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[url]http://www.bizjournals.com/pacific/stories/2003/12/08/story2.html[/url]
Pacific Business News (Honolulu) - December 8, 2003
[url]http://pacific.bizjournals.com/pacific/stories/2003/12/08/story2.html[/url]
EXCLUSIVE REPORTS
State probes Marshallese adoptions
Kristen Sawada
The state is investigating Marshallese adoptions -- a practice that has raised questions about whether it exploits the Medicaid system.
"From my division's perspective we take abuse of the Medicaid program seriously and any allegations related to fraud against the program we will look at," said Christopher Young, deputy attorney general with the state's Medicaid investigations division.
"The attorney general is very concerned about whether or not there is fraud and abuse as it relates to the Medicaid program and also is concerned whether or not these adoptions are being done properly and that mothers are making knowing [choices] when that occurs," he said. "There are issues we are looking at from the attorney general's perspective at this point that potentially could be criminal."
The state over the past few years has become a staging ground for Marshallese women who come here to give birth and relinquish their newborns to American adoptive parents.
In the process, some Marshallese mothers are placed on the state Medicaid program, which covers their prenatal and birth expenses. But sources say abuse is prevalent with some adoption agencies also charging adoptive parents for medical fees -- essentially exploiting Hawaii taxpayers. Additionally, Medicaid requires that a recipient reside in Hawaii, but some mothers allegedly come here specifically for adoption and return to the Marshall Islands.
The 1986 Compact of Free Association -- an agreement made by the federal government and the freely associated states of Micronesia, the Republic of the Marshall Islands and the Republic of Palau -- allows Compact citizens unrestricted access to residence, employment, education and health care in the United States in exchange for military defense and security stakes in the Pacific.
Medicaid spends $7.3 million annually on health insurance for Compact citizens and the Department of Human Services pays $12 million in total for health care, financial assistance and other social services.
But Hawaii as a whole, combined with state agencies and private providers, spends millions of dollars -- which is undetermined -- to care for Pacific islanders.
Medicaid's Quest program, which has about 142,000 recipients -- of which approximately 5,251 are Compact citizens -- spends about $180 per month on average for adults statewide, which accounts for 40 percent of enrollees.
Dave Heywood, Hawaii Pacific Health vice president, says the system loses $4 million to $5 million annually on health care for Compact-covered citizens. The cost to care for a baby with complications can easily run as high as $50,000 and $100,000 in a matter of weeks, he said.
"The parents who are adopting the children are given the impression that the adoption agency is paying for medical expenses when in fact the state of Hawaii is paying for those expenses," Heywood said. "It's putting a strain on the hospital system, but it's also putting a strain on the state of Hawaii with their Medicaid budget."
While the adoption practice isn't illegal in the United States, it became illegal in the Marshall Islands on Oct. 1 with the implementation of a new law creating a Central Adoption Authority and prohibiting agencies from coercing mothers into giving up a child or facilitating the transport of mothers to the United States for adoption.
"We've been looking at this matter trying to come up with ways to discourage that and we're happy that the Marshall Islands have tried to address this issue," said Stuart Patt, spokesman for the U.S. State Department Counselor Affairs Bureau. "And now that they've got that law in place let's see how that plays out before we see what, if anything, is called for. We are opposed to baby marketing or baby selling anywhere in the world."
Kimber Liu, a volunteer with Mississippi-based Southern Adoption Inc., which houses pregnant Marshallese at the Moanalua Hillside Apartments, says the Attorney General's Office has questioned her about Medicaid recipients and asked the agency for all files related to these adoptions.
"Southern Adoptions sent them all the files and said this is everything, let us know if there are discrepancies because we'll make it right," Liu said, adding that the agency has done only about a dozen Marshallese adoptions since it started in June.
"I know for a fact that not all those girls are on Medicaid," she said. "The ones who are, are the ones who are living here. Some of them aren't on Medicaid because they came here specifically to give their babies up for adoption."
Liu recently adopted a Marshallese child and shortly after began helping birth mothers and adoptive parents through the process in Hawaii with no financial incentives. She says Southern Adoption -- a Christian organization -- aims to operate with the highest integrity and wouldn't intentionally exploit the state system.
"It's never an exact science; a lot of times mistakes are made, but it's nice to know when things are done wrong they try to make it right," she said. "I do know of circumstances where [Medicaid fraud has] been done or they fudge it a little just because [medical costs are] expensive."
Eric Seitz, attorney for Adoption Choices Inc. -- a network of independent licensed adoption agencies operating in Hawaii, Colorado, Oklahoma, Kansas and Arkansas -- says there has never been any mischarging where Medicaid was provided.
"No one has told us that there are any allegations of fraud or misconduct; they're just investigating," Seitz said. "All I know at this point is that they wanted to look at our Medicaid records."
Adoption Choices recently publicized on its Web site that the Hawaii Marshall Islands program is closed.
"The agency has been in the process of obtaining a license with the Marshall Islands Central Adoption Authority to reopen the program in the Marshall Islands," the Web site said. "The delay has been in working out the large number of details and logistical issues involved. If and when the program reopens it will be an international program operating through the Marshall Islands Central Adoption Authority."
Kauai adoption attorney Linda Lach, who has done about 900 adoptions in 20 years, maintains that her office doesn't place Marshallese birth mothers on Medicaid and charges adoptive parents for birth mothers' medical expenses.
"I know what my ethics are and how I sleep at night," Lach told PBN in an interview last month. "One way is I don't expect the state or federal government to pay someone's medical bills for an adoption."
The controversy over potential Medicaid fraud and abuses in the system has led one lawmaker to push for legislation forcing agencies to pay for mothers' prenatal and birth expenses.
"The illegal part in my mind is that they are circumventing Marshallese law by bringing mothers here, getting them on Medicaid and the State of Hawaii is subsidizing a private business," said Senate Health Committee Chairwoman Roz Baker, D-W. Maui-S. Maui, who says she will introduce the legislation next year. "The other is the fact that bringing women in and getting them on Medicaid, they're hurting somebody else who may need to be on Medicaid."
Local attorney Terrance Tom, who was approached by Southern Adoption and began representing Marshallese mothers two to three months ago, says he will no longer facilitate these adoptions.
"Why I'm hesitant in these cases is I don't want even the hint of exploitation," Tom said. "If that [Medicaid fraud] is a problem I would certainly object to anyone attempting to take advantage of the state."
Reach Kristen Sawada at 955-8036 or ksawada@bizjournals.com.
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