Vermont Business Magazine Vermont State Auditor Doug Hoffer today released the findings of a performance audit that details Medicaid monitoring and billing deficiencies at the Department of Vermont Health Access (DVHA). In 2015, the State Auditor’s Office (SAO) discovered that there was no process to disenroll Dr. Dynasaur members from Medicaid for non-payment of premiums.
This finding prompted another audit to determine whether the problems had been resolved. The audit objectives were to: (1) determine the extent to which Medicaid premiums owed to DVHA in fiscal years 2018 and 2017 were collected and (2) assess whether past-due Medicaid premiums affect a member’s enrollment and the State’s payment of claims.
Dr. Dynasaur provides low-cost or free Medicaid health coverage to young Vermonters under age 19. Eligibility is based on income level, and certain households are required to pay a monthly premium of $15, $20, or $60. Many households pay their required premium, but some do not.
In this Audit, the SAO found that DVHA does not monitor when households have not made payments, and the department does not enforce state payment requirements. As a result, the State does not treat all households owing Dr. Dynasaur premiums fairly and equitably.
“Dr. Dynasaur is an important program aimed at ensuring Vermont’s children receive the health care they need, regardless of income level,” Auditor Hoffer said. “But, as with all public assistance programs, Dr. Dynasaur has eligibility rules that reflect tough choices made by Vermont’s elected representatives in the Legislature. DVHA is not authorized to ignore the clear intent of the Legislature.”
The audit found that while DVHA knew the amount of Dr. Dynasaur premiums collected ($3.33 million in FY17-18), it did not know the total amounts owed or uncollected. This is not consistent with the State’s best practice guidance, and DVHA has no way to monitor the extent to which households fail to remit required payments or track its performance in collecting those premiums. Furthermore, past-due premiums for Medicaid’s Dr. Dynasaur program have no effect on a members’ enrollment status, and the State continues to pay claims on behalf of delinquent members. This is not consistent with State rules that require payment of premiums as a condition of initial and continued eligibility in the program.
For a selection of 297 households that did not comply with the initial payment or grace period (a minimum of 60 days) rules, DVHA paid nearly $2.4 million in Dr. Dynasaur claims. In addition to these households, there are many more with unpaid premiums.
Since 2013, DVHA has twice attempted unsuccessfully to remedy this problem at a public cost of at least $1.9 million. DVHA now indicates that it plans to fix this issue no earlier than October 2020 as part of a larger IT effort.
Because the State does not plan to resolve this matter until then, it will have been in violation of its own rules pertaining to non-payment since VHC’s inception. This means that for at least seven years, the State will have: (1) not collected premiums due as is required, (2) paid millions of dollars in claims for individuals whose households are not paying premiums, and (3) treated members who have not paid premiums the same as those who have met their obligations.
The SAO recommends that DVHA develop and implement a process to monitor the amount of Dr. Dynasaur premiums that are due to the State, develop and implement a process to disenroll members whose premiums go unpaid, and correct flaws that allow a member to enroll without meeting the initial premium payment requirement. These changes are necessary to ensure fair and equitable treatment of all households who receive Dr. Dynasaur benefits.
In its response, signed by Commissioner Cory Gustafson and AHS Secretary Al Gobeille, DVHA downplayed the auditor's results and disagreed with his recommendations.
DVHA paid about $166 million in claims on behalf of the Dr Dynasaur program in FY 2018. DVHA in its response said the auditor's results indicate that only a small fraction of cases are represented.
DVHA also stated that because of the technical problems that plagued Vermont Health Connect from its inception in October 2013, "DVHA spent the next several years triaging operational and technical challenges with the goal of achieving stability and ensuring that it could meet the health coverage needs of Vermonters while providing good customer service."
All this, it said, will take time to remedy with the next phase of the technical upgrades to begin this July.
As for the uncollected money, DVHA stated that not only is it a relatively small amount, in effect most members pay delinquent bills, so even though it has not been tracked, not all that money has been lost.
"It is true that members have not been disenrolled for non-payment of premiums since Vermont Health Connect began enrollment in 2014...
"However, the State does not agree with the assumption that the State paid for claims that it otherwise would not have because the members would have been disenrolled for nonpayment had the technology been functioning properly. To the contrary, DVHA's historical experience is that, once noticed for nonpayment of premiums, a majority of members paid their obligations and avoided termination. DVHA's experience in ACCESS is that only a small minority of members actually failed to pay premiums during the grace period and became disenrolled. Therefore, we would expect that a majority of the claims cited in the report would have still been paid because the members would have paid their premiums after proper notice and would not have been terminated for nonpayment."
Source: MONTPELIER, VT – Vermont State Auditor 4.10.2019