DHS in the News: Agency director seeks audit for KOLEA system

Posted on Mar 17, 2015 in NEWS

State lawmakers support a resolution to grant a review of the online program

The new director of the state Department of Human Services is requesting an audit of her agency’s $144 million Medicaid eligibility system, known as Kolea.

Rachael Wong said Monday she asked lawmakers to pass a resolution that would allow the state auditor to assess the online system intended to overhaul a decades-old paper application process and speed up enrollment in the government health insurance program for low-income residents.

“I recognize there’s a lot of public confusion about what Kolea is and what the (Hawaii Health Connector) is,” said Wong, adding that the audit will be paid for by DHS. “It made me recognize there was a need for facts. There’s all this, for lack of a better word, chatter that’s out there. We need a third party to come in to be able to assess the process, to assess our product and to assess where we are.”

Kolea has come under fire recently after widespread complaints that for more than a year the system has constantly frozen up, frequently lost applicant information, didn’t update eligibility in a timely manner and couldn’t upload documents required for verification.

Lawmakers previously criticized Medicaid officials for concealing the problems with the Kolea system and for how much they had spent on the faulty technology. The DHS said that as of December it had spent $96 million of the $144 million contract with information technology developer KPMG LLP.

“In some ways this is an opportunity for us to continue to do our due diligence in what is happening with Kolea. I still have my concerns. We need to know, Is it really working?'” said state Rep. Della Au Belatti (D, Moiliili-Makiki-Tantalus), one of the sponsors of the resolution. “I’m concerned about the contracts and the extensive amount of money that was expended. I don’t feel that we had adequate answers. I’m eager to have the resolution heard.”

State Rep. Dee Morikawa (D, Nii­hau-Koloa-Kokee), another sponsor of the measure, said it is uncommon for directors to request audits of their own agencies.

“That’s probably the first time I ever heard of it. Usually it’s us saying we want to audit you because we don’t think something is right,” Mori­kawa said.

“So this is kind of unusual, but she needs help. No one can come in halfway through this and figure out whether it’s good or bad. When you see how much money it’s costing your agency, then you really have to make sure to see what happened and why. Because she’s the new director, I think it’s the most prudent thing to figure out where the problems are and how she can correct them.”

Problems at the state’s Medicaid program are reminiscent of the difficulties encountered by the Hawaii Health Connector, the Obama­­­care health insurance program for those with incomes too high to qualify for Medicaid. The Connector was awarded $204 million in federal grants to build an online exchange that failed to open on time and frustrated users for months after it did launch.

Connector officials blamed the Kolea technology last year for holding up 11,000 applications on the exchange created by the Affordable Care Act. The Medicaid system determines eligibility for subsidies on the Connector that lower premium costs for Obama­care insurance policies.

Kolea was temporarily suspended for several days in January to complete upgrades intended to provide additional functionality and improve automation of the eligibility determination process. Another upgrade is scheduled for some time in April or May, DHS said.

Wong defended Kolea, saying that after the most recent fix, the user experience has significantly improved.

“The functionality works. We have processed over 330,000 Medicaid enrollments,” she said. “As a government department we know we’re trustees of the public trust and taxpayers’ dollars, and so we want to demonstrate our understanding of that and commitment to that stewardship. We want to improve efficiencies and transparency.”