Posts Tagged: health care

F.A.A. et al v. Cooper and the Coming Conflict between Privacy and Health Care

By: Denise McWilliams, Esq. and Richard Juang, Esq.

       The majority decision in Federal Aviation Administration et al v Cooper, 566 U.S. ____  (2012) (No 10-1024 ) marks another step forward in the relentless national erosion of privacy protections. In Cooper,the Supreme Court held that, under the Privacy Act of 1974, a cornerstone of federal privacy protections, mental anguish and humiliation for individual plaintiffs were not “actual damages.”  Although the outcome was not unpredictable, Justice Alito’s decision is, nonetheless, starkly at odds with the long-standing principle that, fundamentally, the purpose of privacy protections is to prevent and redress “[t]he mental distress from having been exposed to public view.”[1]  Without recognition of that basic injury, privacy jurisprudence loses focus and purpose.

         The facts of Cooper remind us of how complicated things get when medical information intersects with non-medical interests, cultural realities around stigma, and institutional information-sharing. Stanmore Cooper, a licensed pilot since 1964, was diagnosed with HIV in 1985.  At that time, the Federal Aviation Administration would not issue a medical certificate, a prerequisite to obtaining a pilot’s license, for those with HIV.  Medical certificates are not cursory, but include information about the applicant’s illnesses, surgeries and medications and are renewable every two to three years depending on age. Rather than apply and be rejected, Cooper let his license lapse, effectively grounding himself.

         In 1995, Cooper’s health declined until he was no longer capable of working.  Cooper applied for and received Social Security Disability Income (SSDI).  Notably, 1995 also saw the first effective treatment for HIV.  Cooper then experienced a significant recovery of health, voluntarily requested termination of his SSDI benefits, and returned to work.

         In 1998, Cooper, investigating a return to flying, researched the FAA procedures for those with HIV.  At that time the FAA still had not established a protocol for applicants with HIV and agency responses to such applicants varied considerably. Cooper simply withheld all information about his HIV status when he applied and, as a result, received his medical certificate.  In subsequent renewals, Cooper continued to omit information regarding his HIV illness until his fraud was detected by Operation Safe Pilot in 2005.

         Operation Safe Pilot began in 2002 and involved the FAA and the Social Security Administration (SSA) exchanging and comparing their respective records in an attempt to detect fraudulent medical certificates.  Going well beyond a simple computer comparison, the exchange, at least in Cooper’s case, included a hard copy of Cooper’s complete disability file.  After a review of Cooper’s SSA file, the FAA revoked his medical certificate and indicted him on three counts of making false statements to a government agency. Cooper ultimately pled guilty to one count of making and delivering a false official writing in violation of 18 U.S.C. §1018. He was fined $1,000.00 and sentenced to two years probation.  (Cooper’s pilot license had since been reinstated.)

         Subsequently, Cooper filed suit against the FAA, SSA, and the Department of Transportation under the Privacy Act. Enacted in the aftermath of the Watergate conspiracy, the Act details the requirements for the management of confidential records held by federal agencies.  The Privacy Act requires agencies to establish mechanisms to avoid disclosure of confidential information which “[c]ould result in substantial harm, embarrassment, inconvenience, or unfairnesss to any individual on whom information is maintained.”[2]  In essence, federal agencies are permitted to exchange information only with the consent of the individual whose information is being held, or pursuant to a number of exceptions, none of which were relevant in Cooper’s case. The lower courts in Cooper consistently concluded that the agencies had wrongfully disclosed Cooper’s confidential information and had done so “in a manner which was intentional or willful.”[3] Under such circumstances, a wronged individual can recover the “actual damages sustained by the individual.”[4]

         Cooper, however, ran into a countervailing legal matter: the question of whether Congress, in waiving sovereign immunity, had also consented to suits alleging only emotional and mental distress, absent clear pecuniary damages. The Supreme Court majority, in ruling against Cooper relied, in large part, on United States v Nordic Village, Inc. 503 U.S. 30 (1991) which held that “plausible” interpretations of a statue are sufficient to defeat a claimed waiver of sovereign immunity. Looking therefore, only to the statutory phrase “actual damages,” Justice Alito analogized the phrase to libel per quod and slander, both of which require “special damages” or actual pecuniary loss, instead of “general damages” which are not necessarily pecuniary in nature.[5]  Because of this parallel the Court concluded that the required “unequivocal expression” did not exist.  The established and commonsensical principle that the “actual damage” inherent to a privacy violation is mental anguish was, then, defeated by a rigid and arguably unreachable requirement that damages be allowed only when there is an “unequivocal expression” of sovereign consent. In effect, Cooper demoted privacy from a fundamental individual interest to a statutory entitlement, to be conferred or revoked depending on the vagaries of statutory construction and fuzzy legislative compromises.

