LINCOLN — More than half of Nebraskans who got state help paying for private insurance have been dropped from a Medicaid-related program following a critical audit.
But most of those people remain eligible for regular Medicaid coverage, in which the state pays for their medical care.
State Medicaid officials reviewed all 455 people participating in the program after State Auditor Mike Foley raised questions about its operations. The reviews were completed in July.
As of Wednesday, 236 people have been removed from the program. Officials had determined that it was not cost-effective to continue buying private insurance for 207 of those participants, said Russ Reno, a spokesman for the Nebraska Department of Health and Human Services.
Another 29 people were dropped for other reasons, such as no longer qualifying for Medicaid, he said.
Reno said 36 people have appeals pending over the decision to drop them from the program.
He said Nebraska instituted the Health Insurance Premium Payment program as a cost-saving measure.
It uses state and federal funds to pay insurance premiums for people who would otherwise qualify for Medicaid.
The program is intended to be used only when it is less expensive to pay for private insurance premiums, deductibles and co-payments than to pay for a person's care through Medicaid.
Foley detailed several failings of the program in a May audit. He said his staff found “gross mismanagement” and “serious financial discrepancies” in the 19-year-old program
The audit found HHS had failed to adequately check and document whether all of the program participants were eligible.
Foley said that failure called into question all $6.5 million worth of payments made from July 1, 2010, through Feb. 5 of this year, the period covered by the audit.
In one case, HHS paid more than $265,000 in premiums for a participant whose care would have been cheaper to provide through Medicaid.
The audit also found errors in the premium payments made for 53 of 70 participants whose cases were examined, a rate that Foley called “extraordinarily high.”
Foley criticized HHS for putting the program in the hands of a relatively low-level employee who was not well-compensated, well-trained or well-supervised.
Along with the reviews, HHS officials replaced the program administrator.
Kerry Winterer, the department CEO, also ordered division directors to review all programs to make sure they comply with state and federal laws and regulations.
The headline on an earlier version of this story incorrectly said more than 400 Nebraskans were dropped from the Medicaid-related program.