Lobbying effort saves Koller’s job

The timing was tough: Just as Health Insurance Commissioner Christopher F. Koller was preparing to rule on rate hike requests from the state’s three commercial health plans, all intensely opposed by businesses and consumers, legislators put his job on the chopping block.
In its proposed budget for fiscal 2010, the House Finance Committee not only eliminated Koller’s office and its $650,000 allocation, but also repealed the 2004 legislation that created it – and that completely redefined health insurance regulation in Rhode Island.
Gone would be the mandate to keep health coverage affordable, to ensure the fair treatment of providers, and to take a holistic approach to the health care delivery system. Gone would be the standards that require, for example, that health plans emphasize primary care.
And gone would be the new rate-approval system that alerted Rhode Islanders, with plenty of advance notice, that health plans wanted to raise group premiums by as much as 16.3 percent – and to protest so fiercely that Koller rejected the requests as unaffordable.
House Democratic leadership last week ended up restoring the funding for Koller’s office, after an intensive lobbying effort on his behalf. But why the office was targeted in the first place remained a mystery to his supporters, prior to the announcement on the House floor by House Finance Chairman Steven M. Costantino, D-Providence, that the office would not be eliminated.
Prior to the 2004 law and to Koller’s work to restructure health-plan regulation, group rates weren’t set through a public process at all; insurers just filed their “rate factors” – actuarial data to back up rate increases, broken up into categories such as inpatient hospitalizations, outpatient hospital care and prescription drugs – with the R.I. Department of Business Regulation, and unless something was wildly off-mark, the rates went into effect.
The only exception were plans for individuals: Blue Cross & Blue Shield of Rhode Island’s Direct Pay category and its Plan 65 Medicare supplemental plans. But as Rep. Deborah Ruggiero, D-Jamestown, put it at a news conference last week, until Koller’s office changed things, businesses learned about rate hikes “when we opened the bill.”
Ruggiero was one of the legislators who acted to save the Office of the Health Insurance Commissioner. Like many of her peers, she said she didn’t understand why it was targeted in the first place; Koller hadn’t been publicly criticized and Costantino actually was the lead House sponsor of the law that created the office. Prior to last week’s House passage of the 2010 budget, spokesman Larry Berman told Providence Business News and other media outlets that Costantino was too busy to be interviewed.
Not everyone in town rushed to support Koller when the proposed cut was announced; Blue Cross, UnitedHealthcare of New England and Tufts Health Plan all politely declined to comment on the plan, and the Hospital Association of Rhode Island stayed out of the debate.
On Rhode Island’s Future, a high-profile blog on politics and public policy, postings backing Koller drew a couple of negative comments – one calling his office “completely useless,” another saying Koller’s rejection of the proposed hikes was “an obvious ploy to save his job by appearing that he is on the side of the consumer.”
But the overwhelming majority of voices that chimed in on the debate, in the media, in letters to legislators, in public statements and in private discussions, supported Koller: from Republican Gov. Donald L. Carcieri to Democratic Lt. Gov. Elizabeth H. Roberts (the Senate co-sponsor of the 2004 OHIC legislation); from the Rhode Island Business Group on Health, to the Rhode Island Medical Society, to Ocean State Action and the United Nurses and Health Professionals.
Together, they painted a picture of Koller’s office as a crucial consumer advocate, both directly and through its work promoting transparency in the health insurance marketplace. They noted that Koller and his staff have an expertise unmatched elsewhere in state government, essential to being good watchdogs and also to helping shape public policy. And they expressed alarm that the consumer protections from the 2004 law would be abolished.
“If this office is eliminated, Rhode Island will take a large step backward,” said Phil Papoojian, managing director of Mereco Technologies Group and vice chairman of the Smaller Business Association of New England.
Indeed, it was not just Koller’s job that was put on the line, but the state’s whole approach to health insurance and health care system reform for the last few years. The notion that rates must be “affordable” was a particularly radical departure from previous state policy; when Koller rejected the rate hike requests for next year, he didn’t say they weren’t actuarially justified – in fact, he had suggested that to a great extent, they were – but rather, he was able to point to the public outcry and say, simply, people can’t afford this.
“Rhode Island employers and employees have reached a tipping point with respect to their ability to pay for health insurance,” he wrote in a letter to the insurers. “We are in a crisis and our health care system simply cannot go forward as we have in the past.”
Rejecting those requests, Koller supporters note, saved businesses and consumers an estimated $150 million in premiums next year – though as of press time, none of the health plans had said yet whether it would proceed to a hearing, July 14, to fight for the hikes. Last year, rate hike rejections and reductions by Koller saved an estimated $29 million.
Koller is also widely seen as a key figure in efforts to transform the health care delivery system by promoting the use of electronic medical records; emphasizing primary care, prevention and the management of chronic conditions; and realigning provider payments so they encourage the latter and discourage needless high-cost services.
Speaking on behalf of HealthRIght, a coalition promoting health care reform, Ted Almon, CEO of Claflin Co., said last week that re-engineering the health care delivery system is essential to controlling costs, and no one in state government understands the connection between the payment system and the delivery system better than Koller does.
OHIC has also played a major role in unearthing inequities in how hospitals are paid, Almon noted, and it’s an “essential cog” in the effort to change the system to solve “one of the state’s most vexing cost problems.”
Dr. Diane Siedlecki, president of the Rhode Island Medical Society, said Koller has also helped doctors a great deal.
“He demands transparency, and so far it’s really improved our relationship with Blue Cross and especially United,” Siedlecki said. “When we meet with insurers, they say, ‘The commissioner has mandated that we do this.’ They’re careful, because there’s a watchdog.” •