Citations
- 794 F. Supp. 2d 1119
Full opinion text
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND DECISION
ALAN C. KAY, Senior District Judge.
SYNOPSIS
This litigation involves a dispute over the method by which the State of Hawai’i is currently providing Medicaid services to aged, blind, and disabled beneficiaries (“ABD beneficiaries”). Traditionally, states provided Medicaid benefits on a fee-for-service basis (“Medicaid FFS”). In a Medicaid FFS program, the state contracts directly with and pays healthcare providers, such as physicians, hospitals, and clinics, for services they provide to Medicaid beneficiaries. By contrast, under a managed care model, the state contracts with managed care organizations (“MCOs”), which assume the responsibility of providing Medicaid benefits through their own - employees or by contracting with independent providers of such services.
In 1994, Hawai’i began providing Medicaid- benefits to most beneficiaries in a managed care program, the QUEST program. However, ABD beneficiaries continued to receive benefits under a traditional Medicaid FFS program. Hawai’i recently transitioned the ABD beneficiaries to a managed care program as well, the QUEST Expanded Access (“QExA”) program. As of February, 1, 2009, all ABD beneficiaries have had to enroll with one of two managed care plans as a condition of receiving Medicaid benefits.
Plaintiffs generally complain that under the QExA program they have either been delayed or denied covered benefits and care or that they have been unjustifiably burdened in order to access care, which has subjected them to increased harm. State Second Amended Complaint ¶ 83.
Plaintiffs’ State Second Amended Complaint asserted nine counts. As a result of the Court’s rulings on numerous motions, only portions of the following counts remain: Count I (Deprivation of Rights under Federal Law; 42 U.S.C. § 1983); Count II (Violations of Preemptive Federal law by Virtue of the Supremacy Clause of the U.S. Constitution); Count III (Further Specific Violations of Preemptive Federal Law and Regulations); and Count V (Insufficient Range of Services and Provider Networks). Each of these remaining counts is based on one issue, which is whether the managed care organizations providing the Medicaid benefits under the QExA program are in compliance with 42 U.S.C. § 1396b(m)(l)(A)(i). Specifically, subdivision (i) provides that, in order to qualify as an MCO, an organization must:
make[ ] services it provides to individuals eligible for benefits under this title accessible to such individuals, within the area served by the organization, to the same extent as such services are made accessible to individuals (eligible for medical assistance under the State plan) not enrolled with the organization.
42 U.S.C. 1396b(m)(l)(A)(i). Accordingly, the Court was presented with the issue whether the QExA program provides ABD beneficiaries services to the same extent such services are made accessible to beneficiaries under the QUEST program. An eleven day non-jury trial was held on this issue and whether the Plaintiffs are entitled to injunctive relief. As discussed below, the Court finds that the managed care organizations providing Medicaid benefits under the QExA program do provide accessibility to such services to the same extent as does the QUEST program and thus, they are in compliance with 42 U.S.C. § 1396b(m)(l)(A)(i). In sum, the Court finds against Plaintiffs on all remaining counts and finds that Plaintiffs are not entitled to injunctive relief.
PROCEDURAL BACKGROUND
On December 8, 2008, in Civil No. 08-00551 ACK-BMK, Plaintiffs filed a complaint against Defendants the State of Hawaii, Department of Human Services (“DHS”), and Lillian B. Roller, in her official capacity as the Director of the State DHS (collectively, “State Defendants” or “State”). At that point, the Plaintiffs were comprised of aged, blind, and disabled (“ABD”) Medicaid beneficiaries (“ABD Plaintiffs”). Their principal allegation is that the State Defendants have violated certain provisions of Title XIX of the Social Security Act, commonly known as the Medicaid Act, 42 U.S.C. § 1396 et seq., by requiring ABD beneficiaries to enroll with one of two healthcare entities as a condition of receiving Medicaid benefits in connection with the agency’s managed care program for ABD beneficiaries, the QExA Program. Those two entities were the only ones awarded contracts to provide the care for ABD beneficiaries under the QExA Program (“QExA Contracts”). They are WellCare Health Insurance of Arizona, Inc. d/b/a Ohana Health Plan (“Ohana”) and United Healthcare Insurance Company d/b/a Evercare (“Ever-care”) (collectively, “QExA Contractors” or “Intervenors”). Both Ohana and Evercare have intervened in this matter.
On January 30, 2009, in Civil No. 09-00044 ACK-BMK, Plaintiffs filed a complaint against the United States Department of Health and Human Services (“Federal DHHS”) and the Secretary of the Federal DHHS (“Secretary”) (collectively, “Federal Defendants”). These two cases were consolidated on February 19, 2009.
This is the third case brought in this Court challenging the QExA Program. See AlohaCare v. Hawaii, Dep’t of Human Servs., 567 F.Supp.2d 1238 (D.Haw.2008), aff'd, 572 F.3d 740 (9th Cir.2009) (upholding the district court’s decision that a disappointed bidder for a QExA Contract did not have statutory standing to enforce certain provisions of the Medicaid Act) and Hawaii Coal, for Health v. Hawaii, Dep’t of Human Servs., 576 F.Supp.2d 1114 (D.Haw.2008), aff'd 365 Fed.Appx. 874 (9th Cir.2010) (dismissing a health advocacy organization’s complaint because, among other things, the organization did not have statutory standing to enforce certain provisions of the Medicaid Act).
On May 11, 2009, the Court entered an order granting in part and denying in part a motion to dismiss filed by the State Defendants and joinders therein. See G. v. Hawaii, Dep’t of Human Servs., Civ. Nos. 08-00551 ACK-BMK & 09-00044 ACK-BMK, 2009 WL 1322354, 2009 U.S. Dist. LEXIS 39851 (D.Haw. May 11, 2009) (“5/11/09 Order”). The Court thereafter granted Plaintiffs leave to amend their complaints in certain respects. See Order Granting in Part, and Denying in Part Plaintiffs’ Leave to Amend Their Complaints, Doc. No. 138 (July 14, 2009) (“7/14/09 Order”). They then filed a first amended complaint against the State Defendants and a second amended complaint against the Federal Defendants.
On August 10, 2009, Plaintiffs filed a motion for a temporary restraining order and a preliminary injunction against the State Defendants. The Court denied Plaintiffs’ motions for temporary restraining orders. Plaintiffs subsequently withdrew their motions for preliminary injunctions.
With leave of Court, on August 31, 2009, Plaintiffs filed a second amended complaint against the State Defendants (“State Second Amended Complaint”) and, on September 1, 2009, they filed a third amended complaint against the Federal Defendants. Those complaints added claims on behalf of certain Medicaid healthcare providers (“Provider Plaintiffs”) and new ABD beneficiaries. The Provider Plaintiffs are physicians, pharmacists, and ancillary care providers who accepted ABD beneficiaries as patients and clients under the fee-for-service program, which preceded the QExA Program, and who have provided care and services to ABD beneficiaries under the QExA Program. State Second Amended Complaint ¶ 10.
