Audit: Bad Planning, Procurement Made Health Connector Unsustainable
Hawaii auditor slams the state’s health insurance marketplace created under the Affordable Care Act.
In a biting , the state auditor calls the former head of the Hawaii Health Connector “an uncooperative executive director who withheld information,” hampering聽the聽board of directors’ ability to聽monitor the development of its massive IT system.
Coral Andrews was the Connector’s executive director when the audit was winding up, but in December聽2013. Tom Matsuda served as聽interim director until Jeff Kissell, the current executive director, was hired in October.
The lack of transparency didn’t just affect the Connector’s own work. It also delayed the start of the audit and聽affected聽the ability of the auditor’s office, headed by acting Director Jan Yamane, to do its job.
Jeff Kissell, executive director of the Hawaii Health Connector, makes his case for more state support at a legislative oversight committee hearing in December.
Cory Lum/Civil Beat
“At the start of our audit, we encountered resistance from the former executive director, who was reluctant to share any information, claiming the Connector was a separate nonprofit organization and not an entity of the State,” the audit says.
State law created the Connector and requires an annual state audit.
The Connector delayed producing requested data and聽documents 鈥 sometimes by up to two months 鈥 and denied direct access to records聽and聽files, the audit says.
“Records requested were screened and released to聽us piecemeal,” the audit says. “As a result, we had no assurance that documents were聽complete or in existence prior to our review.”
Specifically, the auditors were unable to determine if fees paid to one of the Connector’s consultants were reasonable because the聽Connector did not provide all the information requested.
The auditors wanted to know more聽about a聽$12.4 million contract with Mansha Consulting because as far as they were able to聽see, the company failed to do what聽it was hired to do. The auditors are still waiting for information about the聽number of Mansha employees and subcontractors who actually worked on a particular project from April 2013 to April 2014.
Overall, the 58-page audit hits the Connector hard for inadequate planning and improper procurement leading to an unsustainable state-based exchange.
However, the Connector’s new director is working to right the ship.
碍颈蝉蝉别濒濒听released a nearly 200-page report earlier this month charting a path for the Connector to become sustainable, in part by helping Hawaii’s economy gain more than $500 million in federal tax benefits under the Patient Protection and Affordable Care Act.
The Connector has already received $204.4 million in federal grants, but Kissell told lawmakers that its聽path to sustainability will require $28 million from Hawaii taxpayers over the next seven years, starting with an estimated $2.5 million to shore up a deficit next year.
The health exchange needs to attract at least 35,000 new members to become sustainable.
Kissell has recognized the Connector’s missteps in the past and vowed a more transparent future. He released a statement Thursday responding to the audit.
“The audit findings detailed many of the challenges the Connector encountered during its first year of business,” Kissell said. “They included deficiencies in the planning process, procurement, and governance. The recommendations are reasonable and have been addressed.鈥
Read the full audit below.
