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Correspondence-Other-Maggie Williams Letters
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Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001. letter
Dr Douglas Wood to Frank Lindsay (1 page)
03/24/1995
b(6)
COLLECTION:
Clinton Presidential Records
Office of the First Lady
Jenifer Klein
OA/Box Number: 12509
FOLDER TITLE:
Correspondence-Other-Maggie Williams' Letters
2014-0536-F
kc1355
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)]
Freedom of Information Act - 15 U.S.C. 552(b)]
P1 National Security Classified Information |(a)(1) of the PRA]
b(1) National security classified information [(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRA]
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute |(a)(3) of the PRA]
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute |(b)(3) of the FOIA]
financial information ((a)(4) of the PRAJ
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information |(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy |(a)(6) of the PRA]
b(7) Release would disclose information compiled for law enforcement
purposes |(b)(7) of the FOIA)
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions [(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells [(b)(9) of the FOIA|
RR. Document will be reviewed upon request.
THE WHITE HOUSE
WASHINGTON
August 24, 1995
Gail Chasey Beam
425 Aliso Drive, NE
Albuquerque, NM 87108
Dear Ms. Beam:
Thank you for writing to express your concerns about
programs for young children with disabilities. The First Lady
shares your commitment to providing children with disabilities
the services they need.
At a time when Congress is considering dramatic funding
reductions, the President and the Department of Education are
working to ensure a continuation of quality programs for children
with disabilities. The President opposes the bill that the House
has passed that would eliminate funding for early childhood
education programs for children with disabilities and other
important programs such as training for special education
teachers.
The programmatic changes that the President proposed for
fiscal year 1996 were designed to improve services to all people
with disabilities, including preschool children. I know that you
have also heard from Mr. Thomas Hehir, Director of the Office of
Special Education Programs at the Department of Education. As
Mr. Hehir noted, by reconfiguring the discretionary grant
program, the Department believes that it can ensure that states
best meet the needs of all children with disabilities. It is
important to note, however, that the Administration's proposed
consolidations do not include any funding reductions.
Thank you again for sharing your concerns with me.
Sincerely,
Maggie Margie Willians Williams
Chief of Staff to
the First Lady
Gall Chasey Beam
425 Allso Drive, NE
Albuquerque, New Mexico 87108
505/266-5191
February 28, 1995
Date 2/28/95
" of
Post-it* Fax Note
7671
pages
2
Secretary Richard Riley
To Secy. Riley
From Gail C. Beam
U.S. Department of Education
Co/Dept.) USDept. of Educ
Co.
400 Maryland Avenue, S.W.
Phone 202/401-3000
Phone 505/266-5191
Washington, D.C., 20202
Fax 202/401-0596
Fax # 505/272-5280
I would like you to know how very disappointed families and advocates are in the
President's 1995-1996 budget proposals for the youngest children with disabilities
under the Individuals with Disabilities Education Act (IDEA). This budget proposal
includes three devastating changes:
1. NO FUNDING FOR PRESCHOOL SPECIAL EDUCATION for children with
disabilities, ages three through five (IDEA Part B, Section 619). Preschool funds
have been transferred into the Part B state grant program without an earmark to
ensure funding for 3-5 year olds. The combination of these grant programs will
result in cuts to programs for preschool children. There must be separate funding
at the level of at least $670 million to guarantee appropriate services for these
children.
2. THE ELIMINATION OF EARLY CHILDHOOD RESEARCH, DEMONSTRATION
AND TRAINING PROJECTS and the transfer of those funds to a block grant. The
Early Education Program for Children with Disabilities (EEPCD) has provided state-
of-the-art knowledge and methods for over 25 years. This program's budget is
only $25 million, and it has been evaluated independently as one of the best
examples of research-to-practice in the federal government. The blocking of this
program will undoubtedly result in a decreased emphasis on very young children
and their families.
3. NO INCREASE FOR INFANT/TODDLER PROGRAM (PART H of IDEA) will
result in fewer services to these very young children and their families. Last
September. all states finally promised to provide services to eligible children and
their families, thus increasing the number of children receiving services. Without
the federal commitment, states may find it Impossible to keep their promises,
putting the program in severe jeopardy across the nation. The funding level
needed Is $376 million.
Here in New Mexico, where so many children live below the poverty level, and
where so many families have to travel great distances to receive services for their
young children with developmental problems, the effects of such actions will be
suffered widely. Families and advocates are particularly upset that we have not
E0 'd
FAX NO. 2022059252
USDOE/OSERS
JUN-13-95 TUE 10:38
been able to work with the Department of Education on these issues, despite more
than 20 years of successful bipartisan collaboration with previous Administrations.
In fact, when I called your office about this matter, I was redirected numerous
times, and was finally referred to the Director of EEPCD, the program scheduled
for elimination. I then called Judith Heumann's office to try to convey my concerns,
and was again referred to the Director of EEPCD. I did ask her staff to let her
know that It does not feel responsive to have such calls referred an individual who
is not at a decision-making level.
I would appreciate knowing how we can work with you In the future.