The State Second Amended Complaint asserts the following nine counts: (I) deprivation of rights under federal law and 42 U.S.C. § 1983; (II) violations of preemptive federal law by virtue of the Supremacy Clause; (III) further specific violations of preemptive, federal law and regulations; (IV) insufficient assurances of solvency and evidence of poor performance in other states; (V) insufficient range of services and provider networks; (VI) violation of the Americans with Disabilities Act (“ADA”); (VII) violation of the Rehabilitation Act of 1973; (VIII) violation of 42 U.S.C. § 1396a(a)(30)(A) and 42 C.F.R. § 447.204; and (IX) unlawful taking.
On September 8, 2009, the Federal Defendants filed the administrative record (“AR”), which is roughly 5,200 pages in length. At Plaintiffs’ request, the administrative record includes documents from 2004 onwards. 7/18/09 Transcript of Proceedings 28:3-22. Plaintiffs did not request any documents that were created prior to 2004. Id.
In October and November of 2009, three motions for summary judgment were filed in the action against the State Defendants and three motions for summary judgment were filed in the action against the Federal Defendants. With respect to the motions in the action against the Federal Defendants, the Court granted summary judgment in favor of the Federal Defendants on December 23, 2009 as to all claims asserted in the third amended complaint against them. See G. v. Hawaii, Dep’t of Human Servs., 676 F.Supp.2d 1006 (D.Haw.2009) (“12/23/09 Order”).
As for the motions for summary judgment in the action against the State Defendants, the Court granted summary judgment in favor of the State Defendants on December 24, 2009 as to: (1) Counts VI(ADA) and VII (Rehabilitation Act) insofar as those counts assert integration claims on behalf of all ABD Plaintiffs, except for ABD Plaintiff L.P.; (2) Count VIII (42 U.S.C. § 1396a(a)(30)(A)); (3) Count IX (taking); and (4) Plaintiffs’ claim that the QExA Contractors fail to meet the second solvency standard set forth in 42 U.S.C. § 1396b(m)(l)(A). However, the Court denied the State Defendants’ motion for summary judgment as to Counts VI(ADA) and VII (Rehabilitation Act) insofar as those counts assert equal access claims (in relation to QUEST) on behalf of the ABD Plaintiffs and an integration claim on behalf of ABD Plaintiff L.P. G. v. Hawaii, Dep’t of Human Servs., 676 F.Supp.2d 1046 (D.Haw.2009) (“12/24/09 Order”). In addition, the Court denied Plaintiffs’ motion for summary judgment as to whether the QExA Contractors meet the first and third solvency requirements for MCOs prescribed by 42 U.S.C. § 1396b(m)(l)(A). Id.
On November 20, 2009, Evercare filed a motion for partial summary judgment regarding Plaintiffs’ claims that assert the State Defendants violated the requirements of the Medicaid statute relating to provider networks and access to services by requiring enrollment in the QExA plans offered by Evercare and Ohana as a condition of receiving Medicaid benefits. These claims are asserted in Counts I, II, III, and V of the State Second Amended Complaint.
On March 19, 2010, the Court ruled on Evercare’s November 20, 2009, motion for summary judgment. G. v. Hawaii, Dep’t of Human Servs., 703 F.Supp.2d 1078 (D.Haw.2010) (as amended June 14, 2010) (the “Provider Networks Order” or “6/14/10 Order”). In that order, the Court (1) granted Evercare’s motion for summary judgment, and the joinders therein, with respect to Plaintiffs’ claim that the QExA Contractors’ provider networks are inadequate in contravention of 42 U.S.C. § 1396u-2(b)(5) and its corresponding regulations; (2) granted Evercare’s motion for summary judgment, and the joinders therein, with regard to Plaintiffs’ claim that the State Defendants’ decision to restrict the number of MCOs to two substantially impaired access to services, in contravention of 42 U.S.C. § 1396u-2(a)(1) (A) (ii); and (3) denied Evercare’s motion for summary judgment, and the joinders therein, with respect to Plaintiffs’ claim under 42 U.S.C. § 1396b(m)(l)(A)(i) that the Intervenors fail to make services accessible to QExA beneficiaries to the same extent as services are made accessible to QUEST beneficiaries under the QUEST program.
In the 6/14/10 Order, the Court explained:
As a result of this order, the following issues remain to be resolved at trial: (1) the claim set forth in Counts I, II, III, and V that the QExA Contractors do not make services accessible to QExA beneficiaries to the same extent that services are made accessible to QUEST beneficiaries under the QUEST program, as required by 42 U.S.C. § 1396b(m)(l)(A)(i) [the Medicaid equal access injunctive claim]; (2) the claim set forth in Counts I through IV that the QExA Contractors failed to meet the first and third solvency standards set forth in 42 U.S.C. § 1396b(m)(l)(A)(ii); (3) the claim by L.P. set forth in Count VI(ADA) and Count VII (Rehabilitation Act) that the State Defendants have violated the integration mandate; and (4) the claim by the ABD Plaintiffs set forth in Count VI(ADA) and Count VII (Rehabilitation Act) that they have less access to Medicaid benefits through the QExA Program than non-disabled beneficiaries enrolled in the QUEST Program.
6/14/10 Order at *74-*76 (footnote omitted).
On June 21, 2010, Evercare filed a Motion to Amend the Rule 16 Scheduling Order requesting an extension of the dis-positive motion deadline to June 29, 2010, in order to potentially limit the issues for trial. On June 25, 2010, Magistrate Judge Kurren granted Evercare’s Motion to Amend the Rule 16 Scheduling Order and extended the dispositive motion deadline to June 29, 2010.
Subsequently, an additional three motions for summary judgment were filed. On June 28, 2010, Evercare filed a Motion for Partial Summary Judgment Re ADA and Rehabilitation Act Claims, as well as a memorandum in support of that motion (“Evercare’s ADA MSJ”). On June 29, 2010, Evercare filed a Motion for Partial Summary Judgment Re Plaintiff L.P.’s ADA and Rehabilitation Act Claims and a memorandum in support of that motion (“Evercare’s L.P. MSJ.”) Doc. No. 634. Also on June 29, 2010, Ohana filed a motion for summary judgment on the remaining solvency issues.
On September 3, 2010, the Court ruled on those three motions for summary judgement in two orders. See Order (1) Denying Evercare’s Motion for Partial Summary Judgment as to Plaintiff L.P.’s Integration Claim and the Joinders Therein, and (2) Granting Evercare’s Motion for Partial Summary Judgment As to Plaintiffs’ Equal Access Claims Under the ADA and Rehabilitation Act and the Joinders therein, G. v. Hawaii, Dep’t of Human Sens., Civ. Nos. 08-00551 ACK-BMK & 09-00044 ACK-BMK, 2010 WL 3489632 (D.Haw. Sept. 3, 2010) (“9/3/10 ADA Order”); and Order Granting WellCare of Arizona’s [Ohana’s] Motion for Summary Judgment, and the Joinders Therein, on the Remaining Solvency Issues, G. v. Hawaii Dep’t of Human Servs., Civ. Nos. 08-00551 ACK-BMK & 09-00044 ACK-BMK, 2010 WL 3489629 (D.Haw. Sept. 3, 2010) (“9/3/10 Solvency Order”).
On October 18, 2010, the Court approved the parties’ Stipulation to Dismiss Plaintiff L.P., a disabled adult, for himself. Doc. No. 803.
