Summit County cancels health benefits for ineligible people

Rick Armon
Nov 11, 2009 (The Akron Beacon Journal - McClatchy-Tribune Information Services via COMTEX) --

Summit County has booted nearly 100 people off its health insurance plans -- including a dead person -- after determining they were ineligible for coverage.

County leaders also may remove others, and possibly pursue disciplinary and criminal charges if intentional fraud is uncovered during an ongoing eligibility audit.

"A strong message has to be sent out to those who are caught stealing," County Council President Nick Kostandaras said.

The county notified nearly 2,000 workers in mid-September that it wanted proof that more than 4,200 dependents receiving health benefits are really eligible for coverage. The county -- which provides insurance for about 3,000 employees overall -- demanded legal documents such as marriage and birth certificates.

To encourage workers to fix mistakes, officials offered amnesty from discipline and prosecution to employees who corrected an error by the end of September.

The county so far has canceled benefits for 95 people. It's unclear right now whether there was any intent to defraud the county.

"I think the majority was unintentional," said Ken Jones, county director of insurance and risk management. "I think people mistakenly covered ineligible people."

The vast majority are children who, for example, are no longer full-time students or don't live with the employee. Other cases involved spouses still receiving benefits after a divorce. In one instance, the county was paying for coverage for a spouse who had died.

Those ineligible people had filed claims for about $500,000 in health benefits this year.

The county is still reviewing paperwork or hasn't received any response from 68 employees.

Summit County is self-insured, meaning claims made by workers and dependents are paid by the county. The local government pays the claims by setting a health-care premium, and then collecting fees from employees and paying its share of the employee cost, as well.

Ineligible dependents and claims drive up the county's health-care costs.

Eligibility audits have been growing in popularity over the last five years, with private companies and public entities doing reviews to help contain their increasing health-care costs. Akron is pursuing an audit and has said it hopes to save several million dollars.

Enrollment fraud is a common problem. Studies show that 4 to 12 percent of people listed as dependents aren't eligible for the benefits. And the typical cost for a dependent is between $3,000 and $3,400 a year.

"If you reduce the plan costs by eliminating people who shouldn't be on the plan in the first place, you're saving potentially $3,000 per dependent," said Paul Cantwell, president of American Benefits Management in North Canton, which conducts eligibility audits for private companies and public entities. "Your return on your investment is quick."

Despite that, enrollment fraud is "a small percentage of the fraud that's in the system," said Louis Saccoccio, executive director of the National Health Care Anti-Fraud Association in Washington, D.C.

He estimated that overall health-care fraud nationwide -- not including waste or abuse -- is at least $70 billion a year.

Jones, who launched the county's eligibility audit, said it's not known right now how much money the county will save by identifying ineligible people.

He plans to provide a final report to County Council when the review is completed either at the end of next month or the beginning of next year.

He added that the county routinely reviews eligibility each year and is stringent when new employees are hired, but hasn't asked workers before to participate in a full-scale audit. For example, he said, the county checks twice a year on whether full-time students are still in school.

Sometimes people are eligible at the time they are enrolled, but then circumstances change and records aren't updated.

"Births. Deaths. Those are easy," Jones said. "Divorces are the hard ones."

According to the preliminary results, at least 12 divorced spouses were still receiving benefits in the county.

Less forgiving

Kostandaras said he wants to pursue those who intentionally abused the system.

"Amnesty, my ass," he said. "I'm not going to give them no leeway. Nothing. I'm determined to make sure that Mr. Jones or [County Executive Russ Pry] don't give these guys any break at all."

Jason Dodson, Pry's chief of staff, said the offer of amnesty doesn't mean the county won't seek to be repaid for claims made by ineligible people.

But he said pursuing disciplinary or criminal charges is more difficult.

"The problem is that in order to have fraud you have to have intent to defraud," he said.

Rick Armon can be reached at 330-996-3569 or rarmon@thebeaconjournal.com.

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