Audit: State’s Obamacare exchange makes progress
Colorado’s health insurance exchange has made progress in addressing repeated accounting troubles but still fails to always follow its own policies when it comes to contracts and purchases, according to a state audit released Tuesday.
The audit of the exchange, known as Connect for Health Colorado, found that 11 percent of payments analyzed — which came out to about $50,000 — did not have the proper documentation. The same was true for nearly $4 million in contract costs. In one instance, the audit found that Connect for Health’s general counsel signed off on a nearly $3 million database contract despite not having the authority to do so for contracts that big.
“These problems happened because Connect for Health did not always follow its policies or update its policies to reflect current practices,” Carleen Armstrong, a team leader at the Office of the State Auditor who worked on the new audit, said at a Tuesday morning meeting where the report was presented to lawmakers.
Connect for Health CEO Kevin Patterson largely agreed with the findings, saying the exchange is continuing to improve its accounting practices. He also said the exchange is working to improve its process for fielding and responding to complaints — another area where state auditors dinged the program.
“We expect to have all these things cleaned up and appropriately change by fall this year,” Patterson said at Tuesday’s meeting.
Connect for Health is the place where people in Colorado who buy health insurance on their own can shop for plans, and it is the only place where people in Colorado can buy health plans that are eligible for tax credits through the Affordable Care Act, also known as Obamacare. Colorado is one of 11 states that operates its own ACA exchange. All other states use the federally operated Healthcare.gov.
The new audit follows up on one from 2014 and a federal audit from earlier this year, both of which found that Connect for Health either didn’t appropriately document or misspent millions of dollars. Relative to those reports, then, Tuesday’s audit was mostly positive for the exchange.
The audit found that Connect for Health has taken steps to increase its revenues and control costs — including a savings of $18.5 million that came through administrative cuts and contract renegotiations. The auditors project that Connect for Health will be financially sustainable through at least the 2019 fiscal year, provided there are no major changes to the Affordable Care Act.
“I really want to say congratulations,” state Rep. Tracy KraftTharp, an Arvada Democrat who is the chair of the legislative audit committee, said to Patterson at Tuesday’s meeting. “You’ve really made some giant steps these last couple of years.”
But the audit warned that continued failure to tighten up its bookkeeping and adhere to its policies could threaten the exchange’s viability. The audit notes that Congress is currently debating proposals to repeal or revise the Affordable Care Act, which would have major implications for the exchange’s financial health.
“Given that Connect for Health’s future revenue growth may be limited or decline, it is important that it have financial controls that are working as intended to ensure that all of its expenses are reasonable and necessary,” the audit states.