In light of the foregoing rulings by the Court and the parties’ stipulation to dismiss Plaintiff L.P., only one of Plaintiffs’ claims remained for trial — the claim set forth in Counts I, II, III, and V that the QExA Contractors do not make services accessible to QExA beneficiaries to the same extent that services are made accessible to QUEST beneficiaries under the QUEST program, as required by 42 U.S.C. § 1396b(m)(l)(A)(i) (“the Medicaid equal access injunctive claim”).
An eleven-day bench trial was commenced on November 9, 2010, and completed on December 13, 2010. Having heard and weighed all the evidence and testimony adduced at the trial, having observed the demeanor of the witnesses and evaluated their credibility and candor, having heard the arguments of counsel and considered the memoranda submitted, and pursuant to Fed.R.Civ.P. 52(a)(1), this Court makes the following findings of fact and conclusions of law. Where appropriate, findings of fact shall operate as conclusions of law, and conclusions of law shall operate as findings of fact.
FINDINGS OF FACT
I.The Parties
1. The ABD Plaintiffs who remain Plaintiffs are: Plaintiffs K. (suing through parent and next friend G.), E. (suing through parent and next friend D.), I. (suing through parent and next friend M.), R. (suing through parent and guardian V.), E.S. (suing through parent and next friend T.), C. (suing through parent and next friend A.), T.I., and K. (suing through parent and guardian H.) are individuals who receive QExA benefits from the DHS and have enrolled with either Evercare or Ohana.
2. The Provider Plaintiffs who remain Plaintiffs are: Plaintiffs Kevin McGill, Malcolm Ing, M.D., Arlene Meyers, M.D., Jon Graham, M.D., Thomas Jones, R.Ph., Kevin Glick, R.Ph., Les Krenk, R.Ph., and Joseph Zobian, M.D. are physicians, pharmacists, and ancillary health care providers who have provided services to QExA beneficiaries.
3. A number of former Plaintiffs in this matter have been dismissed by stipulation and order. See Doc. Nos. 861 (dismissing Dennis Ayon, M.D.); 838 (dismissing Nelson Agcaoili); 837 (dismissing Anita Agcaoili); 803 (dismissing L.P.); 739 (dismissing J., parent and next friend of R.J.), 706 (dismissing C, parent and next friend of M.), and 264 (dismissing A., S., C.J., and H.T).
4. Defendant DHS is the state agency responsible for designing and administering Hawaii’s Medicaid program.
5. Defendant Lillian Koller was at relevant times the Director of DHS and is sued solely in her official capacity.
6. Intervenors Evercare and Ohana are insurance companies licensed to offer health insurance in Hawai’i who arrange for the provision of health care services to QExA beneficiaries under separate contracts with DHS. Exs. 321-327 (Evercare); Exs. 343-350 (Ohana).
II. Hawaii’s Medicaid Program Generally
7. The Medicaid Act, 42 U.S.C. § 1396 et seq. “provides federal funding to ‘enable] each State, as far as practicable ... to furnish ... medical assistance, on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services.” AlohaCare v. Hawaii, Dep’t of Human Servs., 572 F.3d 740, 742 (9th Cir.2009).
8. The Medicaid program is “a jointly financed federal-state program that is administered by the States in accordance with federal guidelines.” Id.
9. The Medicaid Act “imposes detailed requirements on States that wish to delegate the provision of health care services through contracts with managed care organizations (‘MCOs’), [42 U.S.C.] § 1396u-2.” AlohaCare, 572 F.3d at 742-43.
10. Furthermore, under 42 U.S.C. § 1315, the Centers for Medicare and Medicaid Services (“CMS”) may waive compliance with certain Medicaid requirements for “experimental, pilot, or demonstration project[s].’ ” Id. at 743 (quoting 42 U.S.C. § 1315(a)) (brackets in original).
11. Pursuant to the waiver program, in July 1993 CMS granted the State of Hawaii, a waiver of various provisions of the Medicaid Act for the QUEST program.
12. QUEST was a demonstration project to replace Hawaii’s fee-for-service Medicaid program for beneficiaries who were not aged, blind or disabled with a managed care delivery system for covered Medicaid services.
13. Because QUEST categorically excluded the ABD population, this population continued to receive Medicaid benefits on a fee-for-service basis.
14. The QUEST program continues to this day for non-ABD Medicaid beneficiaries. VI: 119: 10-12 (Bazin).
15. Starting in 1997, DHS submitted various waiver applications to CMS so that it could transition the ABD population (or portions thereof) into managed care.
16. On February 21, 2007, DHS submitted its fourth request for a waiver, seeking approval to implement the QExA program in close to its present form.
17. ■ On October 10, 2007, DHS issued a request for proposals (“RFP”) to contract on a capitated basis with managed care organizations that would be responsible for providing all of the Medicaid covered services for ABD beneficiaries under the QExA program, other than a few “carve-outs” for certain services provided under the State’s program for assistance to the developmentally disabled and mentally retarded (“DD/MR”) and other Department of Health and Department of Education services. Ex. 200, §§ 10.100, 30.320.3.
18. The RFP required that the MCOs “develop and maintain a provider network that is sufficient to ensure that all medically necessary services are accessible and available.” The RFP also: (a) specified the minimum requirements for the provider networks in terms of hospitals, primary care providers, specialists, and ancillary care providers; and (b) imposed maximum wait time requirements for certain categories of services. Ex. 200, §§ 40.210, 40.220, 40.230, 40.240, 40.260, 51.320.2.
19. Evercare and Ohana timely submitted their response to the RFP on December 7; 2007.
20. On that same day, DHS submitted the RFP to CMS for its review.
21. On February 1, 2008, DHS awarded contracts to Evercare and Ohana.
22. The RFP is incorporated into the State Defendants’ contracts with Evercare and Ohana. Ex. 321 at 2 (“The Provider shall, in a proper and satisfactory manner as determined by the State, provide the Required Services set forth in Amendment “1” to this Contract, which is hereby made a party of this Contract, and the Request for Proposals (“RFP”), and the Provider’s Proposal, which are incorporated in this Contract by reference. In the event that there is a conflict among the terms of this Contract, and either the Proposal or the RFP, or both, then the terms of this Contract shall control.”); Ex. 343 at 2 (same); V:42:16-43:5 (Roller).
23. On February 7, 2008, CMS approved DHS’ waiver application for the QExA program.
24. On January 30, 2009, CMS approved the QExA contracts with Evercare and Ohana.
25. The QExA program started on February 1, 2009 and the State Defendants stopped providing services through the fee-for-service program. DHS provided a transition period until July 31, 2009, during which time QExA beneficiaries could receive services from healthcare providers even if the providers were not yet contracted with Evercare and/or Ohana. Ex. 321 (Evercare); Ex. 343 (Ohana).
26. Since August 1, 2009, QExA members must receive prior-authorization to receive services from a provider who is not contracted with their QExA plan (except for urgent and emergent services, and services covered by Medicare, as described below). Ex. 200, § 50.700.