         The Court’s retreat from expansive privacy protections warns us that the traditional tort-based and fundamental rights approaches to privacy are no longer viable ways of protecting people’s confidential information. On the one hand, Cooper signals to holders of personal data that the mental distress and humiliation of public exposure is no longer a protected interest. On the other hand, Cooper further signals to the public that the sole means for individuals to protect their personal information is to refuse to disclose it. The Court’s sharp restriction on individual enforcement of privacy interests suggests that, going forward, withholding personal information may well be the only tool available when interacting with misbehaving federal agencies.

         At the same time, withholding information may no longer be an option for most individuals. The health care sector, both in Massachusetts and nationally, are decisively moving toward increasingly integrated database technologies. The main example (indeed the cornerstone) of this is the implementation of portable Electronic Medical Records (EMRs).

         EMRs promise more efficient and accurate delivery of medical services. It is widely accepted that successful implementation of EMRs depends on the public’s belief that the information contained therein will be protected from unauthorized disclosures:

“Privacy and security are the bedrock of building trust, a must-have component that is essential to achieving meaningful use and realizing the value of health IT. Patients and providers must feel confident that laws, policies, and processes are in place to keep their health information private and secure, and that they will be enforced when violations occur.”[6]

         However, the reality of EMRs is rather more complicated than the ideal of teams of medical professionals seamlessly exchanging information on a common patient. Many diverse parties, completely unrelated to the treatment needs of the person whose information is contained in an EMR, such as insurers, researchers, law enforcement personnel, among many others, want access to that information, preferably without the consent of the individual — indeed, sometimes without alerting that individual. Their interests are as varied as quality assurance, health outcomes and fraud detection to name but a few. The single unifying theme in the promotion of EMRs is that all of these players seek unconsented access to individuals’ health information for some “greater good.”

         Nonetheless, it is far from clear what, other than institutional restraint, will prevent or deter the misuse of individual information. Fear of misuse could easily drive people to withhold information, even when health and safety are at stake. Cooper should be read as a warning: we are, increasingly, legally unprepared for the growing conflicts between institutional power and individual privacy needs, which lay at the very heart of institutional changes in health care.

Denise McWilliams is General Counsel of AIDS Action Committee of Massachusetts, Inc., the Commonwealth’s largest AIDS service organization. She is a graduate of Northeastern University Law School.

Richard Juang is Assistant General Counsel of AIDS Action and a graduate of Northeastern University Law School.

[1] Times, Inc. v. Hill, 385 U.S. 374, 385, n. 9 (1967).

[2] 5 U.S.C. §552a(e)(10).

[3] 5 U.S.C. §552a(g)(4).

[4] 5 U.S.C. §a(g)(4)(A).

[5] Cooper at 10.

[6] Federal Health Information Technology Strategic Plan 2011-2015  Goal III Inspire Confidence and Trust in Health IT, p. 29.

Affordable Care Act Continues to Create a Healthier America

By: Eva Marie Stahl, PhD, MPA, and Anna Dunbar-Hester, JD, MPP

Thanks to the Affordable Care Act (ACA), 32 million people will gain access to health insurance. In addition, the millions of Americans who already have health insurance will benefit from new consumer protections and an emphasis on preventive and patient-centered care. The ACA moves us closer to a health care system where all Americans can access quality, affordable care. The Supreme Court reaffirmed the Congressional intent and the ACA’s legitimacy through its recent June ruling on the constitutionality of the law.

Specifically, the Court upheld the entire law except for the enforcement mechanism attached to an expansion of the Medicaid program. Medicaid is a state-run public health insurance program for low-income populations that is supported through federal matching funds. In its original form, the ACA expanded the Medicaid program to cover new populations with incomes up to 133 percent of the federal poverty level (FPL), or about $15,000 for an individual. If a state refused to expand its Medicaid program, it risked losing all of its federal Medicaid funds. The ruling removes only the penalty; the expansion option remains intact.

While there are some negative implications of the ruling, for the majority of consumers, the benefits remain unchanged. These benefits have already begun rolling out, although the majority of them kick in beginning in 2014. Most states will expand their Medicaid program and implement the law as intended.  By and large, the Supreme Court ruling is a win for consumers.

