ALL KIDS STILL AN ALL MESS

It is ironic that I mentioned in a blog last week about how we have never heard any follow up on the fraud and mismanagement in the Illinois All Kids insurance program that we learned about last year on the same day that Illinois Auditor General William Holland announced the most recent findings.  Not only has nothing been done to correct the problems, but they continue!

All Kids was implemented in 2006 by Governor Rod Blagojevich (that should have been a clue that it would not work!) as an expansion of KidsCare and provides health insurance coverage for uninsured children not previously covered by KidCare (i.e., those children whose family income was greater than 200 percent of the federal poverty level or who were undocumented immigrants.)  The expansion of the program made Illinois the first state to provide health insurance for all children without exception.

Last year, after listing many of the errors found in the audit, I wrote:

“There are so many unanswered questions after one reads the audit. So how will the state recover the misallocated marketing funds? What about the Health & Family Services officials who signed off on the payments? Will they be fired? What about families whose assets exceeded the income limit and were erroneously part of the program? Can they be forced to repay the benefits they received? The same for families who received benefits when their children were past the cut off age.”

Were any safeguards put into place to make sure the same errors did not occur?  Judge yourself by looking at some highlights from the FY 2010 audit report:   

-- All Kids paid out $84 million in medical claims in fiscal 2010 for children added through the expansion. But it only received $9.8 million in premiums from families, resulting in a net cost of $74.4 million. In 2009, unpaid premiums cost the state $70 million. Holland found that the Illinois Department of Healthcare and Family Services did not terminate coverage when enrollees failed to pay their premiums, as required by law.

-- Though All Kids enrollment is supposed to end at age 18, more than 4,000 19-year-olds were still in the program, and 265 of them received services after their 19th birthday.

--Of the nearly 74,000 children enrolled under the expansion as of June 30, 2010, 73 percent were classified as undocumented immigrants. But the audit also found that more than 12,000 legal immigrant children were misclassified as undocumented immigrants. As a result, the state missed out on federal money it could have received for covering these children.

--FY10 claim data had billing irregularities in areas such as transportation, optical, preventive medicine, and dental claims. These irregularities may have been billing errors or may have been fraudulent.

The Auditor General does a financial audit; he reports the findings and what happens?  Obviously nothing because basically the same report is issued the next year.  If the State of Illinois were a publicly-held company, the SEC would be de-listing them from the stock exchange and the principals would be going to jail for financial fraud.

Healthcare and Family Services Director Julie Hamos said the department has “already taken a number of steps to address the findings in the audit and enhance the integrity of the eligibility process.”  Obviously only baby steps, because the mismanagement has been going on for years.  It is now time to take a giant leap.