Program audit of the Covering ALL KIDS Health Insurance Program.

              REPORT DIGEST
PROGRAM AUDIT OF
THE COVERING ALL KIDS
HEALTH INSURANCE
PROGRAM
Released: May 2010
State of Illinois
Office of the Auditor General
WILLIAM G. HOLLAND
AUDITOR GENERAL
To obtain a copy of the report contact:
Office of the Auditor General
Iles Park Plaza
740 East Ash Street
Springfield, IL 62703
(217) 782-6046 or
TTY: (888) 261-2887
This report is also available on the
worldwide web at:
http://www.auditor.illinois.gov
SYNOPSIS
Public Act 95-0985 amended the Covering ALL KIDS Health
Insurance Act [215 ILCS 170/63] and directed the Auditor General
to annually audit the ALL KIDS program. This first annual audit
covers FY09. The focus of this audit is on “EXPANDED ALL
KIDS,” which is the portion of the ALL KIDS program that serves
uninsured children not previously covered by KidCare (i.e., those
children whose family income was greater than 200 percent of the
federal poverty level or who were undocumented immigrants). Our
audit found that:
 In FY09, 94,525 children whose family income was greater than
200 percent of the federal poverty level or were classified as
undocumented immigrants were enrolled in the EXPANDED
ALL KIDS program.
 Total claims paid in FY09 for the EXPANDED ALL KIDS
enrollees were $79.1 million. HFS received approximately $8.9
million in premiums from enrollees, thus making the net cost of
the ALL KIDS expansion approximately $70.2 million. The
children added as a part of the expansion are not eligible for
federal reimbursement and thus are funded entirely by the State.
 HFS and DHS misclassified documented immigrants who receive
ALL KIDS services. In 9 of 48 (19%) “undocumented”
immigrant files auditors reviewed, the enrollees were actually
documented immigrants.
 Of the 98 cases sampled, 42 enrollees (43%) did not provide
proof of birth (e.g., birth certificate). Auditors could not find
documentation of identity in 6 cases reviewed (6%).
 HFS does not terminate ALL KIDS coverage when the enrollees
fail to pay premiums as required by 89 Ill. Adm. Code
123.340(a).
 Annual reviews of ALL KIDS eligibility – also called
redeterminations – required by the Illinois Administrative Code
[89 Ill. Adm. Code 123.260] – were not being adequately
implemented by HFS.
 DHS does not calculate family income for EXPANDED ALL
KIDS eligibility as required by the Administrative Code. When
determining family income when a stepparent is present, HFS
counts the income of the stepparent; however, DHS does not.
 HFS had difficulty providing accurate data from its Data
Warehouse in a timely manner for this audit.
 HFS utilized a pricing evaluation formula which was not
published in the Request for Proposal (RFP), a formula which
directly affected which bidder was awarded the contract.