MNsure errors in determining eligibility cost the state hundreds of millions of dollars

Minnesota’s Legislative Auditor found that over a five-month period the state overpaid between $115 and $271 million in Medical Assistance and MinnesotaCare benefits due to MNsure’s failure to ensure people met the programs’ eligibility requirements.

The audit sampled 157 people and found that 38 percent of them were not eligible for the program MNsure enrolled them in.  Of those sampled, 28 percent weren’t eligible for any program at all.

The price for this error rate is not limited to the five months the audit covered.  Assuming the eligibility errors remain unresolved, the overpayment becomes a loss ranging from $276 to $650 million over a full year.  Over a two-year budget period, the loss runs upwards of $1.3 billion.

But MNsure and the Minnesota Department of Human Services (DHS) will fix the enrollment problems, right?

Not if history repeats itself.  Of the eleven “findings” identified in the audit—all of which report serious errors in the eligibility verification and enrollment process—nine are a “repeat finding.” That fact is, MNsure and DHS have repeatedly failed to meet basic standards to ensure that the people enrolling in Medical Assistance and MinnesotaCare are actually eligible for the programs.

That’s why Center of the American Experiment recommended the state should contract with an outside vendor to audit Medicaid eligibility on a quarterly basis.  Our work helped pass a bill to strengthen the eligibility review process, but DHS still controls it.  This current audit shows someone outside DHS needs to take charge of reviewing eligibility.

On Wednesday, Dayton administration staff and DFL legislators in a House committee hearing tried to diminish the findings of the report by claiming, among other things, the sample size was too small.  In response, the Legislative auditor and his staff vigorously defended their methodology and explained how they wouldn’t have proceeded if they weren’t confident it would deliver meaningful results. Fortunately, the reputation of the Minnesota Office of the Legislative Auditor remains impeccable and so the audit’s findings were in no way diminished by efforts to deflect blame and criticism.

I served on the Minnesota Health Care Financing Task Force and we adopted a disappointing set of recommendations in January, mostly aimed at expanding the public health care programs subject to this audit.  One recommendation would have expanded eligibility to undocumented immigrants and another would expand the income eligibility limit for MinnesotaCare from 200 percent of the federal poverty guideline to 275 percent.

I think it’s safe to say that any effort to expand Medical Assistance and MinnesotaCare are dead in the water after this audit.

Put aside the fairness and politics of extending health benefits to undocumented immigrants.  If Minnesota screws up eligibility determinations for citizens with social security numbers 38 percent of the time, how can we ever expect to enroll undocumented immigrants with any accuracy?