Audit finds errors remain in Minnesota's public insurance programs

A new audit finds continued trouble for Minnesota when it comes to determining who is eligible for public health insurance programs, with the latest report finding errors in one out of every six cases reviewed.

The audit commissioned by the Department of Human Services reviewed 300 eligibility determinations for people covered through the public insurance programs between October 2015 and January 2016.

It found errors in 50 cases, or 16.7 percent of the total. Those cases accounted for more than $25,000 in overpayments during the four-month period reviewed.

"These error rates are too high," said Chuck Johnson, a deputy commissioner with the state's Department of Human Services during a legislative hearing near the Capitol. "We're disappointed in the findings."

Johnson said the error rate is lower than what Legislative Auditor James Nobles found in a report that shook up the Capitol last year, with its projection that the state might have spent up to $271 million in overpayments during a five-month period. Nobles put the error rate at 38 percent.

However, the new audit documents an error rate that's higher than the rate seen in a separate internal audit that DHS officials cited last year when pushing back against the findings from Nobles.

DHS commissioned the new audit after the report from Nobles, which looked at a sample of 157 cases and then extrapolated the findings across a much larger group of people covered through the Medicaid and MinnesotaCare programs. The programs cover more than 850,000 people in the state.

While the new audit looked at a larger sample size, auditors said they could not extrapolate from the findings to project total overpayments across the vast public health insurance programs.

During the time period covered in the new audit, DHS went through a chaotic year-end renewals process that included thousands of people who were poised to be cut off from coverage, even though they had submitted paperwork as requested by the department.

On New Year's Eve, DHS decided the problems were so widespread that they simply extended coverage into January 2016 — a process that likely contributed to some of the eligibility errors found in the new audit, Johnson said on Tuesday.

He said state officials "knew we would identify some issues during this period."

"We know that there are issues with eligibility," said Rep. Matt Dean, R-Dellwood, following the hearing. "Eligibility determination is one of many problems at MNsure."

The eligibility determinations are made by a computer system called the Minnesota Eligibility Technology System, or METS.

Until November 2015, state officials referred to this computer system as MNsure.

The audit documented system problems, as well as errors related to the agency workers who use the computer system.

The audit report found that the majority of errors were caused by the system.

"These were mainly interface issues where METS accurately closed the case, but that key information was not accurately transferred to the payment system," the report said.

"When this happens, coverage remains open in [the payment system], meaning bills were still being paid for the recipient, and capitation payments were still being paid on behalf of the recipient," the report stated.

Since 2014, the state has used this MNsure-METS system for determining eligibility for those in Medicaid and MinnesotaCare.

The state developed the system as part of its launch of the new MNsure health insurance exchange for individual who buy commercial coverage.

Medicaid provides health insurance to a variety of groups, including adults with incomes at or below the poverty line. MinnesotaCare covers a slightly higher-income group often described as the "working poor."

Christopher Snowbeck • 612-673-4744

Twitter: @chrissnowbeck