Report: Vermont Health Connect flawed, but state’s best option

From left: Don VanSlochem, John Schaeffer and David Weiher of Strategic Solutions Group. Photo by Elizabeth Hewitt/VTDigger

From left: Don VanSlochem, John Schaeffer and David Weiher of Strategic Solutions Group discuss the report Wednesday at the Statehouse. Photo by Elizabeth Hewitt/VTDigger

An analysis of the state’s health insurance exchange concludes that although the system has “significant deficiencies,” the best course for the state is to stick with it.

The 121-page report by Massachusetts-based Strategic Solutions Group, commissioned by the Legislature in the budget bill, was released Wednesday.

Several issues plague Vermont Health Connect, the analysis found — including incorrect data, problems with data exchanges, lack of automation and poor customer service. The review explored alternatives to the current model, including using the federal exchange, finding a commercial option or looking to technology from another state.

“After reexamining six possible alternative solutions, the most feasible and cost-effective path for long-term sustainability is to continue to enhance the current VHC system,” the report concludes.

The issues with the current system are significant, members of the team that conducted the review said Wednesday at the Statehouse. If the system continues as is, the researchers would not consider it to be “a sustainable platform,” said David Weiher, one of the Strategic Solutions Group analysts. “It needs work.”

To function, the system relies on a number of manual workarounds, he said, which will prove problematic as requirements of the technology shift over time.

The researchers emphasized, however, that they see the technology that provides the foundation for Vermont Health Connect as a “sound investment.”

“We believe you have a roadmap, a very viable roadmap ahead of you to do more work to stabilize and create a platform into the future,” Weiher said.

Peter Shumlin

Gov. Peter Shumlin speaks at a news conference. With him is Green Mountain Care Board Chair Al Gobeille. File photo by Andrew Kutches/VTDigger

Gov.-elect Phil Scott said in a statement that his administration will assess the report’s recommendations and develop a plan to move forward.

“The outcome we all want is an exchange that ensures Vermonters have an easy avenue to affordable health benefits. I will hold my administration accountable to delivering on that goal,” Scott said.

Green Mountain Care Board Chair Al Gobeille, who will serve as secretary of human services in the Scott administration, said the report shows the exchange needs a lot of improvements.

“Basically, it says it’s not sustainable. That’s the bottom line. And a lot of work has to be done to make it sustainable,” Gobeille said.

The review’s recommendation was informed by a $62 million grant from the federal Centers for Medicare and Medicaid Services to fund certain improvements to the existing exchange, Weiher said. The grant pays for the first phase of a planned new technology platform that will be a one-stop shop for determining benefits program eligibility. The grant was approved in September, and the work must be completed by Sept. 30, 2018.

The state will need to budget $6.2 million in matching funds in the next fiscal year to receive the federal money, according to the Joint Fiscal Office.

That federal grant is available only if Vermont sticks with the state-based exchange, the report authors said.

Any other alternative, including switching to the federal exchange or working with another state, would need to be funded entirely from state coffers, according to the report’s authors.

None of the six alternatives the analysts reviewed would allow the state to continue to offer the services it does without interruption to customers, they said.

According to Weiher, one key step for the exchange to get on track will be to remove code built and installed in the program by the now-defunct Exeter Group Inc., a Vermont Health Connect subcontractor that shut down in 2015. That work would be funded by the federal grant, they said.

The report’s conclusions also took into consideration the large portion of the population on the exchange that receives some sort of subsidy related to the Medicaid program — 94 percent.

John Schaeffer, president of Strategic Solutions Group, said it is “hard to speculate” on what changes in federal support could come with the incoming Trump administration.

“The prudent thing to do is to move forward assuming the commitment is strong,” Schaeffer said, saying there is work that needs to be done. “If things change in Washington, you know, that could change everyone’s plans.”

Gov. Peter Shumlin reiterated his support Wednesday for Vermont Health Connect.

“Now that this report is completed, it’s time for everyone to stop posturing and get to work continuing to build upon the system that Vermont has used to achieve the lowest uninsured rates in the nation,” Shumlin said.

Gobeille said the most important area that needs to be fixed is the section that deals with determining eligibility for the Medicaid program.

“That part has to work,” he said. “The platform needs to work, and it needs a lot of work.”

Gobeille said it was clear from the report that moving to the federal exchange or another state exchange was “not viable,” particularly given the unknowns about what will happen with the Affordable Care Act when President-elect Donald Trump takes office.

“It’s certainly not the time to stay with the status quo. We have to make changes. And we have to figure out what we mean by that and when we can get it done.”

(VTDigger’s Mark Johnson contributed to this report.)

Elizabeth Hewitt

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