Sincerely,
GoilC.Beam
Gail C. Beam
FAX NO. 2022059252
USDOE/OSERS
JUN-13-95 TUE 10:38
6/13
6.7610-Jenny McCasthe XD
spoke to Elgan at 220p
Presidential Correspondence
Ed Dept's conespond-
Andy 6-7610 40
ence office -
#220a 4/10 budget
Education responded
office on Special
since updated
Clorid 6-5915
& he'll have d copy
will call when
faxed.
401-2981
ready
MAY-11-1995
08:21
UNIV. PROG.2
Gail Chasey Beam
425 Aliso Drive, NE
Albuquerque, New Mexico 87108
505/266-5191
February 28, 1995
President Bill Clinton
The White House
1600 Pennsylvania Avenue
Washington, D.C., 20500
I would like you to know how very disappointed families and advocates are in your
1995-1996 budget proposals for the youngest children with disabilities under the
Individuals with Disabilities Education Act (IDEA). This budget proposal includes
three devastating changes:
1. NO FUNDING FOR PRESCHOOL SPECIAL EDUCATION for children with
disabilities, ages three through five (IDEA Part B, Section 619). Preschool funds
have been transferred into the Part B state grant program without an earmark to
ensure funding for 3-5 year olds. The combination of these grant programs will
result in cuts to programs for preschool children. There must be separate funding
at the level of at least $670 million to guarantee appropriate services for these
children.
2. THE ELIMINATION OF EARLY CHILDHOOD RESEARCH, DEMONSTRATION
AND TRAINING PROJECTS and the transfer of those funds to a block grant. The
Early Education Program for Children with Disabilities (EEPCD) has provided state-
of-the-art knowledge and methods for over 25 years. This program's budget is
only $25 million, and it has been evaluated independently as one of the best
examples of research-to-practice in the federal government. The blocking of this
program will undoubtedly result in a decreased emphasis on very young children
and their families.
3. NO INCREASE FOR INFANT/TODDLER PROGRAM (PART H of IDEA) will
result in fewer services to these very young children and their families. Last
September, all states finally promised to provide services to eligible children and
their families, thus increasing the number of children receiving services. Without
the federal commitment, states may find it impossible to keep their promises,
putting the program in severe jeopardy across the nation. The funding level
needed is $376 million.
Here in New Mexico, where so many children live below the poverty level, and
where so many families have to travel great distances to receive services for their
young children with developmental problems, the effects of such actions will be
suffered widely. I urge you to reconsider sacrificing the needs of young children
MAY-11-1995 08:22
UNIV. AFFIL. PROG.2
with disabilities and their families in the interest of budget cutting. Everything we
know about these programs tells us that every dollar spent is an investment that is
recouped again and again.
Families and advocates are particularly upset that we have not been able to work
with the Department of Education on these issues, despite more than 20 years of
successful bipartisan collaboration with previous Administrations. In fact, when 1
called Secretary Riley's office about this matter, I was redirected numerous times,
and was finally referred to the Director of EEPCD, the program scheduled for
elimination. I then called Judith Heumann's office to try to convey my concerns,
and was again referred to the Director of EEPCD. I did ask her staff to let her
know that it does not feel responsive to have such calls referred an individual who
is not at a decision-making level, and who, in fact, probably shares many of my
concerns.
Those of us who worked for your election and who continue to support you hope
that our appeal on behalf of these families and their young children will be heard.
Thank you very much for your interest in this matter.
Sincerely,
Gail C. Beam
Gail C. Beam
MAY-11-1995 08:22
UNIV. AFFIL. PROG.2
Gail Chasey Beam
425 Aliso Drive, NE
Albuquerque, New Mexico 87108
505/266-5191
February 28, 1995
Secretary Richard Riley
U.S. Department of Education
400 Maryland Avenue, S.W.
Washington, D.C., 20202
I would like you to know how very disappointed families and advocates are in the
President's 1995-1996 budget proposals for the youngest children with disabilities
under the Individuals with Disabilities Education Act (IDEA). This budget proposal
includes three devastating changes:
1. NO FUNDING FOR PRESCHOOL SPECIAL EDUCATION for children with
disabilities, ages three through five (IDEA Part B, Section 619). Preschool funds
have been transferred into the Part B state grant program without an earmark to
ensure funding for 3-5 year olds. The combination of these grant programs will
result in cuts to programs for preschool children. There must be separate funding
at the level of at least $670 million to guarantee appropriate services for these
children.
2. THE ELIMINATION OF EARLY CHILDHOOD RESEARCH, DEMONSTRATION
AND TRAINING PROJECTS and the transfer of those funds to a block grant. The
Early Education Program for Children with Disabilities (EEPCD) has provided state-
of-the-art knowledge and methods for over 25 years. This program's budget is
only $25 million, and it has been evaluated independently as one of the best
examples of research-to-practice in the federal government. The blocking of this
program will undoubtedly result in a decreased emphasis on very young children
and their families.