The ACA provides unprecedented consumer protections to Americans in every state

The ACA takes important steps toward expanding coverage, reducing cost and improving the quality of health care for all consumers in all states. It builds on successful health reforms from across the country and extends them to all states. (Of course, many of the reforms were modeled in Massachusetts.) The ACA offers many new benefits for consumers ranging from reforms of our private insurance market, creation of health care marketplaces (Exchanges), to expansion of Medicaid and strengthening the safety net.

As in Massachusetts, success of these reforms is inextricably tied to the individual mandate. Now validated by the Supreme Court, the individual mandate strongly encourages everyone to gain insurance coverage. Requiring all who are able to purchase health insurance protects the market from adverse selection (people buying insurance only when they are sick) and keeps premiums from skyrocketing over time – it provides stability. These are key pieces of reform that allow many of the following benefits to be possible.

Private Insurance, Market Reform and Exchanges

Those who already have health insurance will benefit greatly from the ACA, but this group of people may be the least aware of these new benefits.

Beginning January 1, 2014, no one may be denied coverage due to a pre-existing condition or health status, and no one’s health coverage can be pegged to a lifetime dollar amount. Already implemented reforms include allowing young adults to continue to enjoy their parents’ health insurance coverage until the age of 26. As of August 2012, women can now access preventive coverage with no co-pay including mammograms and birth control. In addition, seniors continue to receive discounts on their prescriptions as the ACA brings us closer to elimination of the ‘donut hole’ (gap) in prescription drug coverage for Medicare recipients.

As consumer advocates, we see health reform making a difference every day. Consumers and businesses all over the country received reimbursement checks if their health insurer failed to direct enough premium dollars toward health care. This reimbursement is based on the new medical loss ratio (MLR) requirement – for every premium dollar, 80 cents must be spent on care. If the insurance company spends less than 80 cents on care, they have to correct the balance using rebates. In Florida, a school system in Sarasota received a check for over $800,000.[1] On average, consumers will receive $151 per household.[2]

Consumers have access to new tools to hold insurers accountable and level the playing field. New rate review tools provided by the ACA hold insurers accountable for premium increases, requiring insurers to be transparent and justify premium hikes. For example, New York consumer advocates used ACA rate review tools to pressure insurers to be more transparent about premium rate hikes.[3] This pressure resulted in New York’s largest insurer agreeing to make rate filings publicly available.

In 2014, about 16 million consumers will have access to insurance Exchanges (online marketplaces, similar to the Massachusetts Health Connector) where they can use federal subsidies to purchase health insurance for the first time. For wage earners between 133 and 400 percent of FPL, federal subsidies will support the purchase of insurance, making it affordable. The ACA requires a consumer-friendly Orbitz-type website with simplified application forms and information about plan quality. California, for example, is leveraging the ACA quality reporting requirements to explicitly address health disparities in its Exchange.[4] Small businesses will be able to use the Exchanges to provide insurance to their employees – making it easier for them to do so.

Medicaid Expansion

As it was passed, the ACA would have extended Medicaid benefits to Americans earning very low wages, less than about $15,000 annually per individual or just over $30,000 for a family of four (under 133 percent of the FPL). The expansion, if fully implemented, will reach almost 17 million people nationally. The Federal government will fund 100 percent of the expansion through 2016, transitioning to 90 percent support by 2020. This $931 billion dollar contribution over eight years will persuade most states to implement the law.[5] This is a great deal for states, enabling them to provide insurance coverage to many uninsured at very little cost to state budgets.[6]

Also, the Medicaid expansion is vital because it completes the coverage package that was envisioned by the ACA: it picks up where the Exchange leaves off, providing coverage to low-income populations not eligible for a federal subsidy in the Exchange. According to the Urban Institute, 82 percent of these uninsured are adults without dependent children. They have traditionally been denied public coverage opportunities at the state level.[7]

Providing coverage to the “expansion population” holds promise of long-term better health whether through preventive prenatal services, near-elderly health care as consumers transition to Medicare, or a reduction in racial and ethnic disparities in health.

The Safety Net

The safety net will continue to play an important role for many people despite the benefits rolled out by the ACA.  Even if the Medicaid expansion were implemented in every state, an estimated 20 million people would remain uninsured – the ACA does not provide universal coverage. Of those approximately 20 million, the Urban Institute estimates that 37 percent will be eligible for Medicaid but not enrolled; 25 percent will be undocumented immigrants; 16 percent will be exempt from the personal responsibility provision to buy health insurance because it is unaffordable; 15 percent will not be eligible for subsidies and will choose to not buy health insurance; and 8 percent will be eligible for subsidized coverage in the Exchanges but not enroll.[8] These estimates were calculated before the Supreme Court ruling, so additional people will remain uninsured if some states don’t take up the Medicaid expansion.

