[T]he Shumlin administration’s push to meet a key Vermont Health Connect milestone deadline eight weeks ago could leave the state on the hook for another $2.7 million it didn’t expect to pay.
The Joint Fiscal Office wrote in a July 24 memo that Vermont won’t be able to rely on between $862,000 and $2.7 million in federal funding for expenses that Vermont Health Connect incurred this spring while it was trying to fix the website’s change of circumstance function.
The change of circumstance function allows Vermonters to alter their insurance information based on divorce, death in the family, job loss, address change or other life events. Vermont signed several smaller contracts with its vendor, Optum, to fix the functionality issues by June 1. For the time being, only VHC staff can use the change of circumstance system.
Vermont submitted the invoices for the work to the Centers for Medicare and Medicaid Services seeking to recover 90 percent of the money. The Joint Fiscal Office wrote that the feds had determined that Vermont was not eligible for that “enhanced match,” so the federal government will pick up only 55 percent of the tab.
Steve Constantino, commissioner of the Department of Vermont Health Access, said the lost reimbursement in question only applies to certain expenses between Feb. 22 and June 30.
The state worked out contracts to install the change of circumstance function and then submitted the information to CMS, which had the option to approve the 90 percent or 55 percent level of funding, he said.
“If we hadn’t moved forward, we wouldn’t have been able to work on the backlog and have the functionality in place,” Constantino said. “A delay would’ve been catastrophic for Vermonters.”
There are currently 6,300 Vermont households waiting for changes to be made, the department’s spokesperson says. The backlog was more than 10,000 in May.
The nearly $200 million exchange has largely been paid for by the federal government, but with a portion of those “enhanced” reimbursements off the table, critics are concerned.
Lt. Gov. Phil Scott was the first official to raise public questions about the possible $2.7 million in added state expense. The Joint Health Care Oversight Committee did not bring up the issue at its Monday meeting.
Scott, a Republican who is weighing a run for governor next year, said Vermont may have waited too long to switch from CGI, which was first chosen to build the health care exchange, to Optum, the state’s current Vermont Health Connect contractor.
“I think we should’ve seen the handwriting on the wall sooner,” he said. “We were missing deadlines internally for a lot of different issues, so I think there was plenty of warning.”
Scott said $2.7 million would be a huge hit to the state’s general fund, when appropriations committees during the legislative session were trying to cut amounts from the budget in the $50,000 range.
“I would think that $2.7 million is a lot of money to them, and I would think that $27,000 would even be a lot of money,” he said.
Constantino and Lawrence Miller, chief of health care reform for the Shumlin administration, say the additional money won’t come from the state’s general fund.
The departments, which fall under the Agency of Human Services, will essentially have to absorb the unexpected costs, they said.
