Change requests range from updating an address to reporting new income, new dependents or even just terminating a plan after gaining health insurance through an employer. The exchange has carried a backlog since it launched and reached a high of 15,000 in August. That number was reduced to a manageable figure prior to this year’s open enrollment, but is now close to 11,200, officials said.
The underlying problem is the manual process the state relies upon to make the requested changes, which is cumbersome and introduces the potential for human error.
A rash of contingencies that relied heavily on the two participating insurers has largely prevented anyone from losing coverage or experiencing a gap, but many are still dissatisfied with the service.
Vermont is the only state to require individuals to purchase insurance through its exchange, though some lawmakers are hoping to change that, and the Speaker of the House has said time is running out for VHC to fix its problems.
Optum, the exchange’s primary IT contractor, inked a revised contract Feb. 22 to “normalize” the change backlog by May 15 and deliver an automated change function by May 30. The revision brings the value of Optum’s contract to $57.3 million.
Lawrence Miller, chief of Health Care Reform, said he’s confident Optum will deliver, but added there are no guarantees. Once complete, the function will be rolled out in stages, with state workers testing it before customers can use it.
The current spike in change requests is at least partially by design, Miller said. VHC shifted resources to automatically enroll close to 30,000 people who did not need to make changes in 2015. Those numbers cover Medicaid participants and the private health plans sold through the exchange. There are only 133 no-change renewals left, according to Miller, down from 2,400 a month ago.
Now that open enrollment is over, with a caveat for people who didn’t know there was a federal penalty for being uninsured, VHC is focused on the backlog, Miller said.
There are close to 5,000 change requests associated with renewing coverage. Those customers have not received an invoice in 2015. An additional 6,200 change requests not associated with a renewal are also waiting to be processed. The total backlog is a moving target as requests are resolved and new ones logged each day. One customer can make multiple change requests, so the 11,200 total doesn’t represent the number individuals seeking changes.
But the unprocessed changes are gumming up the works, leaving customers confused and frustrated, while creating mountains of paperwork for VHC employees and contractors. It’s also having a downstream impact on payment processing.
Changes need to be reflected in the electronic files that transmit a customer’s information from Vermont Health Connect to the IRS, its payment processor, Benaissance, and eventually to the insurance carriers. The files themselves were riddled with technical errors, which continue to be problematic for VHC.
That creates a “pinch point,” Miller said, where backlogs can bottleneck. Processing those bulk files falls to the “Lion’s Den,” a team of Optum, Benaissance and state employees who work closely with the carriers to straighten out errors and make sure changes are reflected in the IRS, VHC and Benaissance systems.
As a result of the backlogs and billing issues, there are 900 to 1,000 “unallocated checks” in the VHC system, meaning a customer has sent in a premium payment that hasn’t been processed by the insurance carrier, according to Miller.
Blue Cross Blue Shield of Vermont, which has more than 90 percent of the exchange market, recently told WCAX that the value of those unpaid bills is in the millions, but did not give a precise figure.
In a statement Monday, BCBS told VTDigger that their accounts receivable balances due “reflect the ongoing problems with Vermont Health Connect, which continues to lack basic functionality.”
But the state’s largest insurer, which has a book of business that dwarfs the exchange premiums its owed, kept the focus on its customers, adding that the situation is creating “anxiety and uncertainty” for thousands of Vermonters “who are unable to confirm that they are enrolled in the health care coverage they selected for their families.”
Miller said he understands the havoc this creates for VHC users and their families, and he urged people not receiving an invoice to budget for the back payments. Those worried about overpayments should know their accounts will be credited, he added.
Trinka Kerr, the chief health care advocate for Vermont Legal Aid, said close to half of the calls to her office are related to Vermont Health Connect, and the total number of calls has increased in the first two months of the year. It’s on pace to do so again in March, she added.
“We’ve got a few people that are giving up, they’re so fed up, they tell us they’re going to go without insurance,” she said. Kerr said she hopes those people are only voicing frustration, and will stick it out to get covered.
Things aren’t likely to improve until there is an automated change-of-circumstance function, she said.
Cost estimates increased
Total spending on developing the incomplete exchange as of Dec. 31, 2014, was $126.7 million in federal money. The projected cost of completing the exchange is $72 million, which is also the exact amount of remaining federal grant money, according to state officials. That would bring the total cost of implementing VHC to nearly $200 million.
That’s an increase from the $171 million in federal grants to develop and implement VHC that Vermont was originally awarded by the feds.
Vermont is still required to build a system that works for small businesses, which currently go through the carriers. The state is seeking federal permission to put that off until later this year or possibly next year. The small business portion is not covered by Optum’s contract, and would need to be covered by the remaining $72 million or be paid for by the state.
The $200 million does not include the maintenance and operation of the exchange, which became fully the state’s responsibility Jan. 1. The governor’s proposed fiscal year 2016 budget allocates $27.7 million from the general fund to run VHC in fiscal year 2016. The state was also forced to use $3.5 million from the general fund during budget adjustment to shore up overages in the current fiscal year.