People who are uninsured or underinsured need the protection of a strong safety net – something to catch them if they need health care when they cannot afford it.  The safety net will continue to play this important role in our communities. Recognizing this need, the ACA includes provisions to bolster the safety net such as strengthening non-profit hospital partnerships with communities. Non-profit hospitals have always played an invaluable role in the safety net. The ACA elevates that role by spelling out some specific expectations of these hospitals to address community needs, thereby bringing a new level of transparency to these institutions. Under the ACA, non-profit hospitals are now required to have financial assistance policies and publicize them to the community where they reside. They are also required to make reasonable efforts to determine if a patient qualifies for financial assistance before engaging in extraordinary debt collection practices, such as placing a lien on a patient’s home. The expectation that non-profit hospitals provide benefits back to the community are justified in part by the fact that they don’t pay federal income taxes, and are generally exempt from state and local property, income, and sales taxes, although some states and municipalities determine tax exemptions using their own tests.

Similar to insurance reforms and other innovations included in the ACA, the nonprofit hospital provisions were based on leading state laws around the country. Now these critical protections will set a floor for all states and enhance access to critical service providers.

The chasm ahead

As a result of the Supreme Court ruling, state level politics will determine the insurance status of low-income populations. By saying ‘no’ to Medicaid expansion, they risk the health of some of their most vulnerable constituents and walk away from billions of federal dollars.[9] The population at greatest risk will be those who are between a state’s own current Medicaid eligibility level and 100 percent FPL. For those earning less than 100 percent FPL, there are no real opportunities for insurance coverage. While this group will not be subject to the individual mandate penalty, they will be left uninsured. Those between 100 and 133 percent FPL will qualify for subsidies in the Exchange. However, these subsidies may not be enough to make insurance affordable and the benefits may be less robust.

If a state opts not to expand Medicaid, it will place significant strain on the safety net across their communities. Hospitals’ emergency departments and community health centers will find themselves juggling even greater demand for services. The inequalities in health access between states will grow.

Consumers march forward

The vast majority of Americans will benefit from the upheld portions of the ACA. We expect more preventive care, fairer play from insurers, and more affordable options through Exchange subsidies. However, the Supreme Court decision potentially set us back in our journey to becoming a nation where income doesn’t determine health status. In fact, by removing the Medicaid “stick” and allowing states to choose whether to take up the expansion for people under 133 percent of the poverty level, there’s an increased chance that income will determine health status. The Southern states, which have more poverty and low-income people of color, also have some of the most vocal governors threatening not to expand Medicaid. Where does this leave us? It is a major step backwards. In the words of Dr. Martin Luther King, Jr.: “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.” Consumer advocates will continue to push for Medicaid expansion in every state and make efforts to strengthen the safety net, but this is more than a health care issue – it is a civil rights issue.

We expect those in more progressive states to forge ahead with implementation and reap the benefits of expansion through lower uninsured rates and greater access to care. Those who reside in more conservative climates will face a steep but winnable – on both moral and economic grounds – climb to health coverage.

The history of the Medicaid program tells us that states end up joining the bandwagon sooner or later because it makes sense for their consumers and their economies – better consumer health, healthier communities. Despite Medicaid being a voluntary program, all states joined by 1982. Finally, the uninsured do not simply evaporate, they shift to and rely on a different space in the health care system – the safety net. For many states, it is a calculation of where they will support the uninsured – in emergency rooms or practitioner’s offices.

In the coming year, consumer advocates will continue to raise their voices about the potential negative implications for consumers, and we will continue to celebrate all we’ve gained.

Eva Marie Stahl, PhD, MPA, and Anna Dunbar-Hester, JD, MPP, work as policy analysts at Community Catalyst, a national non-profit consumer advocacy organization dedicated to quality affordable health care for all. Community Catalyst works in partnership with national, state and local consumer organizations, policymakers, and foundations, providing leadership and support to change the health care system so it serves everyone – especially vulnerable members of society.

At Community Catalyst, Eva focuses on legislative and legal challenges to the ACA, the establishment of Exchanges, and Essential Health Benefits. Prior to joining Community Catalyst, Eva completed her PhD in health policy at Brandeis University.  During that time she worked for the Institute of Medicine (IOM) and for the Agency for Health Care Research and Quality (AHRQ).  She holds a MPA from the Lyndon B. Johnson School of Public Affairs and a BA from Colgate University.        

