by Mark Friedman on Monday, Mar. 23, 2009 12:00 am
Bowman left the Insurance Department at the end of 2008 and began work Jan. 12 as United HealthCare's director of regulatory affairs for Arkansas and Tennessee.
Sam Perroni, an investor in Arkansas Surgical Hospital of North Little Rock and one of its attorneys, is appealing the September ruling in which Bowman interpreted the state's "any willing provider" legislation in a manner favorable to insurers and costly to the state's three surgical hospitals. He maintains that Bowman had a conflict of interest that should have disqualified her from hearing the case.
Perroni also said in the filings in Pulaski County Circuit Court that United or its attorneys from the Mitchell Williams law firm of Little Rock "paid directly or reimbursed expenses relating to Bowman's travel for certain out of state meetings."
Bowman strongly denied last week that she did anything wrong in handling the surgical hospitals' complaint against United HealthCare of Arkansas and the other large health insurers in the state, Arkansas Blue Cross & Blue Shield and QualChoice of Arkansas.
The surgical hospitals don't "have the law or the facts on their side and they're grasping at straws," Bowman said. She said the surgical hospitals were attacking her credibility and integrity "because they don't have anything else."
Nick Thompson, an attorney for Mitchell Williams, took Bowman out to eat several times in 2007 and 2008, according to documents obtained by Arkansas Business. Thompson, too, said the surgical hospitals' allegations "are totally without merit."
The documents show that Thompson had lunch with Bowman five times starting in February 2007 – a month after Arkansas Surgical Hospital filed its complaint with Bowman – through July 16, 2008.
The lunches occurred at places such as the Country Club of Little Rock and Copper Grill and sometimes included Bowman's deputy commissioner, Dan Honey. Thompson's expense report listed the reason for most of the lunches as discussion of the "MAWG" settlement, which stood for Market Analysis Working Group of the National Association of Insurance Commissioners. Bowman was vice chair of the NAIC's southeastern zone.
The expense reports show the law firm billed the meals to its client, United HealthCare.
At that time, United HealthCare was facing allegations that it violated state laws involving claims-payment services. Arkansas helped negotiate the September 2007 settlement in United agreed to pay $13 million to 36 states and to improve its claims-payment system.
Seven days after Bowman ruled against the surgical hospitals, Bowman met Bill Woodyard, another Mitchell Williams lawyer, and a third person for dinner while attending a NAIC meeting in Maryland. The expense report shows that insurance business was discussed during the dinner and the $264 tab was listed as business development for the law firm.
The meetings and meals "had absolutely nothing to do with [the surgical hospitals'] complaint and nothing to do with the 'any willing provider' issue," Thompson said.
Still, "the additional documentation that we've received makes this look very, very troubling," Perroni told Arkansas Business last week.
Bowman said nothing improper was discussed during the meals, and she said she had also attended a dinner paid for by Arkansas Surgical Hospital.
On Aug. 20, 2007, Bowman and three others from her staff attended an "AWP dinner" at the surgical hospital, according to Bowman's calendar, which the Arkansas Insurance Department released to Arkansas Business under the Freedom of Information Act. The calendar entry said Lynn Weeks, the surgical hospital's CEO at the time, and 18 others attended the dinner.
Perroni couldn't be reached for comment on that event.
Little Rock attorney Chuck Banks, who is representing Bowman, said in a statement to Arkansas Business last week that she did an "exemplary job" as insurance commissioner.
Bowman "conducted a full and complete hearing, permitting the parties to make a complete record by the presentation of evidence, testimony, documents, and objections," Banks said in the statement. "She fulfilled her oath and performed her duties in a legal, ethical, and diligent manner without arbitrary, capricious, or abuse of discretion utilized in the procedures or the final order."
Banks said that he believed her order will be upheld. A spokesman for United HealthCare said the insurance company is still gathering facts about the case, but stands behind Bowman.
"United HealthCare remains firmly of the belief that Commissioner Bowman's decision was fair, unbiased and correct on the merits," said spokesman Roger Rollman in a prepared statement. "And [United HealthCare] fully expects her decision to be upheld by Arkansas courts."
In January 2007, the Arkansas Surgical Hospital filed a complaint with the Arkansas Insurance Department seeking clarity on the Patient Protection Act that went into effect in 2005.
