Does Maryland Reward Political Incompetence?

from the Baltimore Sun

Maryland must spend as much as $30.5 million more to provide Medicaid coverage to Marylanders because the state's glitch-riddled health exchange website can't tell whether they are still eligible.

It's another problem exacerbated by the software that has been causing headaches since the exchange website launched on Oct. 1 for those trying to get into the expanded Medicaid program or buy private insurance with subsidies.

This issue identified in a legislative report only applies to people already in Medicaid, the federal-state program for the poor. State officials say they had planned all along to delay determining Medicaid eligibility, but acknowledged the exchange made the problem worse.

"It was a deliberate decision to keep people in coverage while system issues were getting resolved," said Charles Milligan, a state deputy health secretary in charge of the Medicaid program. "We recognize by blocking normal attrition from Medicaid that there would be a state cost."

The eligibility issue will add to the costs of the state's Medicaid program and won't be counted toward the total cost of the exchange, which is now expected to reach $261 million by the end of 2015. About 80 percent of those funds will be federal.

But critics were further infuriated by any additional money spent because of the exchange and seized on the issue to heap more scorn on the program and its advocates and intensify calls for an investigation.

Minority Leader David R. Brinkley of Frederick County took a swipe at Democratic gubernatorial candidate Anthony G. Brown, the state's point man on health care reform, and said the state is spending millions on "this malpractice by the lieutenant governor."

He said, "We need outside counsel. This thing keeps getting bigger and bigger."

Brown, who could not be reached for comment, has said that he supports investigating what went wrong, but that the state is focusing on fixing problems to get people enrolled in health plans.

Milligan said he expects the issue will cost the state less than $30 million because income limits are now higher and fewer people will be removed from the ranks. The estimate is based on the program's attrition rate before the increase in income limits. The federal government also agreed to pick up an equal share of the cost.

The more than a million Marylanders in Medicaid must reapply for the program each year. About 5,000 a month are typically pushed out of the program because of a change in income or family status.

State officials — along with those in 30 other states and Washington, D.C. — feared they couldn't handle all those re-applications under new Affordable Care Act rules at the same time the exchanges were launching and new people were being added to Medicaid, Milligan said.

All those states were given permission to keep Medicaid recipients on the rolls longer than one year. Most states requested longer extensions than Maryland, which initially asked for its extension before problems with its exchange website surfaced.

Milligan said they figured that the Medicaid enrollees had coverage and it was better to focus everyone's attention on enrolling new people. So far, more than 150,000 people have been added to Maryland's Medicaid rolls since state officials chose to expand the program, exceeding expectations.

State officials had hoped to redetermine the eligibility of current enrollees through the new health exchange website by December. But it crashed the day it launched Oct. 1. Exchange officials have since focused on fixing the major problems, putting off the Medicaid issue.

Milligan said the state asked for and was given another extension by the federal Centers for Medicare & Medicaid Services until June.

The problem and its costs were included in a report from the state Department of Legislative Services presented to lawmakers Wednesday.

The report came out just days after exchange officials terminated the contract of Noridian Healthcare Solutions, the prime contractor charged with developing and operating the state exchange.

They are reviewing their options for the next open enrollment period in the fall, which includes moving to the federal exchange website, using another state's system, entering a consortium with other states or fixing their own site.

Milligan said most states are not enrolling people in Medicaid on their exchange websites, so that will be a consideration for Maryland. He said officials likely won't ask for another extension and will need to either adjust their existing system to handle new Medicaid eligibility rules or use other new technology.

Sen. Thomas M. "Mac" Middleton, a Charles County Democrat who chairs the Finance Committee and is co-chair of the newly formed joint committee overseeing the exchange, said officials may be able to go after some of the costs of this newly identified failure in litigation with contractors.

"We all know this is a system that isn't working," Middleton said. "If you pay for a system that was supposed to work and it doesn't work, you go after them for damages."

Noridian officials have said they complied with contractual obligations even under pressure and facing constant changes requested by the state.

We'll certainly find out after the next election.