Anna’s work at Community Catalyst is focused on state and federal laws regulating nonprofit hospitals, including requirements to be responsive to community needs for affordable access to hospital care and participate in public health strategies. Prior to joining Community Catalyst, Anna worked for a Massachusetts State Senator as legal counsel and policy advisor. She holds a JD and MPP from the University of Minnesota and a BA from Bryn Mawr College.

[1] O’Donnell, Christopher. “Sarasota Schools get $800,000 Insurance Rebate,” Herald-Tribute. Aug. 6, 2012. Available at

[2] “The 80/20 Rule: Providing Value and Rebates to Millions of Consumers.”

[3] Bernstein, Nina. “Insurer Drops Fight to Keep Rate Filings From Public,” New York Times. Oct. 25, 2011. Available at

[4] Nguyen, Quynh Chi and Alice Dembner. “Promoting Racial and Ethnic Health Equity through Exchanges,” Community Catalyst, March 2012. Available at

[5] Angeles, January. “How Health Reform’s Medicaid Expansion Will Impact State Budgets,” Center on Budget and Policy Priorities. July 25, 2012. Available at

[6] Id.

[7] Kenney, Genevieve, et al. “Opting in to the Medicaid Expansion under the ACA: Who Are the Uninsured Adults Who Could Gain Health Insurance Coverage?” Urban Institute. August 2012. Available at

[8] Buettgens, Matthew and  Hall, Mark A. “Who Will be Uninsured After Health Insurance Reform?” Urban Institute, March 2011. Available at

[9] “Supreme Court Ruling on Medicaid: Challenges and Opportunities for State Advocates.” Community Catalyst. July 2012. Available at

Health Care in Massachusetts 2012: The Way I See It

 By Governor Deval Patrick

This month, we celebrate the sixth anniversary of Massachusetts health care reform.  Our reforms are an expression of values, a codifying of our belief that health is a public good and that everyone deserves access to affordable, high-quality care.

Like President Obama’s Affordable Care Act, we took a hybrid approach, relyingmainly on private insurance provided through the workplace, with varying degrees of public subsidy, depending on a person’s ability to afford private insurance.

It’s working.  Today, more than 98% of Massachusetts’s residents have health care coverage, including 99.8% of children. No other state in America can touch that. More companies offer their employees insurance today than before the bill was passed.  More than 90% of our residents have a primary care physician and four out of five have seen their primary care doctor in the last year.  Emergency room visits for primary care are down and spending on the uninsured and underinsured has dropped by nearly half.

We’re healthier, too.  For example, because of access to screenings, we’ve seen a 36% decrease in cervical cancer in women.

All of this while adding about 1% to state spending on health care.

Those are the numbers; but policy matters most when it touches people.  And this policy touches people.I remember meeting a young woman named Jaclyn Michalos, a cancer survivor who got the care she needed through the Commonwealth Connector, our version of the Exchange. She had no affordable way to receive the care she needed before Massachusetts’ health care reform – it saved her life.  People no longer have to fear having their insurance cancelled when they get very sick and need it most, or that a serious illness will leave them bankrupt.  Health care reform in Massachusetts is helping people in profound ways.

Our next challenge is slowing the growth in health care premiums.  This is a national problem, one neither caused by our reform nor unique to Massachusetts.  Spending on health care makes up 18% of all spending in the United States and is projected to reach 34% by 2040 if costs continue to grow at historic rates.  In recent years, growth in health care costs has outstripped growth in GDP even as the share of Americans with health insurance has fallen.  In many ways, this will be harder to solve than universal access.  But we need to solve it.

As spending on health care programs and emergency care grows, it weakens our ability to compete and slows job growth.  In budgets everywhere – families, businesses and governments alike – spending on health care comes at the expense of spending on education and other basic needs. Left unchecked, health care costs threaten our fiscal integrity and our ability to provide future generations with the services we have enjoyed.

Just as we in Massachusetts have provided the national model for universal access, I believe we are on track to crack the code on cost control.

We have already seen significant progress.Two years ago, I directed the state’s Commissioner of Insurance to disapprove excessive premium hikes.  While an admittedly blunt tactic and not in and of itself a long-term solution, it was a necessary step to galvanize the market to act.  Massachusetts is home to an innovative, world-class health care community and they have responded with real solutions.