27. “Dual-eligibles” (or “dual-eligible members”) are beneficiaries who are eligible for services under both Medicaid and Medicare. VI:90:2-9, 91:9-19 (Bazin); VIII:92:2-25 (Heywood); see also 5/11/09 Order at *4 (“ ‘dual eligibles’ [are] beneficiaries who are eligible for services under both Medicaid and Medicare programs, 42 U.S.C. § 1396u-2(a)(2)(B); ... First Med. Health Plan. Inc. v. Vega-Ramos, 479 F.3d 46, 48 (1st Cir.2007) (‘medicare beneficiaries who are indigent are referred to as dual eligible beneficiaries, meaning that they also qualify for Medicaid assistance’)”).
28. For dual-eligible members, Medicare is the primary insurance and payor for the dual-eligibles for many services such as hospital, physician and ancillary services. VI:90:2-9, 91:9-19 (Bazin); VIII:92:2-25 (Heywood).
29. The QExA RFP defines primary care as “all healthcare services and laboratory services customarily furnished by or through a general practitioner, family practitioner, internal medicine physician, obstetrician/gynecologist, or pediatrician, to the extent the furnishing of those services is legally authorized in the State.” Ex. 200, § 30.200 at 42. A Primary Care Provider (“POP”) is a “provider” who has responsibility for “supervising, coordinating, and providing initial and primary care to the member and for initiating referrals and maintaining the continuity of member care.” Ex. 200, § 30.200 at 42-43.
III. Hawaii’s Medicaid Populations
A. The QExA Population
30. As of the end of September 2010, Evercare had 19,487 members in the QExA program and Ohana had 22,187 members. Ex. 412 (QExA Dashboard Report).
31. Evercare’s 19,487 members includes 13,027 dual-eligible members (67% of the population) and 6,480 Medicaid only members (33% of the member population). Id.
32. 875 Evercare members are 21 or younger. VIII:90:14 — 91:9 (Heywood) and Ex. 412 (QExA Dashboard Report).
33. Ohana’s 22,187 members includes 13,342 dual-eligible members (60% of the member population) and 8,844 Medicaid only members (40% of the member population). Ex. 412 (QExA Dashboard Report).
34. For the services that are covered by Medicare and provided to dual-eligibles, QExA acts as the secondary payor covering applicable Medicare copayments and coinsurance — regardless of whether the provider is in the QExA network. Id.
35. Despite the requirement that all ABD beneficiaries enroll in QExA, dualeligibles are still permitted to see their providers under the Medicare program even if those providers are not in their QExA health plan network. VI:42:5-12 (Dr. Fink); VIII:92:2-25 (Heywood).
36. Dual-eligibles also have the option of seeking managed care in a Medicare Advantage program. Not all members are assigned a PCP in United’s Medicare Advantage plan in Hawai’i, although they may be assigned a PCP if they would like one. IX:23:10-19 (Heywood).
37. Approximately 7,000 of Evercare’s 13,027 dual-eligible members are members of United’s Medicare Advantage Plan in Hawai’i. IX:23:20-25 (Heywood).
B. The QUEST Population
38. QUEST beneficiaries are provided covered health care services through three managed care organizations: Hawaii Medical Service Association (“HMSA” or HMSA QUEST), Kaiser Foundation Health Plan (“Kaiser QUEST”), and AlohaCare QUEST. YI:12:11-17 (Dr. Fink).
39. HMSA QUEST has a total enrollment of about 114,000 QUEST beneficiaries. 11:113:8-10 (Cravalho (HMSA)). Of this number, about 63% are 21 or younger. 11:166:16-23 (Cravalho (HMSA)).
40. AlohaCare QUEST has a total enrollment of about 75,000-76,000 QUEST beneficiaries. 111:117:25-118:2 (Brennan (AlohaCare)). Of this number, about 58-59% are 21 or younger. 111:118:7-119:1 (Brennan (AlohaCare)).
41. Kaiser QUEST had 24,023 members as of December 2009. Of that number, 15,201 were 18 years of age or younger. Ex. 406 (Deposition of Carol Ganiron).
42. As set forth below, the two QExA plans and the three QUEST plans are all managed care plans and, as such, utilize methods to manage care and control costs that are typical of managed care: such as selective contracting; requirements that certain health services, drugs, or devices be preauthorized; and preferred drug lists (in some cases known as formularies). V:8:8-25 (Koller); Ex. 200, §§ 30.200 (managed care definition), 40.100, 40.750.1(0), 50.700; Exs. 300, 302-310, 312-318.
43. Medicaid is the primary health insurance for the majority of QUEST members, in contrast to the QExA program where Medicare is the primary health insurance for approximately 66% of members and thus Medicaid is only a secondary payor and provider of additional services not available in Medicare. VI:111:23-112:8 (Bazin).
IY. QExA and QUEST Provider Networks
44. The QExA contracts between Evercare and Ohana respectively and DHS require Evercare and Ohana to contract with health care providers to establish provider networks. VIII:93:16-94:7 (Heywood); Exs. 200, 321, and 343.
45. The capitation rates paid by the State to Evercare and Ohana under the contract are reviewed annually. V:89:20-92:2 (Koller)
46. Evercare developed its provider network using information about the health care providers who had previously-served the ABD population, the existing network for Evercare’s Medicare Advantage plan, and the network of its subcontractor, MDX Hawaii (“MDX”). VIII:96:14-97:15 (Heywood); Ex. 201.
47. In connection with developing its provider network, Evercare analyzed the adequacy of that network using membership demographics, information about the location of members and providers, and data and experience regarding utilization of health care services from other Medicaid managed care plans operated by companies related to Evercare across the nation. VIII:99:1-15 (Heywood); Ex. 201 at 2.
48. Similarly, Ohana in developing its provider network undertook analysis to accurately determine requirements to meet time, distance and appointment availability standards and to target providers critical to meeting these standards and providing a comprehensive scope of services to meet the multicultural, gender, and language needs of members. Ex. 205 at 1-3; X:34:16-35:21 (Preitauer).
49. Providing care through a selective, contracted network of health care providers is typical of managed care plans. VIII:94:8-10 (Heywood).
50. Currently, Evercare has over 4,000 provider locations statewide and 3000 unique providers. VIII:97:16-19 (Heywood). Many providers have more than one location, thus increasing geographic access. VIII:102:21-104:7 (Heywood); Exs. 202, 203, 204. If a provider has more than one office, for example an office in Waipahu and Honolulu, that is two provider locations, but only one unique provider. Ohana currently has 4594 provider locations statewide. Ex. 412; Exs. 206A-206F.
