A new state audit reveals continued problems with lax oversight in the Expanded All Kids state health insurance program.

State agencies in charge of the program were cited for failing to conduct annual eligibility reviews, failure to verify income, duplicate enrollments and continuing to pay benefits for patients who were too old to qualify for the insurance program.

The audit findings drew a quick response from Senator Dale Righter (R-Mattoon) one of the legislature’s top experts on Medicaid funding.

The audit reveals that when it comes to “making sure that the dollars we have to devote to Medicaid and the people who need it are being protected,” Righter said “the administration doesn’t view that as a priority mission for them.”

The Expanded All Kids program covers about 84,500 children and provided $75.2 million services to children during the audit period. It was created during the Blagojevich administration in 2006 and at the time covered children whose family income was greater than 200 percent of the federal poverty level. In 2011 a cap was placed on the program to exclude children whose families earned more than 300 percent of the federal poverty level.

Among the audit’s major findings:

·         Out of nearly 35,000 recipients required to have an annual review of their eligibility for the program, 32 percent were not reviewed annually as required;

·         The two state agencies assigned to determine income eligibility did not verify one month’s income as required;

·         During the audit period, 154 recipients received 1,966 services (an average of 12.7 per recipient) after they had turned 19 and were no longer eligible;         

·         The Expanded All Kids program continues to have children who are coded as undocumented immigrants even though they had verified social security numbers or alien registration numbers;

·         There was a lack of documentation to verify Illinois residency of recipients;

·         Eight out of 10 recommendations from previous audits were repeated in the latest audit.

The issue of undocumented vs. documented immigrants, which has been cited by the Auditor General in earlier audits, has a direct impact on the cost of the program to the state because the federal government does not reimburse the state for Medicaid costs for undocumented immigrants. The state, therefore, loses out on federal funding when it misclassifies documented immigrants as undocumented.

A key controversy in Illinois has been over the verification and scrubbing of Medicaid and All Kids rolls.

Bi-partisan Medicaid reforms passed by the legislature required the state to hire an independent contractor to conduct reviews and re-determine Medicaid eligibility. However, the state’s largest public employees union, the American Federation of State, County and Municipal Employees, challenged that process.

Critics have pointed to the high rate of success by the independent contractor before being shut down and argued that the Governor has not been aggressive enough in trying to overturn the arbitrator’s ruling or clarifying the language of the original legislation to allow the independent reviews to continue.

The audit provided additional fodder for those charges, by raising continuing issues about the ability or willingness of state program administrators to adequately monitor eligibility and purge individuals who do not qualify.