By Bob Hennelly

The deadline for the City Council to change its Administrative code that covers how the city provides healthcare insurance for its active-duty workforce and retirees came and went last month without the Council opting to act after a marathon Jan. 9 public hearing where scores of city retirees blasted the proposal.  

Meanwhile, the Adams administration and the Municipal Labor Committee are closing in on a deal with Aetna to provide a Medicare Advantage plan for the city’s 250,000 retirees, according to Harry Nespoli, chairman of the Municipal Labor Committee, and president of Teamsters Local 831, which represents the Department of Sanitation’s rank and file workforce.

“We are still working on it,” Nespoli told Work-Bites. “We got the contract written up and our official people are all looking it over right now — we are just going to continue moving towards it.” Nespoli added that the MLC had made progress on getting Aetna to further reduce the number of procedures that would require a pre-authorization.

“We have eliminated a lot of the pre-authorizations already and we want to continue doing that because that is the biggest gripe with Emblem [the current provider], and from what we are hearing these pre-authorizations take too much time to get the o.k. for something,” Nespoli said. “If you look throughout the country, Medicare Advantage is the way it’s going for a large group of people. It’s just that you have to make sure that you have the right contract, and you justify the needs of your members---who have had good medical coverage and which we don ‘t want see cheapened now.”

An Adams administration source described the negotiations as ongoing, and a United Federation of Teachers source confirmed an earlier Crain’s New York report that UFT was “requesting an independent entity to conduct pre-authorization reviews for medical procedures in addition to Aetna’s reviews.”

The MLC’s controversial embrace of Medicare Advantage is the outgrowth of deals it cut with the de Blasio administration to find billions of dollars in healthcare costs savings as unions settled well over 100 labor contracts that Mayor Bloomberg had left unsettled for years. And multiple union sources confirm Mayor Adams finds himself in a similar fix with union contracts lapsed and the understanding that no progress can be made on any of them without a resolution of the healthcare question.

FRAUD FOR PROFIT?

Opponents of Medicare Advantage, including the NYC Organization of Public Service Retirees, cite a growing cloud surrounding Medicare Advantage following investigative reports in the New York Times and Kaiser Health News that documented the private plans were ripping off the federal government while restricting retirees access to critical medical care through pre-authorizations. In October, the New York Times published the headline “The Cash Monster Was Insatiable: How Health Insurers Exploited Medicare for Billions-By next year half of Medicare beneficiaries will have a private Medicare Advantage plan. Most large insurers have been accused in court of fraud.”

“Anthem, a large insurer now called Elevance Health, paid more to doctors who said their patients were sicker,” the Times reported. “And executives at UnitedHealth Group, the country’s largest insurer, told their workers to mine old medical records for more illnesses — and when they couldn’t find enough, sent them back to try again.”

The newspaper continued. “Each of the strategies — which were described by the Justice Department in lawsuits against the companies — led to diagnoses of serious diseases that might have never existed. But the diagnoses had a lucrative side effect: They let the insurers collect more money from the federal government’s Medicare Advantage program.”

According to the Times “eight of the 10 biggest Medicare Advantage insurers — representing more than two-thirds of the market — have submitted inflated bills, according to the federal audits. And four of the five largest players — UnitedHealth, Humana, Elevance and Kaiser — have faced federal lawsuits alleging that efforts to overdiagnose their customers crossed the line into fraud.” All totaled, the Times reported the additional diagnoses led to $12 billion in overpayments in 2020, according to an estimate from the group that advises Medicare on payment policies — enough to cover hearing and vision care for every American over 65.”

In June, CVS Health, the parent of Aetna, the insurer the city is currently negotiating with, disclosed to  investors its practices were under investigation by the Department of Justice. (At the Jan. 9 public hearing of the New York City Council’s Civil Service and Labor Committee, Council Member Charles Barron (D-Brooklyn) asked a panel representing the Adams administration if the city was aware of the ongoing DOJ probe that had been reported in the Times back in October.

