Health Connect's Poor Functioning Causes Millions Of Dollars Of Billing Discrepancies

Apr 8, 2015

The Shumlin administration is working with the state’s health insurance carriers to reconcile millions of dollars in billing discrepancies resulting from Vermont Health Connect’s lack of key functions.
 

The reconciliation process has been going on for about three weeks, according to Lawrence Miller, Gov. Peter Shumlin’s chief of health care reform. Because automated functions on the state’s online insurance exchange are not working, the state’s carriers — Blue Cross Blue Shield and MVP Health Care — have millions in premiums on their books that they have not received payment for. 

The state has been scrambling to manually process paperwork to make up for the lack of automation on the website since its launch in October 2013. Miller said the focus has been on signing people up for coverage and helping them retain it.

“They were not necessarily processing terminations or cancellations as a very high priority,” Miller said.

As a result, the insurance carriers in many cases were not told by the state that they should stop billing customers. They are now working with the state and its contractors to compare records and determine if they are really owed money for the unpaid premiums on their books.

There is also a pool of money collected by Benaissance, a health care benefits administration firm the state uses to process payments, that has not been distributed. The money represents premium payments sent by customers but without enough information to apply the credit to an account. There are at least “a few hundred checks” in that category, according to Miller.

All sides are hesitant to say for sure how much money is at stake. But Health Care Reform Chief Lawrence Miller said at one point Blue Cross Blue Shield thought it could be as high as $4 million.

All sides are hesitant to say for sure how much money is at stake. But Miller said at one point BCBS thought it could be as high as $4 million.

“I hesitate to quantify it until they’ve actually gone through the work,” Miller said. “It represents maximum exposure because if there are claims in there where people were covered and they do actually owe money, then we’ll go ahead and work with them to collect that.”

Cory Gustafson, director of government and public relations for BCBS, said the company does not have a clear idea of how large the discrepancy is.

“It continues to change, and the reconciliation process changes that even further,” he said. 

Miller said about 70 percent of the cases that have been resolved were the result of customers’ terminating their policies without the carriers knowing. If that percentage were to hold for all of the cases in question, the carriers could still be owed a significant amount of money.

“There is a chance,” Gustafson acknowledged.

The amount in question is significantly higher for BCBS than for MVP. Blue Cross sells more insurance plans in Vermont, but it also had a policy of keeping those plans on the books rather than risk mistakenly canceling them.

MVP canceled policies more freely to avoid such a risk, Miller said.

“They didn’t want that exposure. We had a bunch of people that we had to intervene with — hundreds — where MVP didn’t check with Vermont Health Connect,” Miller said. “They just did it.”

"We had a bunch of people that we had to intervene with - hundreds - where MVP didn't check with Vermont Health Connect." - Lawrence Miller

Still, Gustafson said clearing up the discrepancies remains a priority for Blue Cross Blue Shield. And he said the company is counting on the Shumlin administration to deliver on its promise to complete work on the automated systems that the exchange now lacks.

“To us, our accounts receivable balance really symbolizes how important it is for the governor’s plan to be implemented to get to a fully functional exchange. The exchange isn’t going anywhere,” Gustafson said.

The administration has said those automated functions will be in place by the end of May. If not, the administration has said it will abandon the state exchange and transition to one managed by the federal government.

Miller said the next version of the website is expected by May 30, at which time he expects all of the 2014 billing issues to be resolved, as well as any created this year.

“It all has to be wrapped up before go live,” he said. “We want a clean and stable data set.”

Both the state and the insurance carriers said they were aware that issues were likely when the exchange launched without all of the automated functions working.

"To us, our accounts receivable balance really symbolizes how important it is for the governor's plan to be implemented to get to a fully functional exchange. The exchange isn't going anywhere." - Cory Gustafson, BCBS director of government and public relations

“We all knew we were going to have to go through the reconciliation process, and we all knew it would be a bear the first year,” Miller said. “... This is not a dispute between the state and Blue Cross right now, or MVP.”

Some “differences of opinion” could emerge once the reconciliation process is completed if the carriers’ books are not balanced, Miller said.

“If there is some bad debt at the end of that process it’s going to be a question of what’s the expected rate of bad debt accumulation at a carrier,” Miller said. “We shouldn’t cover what’s normal.”

MVP spokeswoman Jacqueline Marciniak issued a brief statement Tuesday.

“MVP Health Care is committed to working with exchange officials to reconcile discrepancies and develop a solution that is mutually beneficial to our members and to the state of Vermont,” she wrote in an email.

This story originally appeared in the Rutland Herald and has been republished through a partnership with the Vermont Press Bureau.