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Health Exchange Audit Cites Xerox

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(Photo by Thearon W. Henderson/Getty Images)

(Photo by Thearon W. Henderson/Getty Images)

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CARSON CITY, Nev. (AP) — An independent auditor has recommended Nevada levy penalties against Xerox, saying the company failed to achieve key performance benchmarks in operating the state’s health insurance exchange.

The auditor’s review, discussed before the state’s exchange board Thursday, found instances of incorrect subsidy calculations and more than 1,000 invoices in which people paid too much because tax credits were omitted. Additionally, about 11 percent of claims reviewed did not account for reduced out-of-pocket costs for participants based on income levels.

The audit also noted that some premium information on the Nevada Health Link website was different than rates listed by the Division of Insurance. The exchange was given a rating of “fail” in several categories, including call response timeliness and resolution time.

Xerox spokesman Greg Vitiello said the company has made strides to fix problems and is reviewing invoices to correct billings. “We take the results of this audit very seriously,” he said.

Xerox was awarded a $75 million contract to build and operate Nevada’s online Web portal created under President Barack Obama’s federal health care law. But the system has been wracked with problems since it went live Oct. 1, leading to anger and frustration from consumers, insurance agents and state officials alike.

Exchange officials reduced target enrollments to 50,000 from 118,000 because of problems with the site, and in March a board chaired by Gov. Brian Sandoval hired Deloitte Consulting, a Xerox competitor, to evaluate the system and recommend fixes. That review is expected to be complete by the end of this month.

The state also gave anyone who attempted to sign up for coverage by the March 31 deadline another 60 days to try to complete their application process.

No immediate action was taken by the Silver State Health Insurance Exchange Board after it was briefed on the findings by William Carr of Health Claim Auditors Inc. The audit was part of an oversight structure set up when Nevada implemented its own insurance exchange.

It was released the same day the Obama administration said 8 million people nationwide have signed up for health coverage through exchanges. Updated figures incorporating special enrollment signups for Nevada were not immediately available, state officials said. Roughly 42,000 people had selected plans by the March 31 deadline.

Carr said nine categories qualify for possible penalties. Under Xerox’s contract with the health exchange, he said the “aggregate damage for failure” cannot exceed $25,000 per month or 5 percent of administrative fees Xerox receives for monthly billings, whichever is greater.

Another problem identified in the audit was multiple accounts for individual applicants. Of the files sampled, 23 percent had multiple accounts — as many as 16 — that were created either by applicants or customer service representatives when they had trouble accessing account information.

But those abandoned or temporary accounts, estimated at more than 50,000, are not linked to account holders, meaning that when a participant calls in for assistance, a service representative “must look through all the accounts to accrual all information,” the audit said.

The audit recommended Xerox link all accounts pertinent to the same participant to increase accuracy and reduce transaction times.

In its response included in the report, Xerox said the system “is working as designed for the shopping experience” and that it will work with exchange officials “to define requirements and prioritize if implementation is requested.”

One board member, Leslie Johnstone, expressed concern, however, that Xerox did not respond to all the findings included in the audit.

“It does not appear to me that Xerox is taking this report seriously and the number of errors and magnitude of these errors,” she said. “I think it’s just not responsible.”

Vitiello tried to assure the board of Xerox’s commitment to resolving problems, saying the company would submit written responses by next week. “Based on the information and feedback” from the auditors and exchange officials, “we have been working to resolve each of the findings,” he said.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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