“I am not sure what that investigation would be about, but we look into it further,” Daniel Pollak, first deputy Commissioner of the Office of Labor Relations responded. .

“A central concern about the capitated payment model used in Medicare Advantage is the incentive to inappropriately deny access to, or reimbursement for, health care services in an attempt to increase profits for managed care plans,” according to an analysis by the Office of Inspector General for the U.S. Department of Health and Human Services. 

For several years now unions across the country have signed up with Medicare Advantage programs being offered by the for-profit insurance industry.

WORKS FOR US

Dudley Burdge is a long time CWA member and a Commissioner on the New Jersey State Health Benefits Commission representing the New Jersey AFL-CIO on behalf of the state’s public worker unions. In a text exchange with Work-Bites, he described his state’s experience with an Aetna Medicare Advantage plan over the last five years.

“Medicare retirees have an option to stay in a traditional Medicare Plan but the vast majority are in Medicare Advantage,” Burdge wrote. “The coverage for both is identical.  Unlike most individual Medicare Advantage plan our plan pays the bill for any willing provider that accepts Medicare for payment. We’ve had very few complaints.  Savings have been significant and real (actual reduction in cost.)”

He continued. “I believe, as with all Medicare Advantage plans, there's a lot of upcoding going on (giving people more significant diagnosis so that decapitation is increased to account for a diagnosis that should require more treatment) but I don't actually have any proof of it for our particular plan. My biggest concern would be over aggressive use of prior authorization and effectively denying folks treatment, but we don't see any evidence of that.”

For months, the Adams administration and the Municipal Labor Committee warned of dire consequences if the New York City Council did not change the Administrative Code which covers how the city provides healthcare insurance for its active and retired civil servants. In mid-December, Martin Scheinmann, the arbitrator working for the city and the MLC, issued what was cited as a binding “decision” that included January deadlines by which time the City Council would have to vote to change the code in order to prevent retirees from losing their existing healthcare options as the Adams administration moved unilaterally to impose Medicare Advantage.

The Adams administration and MLC maintained the change was necessary to preserve health care options for retirees as the city implements a Medicare Advantage type program, which they say would save the city $600 million a year. The Adams administration and the MLC also claimed time was of the essence because its Health Stabilization Fund, created in 1984, used to cover healthcare obligations and help defray premium costs, was running out of money. This, they reasoned, put at risk the premium-free health care that active and retired city employees have continued to enjoy over a period when other public employees started to have to pay for their healthcare.

Last year, in hopes of shoring up its financial position, the city said that City retirees could opt to keep their current health coverage if they didn’t want to participate in its Emblem/Anthem Medicare Advantage plan, by paying a $191 premium to continue their existing GHI senior plan.

That set off a major backlash with retirees asserting that their premium free healthcare was a form of deferred compensation that the city could not rescind.  The ad hoc group NYC Organization of Public Service Retirees mobilized quickly and went on  to win two reounds in state court challenging the city's implementation of its healthcare reset. Litigation continues.

After the City and the MLC’s setback in court, their Plan B was persuading the City Council to change the Administrative Code which they reasoned would provide the flexibility needed to the city’s unions to continue providing multiple plans. The MLC itself was divided over changing the code change with DC 37, the UFT, Teamsters 237 and CWA 1180 supporting the change while DC 37 Retirees, DC 37 Local 2507, the UFOA, UFA and the Professional Staff Congress, representing CUNY staff all opposed it.

LOST THE NARRATIVE 

At the Jan. 9 public hearing Greg Floyd, president of Teamsters Local 237, testifying in support of the administrative code change, told the Council panel that opposition to the MLC efforts to reset healthcare got traction with retirees as a direct consequence of a lack of transparency by the de Blasio administration.

