Data errors cost Minnesota $76 million in Medicaid funding

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Data errors in Minnesota’s Medicaid enrollment program have cost the state $76 million in federal funding over the past four years and that number is projected to grow, according to a report published Wednesday by the state’s Office of the Legislative Auditor.

The report, which examined internal controls and compliance for Minnesota’s Eligibility Technology System, or METS, concluded that the state’s technology agency, called Minnesota IT Services, and the Minnesota Department of Human Services are putting “financial resources at risk” as they struggle to comply with legal requirements for Medicaid eligibility. The state has spent $432 million over the last 8 years to develop and maintain the METS system, though auditors determined the system has failed to “achieve the efficiencies that an automated eligibility determination system should provide.”

The inefficiencies that auditors found involved a reliance on caseworkers to determine whether people were eligible for Medicaid, rather than maintaining or improving the system itself. Caseworkers were relied upon to follow-up on determinations for 37 percent of all cases, largely because of errors introduced during data entry or mismatching data between agencies. The workarounds that caseworkers used to fix these errors were “inefficient, onerous … and in some scenarios, not effective,” the report found.

As a result of these errors, the state has been unable to collect nearly $76 million in health care expenses owed to them by the federal government over the last four years, and would struggle to determine whether it has overpaid insurance companies without manually reviewing each error.

The audit recommended the state develop a proactive approach to reviewing cases with eligibility-data errors, as well as develop more definitive access control tools to mitigate unnecessary system access from employees who don’t need to view or edit data.

In a letter attached to the audit from Minnesota IT Services Commissioner Tarek Tomes and Human Services Commissioner Jodi Harpstead, the officials disputed the auditor’s claim that inadequate data and control weaknesses led to more than 232,000 cases being flagged as having discrepancies within a 15-month period.

“We have particular concerns with this finding,” the letter reads. “The eligibility process for public health care programs is designed to determine eligibility by matching independent, external data sources with data provided by applicants and enrollees. When data is comparable, the system can determine eligibility automatically, as the report found in two-thirds of the cases.  When the automatic determination does not happen, the audit suggests a failure of internal controls. We do not believe this reflects a correct understanding of how to measure the accuracy and efficacy of METS or the eligibility process. To the contrary, we believe this is exactly how the eligibility process is supposed to work.”

The commissioners agreed with the report’s several other findings, however, including that the agencies had not ensured some enrollees had been correctly categorized, that Social Security information had not been verified in some cases, that data-transmission errors between systems had not been monitored and that security roles had not been properly established.

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audit, Medicaid, Minnesota, Minnesota IT Services
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