Hospitals and insurance carriers have reopened their contracts and cut rate increases, in some cases by more than half.We’ve created limited network health plans to give consumers opportunities to get great care in neighborhood settings at lower cost.  There are new plans coming out tailored for small businesses that promise to be as much as 20% cheaper than current rates.  Our new Wellness Track program offers a 15% rebate for certain small business owners who take part in the wellness program.  We are also ending administrative duplication by requiring common codes and forms from insurers and providers.  And with the help of the Affordable Care Act, more and more providers are piloting medical home or accountable care models that manage wellness for the whole person, and deliver both better care and more cost-effective care.

All of this is making a difference.  In the last two years, average premium increases have since dropped from over 16% to less than 2% today.Our focus now is on making these gains last.

There are a number of strategies we are pursuing, including putting an end to the “fee-for-service” model wherever practicable, to stop paying for the amount of care and start paying instead for the quality of care.  We need to empower doctors to coordinate patient care and to focus on wellness rather than sickness.

We are working with our health care community to accelerate this transition to innovative models for delivering health care, in which incentives are realigned to reward integrated care that emphasizes wellness and lowers costs for everyone.  For example, Blue Cross Blue Shield has persuaded some of the state’s biggest hospitals and thousands of doctors to accept a fixed amount each month per patient rather than receive payment for each individual procedure.

In state government, by using these new tools and new approaches to how we pay for care, we will avoid nearly a billion dollars in cost increases in this fiscal year and another several hundred million more next year.Our goal is for integrated, cost-efficient caregiving to predominate throughout Massachusetts by 2015.

This is a complex challenge but we are making great progress and will be successful in the end.We have no choice.  For us, and for this country, solving the health care challenge has everything to do with fulfilling our generational responsibility – that old-fashioned idea that each of us in our time must do all we can to leave things better for those who come behind us.  This challenge belongs to all of us, from whatever party or no party.  We owe it to our future to get this right.

Discussion with Mr. Aron Boros, Commissioner of the Massachusetts Division of Health Care Finance & Policy

By Phillip Rakhunov



On August 22, 2011, the Patrick-Murray Administration announced the appointment of Áron Boros as Commissioner of the Division of Health Care Finance and Policy.  Since 2008, Mr. Boros has served as Director of Federal Finance for state’s Office of Medicaid.

In his capacity as Director of Federal Finance at MassHealth, Mr. Boros has been engaged in key initiatives, including MassHealth and federal expenditures.  Over the last several years, he has been deeply involved in a variety of health care payment initiatives, including the MassHealth Section 1115 Medicaid waiver and and Health Safety Net programs.

Mr. Boros is also an attorney and received his J.D. and Masters in Public Policy from the University of Michigan. Prior to joining the Office of Medicaid, Mr. Boros worked as an Associate in Foley Hoag’s Boston Office, where he researched and implemented strategic initiatives for health care industry clients. His work included initiatives related to chronic disease management, health information technology, and evidence-based medicine. In this role, Boros became an expert on Medicaid and Medicare regulatory issues, including national coverage decisions, coding and payment concerns. Mr. Boros also has experience in a hospital setting, having served as a Law Clerk at Trinity Health’s Saint Joseph Mercy Hospital in Michigan.


Mr. Boros, please tell me about how you became interested in public health?

My dad is a doctor.  He is an oncologist, and oncology plays a particularly important role in our society.  It’s exciting medicine, it’s challenging medicine, and for many reasons: not just the science of it, but also the human aspect of it.  I always knew, however, that I did not want to spend fifteen years in [medical] school after high school, so ultimately I did not think that medicine was the direction I wanted to go in.

What really inspired me to go back to graduate school was– and this will date me a little bit – it was the Supreme Court election case of Bush v. Gore.  Yes, Bush v. Gore drove me to law school.  Even then, I knew I didn’t really want to be a lawyer in the long term, but I also knew I wanted more tools than a policy degree would give.  So, I went to the University of Michigan for a joint program in Law and Public Policy, hoping to develop a career in healthcare policy and policy making.  So fast forward, and this is a dream job for me.  The Division of Health Care Finance & Policy really straddles both those worlds.  It’s deep in the weeds on data analysis, data collection, and ultimately in really drawing a story out of the data at the lowest level.  At the same time we are involved in helping shape Massachusetts state policy and the interactions between federal and state policy at the systematic level.

I want to ask you a few questions about your background, going back to your years at Amherst College.  During your time at Amherst, were you already considering going into public service?

