[T]he state is not tracking who pays for Dr. Dynasaur health care coverage and is authorizing millions of dollars in benefits for those who are delinquent on their monthly premiums, a new Vermont auditor’s report says.
Auditor Doug Hoffer says the issue with Medicaid coverage for young people has been ongoing since the launch of Vermont Health Connect in 2013, meaning the state “has been in violation of its own rules” for years.
The Department of Vermont Health Access “has attempted to remedy this problem twice without success at a public cost of at least $1.9 million,” Hoffer wrote in a letter accompanying his office’s audit.
Department officials acknowledged the issues and said they expect to address them within the next two years as part of their recently reformatted “integrated eligibility” project. They also said it has taken years to tackle more-pressing problems with Vermont Health Connect.
“The state feels strongly that functionality failures should not impact children’s health care and did not prioritize the implementation of new functionality to terminate Medicaid coverage of children during this time,” officials wrote in a response to Hoffer.
Dr. Dynasaur provides free or low-cost health insurance to children and young people under age 19 and pregnant women below a certain income level. Depending on income, those enrolled in Dr. Dynasaur could be responsible for monthly premiums of $15, $20 or $60.
Statistics gathered by the auditor as of June 30, 2018, show that 52,957 Dr. Dynasaur members – or about 86 percent of the total – were not subject to premiums.
But for those who are obligated to pay, Hoffer says Department of Vermont Health Access has no way to effectively monitor or enforce that obligation. “As a result, it does not treat all households owing Dr. Dynasaur premiums equitably,” Hoffer wrote.
The department knows it collected $1.85 million in Dr. Dynasaur premiums in fiscal year 2018 and $1.48 million the year prior, the auditor says. But the department “did not know the total amounts owed or uncollected,” or who owed those amounts.
Without a method to unenroll members who aren’t paying, “the state continues to pay claims on delinquent members’ behalf, which is not consistent with state rules that require payment of the premiums as a condition of initial and continued eligibility for households with a premium obligation,” Hoffer said.
He cited a sampling of 297 Dr. Dynasaur households that weren’t paying as required. The audit found that the state paid almost $2.4 million in claims for those beneficiaries over varying periods ranging from several months to several years.
Most of the claims were paid after members’ grace period for delinquent payment had ended. But claims for 28 households were “for members whose initial premium obligation was never paid,” the audit says.
The audit found “systemic errors” in the Dr. Dynasaur system including:
• “Flaws that allowed members to enroll without a household paying the initial premium obligation.”
• Vermont Health Connect problems “that resulted in households not receiving their monthly premium invoice.”
• In some cases, the department “deleted valid past-due amounts on an ad-hoc basis from household accounts … even though no payment had been made.”
The auditor’s office is recommending that the state implement new processes to monitor unpaid premiums; to unenroll members who haven’t paid; and to ensure that no one can enroll without paying the required initial premium.
In their response to the auditor, and in an interview on Wednesday, department officials tied the Dr. Dynasaur issues to serious problems that plagued Vermont Health Connect – especially in the aftermath of its initial launch.
“There were many system shortcomings and failures in that rollout that needed to be dealt with,” department Commissioner Cory Gustafson said.
Fixing those problems was “an issue of prioritization for us,” said Gustafson, who assumed the commissioner’s job in 2017. “We wanted to achieve stability. We wanted to ensure that the system would meet health coverage needs, and that we could serve customers.”
Furthermore, “it’s no secret that the state has been challenged to get (information technology) projects across the finish line on time and on budget,” said Cassandra Madison, deputy commissioner at the Department of Vermont Health Access.
Madison has taken a leading role in the state’s long-running integrated eligibility project, which seeks to establish a streamlined program that will allow one-stop shopping for benefits like food assistance and health insurance. That includes a new portal that will replace the current version of Vermont Health Connect.
The state’s new approach to integrated eligibility relies in part on tackling technology projects in smaller chunks rather than as a whole “so that we don’t see big slides in timeline or budget,” Madison said. “Our priority is in delivering software that works for people.”
She said fixing Dr. Dynasaur issues is “explicitly” in the plan for upcoming integrated eligibility work. “Generally, our plan is to address these issues within the next 24 months,” Madison said.
But she said officials chose not to undertake a multimillion-dollar fix to the current system, given that it’s going to be replaced soon.
While the department didn’t dispute Hoffer’s core findings about the Dr. Dynasaur system’s disfunction and the need for specific fixes, officials did take issue with the auditor’s “assumption that the state paid for claims that it otherwise would not have.”
Had beneficiaries been notified that they were behind on their payments, “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,” officials wrote.
Additionally, as context for the auditor’s finding of $2.4 million in claims paid for delinquent members, the department noted that there were $166 million in Dr. Dynasaur claims paid in fiscal 2018.
In rebuttal, the auditor’s office said the $2.4 million figure is still “significant.”
“It means that, on average, taxpayers paid a benefit for these households of $8,044 even though they chose not to fulfill their obligation to the state by paying required premiums,” the auditor’s response says.
Furthermore, “there were many more households that had overdue unpaid premiums than we reviewed,” the auditor’s office said.
