves of over $900 million and on March 10, 2005 HIP purchased a for-profit health care insurer named ConnectiCare for $354 million when, according to the Massachusetts Commissioner of Insurance, ConnectiCare, which operated in Massachusetts, had a net worth of only $4.0 million.
2. Since President Obama is saying that his health care reform bill will include investigating the “waste, fraud and corruption” that appears to be endemic to New York City’s health care system, I believe the Congress should look into why HIP would pay hundreds of millions of dollars for a small out-of-state health care insurer whose credit rating in December 2003 was lowered by Standard and Poor’s from “marginal” to “weak”, after ConnectiCare took out a $115 million bank loan that allowed ConnectiCare’s owners, “The Carlyle Group” and “Liberty Partners”, two Wall Street private equity firms, to get a dividend on their investment in the ConnectiCare.
3. In addition, as stated above, since HIP paid $354 million for a health insurer whose net worth was only $4.0 million, and Attorney General Cuomo has ignored Mayor Bloomberg’s complaint that the conversion of HIP/GHI to a “single for-profit entity could increase health care costs by hundreds of millions of dollars” for New York City taxpayers, I fail to see how any New York member of the House, or the U.S. Senate, can support “fast-tracking” President Obama’s health reform bill that would add millions of dollars to New York State’s health care costs without first ensuring New York City’s health care insurers are being run in the best interest of New York City’s taxpayers and their active and retired employees, including the members of the NYPD Superior Officers Association Retired.
If you have any questions regarding the above, please feel free to contact me at your convenience.
NYPD Superior Officers Association Retired
PS: Please feel free to pass the above and Mayor Bloomberg’s attached members to the other members of Congress and U.S. Senate for their consideration as well.