Auditors are starting to give the state-based public exchanges their first audits since the exchange program went live, and posting the results on the Web for all to see.
States that chose to set up their own Patient Protection and Affordable Care Act (PPACA) exchange programs had to cope with complicated, rapidly changing federal regulations; the conflicting interests of federal agencies, state agencies, patients, health care providers, insurers and vendors; and severe uncertainty, until June 27, 2012, about whether the U.S. Supreme Court would let implementation of PPACA proceed.
Now the auditors are looking back at the decisions made as the exchange builders raced to get ready for the Oct. 1, 2013, start date of the first PPACA open enrollment period.
Officials in the Hawaii state auditor’s office argue that, in their state, management choices, and the board’s inability to make choices, contributed to operating problems at the Hawai’i Health Connector exchange, and, as of the time the audit was conducted, raise questions about whether the exchange will be sustainable.
Coral Andrews, the founding executive director for the exchange, and representatives for the founding board, could not immediately be reached for comment.
The auditors say in their report that Jeffrey Kissel, the current exchange executive director, and the current exchange board members have agreed with most of the findings.
Kissel himself says in a statement that the exchange has already acted on the recommendations made in the auditors’ report.
The exchange has developed a strategic and sustainability plan, and “strict controls on the procurement process are in place, and the relationship with certain contractors and service providers has either been terminated or revised,” Kissel says. The exchange “is also working closely with its legislative oversight committee to ensure that it continues to improve its operations as enrollment increases and costs are reduced,” he says.
But the auditors’ report can give exchange watchers ideas about the kinds of challenges that organizers of any public exchange, or the organizers of any big, complicated health coverage distribution system, might face.
To learn more about the auditors’ findings, read on.
1. The exchange had problems with documenting travel expenses and other expenses.
Organizers of the Hawaii exchange received $204 million in PPACA grant funding, and strict federal regulations apply to use of federal grant money.
The exchange lacked documentation for the payment of $46,250 in severance pay to one employee, and it lacked documentation for 11 instances of travel costs, with a total value of $12,771 the auditors say. The exchange also paid $1,185 in expenses for one trip without having documentation that the trip was for official business purposes, auditors say.
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2. The exchange went around its own procurement rules when it hired contractors.
The auditors found many different kinds of problems with procurement.