Department of Health Access

Audit Title

Performance Audit: Effectiveness of the Department of Vermont Health Access (DVHA) in Identifying and Leveraging Third-Party Liability (TPL) for Medicaid Claims

Objective:

To determine whether the Department of Vermont Health Access (DVHA) has implemented an effective system to ensure Medicaid acts as the "payer of last resort" by accurately identifying, billing, and recovering payments from primary insurers (e.g., Medicare or private insurance) for "dual-eligible" members.

Scope:

Review DVHA’s policies, data-sharing agreements, and contractor oversight (e.g., Gainwell Technologies) concerning Third-Party Liability (TPL) for a period covering the two most recent fiscal years. Review a statistical sample of paid claims for members identified as having "Other Health Insurance" (OHI) to test the accuracy of the cost-avoidance and "pay and chase" mechanisms.

Key Audit Areas and Procedures

Data Integrity and Automated Cost-Avoidance:

Test the reliability of the Medicaid Management Information System (MMIS) in flagging claims for members with known primary insurance. Determine the "data lag" time between a member gaining private coverage and that information being actionable in the state’s billing system.

Oversight of "Pay and Chase" Recoveries:

Evaluate the efficiency of the "pay and chase" process, where the state pays a claim upfront and seeks reimbursement later. Determine if the state is meeting its own 3-year statutory deadline for recovery and assess the volume of "written-off" claims that were deemed uncollectible due to administrative delays.

Provider Compliance and EOB Verification:

Assess whether DVHA ensures that providers are submitting an Explanation of Benefits (EOB) from primary insurers before Medicaid pays the balance.

Expected Value of the Audit:

This audit provides a direct pathway to cost containment by ensuring that Vermont taxpayers are not paying for healthcare costs that are legally the responsibility of federal programs (Medicare) or private corporations. By identifying "leakage" in the TPL system, the audit can recommend software logic updates and better data-sharing practices that yield recurring, multi-million dollar savings without reducing the quality or quantity of care provided to Vermonters.