Massachusetts has been given an additional year to comply with the Affordable Care Act, following a trend of deadline extensions. Initially granted a one-year extension in 2013, they have now been granted another year to get the program aligned with federally mandated standards. Governor Baker has asked for an “indefinite extension” citing that the reduction of qualifiers used to determine premiums could cause a ripple effect of “instability” in the insurance marketplace. The new deadline allows them until January of 2018 to fully comply with ACA requirements.
Currently, Massachusetts Health Connector uses nine identifiers to determine health premiums, under Obamacare, that number would need to be reduced to four—only age, family size, geographic area, and tobacco use would be considered. The extension allows insurance companies to use their full range of factors—such as industry, group size, and participation rate—until 2017 when determining health care premiums. Another point of contention is the definition of small businesses under the ACA requirements. Governor Baker has asked that the definition of a small business in Massachusetts remains 50 employees rather than the ACA specified 100 employees.
The hope is that these allowances will help prevent small business from falling prey to huge rate hikes in insurance and the associated risk of having to downsize or even close shop should the premiums become too large for a small business to afford. Administrators from both sides have continued to negotiate the specifics of the requirements over the last few weeks.
This is just the latest chapter in the story of MassHealth’s continued difficulties complying to the federal ACA requirements and regulations. Just last month it was reported that the US attorney served a subpoena in January of 2015 for the Massachusetts Health Connector records dating back to 2010 in an attempt to figure out the difficulties MassHealth has encountered when trying to meet the ACA regulations. Massachusetts’ continued trouble complying with the ACA is an interesting puzzle, given that the ACA was modeled in large part after Massachusetts law, Chapter 58: An act Providing Access to Affordable, Quality, Accountable Health Care. This leaves one to wonder whether there are true difficulties with and concerns about the ACA regulations or whether the changing winds of political rhetoric and special interests are at the source of these current difficulties.
In an audit of MassHealth—the MA Medicaid agency—released Tuesday, June 16th, by Massachusetts Auditor, Suzanne Bump, reported that the commonwealth’s health care program has wasted over 500 million dollars over the last five years. The errors resulted in duplicate payments being made for health services that were provided in the years studied. This error is the largest financial error uncovered by Bump’s office in nearly thirty years.
500 Million in Misapplied Funds
The audit of the MassHealth system covered the years between October 2009 and September 2014. During that five year period, the MassHealth system racked up an astonishing 500 million dollars in misapplied funds and unnecessary expenditures. Some 233 million dollars of the total amount was squandered by paying medical providers directly, in direct violation of existing laws that provide for those services to be paid for by a state qualified MCO (Managed Care Organization).
Doubly Charged for a Single Service
According to the audit, the problem that caused these errors has to do with MassHealth’s record keeping. MassHealth did not maintain a master list detailing which medical procedures must be covered by the MCOs program-wide. This meant that the MassHealth claims system was unable to identify the services that should have been covered by the MCOs. As a result, payments were made to direct medical providers for services that were already paid for through the MCOs. This happened not once, but on a total of nearly 1.5 million occasions. The bill has naturally been passed on to the state’s taxpayers, making this an issue that will have far reaching financial, social, and political repercussions.
A Shocking and Shameful Sum
In addition to the 233 million dollar error by the state’s Medicaid system, Auditor Bump’s report also managed to expose an additional 288 million dollars that was wasted when the MassHealth agency spent that amount on services that it was not required to provide. It turns out that these services—although not provided for under the terms of a legally binding contract—were often covered by MCOs in the commonwealth. As a result, the total expenditure of misapplied funds has risen to an officially estimated $521 million.
Disputing the Findings
Following the revelation of these unprecedented charges, MassHealth has struck back in its own defense. The agency has issued statements to the public in which it claims that only $60 million (of the alleged total of $233 million) was wasted in payment for duplicate funds. It also claims that $127 million of the total figure was spent in an appropriate fashion. However, MassHealth also stated that it needed to make their policies more clear and would implement “all actionable recommendations” from the audit.