51. A more specific breakdown of Evercare and Ohana’s providers is provided in the comparison table set forth on the next page, which is based on the evidence that was adduced at trial and compares the numbers of various categories of Evercare and Ohana providers with the number of HMSA QUEST, AlohaCare QUEST, and Kaiser QUEST providers in the same categories: (Remainder of page intentionally left blank)
QUEST QExA
HMSAa AlohaCareb Kaiserc Evercare Ohana
Primary Care Physicians (PCP) 735 543 125 734 636
Anesthesiologists category not listed 142 8 110 179
Cardiologists 54 43 6 55 48
Endocrinologists 9 7 1 13 10
Gastroenterologists 24 27 6 31 25
Gerontologist 6 8 5 21d 32
Hematology & Oncology 27e 7f 1 20g 34
Infectious Diseases 13 10 3 11 11
Nephrologists 21 18 6 23 20
Neurologists 20h 18 4 28 19
OB-GYN 119; 96i 31 114 104
Opthomologists 80 75 11 92 71
Pediatric Neonatal & Perinatal 16k 14 14 20
Physical Therapists 311 234 category not listed 248 197
Radiologists 9m 77 15n 94° 142
Members 114,000 75-76,000 24,023 19,487 22,187
Medicaid Only n/a n/a n/a 6,460 8,844
Notes:
a HMSA QUEST had 114,000 members as of November 10, 2010 (the date of the trial testimony) and 106,519 members as of January 21, 2010 (the date of HMSA QUEST’S deposition). See 11:113:8-15; 11:165-25-166:7
b AlohaCare QUEST had approximately 75-76,000 members as of November 30, 2010 (the date of the trial testimony) and 72,531 members as of June 10, 2010 (the date of AlohaCare QUEST’S deposition). 111:117:14— 118:6.
c The numbers for Kaiser QUEST are as of February 8, 2010, the date of the deposition of the Kaiser QUEST Representative. Ex. 406 (Deposition of Carol Ganiron). No number was provider for physical therapists.
d Evereare also separately lists 2 “Gerontological Nurse Practitioners,” which have not been included in the Gerontolgy number listed above for Evereare. Ex. 414.
e HMSA QUEST indicated that they have 2 hematologists and 25 oncologists, which the Court has added together to obtained the 27 listed in the chart above. Ex. 393.
f AlohaCare QUEST listed 6 in “Hematology and Oncology” and 1 in just hematology, which the Court has added together to obtain the 7 listed in the chart above. Ex. 400.
g Evereare listed 17 in “hematology/oncology” and 3 in “Hematology,” which the Court has added together to obtain the 20 listed in the chart above.
h HMSA QUEST also indicated that there are 9 neurosurgeons, which are not included in the 20 neurologists listed in the chart above. Ex. 393.
i HMSA QUEST also listed a separate column for ob/gyn nurse practitioners which included 7 specialists, which have not been included in the ob/gyn column for HMSA QUEST.
j AlohaCare QUEST also lists 6 ob/gyn nurse practitioners in a separate category, which have not been included in the ob/gyn column for AlohaCare QUEST.
k HMSA QUEST indicated that there are 2 neonatal nurse practitioners and 14 neonatology specialists; only the neonatology number has been included above. Ex. 393.
1 Kaiser QUEST listed 1 neonatologist. Ex. 407.
m HMSA QUEST listed “Radiation Oncology” with 9 specialists, which have been listed although the Court is not clear whether this compares to Radiology as a general matter. Ex. 393.
n Kaiser QUEST listed five (5) specialists for “radiology — general” and ten (10) for “Radiology — INV/INTV.” Ex. 407.
o Evereare also lists 18 in “Radiation Oncology,” which have not been included in the total of 94 listed above. Ex. 414.
Ex. 417; Ex. 393 (HMSA QUEST); Ex. 400 (AlohaCare QUEST); Ex. 407 (Kaiser QUEST); Ex. 414 (Evereare); X:41:15-52:11 (Preitauer (Ohana)).
52.Based on the foregoing evidence, the ratios of members to PCP are as follows: HMSA QUEST 155:1, AlohaCare QUEST 140:1, Kaiser QUEST 192:1, Evereare 27:1, Ohana 35:1.
53. Thus, both Evereare and Ohana have a far better member to PCP ratio than the maximum 600:1 ratio specified in the QExA RFP and any of the QUEST plans. VIII:105:25-107:7 (Heywood); Ex. 200, § 40.220.
54. In comparison, Dr. Arlene Meyers (Dr. Meyers), who is a very dedicated doctor and who appears to be devoted to her patients, is ironically an assigned PCP for a total of 880 patients under both HMSA QUEST and AlohaCare QUEST, far exceeding the 600:1 ratio under the QUEST RFP. I(S):12:22 — 13:2 (Dr. Meyers). Including commercial insurance patients, Dr. Meyers has almost 2000 patients. I(S):14:9-20 (Dr. Meyers).
55. Both HMSA QUEST and Aloha-Care QUEST fail to monitor the total number of patients their PCPs are handling. 11:207:15-211:18 (Cravalho (HMSA)); 111:106:21-110:14 (Brennan (AlohaCare)).
56. In addition to the provider information recorded in Exhibit 417, more detailed information was provided by each QUEST plan and both QExA plans regarding the composition of their provider networks. Exs. 393 (HMSA QUEST), 400 (AlohaCare QUEST), 407 (Kaiser QUEST), 414 (Ever-care); X:41:15-42:13, 46:10-47:11 (Preitauer (Ohana)).
57. Considering the size of their memberships (even including dual-eligible members) and the fact that the ABD members generally require more care than the QUEST members, the QExA plans compare favorably to the QUEST plans in virtually every category of specialists listed above.
58. The QExA RFP also contains requirements to ensure that the contracted providers are located within certain maximum travel times to QExA members. Both Evercare and Ohana submit reports to DHS documenting their compliance with these requirements. Exs. 204, 206A-206F; VIII:107:8-22, 116:15-121:4 (Heywood); X:49:13-51:7 (Preitauer); Ex. 200, § 40.240.
59. Evercare reports its compliance with the RFP’s network access standards by submitting to the DHS a quarterly provider network adequacy report which includes, among other information, the number of contracted providers who are accepting new patients and the number of members for whom each PCP is responsible. VIII:107:23-116:14 (Heywood); Exs. 202 and 203.
60. Ohana also reports its compliance with the RFP’s provider network access and adequacy standards to DHS. Exs. 206A-206F; X:49:13-51:7 (Preitauer).
61. Evercare monitors the wait time before its members are able to obtain an appointment to see a health care provider, and has not identified any problems in that regard. VTII:101:6-15 (Heywood).
62. With respect to access to specialists, Ohana also monitors actual access through a review of specialists that are not submitting claims on a holistic level, which is one of many reports that can be run in performing a claims analysis. Ohana also monitors members’ access through Ohana’s service coordinators and customer service department. X:82:19-85:24 (Preitauer).
63. Although there is a shortage of certain specialists in specific areas (especially the neighbor islands), such shortages are not unique to QExA. QUEST MCOs face the same problem. 11:18:20-24 (Dr. Graham); 111:141:23-142:2 (Brennan (Aloha-Care)).
64. If medically necessary care is not available within the QExA contracted network, the member can see a non-participating provider (subject to the prior authorization process described below), even if that provider is located on another island or the mainland. VII:29:20-30:19 (Dr. Ellis); X:47:24-48:12, 91:21-92:3 (Preitauer).
V. Oversight of QExA and QUEST
65. The Med-QUEST Division receives a significantly greater amount of information from the QExA plans than from the QUEST plans, approximately 40 different reports from the QExA plans compared with 25 reports from the QUEST plans. VI:87:20-22 (Bazin).
66. Representatives of the state testified that they are now trying to implement the increased monitoring which is in QExA into QUEST, which had become “extremely complacent.” V:102:22-103:14, 105:18-106:9,108:6-110:22 (Roller).
67. QExA has an ombudsman, which QUEST does not have. V:102:25-103:5 (Roller). The ombudsman is an added layer in QExA who is an advocate for members and who answers questions or obtains answers to questions. V:112:10-113:16 (Roller).
