Guam News - Guam News

Guam - TakeCare COO Jeff Larsen took the brunt of the questions at the Guam Medical Association's [GMA] forum on ObamaCare Wednesday night.

However the focus of the questions directed at Larsen were not on ObamaCare, but on TakeCare's business practices. 

READ SelectCare Administrator Frank Campillo's presentation on the Medical Loss Ratio HERE

GMA President Dr. Tom Shieh who moderated the forum, bore in on the controversial $15-million dollar payment TakeCare made to its shareholders, rather than paying $11.3 million in unpaid claims or paying rebates to its subscribers. 

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At one point a member of the audience objected saying "this was supposed to be about ObamaCare ...its about TakeCare."

Dr. Shieh responded, "Well no this is about ObamaCare ... the medical loss ratio, under this particular system, allows TakeCare to not pay a medical loss ratio."

"That's not true," interrupted TakeCare COO Larsen. "The facts are that TakeCare has met the medical loss ratio before medical loss ratios were required or mandated ...we have the advantage to incorporate the costs of the clinic, those are direct patient care costs, into our MLR ratio."

"I need to speak to this. There is talk of a 'loophole'. The loophole is the fact that when you look at how the MLR calculation is made, it allows for direct patient care to be included in the numerator. And so because Keiser, Geisinger and others have their own clinics and hospitals those are all admissible assets under the medical loss ratio."

Dr. Shieh displayed TakeCare's 2011 Financial Statement on an overhead screen for all to see. The statement shows  $11.3 million in un-paid claims owed by TakeCare while $15.2 million in dividends was paid to shareholders.

READ TakeCare's 2011 audited Financial Statement HERE

"Several members of GMA have compared this to the banking scandal," said Dr. Shieh. "where the rich people pay themselves millions while the company owes more and more to the people who are suffering."

Why, Dr. Shieh wondered, would you pay dividends before claims?

"Its probably not best to comment in this forum," said Larsen, "because the facts are that some of those details aren't completely accurate."

Larsen quickly added that "The report is accurate, but in terms of un-paid claims, all insurance companies have un-paid claims as part of what we call 'incurred, but not reported.' ... that doesn't indicate that those claims are un-paid and we'll never pay those claims, because at the end of the reporting period we have to submit those to show what our liabilities are." 

Dr. Shieh however, pressed on, asking Larsen "Why not just pay that claim[s] and cut that [$15 million] profit down to $4-million?"

"Well again, I'm not going to comment on the details of the $15-million dollars," said Larsen. "But the end result is this, we all have claims that we adjudicate. Some of those claims require research , followup and so on and so forth ... We again comply with prompt payment laws, as do other insurers on this panel and stateside. And when those claims are due to be paid, provided they are clean claims for payment, they will get paid."

Undeterred, Dr. Shieh followed up with another question about "Veiovis", a TakeCare affiliated company, which provides medical travel referral services. 

SEE the Veiovis website HERE

Senator B.J. Cruz and NetCare Administrator Jerry Crisostimo have referred to a loophole in the Affordable Health Care Act which allows insurers to transfer administrative costs to sub-contracted medical groups, like clinics, [or possibly companies like Veiovis], and then count those costs as medical expenses, even if they're not spent. The process is known as capitation.

Last December, Larsen issued a "Notice of Termination and Transfer of Employment" to TakeCare employees which terminated their employment with TakeCare effective December 31 and transferred their positions to Veiovis LLC.

READ the December 9th "Notice of Termination and Transfer of Employment" letter HERE

"Veiovis...was this a loophole, or not a loophole," asked Dr. Shieh.

"Well, again, the purpose of the forum I'm not sure was to debate whether TakeCare's business model was the appropriate model," said Larsen. "So, I'm not going to comment about 'Veiovis' in-particular. But I do want to say that Veiovis was created well before MLRs or ObamaCare was ever in place. Actually 2009 was when Veiovis was created."

"The purpose of Veiovis was initially for medical travel and tourism. But one of the popular features that resulted from healthcare reform was accountable care organizations, medical homes, direct patient care, there are a lot of different terms for that."

"So one of the things that were unique from, TakeCare's perspective, is that we have our own clinic ... instead of splintered or fragmented care delivery, its delivered in a very comprehensive and co-ordinated fashion and that ultimately is what we intend to use Veiovis for, is for that purpose, of co-ordinating care in a delivered fashion that is comprehensive, unfragmented and certainly added value to the delivery system of healthcare."