The back-end manual processes that underpin Vermont’s health care exchange continue to cause problems, according to customers, state officials and an internal memo.
Those processes are also driving up spending that could add to the budget deficit next year, which is already pegged at roughly $100 million.
Vermont Health Connect has a process to resolve problems that could lead to a denial of service, but some customers are still paying the full cost of premiums, prescription drugs or medical care and then being told to wait for their account to be credited retroactively.
In some cases, people’s premium checks are cashed long before the payments are reflected on their account. Other people are being overbilled because of issues with the manual renewal process.
Still others are awaiting changes they’ve requested to their coverage — anything from adding a dependent to canceling their policy — that can result in similar account issues.
’It makes me nervous’
Wendy Palthey, 50, is a self-employed vegetable farmer in Tunbridge. She sent VHC a check for two months of premiums in October. The check has been cashed, but her insurer, Blue Cross Blue Shield of Vermont, started sending her past due notices.
Her son has a chronic condition that requires daily medication. Earlier this week she tried to refill his prescription, but was told by the pharmacy benefit company Express Scripts that her order had been rejected because she hadn’t paid her premium.
Palthey had to drive through Wednesday’s snowstorm to her local pharmacist and pay $500 for medicine her VHC insurance should have covered. She was told by Blue Cross that her account would be credited later for the expense once her premium payment could be confirmed.
“I didn’t want to pay out of pocket, and I’m worried because we’ve had a few doctor’s appointments too,” Palthey said, “It makes me nervous if we have a major medical episode.”
She’s also frustrated because she spent “several mornings” on the phone with call center workers who assured her her account would be credited, but couldn’t get her premium processed any more quickly.
Lawrence Miller, the Shumlin administration’s chief of health care reform, said Thursday that he understands how disruptive the added costs can be for people’s budgets, and that VHC is working to resolve the problems as quickly as possible.
Miller explained that the number of different computer systems where changes and payments must be entered is one reason for the billing issues.
Payments are sent to Vermont Health Connect, then to the Nebraska-based premium processor — where subsidies are added to payments — then to the insurance company; and finally, the insurers have to inform doctors or pharmacists that the person’s claim will be covered.
There’s always some lag in processing premiums and medical claims, Miller said, but the additional steps created by the Affordable Care Act’s subsidized premium system add to that lag time.
Renewals remain a problem
A Dec. 5 internal memo obtained by VTDigger notifies VHC staff of errors occurring in the renewal process that can lead to the same issues that Palthey and other customers are experiencing with coverage and billing.
There are customers “who should have have been renewed using the same information that was on their application last year [but were] renewed without being considered for financial assistance, and they are now being invoiced for the full premium,” the memo states.
One reason for errors is that people filling out renewal applications may miss or forget to check a box giving the state permission to make sure they’re still eligible for the same subsidy, Miller said.
If they don’t check the box, their invoices going forward will be for the full amount until the state can obtain their permission and someone manually goes into the person’s account and fixes the error.
…tell customers to ‘pay the premium, and let them know that anything overpaid will be credited to future months.’
The memo advises call center workers and other support staff to tell customers to “pay the premium indicated on the bill they received, and let them know that anything overpaid will be credited to future months.”
“If the customer is unwilling or unable to pay the full premium, please let them know that we will log and prioritize their request to correct the error,” the memo states.
Officials were not able to give VTDigger precise information on the scope of the renewal problems Thursday, but VHC spokesman Sean Sheehan said in an email that the “error rate is low, I believe only a couple percent.”
The latest state figures released Thursday show 21,500 people’s policies have been renewed and 3,300 new customers have selected a plan. If the error rate on renewals is 2 percent, more than 400 customers would be having problems.
Change of circumstance still causing headaches
Another issue causing similar problems is that VHC stopped processing changes requested to 2014 policies at the start of open enrollment last month. That’s because the system can only hold one year of plan data. There are thousands of change requests that still need to be addressed, according to Miller.
A workaround using fake zip codes to trick the system into thinking 2014 plans are actually 2015 plans should allow the state to begin processing those old change requests early next week, Miller said.
But the state is finding that many of those requests have already found resolution, and customers who no longer have a problem aren’t notifying VHC, he said.
In one “batch” of change requests workers found that 60 percent were duplicative or were already solved, either because people got coverage from another source — such as a spouse or new job — or the change became unnecessary for another reason.
VHC is also having trouble reaching some customers who requested changes, making it difficult to be certain whether their problems persist.
Officials chose to have existing customers fill out paper applications for renewed coverage, because the website is unable to process them. People sometimes make mistakes filling out the forms; the forms are then manually entered into the system, adding a second instance where errors can occur.
The situation should improve when VHC is able to automate the change process, Miller said, but that won’t be until sometime next year, well after the Feb. 15, 2015, end of the current open enrollment period.
VHC costs likely to exceed estimates
Vermont has spent well over $100 million on the exchange, virtually all paid for by the federal government, and the feds have said they will continue to pay for state exchanges to be completed.
In addition to automating the change process, VHC will eventually work for small businesses, though it’s not clear that will happen by 2016.
However, Vermont will be responsible for the maintenance and operational costs of the exchange starting in January.
The feds earmarked $171 million for Vermont’s exchange, but the state is currently waiting for the feds to approve several “supplemental grants” that would allow Vermont to continue to draw down from that earmark.
Miller said he has had no indication that those requests won’t be approved by the Centers for Medicare and Medicaid Services, the federal agency in charge of that earmark. He expects current grant requests to be approved sometime next week, he added.
But even if those grants are approved, money in the current budget is unlikely to cover VHC’s operating costs, Miller told lawmakers Thursday.
“I do expect some increased costs in the second half of this fiscal year.”
“I do expect some increased costs in the second half of this fiscal year,” resulting from the additional work created by manual processes and increased security demands from the feds, he said. Miller did not have an estimate of the overage, but said VHC’s request at budget adjustment won’t be “massive,” he said.
He had previously said that in a worst case scenario the adjustment could be as high as $20 million.