68. QExA also has the “Dashboard Report,” which QUEST does not. V:109:18-110:22 (Roller). A sample Dashboard Report has been received into evidence as Exhibit 412.
69. The Dashboard Report contains a great deal of information. The Dashboard Report contains monthly data on members, providers, claims, complaints, appeals, and utilization. Ex. 412. The provider information includes a breakdown of PCPs, specialists, and facilities. Id.
70. The Dashboard Report also includes information on the number of member and provider calls, the average time until the call is answered, and the average time spent on the call. Id. In September 2010, Evercare received 3,346 member calls and spent an average of almost seven (7) minutes on the phone with the member; Ohana received 3,148 member calls and spent an average of almost six (6) minutes on the phone with the member. In September 2010, Evercare also received 2,146 calls from providers and spent an average of 6:12 on the phone with providers; Ohana received 3,993 calls and spent an average of 6:07 on the phone with providers.
71. Information on claims in the Dashboard Report is broken down into two categories based on whether the claims were submitted electronically or on paper and includes the number of claims received, the number paid, the number in process, the number denied and the average processing time in days. Id. In September 2010, Evercare processed claims in an average of 21 days; Ohana averaged 10.23 days for electronic claims and 11.33 for paper claims. Id.
72. Member and provider complaints are also reported on the Dashboard Report and are broken down into number received, number resolved, and number outstanding. Id. Evercare received 86 member complaints and 0 provider complaints in September 2010 and Ohana received 15 member complaints and 5 provider complaints. Id.
73. The utilization data reported on the Dashboard Report includes inpatient acute admissions, inpatient acute days, and the number of prescription claims.
74. The Dashboard Report also includes health plan demographic information by island and a health plan summary of call center calls. Id.
75. The QExA program was recognized by the Centers for Healthcare Strategies as a national model in innovative managed care for long term care services. V:83:5-11 (Roller).
76. Based on the information available to the State, Ms. Bazin testified that Ever-care is outperforming the HMSA and AlohaCare QUEST plans in providing timely access to services. VI: 107:4-108:3 (Bazin).
77. Ms. Bazin also testified that she believes the Medicaid beneficiaries being served under the QExA program are receiving the same level of services beneficiaries are provided under QUEST. VI:206:21-25 (Bazin). Director Roller testified that they are getting better care through QExA than they were previously receiving in the Medicaid FFS program and that they are receiving better service than QUEST beneficiaries. V:88:15-17, 101:13-102:14. (Roller).
78. Ms. Bazin of DHS receives complaints about both HMSA QUEST and AlohaCare QUEST. VI:6:69:23-70:21 (Bazin).
79. Med-QUEST conducts a member provider health plan satisfaction survey through the NCQA CAHPS member survey. HMSA was advised of the most recent survey’s results in either August or September 2010. HMSA QUEST’S representative at trial testified that he was not happy with the survey’s results and the levels at which members rated their satisfaction with HMSA QUEST. 11:151:7-153:11 (Cravalho (HMSA)).
VI. Specifíc Issues Raised By Plaintiffs
A. Assignment of PCPs
1. Generally
80. All QExA members may select a primary care provider of their choice. If a QExA member who is not dual-eligible does not select a PCP, a PCP will be assigned to that member. VII:31:4-16; IX:6:22-7:8 (Heywood); X:68:22-69:16 (Preitauer).
81. All HMSA QUEST members have a PCP. 11:18-23 (Cravalho (HMSA)). A member has ten-days to select a PCP. If no PCP has been selected within ten days, then HMSA QUEST will automatically assign a member a PCP and a card listing the member’s PCP will be sent out within three days of selection of the PCP. 11:124:10-129:24 (Cravalho (HMSA)).
82. HMSA QUEST’S representative testified that HMSA QUEST assigns a PCP to all members with multiple insurances, including Medicare. However, the only situation in which he was aware of an HMSA QUEST member also being eligible for Medicare is a situation in which that person had just gained his or her eligibility for Medicare and the State was working on transitioning him or her to QExA. He was unaware of any other situations in which an HMSA member might be covered by Medicare. 11:122:11-124:9, 156:14-157:1 (Cravalho (HMSA)).
83. Medicare primary dual-eligible QExA members may continue to obtain services from any Medicare participating physician; such members are not assigned a PCP unless the member requests one. IX:6:22-7:8 (Heywood); X:69:17-70:22 (Preitauer).
84. Automatically assigning a PCP to a Medicare primary, dual-eligible member who has an existing relationship with a physician who has not contracted with the QExA plan would likely cause confusion and complaints about disrupting existing patient-physician relationships. VI:96:25-98:12 (Bazin); IX:9:8-16 (Heywood); X:69:17-70:10, 124:18-126:23 (Preitauer).
85. The number of Medicare qualified physicians is much larger than any Medicaid contracted network, so that clarifying that a PCP need not be assigned from the QExA provider network was an important step in ensuring the broadest possible access to services for their Medicare dual-eligible members. X:69:17-70-:19 (Preitauer).
86. If, however, a dual-eligible member wants to select a PCP, the QExA plans will assist the member to find a PCP. IX:9:23-10:12 (Heywood); X:68:22-70:8 (Preitauer).
87. Even if a QExA member does not have a PCP, that member still has ready access to physician services, because QExA members can self-refer to any specialist; there is no prior authorization or referral paperwork necessary. VII:29:13-19 (Dr. Ellis); VIII:132:15-133:3 (Heywood); IX:26:15-22 (Heywood); X:54:5-16 (Preitauer).
88. Many QExA beneficiaries are provided health care services by the same providers who provided such services under Medicaid FFS. VIII:122:11-16 (Heywood).
89. Specifically, many QExA beneficiaries choose as a PCP a provider already providing services to that beneficiary. VII:30:20-31:3 (Dr. Ellis).
90. QExA beneficiaries can locate a contracted provider (whether that be a PCP, specialist, or other type of provider), in several ways, including by calling the plan’s call center; assistance from their assigned service coordinator; or assistance from their PCP. VIII:121:22-122:10 (Heywood); X:66:19-67:7, 68:22-69:16 (Preitauer).
91. Both QExA plans maintain websites with provider search applications. The information on the websites is updated frequently. VIII:123:9-126:8 (Heywood); Exs. 328A and 328B (Evercare); X:38:6-12 (Preitauer).
92. The QExA plans attempt to ensure that the data about participating providers on their websites and in their reports to the DHS is accurate and up-to-date. For example, Evercare updates the information by: (a) field visits to providers’ facilities by provider service representatives; (b) notification requirements in their provider contracts, including the requirement that a contracted provider notify the plan if the provider is closing its practice to new patients; and (c) input from its service coordinators. VIII:126:9-127:3 (Heywood). Ohana similarly updates the Internet provider directory in near real time. X:38:6-12 (Preitauer).
2. Service Coordination
93. Both Evercare and Ohana assign each member a service coordinator to perform an initial assessment of each member, develop a care plan, and otherwise assist the member in accessing and coordinating services. VIII:122:17-123:8 (Heywood); X:66:19-67:7 (Preitauer).
94. Service Coordinators are medical professionals including advance practice registered nurses, gerontologists, registered nurses, licensed practical nurses, social workers and licensed clinical social workers. X:67:ll-16 (Preitauer).
