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Vermonters for Health Care Freedom Newsletter #50 - Part 2
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Auditor Confirms No VHC Financial Controls Over Premium Vendor
What is Benaissance? Benaissance is the Vermont Health Connect (VHC) vendor responsible for premium processing and payment. Initially, Benaissance was responsible for making sure that both individuals’ and small businesses’ premium payments were disbursed to the insurance carriers to whom the payments were due. As reported by State Auditor Doug Hoffer, when the state decided to allow small businesses to pay insurers directly, VHC kept paying Benaissance for 6 months after they stopped processing small business premiums. An overpayment of $580k had been made at the time of the audit.
No Benaissance Contract: The state has never had a direct signed contract with Benaissance. That could make collecting overpayments a little dicey. Benaissance came in as a subcontractor under CGI. When the state fired CGI in 2014, a simple “Assignment Agreement” was executed on August 1, 2014 between Mark Larson for VHC, and Michael Reagan for CGI.
The agreement “transfers, assigns and conveys to (VHC) all of the right, title, interest, obligations and liabilities of (CGI) under the Subcontract (in this case only the Benaissance subcontract). As of that date, the parties agreed that the terms and conditions of the Benaissance subcontract under CGI shall remain in full effect and force.
Who Controls the Money? Benaissance maintains a custodial bank account for the daily deposit of premiums paid to them and owed to carriers, customers and the State. As of 1/30/15 this balance was $5m. Per a VHC financial official, “VHC has performed very limited monitoring over the bank account. As of March 24, 2015, the state had not received requested reports from Benaissance that provided details on the makeup of this balance.”
On April 24th, we asked Auditor Hoffer whether there were any VT officials with signing authority on the account. Hoffer replied, “During the time of our audit, no state official had signature authority on this account. The account belongs to Benaissance, but is “for the benefit” of the State of Vermont”. Hoffer added that the money is deposited, held and disbursed according to the terms of the contract. However there is no contract between the State and Benaissance, and there never has been one. When asked by the House Health Committee to produce the Benaissance contract, Health Care Reform Chief Lawrence Miller referred the committee to the CGI contract that has Benaissance as a subcontractor.
Auditor Hoffer also provided information that “the ownership and the ability to perform transactions resides with the owner of the account”, Benaissance.
Where Are The Reports? The lack of state control over the Benaissance bank account raises alarm bells along with some interesting questions. The Benaissance money should be going out to BCBSVT and to a lesser extent, to MVP. At last count VHC owed BCBSVT $9m for 2015 and an additional settlement sum for 2014. How much money is in the Benaissance bank account today? What are the payment terms between the State and Benaissance, absent a contract? Is the State paying Benaissance regularly for its services? Is Benaissance holding money pending being paid by VHC? Is VHC running out of money? According to the state audit, all of the $198.7m in federal money has been accounted for except about $29m. These millions go pretty fast.
The audit report states, “The VHC system does not currently provide financial reports, such as weekly and monthly reporting on the dollar amounts of what has been invoiced, collected and remitted by Benaissance.”
It is disturbing that no Vermont official has any control over this account, and that VHC has not been monitoring Benaissance or requiring at least monthly reconciliations of the monies taken in and disbursed by Benaissance.
Legislators should be asking a lot of questions about this one.