I was.  I always knew that there was an underlying social mission for me that was going to be more than, for example, investment banking.  But, back then, I certainly didn’t know what that was going to be.  My first job out of college was at a graphic design firm, but I always had that sense that giving back is important.  I’ve been given a lot of opportunities and I’ve been blessed with certain advantages in life, and I felt that there was a responsibility that came along with that.  I can’t say that I knew, when I was graduating from Amherst, exactly how that would play out – but it’s no surprise to me that I ended up in this kind of role.

Tell me how your legal education at the University of Michigan impacted your career.

While I was in law school, I did two really meaningful things that influenced my career path.  First, I worked for the General Counsel’s office at the Trinity Health’s Saint Joseph Mercy Hospital in Michigan.  It was a really interesting look into what healthcare law really is.  I think that a lot of law students don’t understand how much of healthcare law is transactional, as opposed to things like end of life decisions, or policy about minimum credible coverage. When you look at what hospitals are actually doing day-to-day and what they need legal advice about, you realize that most health law is transactional.

Take a big, integrated health care system: hospitals, physician groups, and other sites of care like community health centers . Because they are big employer, they have a lot of labor and employment issues. They are land-owners, so they have real estate and capital assets issues. Of course mergers and acquisitions and contracting have unique health law concerns, such as compliance with self-referral and antitrust laws.  Contracting also involves increasingly complicated relationships between hospitals, physician groups, and other kinds of ambulatory care providers and long term care providers, not to mention health plans.  Other industries aren’t regulated to the same extent as health care. Here we have special rules surrounding health care arrangements because of Medicare and Medicaid, for example.  So, every merger, every contract, has another layer of complexity.  The legal clerkship that I did at the Mercy Hospital was first time I heard about Stark laws; first time I heard about anti-kickback laws.

The other really important thing that I did when I was in law school is that I worked for the graduate employees union.  I was on the bargaining team that represented graduate employees in a couple different roles.  And that was also a really an important part of my career development.

After law school, you spent some time in the private sector at the law firm of Foley Hoag?

Yes. For several years after law school I worked at Foley Hoag LLP, in their government strategies group.  There, I got my education from Nick Littlefield and his team about how the world really works with respect to policy making and the way things get done in Washington.  I also did a lot of pricing work, working with payers.  For example, some of our clients had medical products of one kind or another, and we worked with Medicare and Medicaid about how those products would get paid for.  After Foley, I left to go work for the Patrick Administration in the Medicaid office.

Tell me about your work with the Medicaid Office. 

At the Medicaid Office, I worked on the financial aspects of the federal/state relationship.

And, is that the program known as the MassHealth?

So, you can decide how much you want to get into the weeds on this, but it’s probably good for people to understand that MassHealth is a specific state program that provides health care services.  Medicaid is the state-federal partnership that overlaps most, but not all of what MassHealth does. For example, Commonwealth Care is also part of the Medicaid Office.  So is the Health Safety Net that we run here at the Division of Health Care Finance & Policy and the Medical Security Program run by Division of Unemployment Assistance.  The Office of Medicaid is bigger than just MassHealth.

It is clear that you have had quite a diverse education and professional experiences; please tell me how these experiences have come together for you?

It all comes together as kind of building blocks:  in law school, I learned textbook law; in policy school, I learned textbook economics and statistics; at the Hospital, I learned what health law really was; and with the union, I started my education in politics and learned about power of negotiation and bargaining; then, I went to work for Nick [Littlefield at Foley] and learned how policy making and politics happen in the real world at the State and Federal level; and then went to work for the State and really got to understand how the sausage gets made.

What led you to begin your public service with the State Medicaid Office?

Primarily, it was that Massachusetts continues to be a leader in taking a hard look at the health care system and making it better.  Governor Patrick is upholding a long tradition of leadership on health care issues that stretches back for at least 20 years. Lots of people deserve credit for laying the foundation that the Governor is building on, including Governor Dukakis, Senator Kennedy, and Mitt Romney (whether he acknowledges it or not).

I want to ask you about a couple of the initiatives that I understand you worked on while you were at the Medicaid Office and which I believe are now a part of your areas of responsibility.  One that you mentioned earlier is the Health Safety Net and another that I wanted to ask about is the Essential Community Provider Trust Fund.

The Health Safety Net is a program run by my office that pays hospitals and community health centers for care that otherwise would be uncompensated.  This covers people who either are uninsured or under-insured for the services provided by the hospital.