95. For purposes of establishing service coordinator ratios, the QExA population is divided up into four categories. For non-nursing facility level of care members the ratio is 1:750; for nursing facility level of care members residing in the community the ratio is 1:50; for nursing facility level of care members residing in an institutional setting the ratio is 1:120; and for members choosing self direction, the ratio is 1:40. Ex. 200, § 40.810 at 161-62.
96. Within 15 days of a member becoming enrolled in a QExA plan, a Service Coordinator will visit the member to do a health and functional assessment utilizing a series of questions. The assessment can range from 30 minutes to several hours. It will address coordination of benefits and the coordination of other care providers or physicians such as an existing primary care provider. X:66:8-69:3 (Preitauer).
97. The QUEST plans do offer care coordination and case management services, but not all members are assigned to a care coordinator or case manager and no face-to-face initial assessment is mandated. Less than 3% of QUEST members access that service. 11:160:21-161:17 (Cravalho (HMSA)); 111:194:3-197:1 (Catalan (Aloha-Care)).
98. The Court finds that while service coordinators are certainly not a substitute for a physician, they are an important benefit and resource which increases the members’ access to care.
99. Additionally, both Evercare and Ohana provide phone lines staffed by nurses twenty-four (24) hours a day seven (7) days a week to help members access care. VII:24:l-25 (Dr. Ellis); Ex. 338 at 6 (Evercare); Ex. 359 at 7-9,17 (Ohana).
3. Alleged Injuries from Delays in Assignment of PCPs
100. The evidence about any alleged delay in assignment of PCPs for non dual-eligible QExA members by Evercare or Ohana predominately related to former patients of Dr. Meyers.
101. Dr. Meyers presented unique circumstances in that because of this lawsuit, both Intervenors made accommodations such that Dr. Meyers could continue to see her QExA patients without prior authorization even though she was not a contracted physician with either Intervenor. IX:48-1-50:11 (Heywood); 1:42:21-43:15 (Dr. Meyers); see also 9/3/10 ADA & Rehabilitation Act Order at *15 n. 5 (“At the 8/12/10 Hearing, counsel for Evercare explained that ‘Dr. Meyers is a special case’ and is ‘the only provider that Evercare has approved to see Evercare members who are her patients without prior authorization.’ 8/12/10 Tr. at 29:9-22. Counsel for Ohana also called Dr. Meyers a ‘special case’ for whom an accommodation had been made. 8/12/10 Tr. at 43:21-44:1.”).
102. Dr. Meyers’ former patients continued to receive primary medical care from Dr. Meyers until September 2010, when Dr. Meyers asked that Evercare and Ohana reassign these patients. IV(S2):75:3-6 and VII(S):49:19-50:4 ([5]); V(S):49:2-13 and VII(S):50: 15-54:9 ( [11]); VII(S):54:ll-55:23 and V(S)28:4-7 ( [8]); IV:122:17-124:13 ([7]).
103. Upon Dr. Meyers’ request that Evercare and Ohana reassign these patients, Evercare and Ohana were able to locate PCPs willing to accept all these members as patients. VII:34: 9-23 (Dr. Ellis); IV:123:1-16 ([6] testifying that [7] has been reassigned to a new PCP). However, Plaintiffs assert that this was not done in a timely manner. The Court finds that there may have been some delay in assigning these members to PCPs; however, there was no delay in accessing medical care and any such delay was partially caused by the unique circumstances surrounding Dr. Meyers interactions with the health plans and her patients desire to continue to see her.
104. Dr. Asha Chekuri agreed to serve as PCP for [8], but [8] and his mother chose not to accept that assignment, as they were entitled to do. Evercare continues to work with [9] to identify an acceptable PCP for [8]. V(S):26:8-16; VII(S):54:25-55:23.
105. Ohana member [3] had Dr. Dennis Ayon as his PCP until Dr. Ayon recently became unavailable due to Dr. Ayon’s personal problems. [3] was assigned to Dr. Tesoro and then to Dr. Texiera. [3] did not accept the assignment to Dr. Texiera. [3] currently has an assigned PCP, Dr. Quiane, who has accepted and already seen [3] as a patient. Exs. 133 and 134; IV(S):51:17 — 52:19; IV(S):56:9-20; IV(S):70:4 — 71:7.
106. Plaintiff [6], mother of Ohana member [7], confirmed that [7] was receiving all needed primary care and specialty services without delay, notwithstanding any delay in reassigning [7] from Dr. Meyers to a contracted PCP. [7] is currently assigned to and seeing another PCP, Dr. Pascua. TV:122:1-124:13.
107. The QUEST plans also experience difficulties in some cases in finding PCPs to accept their members. 11:127:17-128:7 (Cravalho (HMSA)).
108. There is no evidence that any delay in assigning PCPs to any Evercare or Ohana members who are entitled to PCPs has impeded access to covered care for any QExA member as compared to QUEST members.
B. Alleged Injuries Because of Preauthorization Requirements
109. Utilization management is a process used by managed care plans to determine whether a health care service is medically necessary. VII:28:22-29:9 (Dr. Ellis).
110. One aspect of utilization management is the requirement that certain medical services be authorized before they are approved for payment. Evercare and Ohana require prior authorization for certain services and providers and members are informed of these requirements through the internet and manuals distributed to the providers and members, and through provider outreach. VIII:129:17-130:18 (Heywood); Ex. 339 (Evercare); X:54:17-58:3, 60:13-63:10, 70:23-72:11 (Preitauer); and Exs. 358, 359, and 381 (Ohana).
111. Prior authorization is a common requirement of managed care plans. VIII:131:8-17 (Heywood).
112. The QUEST plans also require prior authorization for certain services, prescription drugs, and supplies using policies similar to those of Evercare and Ohana. 11:181:7-182:9 (Cravalho (HMSA)), Ex. 394, and Ex. 395 (HMSA QUEST); 111:124:3-126:11 (Brennan (AlohaCare)) and Exs. 401A, 401B, and 402 (AlohaCare QUEST).
113. The purpose of a prior authorization requirement is to manage and coordinate care and ensure consistent coverage determinations. VII:131:11-132:14 (Heywood). It also includes a cost effectiveness aspect. Id.
114. Medical necessity is defined by Hawai’i law and the QExA plans are required to apply that definition in their prior authorization processes. VII :28: 22-29:9 (Dr. Ellis); VIII: 132:12-14 (Heywood); Ex. 200, § 30.200 at 39 (defining Medical Necessity “as defined in Hawaii Revised Statutes (HRS) 432E-1.4 or health interventions that the health plans are required to cover within the specified categories that meet the criteria identified below, whichever is the least restrictive: The intervention must be used for a medical condition; There is sufficient evidence to draw conclusions about the intervention’s effects on health outcomes; The evidence demonstrates that the intervention can be expected to produce its intended effects on health outcomes; The intervention’s beneficial effects on health outcomes outweigh its expected harmful effects; The health intervention is the most cost-effective method available to address the medical condition.”).
115. The Evercare form to initiate a prior authorization request is available to providers through the provider manual, online, and upon request of the provider; the form can be marked urgent for expedited review. VIII:134:6 -135:24 (Heywood); Ex. 340.
