Tennessee improperly pays out $1.47 million in health benefits

photo The Tennessee Capitol
Arkansas-Tennessee Live Blog

NASHVILLE - Tennessee unnecessarily paid out $1.47 million in health benefits during 2012 for 24 people whom state auditors say weren't eligible to be in the state's high-risk health insurance pool for the uninsurable.

Twelve enrollees were found to be eligible for the federal Medicare program for seniors and thus shouldn't have been allowed to join the state's AccessTN program, which serves those unable to find health coverage, the audit states.

The audit, performed by Comptroller Justin Wilson's State Audit Division, examined a number of programs and procedures in the state's Department of Finance and Administration.

Among them was the effectiveness of state oversight of eligibility verification in the state's AccessTN program, which is administered under contract with BlueCross BlueShield of Tennessee.

AccessTN in 2011 was transferred to the state's newly created Division of Health Care Finance and Administration.

Auditors reported that with minor exceptions, the state properly monitored and reconciled BlueCross' claims data and amounts reimbursed to BlueCross.

But in examining the state's monitoring of Blue Cross' overall administrative services, auditors performed an independent comparison of 60 of 3,092 AccessTN members for March 2012 and all members over age 65 for April 2012.

It was there they said they discovered several problems with state oversight in the eligibility determination area.

"We found that the Cover Tennessee office had not established policies and procedures to periodically review [BlueCross'] eligibility determinations to ensure that BCBST complied with AccessTN's eligibility requirements," the audit states.

Fifteen members of the AccessTN program were found to qualify for the Medicare program for seniors. Auditors said in their report that BlueCross "failed to identify or classify 12 of the 15 members as ineligible because of their federal program eligibility."

Auditors said the 12 were eligible for Medicare Part A, which covers things like hospital care, and Part B, which covers areas like physician visits.

The three other enrollees, auditors said, should also have been deemed ineligible because they didn't provide supporting documentation to BlueCross verifying their permanent residency.

In another area, auditors found three enrollees weren't eligible because they could get coverage under the state's local government insurance plan or the state teachers insurance plan.

In their response, HCFA officials said all the issues raised have either been addressed or are under consideration.

Efforts to reach a HCFA official were unsuccessful Wednesday.

BlueCross spokeswoman Mary Danielson said in an email that "working closely with the state, we've adjusted processes and implemented tighter controls to ensure a more accurate eligibility verification moving forward."

AccessTN provides comprehensive health insurance options and operates as a high-risk pool for those who previously have been denied insurance because of disqualifying medical conditions.

Premiums are based on weight, tobacco use, and age and may range from 150 percent to 200 percent of comparable commercial rates. For individuals who qualify, AccessTN provides premium assistance of up to 80 percent of members' monthly premiums.

Contact staff writer Andy Sher at asher@timesfreepress.com or 615-255-0550.