“From the very beginning when the questions came up, we wanted to put something forward to tell everyone exactly what was going on and it was the last administration, the de Blasio administration who thought they could just push this through and did not talk about it –so they didn’t agree, and they wouldn’t allow us to go out and explain exactly what was going on from the beginning,” Floyd said.  “So, one you lose the narrative and all of the other factors come in and people dig in. It’s difficult—if not impossible to refute everything that’s gotten into everybody’s head and there understanding of what’s going on. And we never caught up and we have not caught up now.”

Council Member Carmen De La Rosa (D-Manhattan) chair of the Civil Service and Labor Committee confirmed after that hearing that the Administrative Code change has been officially “laid aside”.  She described the retirees' successful organizing efforts as “Herculean” that included “making phone calls, emailing constantly calling and showing up.” 

“Obviously, there is a looming problem that we will have to deal with as a Council whether it is by legislation or if we deal with it in the budget process—or deal with it if the administration chooses to move on with Medicare Advantage,” De La Rosa said during a phone interview.

De La Rosa continued. “The hearing process provides a platform that lends itself to getting clarity and getting to ask questions—that being said there are so many questions and there’s real concerns in the Council about the implications of changing the Administrative Code and the Medicare Advantage will have on some very vulnerable city workers--so at this moment there is not an appetite for this legislation by this body.”

“The City Council sent a clear message, they were concerned what would happen to retirees if the Mayor took away our healthcare choices,” wrote Marianne Pizzitola, retired DC 37 Local 2507 FDNY EMT and president of the NYC Organization of Public Service Retirees. “Passing a bill to truly give retirees that choice and protection will be consistent with their goals.”

NYCOSR has circulating a draft of such a bill internally within the City Council that would mandate “the city shall not diminish the health insurance coverage provided to city retirees and their dependents.”

BROKEN TRUST?

Joshua Freeman, noted labor historian and author, is a distinguished professor emeritus of history at Queens College, the Graduate Center, and the School of Labor and Urban Affairs, City University of New York. During a phone interview with Work-Bites, Freeman said the passions ignited by the retiree healthcare debate stem from some of expectations people had who decades ago opted for public employment.

“Traditionally, I am talking about going all the way back to the New Deal and the 50s and 60s, generally speaking private sector jobs were better paid that public sector jobs but one of the great attractions to public employment was steady employment-the expectation you would not be laid off and the benefits, that was kind of the tradeoff people thought they were making, a stable job and having an assured retirement,” Freeman said. “And now you can’t have it or maybe you’ll have to pay for it, people get really upset.”

Freeman continued. “Look at a union like DC 37, those people in general made fairly modest salaries and fairly modest pensions and a lot of them are struggling to get by even with their pensions and social security, so it is a real hot button issue for people because it so directly effects how they are going to be able to live and also a sense of betrayal. I thought I had this deal and now suddenly the city, maybe my own union leaders are telling me no—it has to be a different deal.”

For city labor union leaders there’s a real dynamic tension between the interests of their active-duty members and retirees, who with the exception of the UFT and PSC, are not even members of their legacy unions. This created the sense of a lack of representation for the tens of thousands of retirees on the outside looking in, said Freeman.

“This is a very unusual situation because you have had the creation of this new entity— NYC Organization of Public Service Retirees---that’s outside the union structure,” Freeman said. “So, some people think of that as their representative. In some case in DC 37, the Retirees’ Association of DC 37, the official organization was against the Administrative Code changes.

Freeman continued. “The New York City labor leaders who support this plan, they say their plan is different, that it is not Medicare Advantage but Medicare Advantage Plus—it’s going to be a good plan but my own personal opinion, and I am going to use strong language because I really feel this--- it’s shameful that New York City union leaders are  contributing to the privatization of Medicare, one of the greatest historic accomplishments that the union movement helped achieve and to undermine it by pushing for the privatization of it when the  when the whole thing is being looked at again—I just do. Even if there are short term advantages, as a policy I just don’t get it.”