The Arkansas Surgical Hospital complained it was being paid less by insurance companies than full-service hospitals in Little Rock performing the same procedures. That disparity is believed to have cost the surgical hospital millions of dollars.
The Patient Protection Act, commonly known as "any willing provider," opened the preferred provider networks in Arkansas to medical providers that had previously been excluded even though they were willing to accept the same reimbursement rates as in-network providers.
Arkansas Surgical Hospital had argued to Bowman that, under the law, insurance companies should have some uniform methodology for setting the reimbursement price for a procedure.
"We never said we should be paid the exact same amount," Perroni told Arkansas Business in May 2008. "We just said under the law, they are required to pay us the exact same way."
The Arkansas Surgical Hospital named United HealthCare, QualChoice and Arkansas Blue Cross & Blue Shield in its complaint.
The insurers countered that health insurance premiums would rise if all hospitals were paid the same.
The surgical hospital wasn't sure exactly how much less it was being paid than the full-service hospitals because it was never allowed to see the contracts.
Bowman found that the contracts contained confidential information and wouldn't release them.
Still, Bowman found in December 2007 that AWP didn't "require identical payment to hospitals for similarly performed services."
The Arkansas Surgical Hospital, joined by the Surgical Hospital of Jonesboro and HealthPark Hospital in Hot Springs, appealed that ruling
In April 2008, Bowman held more hearings. She issued her second ruling in September and found once again in favor of the insurance companies.
On Oct. 15, the three surgical hospitals sued Bowman in Pulaski County Circuit Court to overturn her ruling. Initially, the hospitals didn't question whether Bowman should have recused herself from the case.
But after Bowman announced that she was leaving the Insurance Department and would take a job at United, it set off alarm bells with Perroni.
"These facts suggest that, prior to her entry of the Order, the Commissioner may have faced an irreconcilable conflict of interest requiring her disqualification," Perroni said in one of his motions. "Whether the Commissioner was disqualified must be decided on a showing of an objective appearance of impropriety or a showing of actual bias. The facts known at present strongly suggest that both exist."
He said that Bowman knew her term would expire at the end of 2008 and that she would need another job.
On Oct. 26, Bowman e-mailed her resume to Thompson, who then sent it to Anita Bachman, United's regional vice president for regulatory affairs.
Bowman "believes she has contacts among many state insurance commissioners and staff that would be beneficial to an insurer," Thompson wrote in the e-mail, which was attached as an exhibit in one of the filings.
Bowman denied anything was done improperly. She didn't have any communication with United about possible employment until after she ruled in the Arkansas Surgical case, Allan Gates, another of United's Mitchell Williams attorneys, said in one of his court filings in the case.
Bowman also said she was in a no-win position in 2008.
"No matter how I ruled on anything, this hearing or anything else, during the last year, somebody would have said, 'She's ruling that way so can get a job,'" Bowman said. "There's no way I could win for losing."
She said she didn't get the United job until the week before Christmas.
On March 10, Perroni said in a motion that he received 52 pages of documents from United HealthCare. One of the documents showed that Bowman, while still commissioner, asked Nick Thompson for advice in interpreting state law concerning "post-government employment."
"Accordingly, not only did Bowman apparently have concerns as to whether she was acting ethically in soliciting employment with United, but also she turned to counsel for United for his thoughts in that regard."
Bowman said the wording in the statute was unclear and that's why she needed more information.
"I had my own lawyers doing research. I asked numerous people when I was starting to looking," Bowman said.
Perroni also made a reference to a document showing that the Mitchell Williams law firm reimbursed some of Bowman's travel expenses for meetings.
One document, obtained by Arkansas Business from the Arkansas Insurance Department, shows Mitchell Williams reimbursed the department $1,145 for a trip to New York for Bowman and Deputy Commissioner Dan Honey in August 2008. The reason for the trip listed was United HealthCare settlement.
Thompson, of Mitchell Williams, said United had to reimburse the department because it was part of the costs relating to the 2007 settlement.
Bowman said that document showed United reimbursed the Insurance Department, not her personally.
Bowman's deposition is scheduled for April 8.
"I'm sick of this," Bowman said. "I've hired an attorney and I shouldn't have had to. I wouldn't do anything like they're alleging, and it's really frustrating."
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