3. NO INCREASE FOR INFANT/TODDLER PROGRAM (PART H of IDEA) will
result in fewer services to these very young children and their families. Last
September, all states finally promised to provide services to eligible children and
their families, thus increasing the number of children receiving services. Without
the federal commitment, states may find it impossible to keep their promises,
putting the program in severe jeopardy across the nation. The funding level
needed is $376 million.
Here in New Mexico, where so many children live below the poverty level, and
where so many families have to travel great distances to receive services for their
young children with developmental problems, the effects of such actions will be
suffered widely. Families and advocates are particularly upset that we have not
MAY-11-1995 08:23
UNIV. AFFIL. PROG.2
been able to work with the Department of Education on these issues, despite more
than 20 years of successful bipartisan collaboration with previous Administrations.
In fact, when I called your office about this matter, 1 was redirected numerous
times, and was finally referred to the Director of EEPCD, the program scheduled
for elimination. 1 then called Judith Heumann's office to try to convey my concerns,
and was again referred to the Director of EEPCD. I did ask her staff to let her
know that it does not feel responsive to have such calls referred an individual who
is not at a decision-making level.
I would appreciate knowing how we can work with you in the future.
Sincerely,
Gailc. Beam
Gail C. Beam
TOTAL P.07
P.01
MAY-11-1995 08:20
UNIV. AFFIL. PROG.2
Training & Technical Assistance Unit
A University Affiliated Program
The University of New Mexico
School of Medicine
Albuquerque, NM 87131-5020
FAX # (505) 272-5288
Confirming Telephone # (585) 272-3000
To Fax #
702-456-6244
No. of Pages (excluding this page) 6
TO:
ELLi Klein
FROM:
GAIL Beam
DATE:
5/11/5
RE:
THE WHITE HOUSE
WASHINGTON
April 17, 1995
Mr. David J. Crane
1602 Indiana Bay Drive
Vero Beach, Florida 32963
Dear Mr. Crane:
Thank you for writing to share your innovative suggestions
about the use of information-based technology to prevent fraud
and abuse and reduce administrative costs in health care pro-
grams. As you may know, the Clinton Administration is working
to improve the health care system through the use of information
technology.
Currently, the Administration's Information Infrastructure
Task Force is working to foster the creation of a National
Information Infrastructure (NII). Our goal is to use the NII to
give consumers and health care providers access to specialists
and health information regardless of their location. Further,
we anticipate that the NII will significantly reduce the current
administrative burdens of our paper-based system.
You suggested using information technology to increase
immunization rates for America's children. As part of the
President's childhood immunization initiative, the Federal
government sent $129 million to states and local health depart-
ments to improve existing services. Many of the localities used
their funds to create automated record-keeping services to remind
providers and parents to immunize children.
I have also forwarded your letter to John Silva, Chair of
the NII Task Force's Health Information and Application Working
Group. Thank you again for writing.
Sincerely,
Margare Margaret Ann d Williams
Assistant to the President and
Chief of Staff to the First Lady
THE WHITE HOUSE
WASHINGTON
Date April 5, 1995
MEMO FROM MAGGIE WILLIAMS
TO: Jen Klein
The attached is for your:
Information
Advice
Action
COMMENTS:
I have no idea what this is about-
but why don't you put it in your
files.
Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001. letter
Dr Douglas Wood to Frank Lindsay (1 page)
03/24/1995
b(6)
COLLECTION:
Clinton Presidential Records
Office of the First Lady
Jenifer Klein
OA/Box Number: 12509
FOLDER TITLE:
Correspondence-Other-Maggie Williams' Letters
2014-0536-F
kc1355
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)]
Freedom of Information Act - 15 U.S.C. 552(b)]
PI National Security Classified Information [(a)(1) of the PRAJ
b(1) National security classified information [(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRAJ
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency |(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute |(b)(3) of the FOIA]
financial information |(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy |(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA
b(7) Release would disclose information compiled for law enforcement
purposes |(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions |(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells |(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
Mayo Clinic
200 First Street Southwest
ROCHESTER
Rochester, Minnesota 55905
a
Douglas L. Wood, M.D.
FIRST CLASS
MAR29'95
HML
MN
-
Ms. Margaret A. Williams, The First Lady's Chief of Staff
The White House
I
Second Floor West Wing
1600 Pennsylvania Avenue NW
Washington, DC 20500
THE WHITE HOUSE
WASHINGTON
Date 6/20
MEMO FROM: MAGGIE WILLIAMS
TO:
Milli Alston
Neel Lattimore
-
Pam Barnett
Evelyn Lieberman
-
-
Anne Bartley
Diane Limo
-
Liz Bowyer
Capricia Marshall
-
Lisa Caputo
Ann McCoy
-
Kelly Craighead
Alice Pushkar
-
Karen Finney
Sarah Ryan
-
Sara Grote
Patti Solis
-
Julie Hopper
Ann Stock
-
Carolyn Huber
Melanne Verveer
-
Jennifer Klein
X
-
The attached is for your:
Information
Advice
Action
X
COMMENTS:
Cau me- what is this?
Viatical= = gathers Funds
for a long Journey
No response.