Federal Health Reform (the Affordable Care Act) will have a significant impact on the Health Safety Net because of the way it changes the coverage market.  Over the next couple of years, until those federal rules come into effect, we will be taking a hard look at how the Safety Net fits into everything else that is going on with the implementation of the ACA in Massachusetts.

Is the Safety Net program unique to Massachusetts?

Yes.    It’s a claims-based system for paying for uncompensated care, which I believe is unique among states.

What is your take on the recent conversations about cost containment and payment reform?

The Patrick administration, from the Governor and the Secretary [of Health and Human Services], down to agencies like ours, has proposed an approach that achieves cost containment by promoting  integration of the delivery system and improvement of the experience of care and the delivery of care.  Instead of a hospital and a physician never speaking to each other and having their own isolated connections to the patient, we want to build those connections. That way, the physician knows when a patient goes to the hospital and manages some of their care in the hospital; for its part, the hospital communicates about discharge back to the physician and helps coordinate follow-up care to ensure the patient doesn’t end up back in the hospital.

The goal is to use the transformation of the delivery system to drive higher-value care –  better quality, and lower cost – by taking advantage of the improvements that you can get by breaking down some of these walls.  The idea is appealing, and it’s easy to string together some sentences about it – but it’s hard to do in practice.

If you know nothing else about the big picture of health care policy, take this: the [Centers for Medicare & Medicaid Services] just released data showing that in Massachusetts, per capita healthcare expenditures for every man, women and child are $9,278 per year.  That means that, on average, my family of three is paying almost $30,000 a year for health care expenditures.

This figure includes Medicare, Medicaid, out of pocket, and insured costs that either you or your employer are paying in premiums, distributed among the population.  This is the highest per capita cost of all of the states, in the highest per capita cost country in the world.  We can reduce those costs.  It will be hard, it will really take change to accomplish this, but it is possible and there is no reason for us to be the most expensive health care system in the world.

You’ve been in this job now for six months or so.  What has surprised you the most coming into this particular position of the Commonwealth?

There are a lot of hard choices to be made about lowering costs and improving quality, and there are lots of complex interactions between various stakeholders inside and outside of government.  What has surprised me the most is the high level of collegiality in the face of those hard choices and difficult tradeoffs. I expected there to be more contentiousness between the parties.  When push comes to shove with the cost containment legislation, that may change.  But I have been really impressed by the level of discourse inside and outside the Statehouse, and how everybody really is taking this problem seriously.

That said, the choices and challenges will only get harder and I encourage people who are thinking about this to continue to be bold while maintaining civil discourse, in order to push the envelope of what we can accomplish.

As you know, we are coming into what is anticipated to be a very heated election year, and I’m wondering whether the political climate impairs your ability to do your job of analyzing the data and trying to make decisions based on the numbers and economics, as opposed to politics.

The Division has, and deserves, a strong reputation for providing objective analysis.  I don’t see that changing.  We can’t control what different people try do with our analysis, but our reputation speaks for itself: we stick to our best understanding of what the data tells us.

Is there one issue that you would like to bring to the forefront of the readers’ minds?

No matter what happens, there is going to be a lot of change in the health care system in the next few years.  Your clients are going to need to invest in understanding value.  What I mean by that is that they are going to be asked more and more to prove that their piece of the heath system provides high-quality care that actually makes people healthier and happier at a reasonable price.    Attorneys who understand that communicating about value is going to drive a successful business model will be positioned to best support their health care clients.  To be a little bit more concrete, right now we are talking about cost and payment systems, integrated care.  The conversation of tomorrow will be quality measurement, outcome measurement, and really proving that the money spent is delivering results. I anticipate that attorneys who understand that dynamic are going to be in great demand.

Conducted on February 29, 2012

An experienced business litigator, Phillip Rakhunov represents financial institutions, health care organizations, investment professionals, fiduciaries and various other business entities in a broad array of business disputes, including securities fraud litigation, enforcement of restrictive covenants, and high stakes contract litigation. Mr. Rakhunov regularly appears in state and federal courts, as well as before arbitration and mediation tribunals. Fluent in Russian, Mr. Rakhunov also represents Russian-speaking clients and other clients in need of his unique background and language.

Mr. Rakhunov dedicates a considerable portion of his time to a wide array of pro bono work, including representing parents in international child abduction matters, representing victims of domestic violence in obtaining 209A restraining orders, and representing non-profit organizations in contract disputes, among others.

While attending law school, Mr. Rakhunov served as a judicial intern to The Honorable Patti B. Saris of the United States District Court for the District of Massachusetts.