Hawaii health marketplace off to an especially rough start
by Maeve Reston, LA Times, February 25, 2014 (excerpt)
...Frustration over the lack of transparency into the Health Connector's operations has led 20 House lawmakers to sign on to a bill, scheduled for another hearing Wednesday, designed to strip it of its nonprofit status and place it under the control of the state. But that move is facing resistance from lawmakers who fear the state will be saddled with the Health Connector's increasingly apparent financial problems and absorb its potential legal liabilities.
"Will it actually get us closer to the transparency and accountability that everybody's screaming for?" asked Democratic state Rep. Angus L.K. McKelvey, chairman of the House Consumer Protection and Commerce Committee, which stopped short of backing a state takeover. "Making it a state agency — while on paper it may sound like we're going to address these issues ... there are other sorts of issues that are going to emerge that could actually make it an even bigger train wreck."
Democratic state Sen. Josh Green, an emergency room doctor and chairman of the Senate Health Committee, says he has been unable to get clear answers about the agency's operations and viability. He said that with $205 million in grant funds, "You could have actually directly paid for people's healthcare ... and begun to approach full care for everybody."
Agency officials had refused until recently to disclose a budget; they said the bulk of the money had gone toward information technology contracts ($80 million), outreach ($13 million) and salaries ($6.1 million).
Those numbers are not out of line with what other states have spent, but because of the lack of details, lawmakers say they have little insight into why the money has produced such disappointing results.
For the last two months, healthcare program officials — in response to records requests from the Los Angeles Times — have declined to release anything but a nine-line summary of the current year's budget. On Saturday they produced another summary for the 2013-14 fiscal year, which they also provided to lawmakers.
Health Connector officials refused to provide The Times with the grant applications that Hawaii submitted to the federal government to justify the state's federal funding, saying that the release of such information would create "a potential threat" by making public ideas that could put the state exchange at a competitive disadvantage with the private sector.
The federal Centers for Medicare & Medicaid Services has also declined to discuss the Hawaii exchange. Despite requests from The Times beginning in early January, it has not released the state's application for taxpayer dollars or its progress reports.
Hawaii Health Connector had refused even to allow the state auditor to conduct a review required under state law until the agency's new director, Tom Matsuda, took his post at the end of last year. A federal audit, required by the Affordable Care Act, has just been completed but is not yet available because it is pending approval by the agency's governing board.
The last publicly available audit of the nonprofit, a federal review covering July 2011 to June 2012 — the period when the newly created Hawaii Health Connector received its first major grant funds — found that it had no formal policies and procedures for how it spent its money until May 2012 and subsequently failed to follow the policies it created because employees were not familiar with them. The audit also found that the agency did not have formal procedures for handling cash....
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