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Drug-dealing employee stays on employer's health insurance thanks to 'charitable' intervention

Allen County officials happy taxpayers were spared, but company is crying foul

Tuesday, September 17, 2013 - 9:07 am

Most people would say it's a good thing taxpayers didn't have to pay for drug-dealer Garry Russell's expensive dialysis treatments during his stay in the Allen County Jail. After all, the Sheriff's Department spends about $1.5 million on inmate health care every year and even that isn't always enough.

But to Russell's former employers, on whose property he was caught selling cocaine, the fact that a national charity paid to keep him on the company's insurance policy even after the county would have been obligated to pay for his expensive dialysis treatments represents an even bigger injustice.

Either way, the story illustrates why American health care confounded so many people even before Obamacare came along – and often costs far more than it should.

According to Allen Superior Court records, Russell's drug-dealing career included the sale of cocaine to an undercover officer late last year on the property of Nowak Supply, 302 W. Superior St. Just before he was arrested and taken to jail in January, however, Russell quit his job at Nowak and soon notified the company that he would remain on its health-care plan because the American Kidney Fund would continue to pay his premiums under the federal Consolidated Omnibus Budget Reconciliation Act (COBRA), which requires most group health plans to provide a temporary continuation of coverage.

“Obviously, we're good with that. It worked out for the county,” said Chief Deputy Sheriff Dave Gladieux, whose budget did not have cover the cost of dialysis during Russell's six-month stay in jail -- a bill that would have been tied to Medicaid rates and would have cost about $400 for each treatment.

But because Russell remained on private insurance despite his resignation and incarceration, Gladieux estimates each session could have cost Nowak's insurance company about $1,500 per treatment – treatments often repeated three times a week.

All of which has Nowak officials asking a very good question: Why would the kidney fund, which had more than $186 million in revenue last year and advertises itself as a leading provider of education and treatment assistance – pay to insure a man who as an inmate was guaranteed lower-cost dialysis at taxpayer expense?

“(Russell) did something despicable, and he was still causing us grief (through his ongoing insurance coverage), said Nowak Vice President Doug Kline, who with other company officials suspects some form of collusion between the Kidney Fund and DaVita Inc., which treated Russell at its dialysis center at Southgate Plaza. Their suggestion is not unique. Last year, for example, officials with the Oregon Medical Insurance Pool complained that DaVita and other dialysis companies were charging its patients 15 times more than those covered by Medicare, and that the Kidney Fund was encouraging dialysis by refusing to help pay for kidney transplants.

The Kidney Fund receives 80 percent of its budget from DaVita and another firm, the Oregonian newspaper reported at the time.

I have no facts to prove such suspicions, but the Kidney Fund's payment of Russell's premiums is strange on its face, since payments through the organization's “Health Insurance Premium Program” (HIPP) are prohibited to inmates and are supposedly restricted to patients who “would forego coverage in the absence of assistance from HIPP.”

Fund spokeswoman Tenee Hawkins said the organization usually makes premium payments for low-income applicants at the request of a social worker – in this case a DaVita employee. Hawkins said that, so far as she knows, Russell met all guidelines for HIPP eligibility. “We have limited resources, and we rely on (social workers) to relay information to us, she said.”

Nowak Controller Michele Black said the Kidney Found paid Russell's premiums for six months at a total cost of nearly $2,000. Hawkins said the last quarterly payment was made in April and that Russell became ineligible for the program after the Kidney Fund learned of his incarceration in June. That's about when Russell was sent to the correctional facility in Plainfield, which has its own dialysis center.

It could be that DaVita arranged payment for Russell after he quit his job but before he went to jail. But even then, Black notified the Kidney Fund in March that Russell was in jail and “may not be eligible for your program.”

Citing federal health-privacy laws, DaVita spokesman David Tauchen would not comment specifically about Russell's case. He did, however, confirm that it would be difficult to provide dialysis to low-income patients or those covered under cost-cutting government programs without the subsidies provided by higher rates paid by private insurers.

Nowak was potentially harmed even though the Kidney Fund paid the premium, because Russell's bills were factored into its group medical expenses. And because Nowak's previous insurer, Medical Mutual, is dropping most of its Indiana coverage at the end of the year, Nowak will now be covered by another company. Initial quotes indicate premiums may go up 174 percent, Black said.

Whether that's due to Obamacare, Russell's bills or other factors, Black can't say for sure. But she does know this: The company – upon which 32 people depend for their livelihoods -- can't afford it any more than taxpayers can.

This column is the commentary of the writer and does not necessarily reflect the views or opinions of the News-Sentinel. E-mail Kevin Leininger at or call him at 461-8355.