Wednesday, May 24, 2006


Rep. Bev Harbin files ethics commission and IRS complaints against HMSA Foundation

Representative Bev Harbin announced today that she has filed two complaints against HMSA Foundation and its Executive Administrator, Mark Forman, for failure to file lobbyist registrations.

One complaint was filed with the state Ethics Commission and another with the federal IRS, which through its Tax Exempt and Government Entities Division regulates the activities of non-profit corporations.

In her statement, Rep. Harbin wrote:
I continue to be amazed by the hubris of the HMSA Foundation and their parent company HMSA. Even after a loud public outcry and significant media coverage, HMSA continued to maintain this embedded lobbyist on staff with the powerful House CPC Committee. It became abundantly clear that the sole purpose of placing such a high-level employee in this important position was to protect the interests of HMSA as the prevailing health care provider in the State of Hawaii.
This is the first complaint filed with the IRS concerning the practice of corporations placing their paid executives or employees as "embedded interns" in offices of Hawaii state legislators, a practice which raises clear questions of access if not influence over the decisions made by powerful committee chairs. In the case of Mark Forman, he is embedded in the office of Big Island Representative Bob Herkes, chair of the House Consumer Protection & Commerce Committee.

During this just-completed legislative session, the CPC chair altered legislation passing through his committee so as to change a simple bill that would have continued rate regulation of health insurance premiums into a complex nightmare that clearly favored the interests of the insurance carriers. Most of the language was removed when the bill passed through the next House committee, but a House-Senate conference committee (to which Rep. Herkes was appointed) could not agree on a final version, and when Senator Ron Menor re-committed the bill to conference, the House refused, thereby killing the bill and removing the Insurance Commissioner's ability to review health care premiums.

A companion House bill which would also have simply removed the sunset provision of the existing law (and so continued oversight of premiums) was denied a hearing in the House.

Rep. Harbin called attention to the effect that this legislative-industry collaboration may have on employers and employees:
...The Chair of the CPC committee unilaterally killed Hawaii’s Health Care Rate Regulation--the only independent oversight mechanism then in place to protect Hawaii’s small businesses and their employees from predatory and discriminatory pricing of health care premiums and co-pays for drugs and services.
...As the prevailing health plan, without oversight HMSA now has the ability to raise premiums to such a level that employers will be hard-pressed to raise wages accordingly. HMSA also has the ability to temporarily lower prices to such levels as to thwart any competition wishing to do business in the Hawaii market.... The decision of House Leadership to allow this blatant internal control of the CPC Committee and to affect legislation that could enrich HMSA is unconscionable.
With regard to her IRS complaint, Rep. Harbin wrote:
I trust the IRS will take immediate action against this arrogant disregard of IRS regulations prohibiting such blatent political intervention in the legislative process.


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