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State insurance audit shows incomplete eligibility checks

SALT LAKE CITY — An audit of state insurance programs for children and the poor that at first glance might have looked like a $13.7 million stash of fraud that revenue-strapped lawmakers could recoup is mostly a product of incomplete eligibility checking by the state.

In explaining a new audit report on how well the state manages federal programs such as Medicaid and the Children's Health Insurance Program (CHIP), deputy state auditor Joe Christensen said 23.7 cents of every dollar spent on CHIP went to members who weren't really qualified to receive the coverage. Christensen was quick to point out that most of the children in CHIP, an insurance program for children in families who make too much to be covered by Medicaid but who wouldn't have coverage otherwise, were actually qualified to be on Medicaid.

"This was a material noncompliance related to the CHIP program," he said, adding that if the error were projected to a dollar amount, it would total $13.7 million. "But when we found they weren't eligible for CHIP, they were eligible for Medicaid. They were just on the wrong program."

A review of Medicaid enrollees initially showed that about 30 percent were not eligible, but half of those were shown to come from incomplete intake documents that were later provided and added to the person's file, Christensen told members of the Health and Human Services Appropriations Subcommittee.

Sen. Pat Jones, D-Salt Lake, asked if the report could be interpreted to mean that the number of people who are receiving benefits they don't warrant "is really small, and the other piece is accounting errors" due to the state not getting and not asking for the correct documentation.

A lot of those in the programs come up with the proper documentation and are found to be "quite eligible," Christensen said.