Org. helps terminally ill
people sell their life
insurance. notices
JUN-17-'94 11:48 ID:
TEL NO:212-354-0244
#154 P01
Fax Note 7672
No of Pages
Todaye Date C-17-94
Time
1
11:35 EST
To
From
Ms. Maggie Williams
Mark B. Leeds
Company
Company
The White House/First Lady's Chief of Staff
Leeds Comm. Assoc.
Location
Location
Dap: Charge
Wash. DC
NYC
Fax #
Telephone #
Pax #
Telephone #
202-456-6244
202-456-1414
212-819-0784
212-819-0769
Commonts
Original
Doctroy
Return
Call for pickup
Second Submission (first time to this
FAX number) of Letter to Ms. Williams dealing with health care and a particular aspect
involving terminally-ill persons and their care and financial self-sufficiency.
juice me this
naturace
NVA
NATIONAL VIATICAL ASSOCIATION
P.O. BOX 23434 WACO, TEXAS-76702 (817) 772-3688 FAX (817) 772-6626
January 5, 1994
MG. Maggic Williams, Chief of Staff to
Mrs. Hillary Rodham Clinton
THE WHITE HOUSE
1600 Pennsylvania Avenue
Washington, DC 20500
via FAX: 202-456-2461
Dear Ms. Williams,
We write to request your help and quidance on health care and
related issues, and to express our appreciation for Mrs. Rodham
Clinton's concern and leadership vis-a-viv health care reform.
Controlling runaway costs, providing security to every American
family, while maintaining quality medical care and precerving
basic choices is 80 vital to the American people.
We have parallel concerns for ATDS victima, cancer victims and
others that are terminally ill. In 1993 the viatical settlement
industry paid about $200 million in lump sums of cash to Persons
with A108 (PWA) and other terminally ill individuals, to be used
88 they saw fit for health care, medications, food, rent, etc.,
over the remaining 12-24 months of life. Life insurance companies,
through accelerated/living benefits programs, paid under $50 million
to PWA in '93, to individuals with 3-6 months of remaining life.
Through policy cancellations by insurers of terminally 111 persons
that can no longer afford coverage and miss premiums, the major
life insurers save $3 billion (yes, billion(i) a year. Those DWA
become destitute and are then cared for at taxpayer expense, 80
what was once a personal benefit paid for by the individual and an
obligation of the life insurance company, is thusly transferred to
the public to fund. in most cases, and as can be documented by
The National Association of Persons with AIDS and other groups rep-
resenting minorities, women's interests, seniors and others, the
viatical option or choice is the only alternative for terminally-ill
persons, short of less generous offers (if any) from insurers and
the awful choice of exhausting a lifetime's savings and ultimate
poverty. As may be expected the life insurance lobbies at the fed-
eral and state levels are inclined to hamper or remove the compet-
itive threat posed by viatical firmo, to protect that $3 billion
windfall.
We seek to alert Mrs. Rodham Clinton to this matter and enlist the
administration's support as part of the overall health care reform.
Relatedly, when PWA lose their jobs and group health coverages, the
problem ia aggravated And the viatical option needlessly precluded.
we welcome discussing these concerns and pledge our support +or retorm.
Mark B. Leeds, NVA Communications Chair
MBL: mlf
212-819-0769
THE WHITE HOUSE
WASHINGTON
May 20, 1994
Mr. Douglas D. Jenner
President
Superior Mobile, Inc.
545B East Michigan
Marquette, Michigan 49855
Dear Mr. Jenner:
Thank you for writing about the
reductions in Medicare reimbursement rates
that your company is facing. I have
forwarded your letter to Bruce Vladeck,
the Administrator of the Health Care
Financing Administration. I have been
told that his office is aware of the
issues that you raised in your letter and
would be happy to work with you to address
them.
Please feel free to contact me with
any additional questions.
Sincerely,
Margaret A. Williams
Chief of Staff
to the First Lady
we .Re up
*
545B East Michigan
Marquette, MI 49855
Superior Mobile, Inc.
Local: (906) 228-3999
0
Toll Free: 1-800-852-4090
X-Ray
&
Diagnostics
EKG
X-Ray
Ultrasound
March 10, 1994
Margaret Williams, Chief of Staff
Office of the First Lady
Old Executive Office Building
1600 Pennsylvania Blvd.
Washington D.C. 20500
Dear Ms. Williams,
Please allow me to introduce my company, Superior Mobile, Inc.. We provide mobile
diagnostic services to nursing homes and facilities in the Upper Peninsula of Michigan. These
services include mobile x-ray, EKG, pulmonary function exams and ultrasound studies to small
hospitals. We have been in business since 1989.
As of January 1, 1994, Blue Cross Blue Shield of Michigan reduced our reimbursible rate
by 18%. They plan to do this again next year and the year after. A total of 55% in reduction is
expected. Enclosed is a letter that explains in detail what happened in the last six months. Our
company will no longer exist after this year.
The reason I am writing you is that there is a rumor that the First Lady may be coming to
the U.P. to discuss healthcare. Please brief her about my companies situation.
