Minnesota audit finds state spent as much as $271M on ineligible beneficiaries

With a 38 percent error rate, state officials says the need to improve is "critical"
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Minnesota overpaid as much as $271 million over a five-month period on ineligible beneficiaries within the state's health insurance exchange program, according to a recently released audit.

State auditors looked at a random sample of 157 people within MNsure, the state's health insurance exchange, from January 2015 through May 2015, and found that 59 were not eligible for the program in which they were enrolled, representing a 38 percent error rate. Forty-four of those people were not eligible for any program within the exchange.

Auditors extrapolated that improper payment rate to the 270,000 people that enrolled in MNsure in the first three months of 2015 and determined the state overpaid between $115 million and $271 million for ineligible beneficiaries.

"We all know there's going to be some error, but this is higher than an acceptable error rate," Cecile Ferkul, Minnesota's deputy legislative auditor, told the Star Tribune.

The report also found that the state had not yet resolved nine of the 11 findings outlined in a November 2014 report on MNsure eligibility determinations. Once again, the Department of Human Services did not adequately verify that those enrolled in public healthcare programs were eligible, and the agency did not reverify that those enrolled in the state's medical assistance program or MinnesotaCare remained eligible for those programs. The department was also unable to verify basic information including social security numbers, citizenship, income and household size.

Human Services Commissioner Emily Johnson Piper told the Star Tribune that the agency needs to improve its IT infrastructure as well as business practices and customer service, but noted that the agency did not have enough time to fix all of the problems identified in the 2014 audit.  

MNsure has been plagued with deficiencies from the start, including inadequate information sharing and a poor IT infrastructure. Similar eligibility verification problems have plagued Healthcare.gov, the federal health exchange. Last year, two separate Government Accountability Office reports exposed weaknesses within the federal exchange, including a July report that found 11 fake applicants were automatically reenrolled in 2015. Another, released in October, exposed eligibility concerns, including duplicate coverage for ineligible beneficiaries within certain state exchanges.

To learn more:
- here's the Minnesota audit
- read the Star Tribune article

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