Double-enrollment snafu: who’s on the hook for ‘million dollar’ claims?

By Katie Kerwin McCrimmon

Colorado’s Medicaid and health exchange managers simultaneously enrolled about 3,000 people in both public and private health insurance, creating confusion over who will pay claims that could approach $1 million per person for high-cost patients.

The problem is also beginning to emerge around the country, and Colorado officials used the weekend meeting of the National Governor’s Association in Tennessee to plead for help from federal health officials to halt the potentially costly double enrollments.

Exchange managers provide information about enrolling in health insurance at a 16th Street Mall store.

Exchange managers enroll customers in private health insurance at a 16th Street Mall store.

Colorado’s Medicaid Director Sue Birch tried to downplay the problem during a health exchange board meeting on Monday. She said she has identified the people who are double enrolled, is “minimizing the financial magnitude” of the problem and is ensuring that patients are getting care.

“This is a small, quarantined group of folks,” Birch said. “We don’t want people to think it’s a large number. It’s a very small number.”

Overall, Colorado added about 180,000 newly eligible Medicaid clients between October and April while the exchange, Connect for Health Colorado, has sold private insurance to about 140,000 people as of Monday.

But Steve ErkenBrack, president of Rocky Mountain Health Plans and an exchange board member, said this is a “major, major issue.”

‘One person could be a million-dollar claim’

“One person could be a million-dollar claim,” ErkenBrack said. “This has required everyone to reach out of their comfort zones. How do we make sure members aren’t going to get caught in limbo and that their coverage will be there?”

Marc Reece, associate director of the Colorado Association of Health Plans, the group that represents insurance companies throughout the state, echoed ErkenBrack’s concerns both during the exchange meeting and in an interview afterwards.

“This is a very big deal,” Reece said. “Even though the scope is limited, and fortunately the number is small compared to overall enrollments, it’s still a critical issue for those particular carriers and those particular individuals. It’s really important when it happens to you.”

Reece said he has heard of cases where newly insured patients have racked up bills between $500,000 and $1 million so far.

“There are large six-figure claims. There are accidents that happen. That’s the reason you buy insurance,” he said.

Every person who wants to buy health insurance through Colorado’s exchange first must apply for Medicaid. If they get denied, they can then shop for private insurance and in many cases, qualify for federal tax credits.

The problem with double-enrollment comes later. Medicaid managers can reevaluate if people qualify. If they do, the Medicaid eligibility then goes back to the date on which the person first applied. Under federal rules, Reece said if a person has coverage under both public and private plans, private plans would have to pick up the tab for the first month. After that, it’s unclear who will have to pay any claims.

Reece raised concerns about a patient who might have paid a large co-pay, such as a 30 percent payment on a $1,000 procedure. Will the government have to pay individuals back? Will insurance companies have to refund premiums to former clients? Will patients who thought they qualified for tax credits have to give them back?

Reece said it’s not clear yet who will be on the hook for what.

“There are all sorts of complicating factors. Depending on how it all shakes out, it could cost carriers a lot,” he said.

Exchange managers: ‘Simultaneous enrollments’ will continue

Exchange managers conceded that their systems do not prevent the problem. Both Medicaid and exchange managers said they need to do a better job of getting enrollment information to health insurance carriers as fast as possible.

In many cases, patients have been coming to providers like Kaiser Permanente and seeking care before the provider has any confirmation from the exchange that that patient has bought a health plan. Most providers have been accepting the patients, but Reece said many are getting nervous about whether the patients truly have insurance.

Exchange officials raised the concern on Monday and plan to address it.

Native Americans are among those who can sign up for health insurance.

Native Americans are among those who can sign up for health insurance.

“We acknowledge that there will continue to be simultaneous enrollments until (some) structural changes are addressed,” said Connect for Health’s Chief Operating Officer Lindy Hinman. “This is starting to get national attention and the federal government is also engaged with us.”

ErkenBrack said Rocky Mountain began detecting the simultaneous enrollment problem in the late spring. Rocky sells private health insurance across the state, but also has contracts with the state to provide Medicaid coverage in some regions. Rocky workers began to see through their computer systems that some people were paying for private health insurance while they were also enrolled in Medicaid, the taxpayer-funded insurance program for low-income people and the disabled.