I would very much like the opportunity to ask Mrs. Clinton a couple of questions and she
in turn could relay them to the head of H.C.F.A.
1.
If health care services for the elderly are being cut in 1994, what is going to happen
in five years when there will be three times as many seniors needing these same
types of services?!
2.
Since the U.P. is considered "rural" (remote is more the word) H.F.C.A. is making
it impossible for some elderly care services to be provided. This is contrary to what
health care reform hopes to provide. Shouldn't Medicare and its agencies be
working with people like us instead of putting us out of business?
I would be happy to talk about healthcare (in particular, elderly programs) and how it will
effect the elderly in the U.P.
If you need more information or have any questions please don't hesitate to call.
906-228-4514 (work)
Sincerely,
906-228-3248 (fax)
906-225-5002 (home)
Doug Coo J.Jun
Douglas D. Jenner
President
DDJ/lmr
THE WHITE HOUSE
WASHINGTON
May 2, 1994
DRAFT
Ms. Mary Jane Moore
4807 Northwest 27th Terrace
Tamarac, Florida 33309-2912
Dear Ms. Moore:
I am so sorry that you did not receive a proper answer to
your letter to the First Lady about coverage for prescription
drugs under the President's proposal for health reform. You have
raised a very important issue, and the President is committed to
preserving and enhancing the benefits now available to Americans
who are over the age of 65.
You noted in your letter that you are concerned about a
monthly $1,500 deductible for prescription drugs. The Pres-
ident's plan does not include any $1,500 monthly deductible.
Under the President's plan, Medicare will cover prescription
drugs for the first time. Today, some beneficiaries can afford
to purchase supplemental coverage for prescription drugs, while
many others are forced to choose between medication and food.
Under the Clinton plan, after meeting an annual deductible of
$250 dollars, beneficiaries will pay 20 percent of the cost of
each prescription up to a $1,000 out-of-pocket annual limit. All
costs for medication above this limit will be fully covered -- so
that you, the beneficiary, pay nothing.
Thank you for writing and again, I apologize. Please feel
free to contact me with any further questions or concerns.
Sincerely,
Margaret A. Williams
Chief of Staff
to the First Lady
March 2, 1994
Gary S. Mendoza
Department of Corporations
Office of the Commissioner
3700 Wilshire Boulevard, Suite 600
Los Angeles, California 90010
Dear Mr. Mendoza:
Thank your for your letter about the
managed care industry in California and
the Department of Corporations' experience
as the managed care regulator in the
State. I appreciated reading about the
role of your department in the development
of managed care in California and would be
interesting in hearing your views about
the implications of this experience for
national health reform.
We share your commitment to provide
high quality health care at an affordable
price. Thank you again for writing.
Sincerely,
Margaret A. Williams
Chief of Staff
to the First Lady
STATE OF CALIFORNIA -- BUSINESS, TRANSPORTATION AND HOUSING AGENCY
PETE WILSON, Governor
DEPARTMENT OF CORPORATIONS
OFFICE OF THE COMMISSIONER
3700 WILSHIRE BOULEVARD, SUITE 600
Please
Evel
LOS ANGELES, CALIFORNIA 90010
answer xo form
THE
IN REPLY REFER TO:
CALIFORNIA
FILE NO:
February 1, 1994
Ms. Margaret Williams
Chief of Staff
Office of the First Lady
West Wing
The White House
Washington, D.C. 20500
Dear Ms. Williams:
As the national health care debate unfolds, I think it is important to provide national
policymakers with information concerning California's managed care industry and the
Department of Corporations' experience as the managed care regulator in California for the
past 18 years. I would also respectfully suggest that national health care reform provide
states with appropriate flexibility to accommodate those states with strong managed care
experience and effective, consumer-oriented regulation, build on these states' successes and
consider their regulatory programs as models when designing any national system of
regulation.
California has the largest and perhaps the most sophisticated managed health care industry in
America. Currently, approximately 16,000,000 Californians (or more than 50% of the
State's population) receive their health care from the 38 full-service health care service plans
(more commonly referred to as HMOs) operating within the State and regulated by the
Department of Corporations. Despite the scope of the Department's responsibilities in this
area, the Department's Health Care Service Plan Division currently operates with a budget of
less than $5 million and a staff of fewer than 80 people.
CALIFORNIA'S HISTORICAL EXPERIENCE
In the 1960's, major problems in managed care arose when a number of new prepaid health
plans were established to provide care to Medi-Cal beneficiaries. In an effort to avoid plan
insolvencies and the questionable business practices which could result from inexperienced
management operating in an unregulated managed care environment, the California
legislature passed the Knox-Mills Health Plan Act in 1965. This Act provided essentially a
laissez faire regulatory scheme that proved to be ineffective, and major scandals, including
blatant marketing fraud, the unavailability of promised health care services and facilities, and
fiscal mismanagement, ensued.