116. The Ohana form to initiate a prior authorization is also available to providers through Ohana’s provider manual and online. Provider service representatives are also available to directly assist their assigned providers regarding forms and information. Exs. 358, 377, and 381; X:54:17-55:19, 57:19-58:3, 63:1-10 (Preitauer)
117. Under the RFP, Evercare and Ohana are required to decide a prior authorization request within 14 days for a normal request and 3 working days for an urgent request. VIII:135:25-136:8 (Heywood); Ex. 200, § 50.860.
118. QExA members may self-refer to contracted physicians. No prior authorization or referral is necessary for QExA members to access specialist physician services from Evercare or Ohana contracted providers. VII:29:13-19 (Dr. Ellis); VIII:132:15-133:3 (Heywood); X:54:5-16 (Preitauer).
119. Referrals must be submitted by the POP to the HMSA and AlohaCare QUEST plans for specialty services to be paid, even for contracted specialists. I(S):17:2-9 (Dr. Meyers); 11:174:24-175:6 (Cravalho (HMSA)); 111:199:19-201:13 (Catalan (AlohaCare)); Ex. 403 (Aloha-Care).
120. Similarly, Jon Graham, M.D., a neurosurgeon, testified that the QUEST plans require tests to be ordered through the PCP, but for QExA beneficiaries, Dr. Graham is allowed to order tests himself. 1:100:8-17 (Graham). Mr. Preitauer confirmed that contracted QExA specialists may order tests themselves. X:54:5-16 (Preitauer).
121. The means of accessing services for the QExA plans, including preauthorization and referral requirements, are substantially similar to the means of accessing services for the QUEST plans, and with respect to specialty care referrals within the contracted provider network requires less paperwork.
122. The only specific evidence regarding any issues obtaining prior authorizations arose in the pharmaceutical context discussed below.
C. Alleged Injuries Relating to Prescription Medications
123. The QExA RFP allows Evercare and Ohana to use “formularies” as long as members have access to medically necessary prescription drugs. VII:75:24-76:11 (Dr. Pang); Ex. 200, § 40.750.1(o).
124. A formulary, also known as a preferred drug list, is a list of medications selected by a health plan that are approved for payment automatically at the point of sale. Formularies are ubiquitous in managed care plans. VII:76:18-77:12 (Dr. Pang); 11:58:18-25 (Glick).
125. Specifically, the QUEST plans have formularies and require prior authorization for coverage of prescription drugs not on the plan’s respective formulary. 11:173:13-17 (Cravalho (HMSA)); 111:123:2-15 (Brennan (AlohaCare)).
126. Plaintiff Kevin Glick, a pharmacist who provides services to both QUEST and QExA beneficiaries, testified that his pharmacy receives roughly the same number of denials for QUEST beneficiaries as for QExA beneficiaries because the prescribing physician has prescribed a prescription medication not on the respective plans’ formularies. 11:59:1-13 (Glick).
127. Plaintiff Leslie Krenk, another pharmacist, also testified that Ohana’s formulary is not very restrictive. 111:34:21— 23 (Krenk).
128. The Prescribing Guide, a comparison of the QUEST and QExA plans’ formularies for common prescription drugs prepared by the John A. Burns’ School of Medicine at the University of Hawaii, demonstrates that there are as many differences between the QUEST plans’ formularies as there are between the QUEST and QExA plans’ formularies. Ex. 374-C.
129. The prescription drugs on Ever-care’s preferred drug list have been selected as the most elinically-appropriate and cost-effective prescription drugs within their therapeutic class. VII:77:7-81:12 (Dr. Pang); Ex. 366 at 3. Ohana’s formulary is developed based on similar criteria with member health and safety being the most important consideration. VIII:79:19-23 (Dr. Mar); Ex. 375.
130. Ohana’s preferred drug lists contains generic alternatives to brand name drugs, in compliance with Hawai’i law, which favors generically equivalent drugs over more costly brand name drugs. VIII:34:18-35:17 (Dr. Mar); H.R.S. § 328-92 (providing inter alia that the “pharmacist shall substitute an equivalent generic drug product if the practitioner does not prohibit substitution under subsection (b), and the substitute equivalent generic drug product results in a savings.”)
131. Evercare’s preferred drug list is updated quarterly based on review of new clinical information and research. VII:79:9-18 (Dr. Pang). Ohana’s preferred drug list is updated monthly. VIII:50:8-15 (Dr. Mar).
132. Physicians and pharmacists may readily access the preferred drug lists for the QExA plans through the internet, either as a complete document or through a function that allows a user to search by the name of the prescription drug. VII:64:18-22, 95:12-96:5 (Dr. Pang) and Exs. 366 and 369 (Evercare); Ex. 358 (Ohana).
133. Several pharmacists who testified were unaware of the availability of formularies, preauthorization requirements and forms, and override information available in provider manuals and online. 11:85:1-19 (Glick); 111:69:8-70:15 (Krenk); 111:168:5-23 (Jones).
134. Plaintiff Kevin McGill, a provider of orthotics and prosthetics who is contracted with Evercare, testified that Evercare patients experience delays in receiving orthotics and prosthetics because Evercare’s preauthorization process is allegedly more burdensome and slower than that of the QUEST plans. IV:26:17-27:2 (McGill). He admitted, however, that Evercare has the same $500 threshold for prior authorization of durable medical equipment as HMSA QUEST, and a higher threshold for prior authorization for orthotics and prosthetics ($1,000) than HMSA ($500), a fact he was not aware of until his trial testimony, and that may cause him to open his practice to new Evercare members. IV:43:22-44:24 (McGill); Ex. 339. In any event, most of the Evercare members he serves are dual-eligibles for which Medicare provides primary coverage, and those members would be unaffected if he otherwise closed his practice to Evercare members. IV:46:13-47:2 (McGill).
135. Prescription drugs not on Ever-care’s or Ohana’s preferred drug list require prior authorization as described above to determine whether the unlisted pharmaceutical is medically necessary for treatment of the member’s condition. VII:82:2-19 (Dr. Pang); VIII:29:10-12 (Dr. Mar).
136. Evercare’s standard is to respond to prior authorization requests within 24 hours, and that standard is usually met. VII:83:14-18, 106:9-24 (Dr. Pang); Ex. 373.
137. Ohana’s average turn around time on prior authorization requests for oral medications is 15 to 20 hours, and for injectable medications, between 24 and 36 hours. VIII:66:1-13 (Dr. Mar); Ex. 386 (Ohana Pharmacy Operations Report for May June and July 2010).
138. Ohana’s and Evercare’s records are consistent with Plaintiff Kevin Glide’s experience. He testified that it takes between one hour and three days to receive a response from Evercare and Ohana to a prior authorization request for a pharmaceutical not on the preferred drug list, with an average response time of 24 hours. 11:41:24-42:18, 43:6-9 (Gliek).
139. Additionally, Ohana permits dispensing pharmacists to fax written requests for prior authorizations upon receipt of oral authorization from the prescribing physician. VIII:60:17; 61:7 (Dr. Mar).
140. Ohana will notify a pharmacist of its decision on a prior authorization request if the pharmacist’s fax number is written on the prior authorization request form. Ex. 377. VII