State treasurer responds to criticism of state health plan audit

State treasurer responds to criticism of state health plan audit

Charles Kurzman, Sociology, at the University of North Carolina at Chapel Hill.

When Charles Kurzman received a letter last month announcing an audit of the State Employee Health plan, it didn’t much worry him.

A similar audit had been done back in 2010 and Kurzman, a professor of sociology at UNC, had provided information about his dependents and kept everyone in the family insured.

But Kurzman quickly realized this audit was different – and more complicated.

“It took me an hour to figure out how I was supposed to comply with the treasurer’s demands,” Kurzman said. “In part because it was challenging to find the user interface that the instructions referred to.”

Navigating that interface was a whole other matter – and it had to be done. In 2010 the independent company performing the audit allowed plan members to mail in copies of supporting documents – birth and marriage certificates, adoption papers, tax returns. That was the most popular method used by respondents. This year, that option was gone.

Instead, state employees have to scan or take photos of the documents and upload them to the state health plan’s website. They have until July 31 – and those who don’t comply risk losing their insurance.

“I worry that folks who may not have the wherewithal to navigate the process, who may not have access to their documents or may not have the same technology may have difficulty,” Kurzman said. “And those families may be the ones who need health insurance the most.”

From those recently displaced by Hurricane Matthew to state employees who may now be traveling outside the country, Kurzman said the process could be a burden to plenty of people – and could result in eligible people losing their insurance.

According to a report on the 2010 audit, a total of 8,726 enrolled dependents were determined ineligible. Of those disqualified, the vast majority – 71 percent – were not removed from the health plan because they voluntarily reported themselves to be ineligible or had their ineligibility confirmed. They were removed because they did not or could not provide the documentation necessary. That’s a total of 6,233 people purged from the rolls not because they were found to have been getting benefits fraudulently but because they didn’t supply the proper supporting paperwork.

Treasurer Dale Folwell

Kurtzman said he believes the audit to be part of a national effort by Republicans to degrade access to health insurance, especially for those who may need it most. He took aim at the audit –and Treasurer Dale Folwell, who ordered it – in a recent op-ed for the News & Observer.

Folwell, for his part, said he’s sensitive to concerns about the process. In an interview this week, he pledged to follow up on complaints and undertake an “employee friendly appeals process” for state employees who have trouble complying with the audit by the deadline.

Unfortunately, Folwell said, the audit is necessary.

“All of the information that we got in the last audit, it wasn’t kept electronically,” Folwell said. “And it’s worse than that. In the old days, we had one provider who did the enrollment, the enrollment audit, the third party administration for the entire health plan, for all the retirees, did all the prescription drugs – everything. In the last ten years that’s all been farmed out to a bunch of different vendors. And none of these systems are talking to each other.”

The state will spend $3.3 billion on employee health insurance this year, Folwell said – more than the $2.9 billion allocated for the UNC system.

“We have beginning state employees – beginning state troopers, beginning teachers – who can’t afford to pay the state premiums,” Folwell said. “They have to work five days to afford that. So it’s my responsibility to make sure that benefits aren’t going to anyone who doesn’t deserve them – that could be a chiropractor, a hospital, a pensioner or someone who is using our health insurance who doesn’t qualify.”

Folwell said he’s heard concerns about the process being too complicated and concerns about the security of the information. But the same company that handled employee enrollment – Benefit Focus – is doing the audit, Folwell said, so the information should be as secure as it has ever been.

Folwell said he agrees the audit shouldn’t be necessary – HR directors should have confirmed eligibility, kept that information and should be able to provide it for confirmation. But while a number of HR directors do an outstanding job – Folwell pointed out UNC-Greensboro’s department as particularly good – others either haven’t properly confirmed that information or haven’t kept it in a way that’s easily accessible.

“There should be a way, once I tell them how old my son is, for them to know when his birthday is and determine eligibility,” Folwell said. “But right now, the vendor outputs on this stuff looks like something psychedelic that should be in a museum of art. So we’re doing this now and getting this information now so that we don’t have to do it later.”

Folwell said he hopes the audit won’t find anyone who is ineligible but still receiving benefits – but doubts that will be the case.

“Last time we had more than 2,000 people who voluntarily said they were ineligible or they weren’t going to verify,” Folwell said. “So I think we’ll find thousands that shouldn’t be there.”

Last week Mona Moon, the health plan’s top administrator, abruptly resigned.

“Treasurer Folwell has a different vision and strategy for the State Health Plan than former Treasurer Janet Cowell, as is to be expected with any change in leadership,” Moon said in a written statement. “I spoke with Treasurer Folwell a few weeks ago about my role as executive administrator and suggested he might want to consider someone who shares his vision and approach.”

Moon said Folwell believed she could be that person, but she disagreed.

This week, Folwell said the audit and issues around it had nothing to do with Moon’s resignation, which he said took him by surprise and wasn’t something for which he was pushing.

Ardis Watkins

Ardis Watkins, government relations director with the State Employees Association of North Carolina, said her group supports the audit and Folwell’s efforts to shore up the health plan.

“We have always supported efforts to make sure the benefit system – health or retirement – are being run properly,” Watkins said.

“We hope people will understand that if the audit is an inconvenience, it’s to make sure the system is working the way it should,” Watkins said. “We don’t want anyone there who doesn’t belong there.”

Watkins said her group has worked with the treasurer’s office and is sure he will go to great pains to make sure no one loses their insurance for not being able to respond properly by the deadline.

“Any time you have members of a plan that need to respond a certain way by a certain date, you run the risk that people aren’t going to make it,” Watkins said. “It sound like maybe the process could be improved, but I think it’s being done for the best reason.”