Ms. Margaret Williams
February 1, 1994
Page 2
The Waxman-Duffy Act, enacted in 1972, provided greater regulatory authority over plans
contracting to provide prepaid Medi-Cal services. Unfortunately, this Act also proved to be
inadequate to stem the tide of fraud, abuse, and broken promises from the "bad actor"
companies.
This history illustrates the potential problems that the national debate should consider as
policymakers seek to assure the public that managed care is a cost-effective, appropriate
means to provide quality health care. California's regulatory framework has successfully met
this challenge and may provide guidance to the rest of America.
THE DEPARTMENT'S EARLY MANAGED CARE REGULATION
To address these problems and create an environment to foster the responsible growth of
managed care, in 1975 the California legislature enacted the Knox-Keene Health Care
Service Plan Act ("Knox-Keene Act"), a comprehensive regulatory scheme to promote the
delivery of health care to the people of California. The Department promptly and vigorously
enforced the Knox-Keene Act to remove the "bad actors" from this industry and to address
the major problems of managed care that prompted adoption of the Knox-Keene Act. This
effort was successful, and most people have only a dim recollection, if any, of the serious
problems which the Knox-Keene Act effectively addressed. Unfortunately, this has not
necessarily been the experience in other states. For example, the recent Nunn Committee
hearings identified health carriers in other states that had mismanaged funds intended to pay
for health care coverage by diverting these funds to questionable investments and activities in
the interest of plan management rather than plan enrollees.
THE GROWTH OF MANAGED CARE IN CALIFORNIA
During the past 18 years of steady, predictable regulation by the Department of
Corporations, the managed care industry has developed from a fledgling movement to a
sophisticated, well-financed industry with a solid overall record of achievement. As I noted
before, approximately 16,000,000 people, or more than 50% of California's total population
of 31,552,000, receive their health care through a full-service health care service plan
regulated by the Department of Corporations.¹ By way of contrast, no more than 4,000,000
1
Although this letter focuses on full-service plans, you should also know that the
Department currently regulates 34 dental plans, 8 vision plans, 16 mental health plans and
one pharmacy plan. Approximately 23,000,000 Californians are enrolled in these specialty
plans.
Ms. Margaret Williams
February 1, 1994
Page 3
Californians receive their health care benefits from insurance companies regulated by the
Department of Insurance.
This disparity has not been driven by any government mandate. Rather, it is a market-
driven, private sector recognition of which system of providing health benefits best delivers
the quality, cost-effective care that payors and patients are seeking. Managed care has
simply done a better job containing premium cost increases, decreasing hospital admissions
and costs and providing more benefits to consumers than nonmanaged care within the State.
KEY FEATURES OF THE DEPARTMENT'S MANAGED CARE REGULATORY
PROGRAM
Financial Stability. The Department has established financial reserve requirements (referred
to as "tangible net equity") that have successfully ensured the financial viability of health
plans in California. While other states have set up guaranty associations, California has
resisted this as a costly approach that forces strong plans to underwrite less capable plans.
The Department reviews regular financial reports to ensure the plans' ongoing financial
viability, conducts periodic financial audits and has the authority to place plans with certain
indices of potential trouble on a close watch. The Department can put a plan into
receivership or take other enforcement action if the well-being of the enrollees is imperiled.
Plans are required to provide the Department with a complete description of the methods of
payment to providers. The Department scrutinizes the plan's various insurance policies and
other provisions for extraordinary losses. A plan's administrative costs are capped to prevent
unreasonable amounts of enrollee premium from being diverted from the actual provision of
health care. If the plan wishes to go into another line of business separate from its health
care business, it must seek approval from the Department. Again, this safeguard is designed
to prevent health plan premiums from being diverted and the financial strength of the plan
from being compromised.
Benefits. The Knox-Keene Act explicitly mandates the scope of services that must be
provided or offered to enrollees. Full-service plans are obligated to provide all medically
necessary care, including: (a) physician services, including consultation and referral services;
(b) hospital inpatient services and ambulatory care services; (c) diagnostic laboratory and
diagnostic and therapeutic radiologic services; (d) home health services; (e) preventive health
services; and (f) emergency health care services, including ambulance services and out-of-
area coverage. In addition, plans can negotiate with employers and individuals to expand
this basic package according to their resources and needs.
Ms. Margaret Williams
February 1, 1994
Page 4
Quality Assurance. The Knox-Keene Act regulations promulgated by the Department
implement the Act's strong emphasis on assuring the quality of care provided to enrollees.
These regulations have been enhanced over the years in the direction of stronger
requirements, through a collaborative process including input from the health plans
themselves.
The institutionalization of quality assurance distinguishes health plans in California from the
more traditional means of monitoring the quality of care, which for all practical purposes
relies upon state professional licensing boards for policing quality. These licensing boards
handle individual professional complaints and enforcement cases which come to their
attention, but they do not have the authority to insist upon systematic procedures to assure
the delivery of quality care. Quality assurance systems are among the most important
features of managed health care, and the historical record in California illustrates their
efficacy.
