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FL says it will contest audit on kids

By Jim Saunders
9/22/2010 © Health News Florida

Florida might have to pay back $5.3 million because some children were enrolled in Medicaid and the KidCare health-insurance program at the same time, a new inspector general's report says.

The report, released this week by the U.S. Department of Health and Human Services (HHS), said the problem stemmed from Florida retroactively enrolling children in Medicaid --- though they were enrolled in KidCare during the same time period. Also, it pointed to a lack of "internal controls" to quickly correct simultaneous enrollments in the two programs.

(update)The state Agency for Health Care Administration (AHCA) said today it will contest the report's findings. In an e-mail response to questions, AHCA said Medicaid and KidCare were "operating correctly" and complying with federally approved plans for the programs.

It also said: "Based on the Florida KidCare structure, enrollment in CHIP (the federal program that encompasses KidCare) and retroactive enrollment in Medicaid is unavoidable. Both programs work hard to minimize the fiscal impact of this.''

The federal government provides matching funds to help pay the costs of KidCare, a program that offers subsidized insurance to children whose families don't qualify for Medicaid. But federal law bars payments for KidCare coverage if a child is eligible for Medicaid.

The audit looked at enrollment between April 1, 2007, and March 31, 2008. The $5.3 million at issue is a tiny fraction of the more than $8 billion in federal matching funds that went to Medicaid and the KidCare program during that time, according to the audit.

The audit recommended that the federal government recoup the $5.3 million, though the Florida Agency for Health Care Administration (AHCA) can try to negotiate for a smaller amount.

In a June 30 letter to the HHS inspector general, then-AHCA Secretary Tom Arnold said the state does monthly checks to try to minimize simultaneous enrollment. The letter said officials complied with a federally approved "state plan," which outlines how programs will operate.

Also, AHCA said the actual amounts of duplicate payments were small, because the state did not pay many Medicaid claims for children who were also enrolled in KidCare. It argued that the amount the state might have to pay back to the federal government should be reduced.

"We are in agreement that it serves no purpose to have a child dually enrolled and is not an effective use of state and federal funds,'' the Arnold letter said. "However, CHIP (the federal program that encompasses KidCare) funding should not be subject to recoupment when the state took reasonable action to comply with our approved state plan and duplicate payments were minimal.''

The KidCare program, which is run by the Florida Healthy Kids Corp., provides coverage through managed-care plans. It makes what are known as "capitation" payments to the plans to cover expected medical costs.

Medicaid also enrolls some children in managed-care plans that use such capitation payments. But many children are enrolled in a "fee-for-service" system that only pays claims when doctors and other providers submit them. The state would not have duplicate payments if children were enrolled in the fee-for-service system but did not have claims.

Children enrolled in KidCare sometimes become eligible for Medicaid when there's a sudden drop in family income. The children are then required to be enrolled in Medicaid, with the Medicaid coverage retroactive for up to three months.

The overlapping enrollment has occurred when children move between the programs.

As an example, the audit cited a child who enrolled in KidCare on April 1, 2007, and applied for Medicaid on May 14, 2007. Medicaid coverage was approved retroactive to March 1, 2007, which led to the child being simultaneously enrolled in both programs for April, May and June 2007.

The audit argues that Florida Healthy Kids and the Florida Department of Children and Families (DCF) did not have an adequate "internal controls" to correct problems with duplicate enrollment. Florida Healthy Kids determines eligibility for KidCare, while DCF determines eligibility for Medicaid. AHCA oversees Medicaid payments and services.

Auditors found that new KidCare applicants were screened to ensure they were not enrolled in Medicaid. Also, Florida Healthy Kids periodically screened KidCare enrollees to determine whether they were eligible for Medicaid and, if so, referred them to DCF.

The state compared records each month to find children who might be enrolled in both programs. But auditors said it did not always quickly resolve cases of simultaneous enrollment.

"(The) results from the referrals and data matches were not always acted on promptly, allowing concurrent enrollments to continue,'' the audit said.

DCF issued a statement today saying it backed AHCA's reponse to the audit.

As the agency charged with determining Medicaid eligibility, our primary focus is making sure that those who need help are receiving it promptly and
accurately,'' the statement said. "We agree with AHCA's response to this report and will continue to work with all of our federal and state partners to most efficiently
provide assistance to our clients.''

--Capital Bureau Chief Jim Saunders can be reached at 850-228-0963 or by e-mail at jim.saunders@healthnewsflorida.org.