Cruz won't be signing GovGuam health plan - KUAM.com-KUAM News: On Air. Online. On Demand.

Cruz won't be signing GovGuam health plan

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by Mindy Aguon

Guam - Acting Governor Mike Cruz won't be signing the Government of Guam's Fiscal Year 2011 health insurance plan that is supposed to go into effect on Friday.  Instead, he's hoping GovGuam's negotiating team and Calvo's SelectCare will go back to the drawing board in the next few days.   

"I think that given our insurance companies on Guam have enjoyed the benefits over multiple years as corporate citizens, they should come back to the table and see what we can do to help our citizens," said Cruz.

In a letter to Calvo's SelectCare plan administrator Frank Campillo, the acting governor has asked the insurance company to voluntarily disclose specific information that is normally held confidential such as medical loss ratios, medical denial rates and administrative costs for the last three fiscal years.  "It's important for us as a government to be able to show the people, specifically our GovGuam workers, that there is some justification or rationale reasons why the increases in rates are what they are," he noted.  

Cruz says he expressed concerns about the increases in the rates last month making a recommendation not to sign the proposal and negotiate for better rates.  But Calvo's SelectCare has said the new rates reflect higher utilization rates during the last year as well as the cost of new mandates imposed by the Obama Health Reform Act. 

Campillo told KUAM News that the company along with Tokio Marine Pacific Insurance, Ltd. are working on a response to Cruz's letter.  

The acting governor's concerns echo those raised by the Democratic gubernatorial team of former governor Carl Gutierrez and Senator Frank Aguon, Jr., who is also the legislative oversight chair on health.  While previous health committee chairs like former senator Lou Leon Guerrero sat-in during negotiations, Department of Administration human resources administrator Cecilia Martinez says that wasn't the case this time around.  She said Aguon never participated in negotiations.

Martinez defended the negotiations, saying, "They aren't new people.  The Legislature was fully represented.  We requested the Speaker designate a representative for the Legislature and she selected Vince Arriola.  He was a very capable individual with experience and was very active in the negotiations," she said.

KUAM News attempted to interview Arriola today. He declined but confirmed he was the legislative representative, but said he only represented employees.  He would not provide comment about the rates that were negotiated. Martinez confirmed though that the negotiating team consisting of representatives from DOA, BBMR, the Judiciary, the Legislature, Mental Health, Rev & Tax, the AG's Office, and the Retirement Fund voted unanimously for the new rates.

While Aguon had sought an investigation into the negotiating process, insurance commissioner John Camacho maintains there's not much to investigate.  He said, "If the process of the law was followed from the beginning of this year as early as developing the plans meeting several times with the consultant, RFP'ing it out getting the proposal done, meeting several times, two or three days consecutive days trying to negotiate a rate.

"I mean, I think the process has been done consistently throughout the years, so other than that I don't see any problems as far as the insurance."

Camacho says he's working on a response to the healthcare committee chair. While he understands consumers are concerned about the increasing cost of health insurance on the island, Camacho says rates around the nation are going up, as well.

The governor is expected to return to the island on Friday to sign the insurance plan that includes an amendment to a provision in prior year contracts that dealt with dispute resolution.  The attorney general had problems with the fiscal years 2009 and 2010 contracts saying the provision on dispute resolution was in contradiction of Guam law.  Those two contracts were never signed.

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