Integrity of Medical Decision-Making. The Department goes to considerable lengths to
ensure that medical decisions are not inappropriately influenced by administrative or fiscal
considerations. While California HMOs have proven to be cost-effective compared to
alternative models of health care delivery, it is critical that these savings be realized without
compromising the quality of care. The structures of plans are scrutinized to ensure this
protection, and the quality of care that HMO network providers furnish is far more carefully
analyzed and assessed than that of traditional fee-for-service providers.
Enrollee Grievance Systems and Disclosures. Every plan is required to have a detailed
procedure that allows enrollees to effectively register complaints or grievances against the
plan. These procedures include appeals processes that provide for the Department of
Corporations to be the final arbiter. There are detailed requirements governing the content
of informational materials that must be given to plan enrollees. The text of these documents
is carefully reviewed by the Department and changes necessary for full and fair disclosure
are regularly insisted upon. Advertising by plans in California is subject to review by the
Department, with a heavy emphasis on clear and full disclosure and the absence of deception.
Provider Networks; Contracts and Controlling Corporate Documents. A managed health
care plan is frequently woven together by a vast web of contractual relationships. The
Department scrutinizes in detail the adequacy of a plan's provider networks, including
referral patterns and procedures, to assure the accessibility of these providers to the places of
work or residence of the enrollees of the plan. All plan contracts are subject to prior
approval by the Department, whether provider contracts, subscriber contracts, contracts for
administrative services or solicitor contracts. All are carefully reviewed by the Department
to ensure that they are reasonable and satisfy regulatory requirements.
Ms. Margaret Williams
February 1, 1994
Page 5
Staffing and Enforcement. The Department relies on a broad spectrum of professional
disciplines to carry out its managed care regulatory responsibilities, including medical and
other healing arts professionals, financial examiners, attorneys, investigators, health analysts
and consumer service representatives. The Department also has a broad range of disciplinary
and enforcement powers to exact compliance with the requirements of the Knox-Keene Act.
For example, the Department can issue orders prohibiting marketing of a plan's services and
can seek civil penalties, and, where appropriate, plan license revocation.
NEW REGULATORY INITIATIVES
As you know, the health care industry is one of the most dynamic in America. The
Department has a series of initiatives to respond to ongoing developments in the managed
care industry and to keep abreast of market forces.
I have enclosed a copy of an article written by Alain Enthoven (the founder of the Jackson
Hole Group) that appeared in the January 17, 1994 edition of The Los Angeles Times. As
that article indicates, it is possible to improve the quality of the health care that patients
receive and lower the costs of that care through, among other things, integrated delivery
networks and the development of better information systems that identify those organizations
or entities that provide quality health care.
The Department has formed two task forces to deal specifically with these issues. In
September, the Department convened the first meeting of a task force it formed to review the
Department's regulatory policies with respect to risk sharing arrangements. Increasingly,
medical groups and hospitals are seeking to develop integrated delivery networks to assume
greater financial risk for health care services and more effectively manage patient care. This
task force has been asked to help the Department develop appropriate operational and
financial safeguards to make certain that the public remains protected if the Department's
policies in this regard are revised.
Building upon our historical emphasis on the importance of quality care, the Department has
convened another task force to help the Department develop performance benchmarks that
would increase the ability of the Department, and purchasers of health care, to determine if
enrollees are receiving appropriate, quality care. This initiative began in January 1994.
CONCLUSION
As you can see, California has a great deal of experience and success with managed care,
and the Department of Corporations has more regulatory experience in this area than perhaps
any other state regulatory body in the United States. With this strong record, I believe the
Ms. Margaret Williams
February 1, 1994
Page 6
Department can provide important insights during the critical debate on national health care
reform, and we would welcome the opportunity to share our experiences with the nation as a
whole.
Very truly yours,
GARY upp S. MENDOZA
Commissioner of Corporations
GSM:ad
CS ANGELES TIMES
37
Commentary
PERSPECTIVE ON HEALTH CARE
TELLS
THEN,
YOU
INSURER
CHOICE
ABOUT
Raise Quality by Lowering Costs
you
UMP
UP,
CRAZED
WITH
AND
BERSERX!
END
YOUR
hospitals purchase expensive equipment
for the cost of care and. therefore. for the
even if they cannot fully utilize it. and
"cost of poor quality." and hold providers
beds go unfilled while hospitals continue
accountable for quality outcomes.
to build capacity. There :S no incentive to
With this new set of incentives. ac-
keep individuals healthy because there :S
countable health pians would sees to
no reimbursement for it. Providers are
attract committed and responsible physi-
paid less for pursuing a less invasive. but
cians. Finding, training and retaining the
equally effective. non-surgical treat-
most qualified group possible in the right
ment
quanuties and specialty mix for the
OUR
In the current system. there is no
population served vouid be key to finan-
NO:
match between resources and needs. This
cial success. Accountable health plans
country has trained too many specialists
would give doctors incentives to provide
incentive for providers now is
and too few primary-care physicians. A
high-quality. low-cost care and the 1001S
to use the most costly
surfeit of specialists is bad for your health
they need to do so.
and bad for your pocKeTpooK. If there
Information systems could be used to
treatment. There's no reward
were fewer. we could pay them well and
identify and adopt cost-effective care.
just keeping people healthy.
give them full schedules. They couid care
Quality management and improvement
DIRECTOR
for the same population at less cost
techniques would be employed routinely
By ALAIN C. ENTHOVEN
Because they would be proficient. their
Providers would study variations in prac
and SARA J. SINGER
work would be of high quality. Because
tice patterns to determine and adopt what
they would be busy. there would be less
makes sense. They vouid be held ac-
unnecessary surgery.
countable for quality outcomes because
EFF DANZGER Christian Science Monitor
T
o improve quality in health care.
