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Office of the Comptroller reveals improper payments by ASES to insurers for deceased Health Plan beneficiaries

The Office of the Comptroller of Puerto Rico (OCPR) issued an adverse opinion on the fiscal operations of the Health Insurance Administration of Puerto Rico (ASES). The tests performed and the evidence revealed that the operations related to the payment of premiums to the insurers were not carried out in all significant respects in accordance with the applicable law and regulations.

The Report reveals that ASES paid $707,588 to the insurers for deceased beneficiaries of the Medicaid Program of the Department of Health. These improper premium payments were identified from a sample taken for the months of August, October, and December 2022. Of this amount, ASES had recovered $13,630 from the insurers.

The Health Plan has 1,374,871 medically indigent patients according to data as of December 31, 2023. From July 1, 2019 to December 31, 2023, ASES had disbursed $16,896,344,705 for the payment of premiums to the insurers.

This situation is attributed to the fact that the specialist only compared three fields of the database of the Medicaid Program and the database of the Demographic Registry. This fact limited the ability to identify the deceased participants. In addition, ASES's chief information officer had not implemented a process to detect the deceased beneficiaries, to adjust the payment of the premiums in time.

The one-finding audit also points out that ASES made duplicate payments of $13,528 to the insurers, in August and December 2022. From the sample examined, the chief officer could not identify which of the duplicate payments to the 25 beneficiaries was the correct one. A similar situation had been commented on in Audit Report DA-16-20 of February 22, 2016.

The Report comments that the insurers took up to 125 days to pay 14,227 clean claims to the health providers for the sum of $4,913,649. A clean claim is one that the insurer can process without the need to obtain additional information for its adjudication. The insurer must pay 95% of the clean claims no later than 30 consecutive days from when the claim is received, and 100% of the clean claims no later than 50 consecutive days from when the claim is received.

This situation, among others, causes the health service providers not to accept the Health Plan card due to the delay in payments. In addition, it implies that the citizen has to pay for the services or change providers. This fact affects services and encourages a health crisis.

From July 1, 2019 to December 31, 2023, ASES had appropriations of $19,623,463,087 and made disbursements of $17,022,081,889, for a balance of $2,601,381,198.

The audit recommends that the secretary of Health and president of the Board of Directors of ASES review the internal procedure to identify the deceased participants and the duplicate payments. In addition, it suggests evaluating and determining whether it is appropriate to impose fines on the insurers for the late payment of claims to the health providers.

This first report of ASES covers the period from July 1, 2019 to December 31, 2023

Audit Report OC-25-34 can be obtained on our website: www.ocpr.gov.pr.