The scope of the problem came into greater focus last week as managers at Colorado’s Division of Insurance began meeting with Medicaid managers, insurance carriers and representatives from Connect for Health.

ErkenBrack said that the problem can emerge weeks after people think they’ve been rejected for Medicaid and buy private insurance.

“Meanwhile they’re accessing services and paying premiums,” he said. “But they (become) Medicaid eligible. They think they’re going to have a tax credit,” which they won’t.”

State officials press feds for help

Kevin Patterson, Gov. John Hickenlooper’s deputy chief of staff, who is also a non-voting member of the exchange board, said he took time to discuss the problem with the new U.S. Secretary of Health and Human Services, Sylvia Mathews Burwell, at the recent meetings of the National Governors Association.

“We had a few minutes to talk to her and her staff. This is the one (issue) I spent some time on,” Patterson said.

“I’m not thinking we will get changes in the law,” he said.

But he said he pressed Burwell and her staff.

“What’s going to be the right kind of guidance so we know how to fix this?”

ErkenBrack and Reece both said it’s vital that Colorado acknowledge the problem quickly and fix it.

“I think we’re one of the first states to see this,” Reece said.

He credits carriers that cover both Medicaid and privately insured patients for catching the problem.

“That’s why it ended up in our laps first.”

“However the situation ends up being resolved, Colorado is on the cutting edge of this problem. We want to make sure we do it right. Even if it’s just a $10,000 claim or a $1 claim, this could continue to happen,” Reece said.

In the short run, Reece said it’s critical to identify and contact every person who is double enrolled.

“They have a choice. They are eligible for Medicaid. But they have already purchased a commercial plan. They’re no longer eligible for tax credits,” he said.

“It’s very, very complicated.”

ErkenBrack saluted Colorado officials for owning up to the problem.

“In this politically-charged environment (when it comes to health reform), there’s a tendency to declare victory or say that we’re on the road to ruin,” said ErkenBrack, a Republican who has supported the Affordable Care Act.

“This is a multi-year process.” In general, he said Rocky has not seen people buy health insurance, get an expensive procedure, then immediately give up their insurance.

“Nor are we seeing people not paying their premiums,” he said.

ErkenBrack said the double-enrollment problem is merely “part of the clunkiness as we go through this. It doesn’t mean we’re a failure.”

Board elects new chair

In other matters, the exchange board unanimously elected Sharon O’Hara, executive vice president of the Colorado-Wyoming chapter of the National Multiple Sclerosis Society, the new chair of the exchange board. She replaces Gretchen Hammer, who is stepping down as chair, but will remain on the board.

Arnold Salazar, executive director of Colorado Health Partnerships, will remain as vice chair of the board while Dr. Mike Fallon, an emergency physician with North Colorado Medical Center, will remain board secretary.

Consumers warn about tight deadlines for new IT

Board members also received updates on the network of guides who assist people with getting health insurance. Altogether, exchange officials say they enrolled about 8,500 people through in-person help at 150 locations around the state.

Connect for Health Technology Update. (Click to enlarge.)

Connect for Health Technology Update.

Dr. Fallon urged managers to carefully evaluate who did well and who did not before Connect for Health hands out more cash to assistors for the next open enrollment, which begins in November.

Technology managers said they are on track to improve problems that emerged during the first open enrollment season. They are also trying to build a joint system with Colorado’s Medicaid managers. Informally dubbed “Kentucky-Lite” the new system is supposed to make it much easier for people to figure out if they qualify for Medicaid or should shop for private health insurance instead.

“As of right now, we are completely on track for early October deadline,” said Adele Work, an IT project manager for the exchange.

She said last year was “all about getting the system stood up.”

Now technology consultants are trying to get as many “clunky issues” fixed as possible.

“We want to improve automation, simplify the system architecture and make the whole thing a lot more streamlined and easy to maintain,” Work said.

Consumer advocates raised concerns that renewals could be much more complicated than exchange officials are anticipating. They also want to be sure that customers understand exactly what they’re buying.

Elisabeth Arenales, director of health programs for the Colorado Center on Law and Policy, also warned that the deadline for finishing the new Kentucky-style system is very tight.

Work acknowledged that IT consultants for both the state and the exchagne have a lot of work to get done in a short period of time.

“There’s just a lot to do,” she said. “If we don’t do it the hard way, we just don’t do it at all.”


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