David Feinwachs was general counsel for the Minnesota Hospital Association.
Until 2010 when he was fired.
His firing ended a 30 year career with the hospital association.
He was fired because he began asking questions about why the four HMOs in Minnesota were making so much money off the state’s Medicaid program.
When he was fired, he was offered $150,000 to remain silent.
He refused the money.
And David Feinwachs is now speaking out.
“Early in 2010, the board of the hospital association established as one of their priorities trying to achieve some measure of transparency and accountability in the state’s Medicaid program,” Feinwachs told Corporate Crime Reporter in an interview last week. “Hospitals in Minnesota were being reimbursed at about 27 percent below their costs. And no one could seem to understand why it appeared that such an enormous amount of money, billions of dollars a year, were being poured into these programs, but providers were being paid so little and so poorly.”
“I was tasked with looking at this and seeing what I could find out and seeing if there were legislative solutions,” Feinwachs said.
Four HMOs in Minnesota — Blue Cross and Blue Shield of Minnesota, Medica, Health Partners, and UCare — dominate the health insurance market.
“I found out that the HMO vendors to these Medicaid programs made five times more money managing public healthcare programs for the state than they did selling commercial insurance products to healthy working people,” Feinwachs said. “They reported their profitability by line of business. And those figures struck me as astounding – in fact, nearly impossible. That’s one thing I found out.”
“I also found out while all the health care providers – all of them – lost on every kind of public health care program and of course lost on them in the aggregate, the HMOs or the health plans, profited in the aggregate.”
Feinwachs believes fraud is involved.