To make matters worse. there is no
the remuneration of the entire group
cut costs. Sounds counterintuitive.
Filming those anti-heaith-care commerciais.
accountability for cost or quality because
would be at stake. Technological redun-
but in health care. as 'n most
providers are not paid on the basis of
dancy would be eliminated
other reforms they propose.
snould not be confused with cost reduc-
businesses. quality and economy go hand
either. Problems in health-care delivery.
Costly specialized procedures would be
Price controls would limit premium
non. While a country can limit the cost of
in hand. One of the biggest misconcep-
such as lack of immunizations and other
concentrated in efficient regional centers
increases CC the consumer price index
treatment. as Britain and Canada have
tions in the health-reform debate IS that
preventive measures. are viewed as iso-
where physicians are busy enough to
pius 1.5% in 1996. phased down to the
done. by shifting the cost of illness back
I you cut the cost. quality will suffer.
lated issues. They are not They reflect a
maintain proficiency and achieve admin-
index plus zero in 1999. Such targets and
onto patients in the form of treatments
Right now. providers-hospitais. doc-
systemic problem: No one IS accountable
istrative economies of scale. There is
a
better couid be me! a few years later or a
delayed or denied. the only way to reduce
tors and other practitioners-we in a
for getting the job done.
well-documented correiation among high
thoroughiy reformed competitive system
the total social cost of illness and ILS
system in which everyone IS rewarded
Even physicians have come to dislike
volumes. low mortality and low COSL The
with the strongest possible market incen-
treatment :S to improve the efficiency
for providing more. not necessarily bet-
the traditional fee-for-service mode! be-
Pennsyivania open-heart surgery study.
tives. without price controis.
and effectiveness of care delivery. What
ter. care. This traditional fee-for-service.
cause it sets them up in an adversarial
for example. studied 35 hospitais doing
There is a great deal or waste in the
is best for society is to minimize the cost
remote third-party-payer mode! pays per
relationship with payers. Physicians rou-
coronary artery bypass graft operations.
health-care system and 01g opportunities
of illness and treatment.
procedure, regardless of the outcome. In
tinely must respond to calls from lesser-
The procedure at the hospital with the
for cutting cost without cutting the
In general. the rationale that high-
a world such as this. providers. no matter
qualified insurance company representa-
best risk-adjusted mortality rate cost
quality of care. To reauze potential
quality health care must be expensive IS
how ethical. have an unavoidable incen-
tives who question their choice of treat-
$21,000: at the worst it was $84.000. and
savings. the industry needs time to
flawed. in fact. biten the opposite :S true.
tive to provide the most costly treatment.
ments.
on average was $44.000. If every hospital
reorganize. restructure. retrain and n-
Mistakes cost lives and doilars. Providers
Wide variations in practice patterns
Better care at less cost IS possible
performed at the level of the most
stall programs of continuous quality and
must be given toois and held accountable
among physicians suggest that more
through integrated financing (that :5.
proficient hospital. Pennsylvania aione
productivity improvement. This cannot
for noing I right the first time. We
procedures are not necessarily related to
insurance and delivery systems (hospi-
could save $350 million in one year for
happen overnight
believe that this can only be achieved
better outcomes. A medical director of an
tais and physicians). Under the new ruies
this one procedure. A similar result could
If the Clinton pian succeeded in meet-
through market forces and accountable
East Coast heaith-maintenance organi-
of the game. all would benefit by keeping
De true or other states.
ing its cost-containment goals. likery
health pians.
cation studied practice patterns and 00-
individuals under their care healthy. or.
We 10 not mean to suggest that any
consequences vouid be urbitrary cut-
served a fiveroid to tenfoid difference in
once sick. by making them well in the
means of cutting costs is acceptable.
backs in service and care. then queues
Alain C. Enthoven :s 1 professor of
the costliness of practice patterns of
most efficient way possible. Such a
Arbitrary CULS put quality at risk. The
and rationing n the form Dt spending
management It Staniorn University 3
iifferent doctors. usually with no evi-
system would give providers responsibii-
Clinton Administration's proposal for
reductions not thought through for ack
Graduate School or Business ind a member
:ence ef difference in outcomes.
Itv for individuals comprehensive care
health- are reform sets unrealistic limits
or time and ncentives. especially = the
" me luckson Hole Group in organization
he
racitional
system
:ces
not
for
e.
fured
certodic
cayment
set
premium
increases
riven
snor: care suffer
md onlicy inu-
scheme
and
ame
for