A new state audit released Thursday found some improvements to Vermont Health Connect's automated services, but it also spotlights a new risk: A contractor has terminated support for a core component of the state's online health exchange.
It's the second time this year that the Office of the State Auditor has pulled the curtain back on one of the most problem-ridden and complicated initiatives of state government.
Vermont Health Connect is an online health insurance marketplace that individuals without insurance from work use to purchase coverage. Launched two years ago, it has lurched unevenly into operation, frustrating thousands of customers with its failed technologies. It was to be the portal for small employers that provide insurance to their workers, too, but that function has never worked.
Small employers are allowed — for now — to buy Vermont Health Connect insurance plans directly from Blue Cross Blue Shield or MVP Healthcare.
The auditor’s 38-page report (PDF) finds improvements in automated services that customers are sure to notice.
Yet it also notes that a contractor no longer supports a key element. The software at issue determines customers’ eligibility for financial assistance, processes applications and plan selection, and also maintains customer accounts. The report warns that this situation increases uncertainty about the success of the future system upgrades, one of which looms on December 21.
State Auditor Doug Hoffer also chides the Agency of Human Services, the arm of state government overseeing the insurance exchange, for using informal letters to extend work assignments and make promises of additional payments rather than amending contracts.
“The use of the 'authorization to proceed' letters has the effect of circumventing the approval processes in the state’s procurement policy,” Hoffer said. The report recommends this practice cease.
Human Services Secretary Hal Cohen, in a written response included in the report, said his agency thought the process was legal but now understands it must seek approval for these kinds of letters from the Secretary of Administration.
The report also cites instances when Optum, the primary private contractor for Vermont Health Connect, and another company continued to provide services without any contract extension or informal letter. The auditor urges the state to negotiate new contracts immediately.
The report provides insight into the system upgrades made to Vermont Health Connect since last spring. Over the summer, the exchange phased in an automated change-of-circumstance function that lets customers make revisions to their accounts. Prior to the system upgrade, this work was done by hand, which resulted in a backlog that reached 10,000. Now, according to the auditor, “most types of changes can be entered by customers or be processed with limited intervention by VHC staff members. This is significant as VHC receives about 125 change requests per day.”
Still, there are changes that must be made by staff, not customers. These include when a family has a new baby or someone dies or when multiple changes are being made. Cohen, in his attached letter, agreed to all the auditor’s findings about progress and remaining shortcomings of Vermont Health Connect.