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Audit: CT officials don’t know if COVID testing providers were overpaid

A COVID screener gets ready for a nasal swab testing in Hartford in December 2021.
A COVID screener gets ready for a nasal swab testing in Hartford in December 2021.

In the rush to test Connecticut nursing home residents and staff for COVID-19, the state Department of Public Health did not track whether testing providers, who received millions of dollars in public funding during the pandemic, were also collecting insurance payments that would need to be remitted to the state, according to a recently released audit.

That oversight may have resulted in testing providers being compensated twice — by the state and by insurance companies — for the samples they collected at the long-term care facilities, according to the state Auditors of Public Accounts.

The uncertainty over the testing contracts is largely due to the Department of Public Health’s lax recordkeeping during the pandemic as the state loosened its normal purchasing rules to quickly build up its testing capacity, according to the audit.

The auditors noted that state health officials did not run checks during the height of the pandemic to determine if they were overpaying the various testing providers, whom they were relying on to screen vulnerable nursing home patients.

The state is only now starting to review those contracts and the millions of dollars it paid out to the companies.

Between July 2020 and June 2021, the state health department distributed more than $159 million in federal funding to 10 different clinics, hospitals and private laboratories to test the patients and staff for COVID-19 at 210 nursing homes around the state.

As part of those contracts, the companies agreed to collect information from the people they were testing and to bill the appropriate insurance carrier if those individuals were covered by a health insurance policy.

Any insurance money the testing providers received was then supposed to be returned to DPH, if the state initially covered the upfront cost of that testing.

Public records show that four of the 10 testing businesses reimbursed the state last year.

Those four companies initially received a combined $138 million from the state for collecting COVID-19 samples and analyzing them at labs. And they eventually returned roughly $22 million back to the state health agency after billing various insurance companies.

Griffin Hospital, which performed the largest share of the nursing home testing during that time period, received more than $113 million from the state and returned more than $19 million it collected through insurance claims.

Urgent Care Medical Associates, which received roughly $19.7 million from the state, returned more than $1.1 million in insurance proceeds. Hartford HealthCare, which was paid $3.5 million, reimbursed the state nearly $500,000, and the Fair Haven Community Health Clinic, which received $1.3 million from the state for testing, returned roughly $188,000.

Meanwhile, the six other companies that were hired to perform testing at the nursing homes did not remit any money to the state.

Those six businesses were Genesys Diagnostics, Prospect ECHN Inc., Prospect Waterbury Inc., Sema4 Genomics, Stamford Hospital and Yale New Haven Health Services.

According to the audit, state officials have been unable to calculate how much those six companies may owe — if anything.

That's because DPH does not have direct access to the health insurance records for the people who were tested at the nursing homes, DPH officials said. The testing companies collected and maintained that information themselves.

The state auditors said that opened up the possibility that the six testing companies got to keep more money than they were entitled to under the contracts.

“The lack of insurance recovery remittances likely resulted in overpayments to the contractors,” the auditors wrote in their report.

“We are not accusing anybody of wrongdoing,” John Geregosian, one of the two state auditors, said. “All we know is that some of the contractors didn’t give any money back to the state from insurance payments they could have collected as the contract required them to do, and that four of them did.”

The CT Mirror emailed and called all six of those companies seeking an explanation about the audit's findings. Officials with four of those testing providers responded.

Yale New Haven Health, which is the largest health care system in the state, and SEMA4, a private lab company, said they did not return any money because they never charged the state for tests that were covered by a health insurance plan. They kept the two billing processes separate, they said.

“We can state very directly, that if we billed insurance, we did not also bill the state," said Vincent Petrini, a senior vice president with Yale New Haven Health. "As a result, we never received both an insurance payment and a state payment for the same test. We are entirely comfortable working with the state to review any of these transactions during the course of the pandemic.”

“We adhered to our contractual obligations to the state for long-term care facilities, including all billing and reporting requirements,” a spokesman for SEMA4 said. “We did not bill the state for tests that were paid by insurance.”

Officials with the Eastern Connecticut Health Network and Waterbury HEALTH, which were previously operated by Prospect Medical Holdings, said they were confident that their two companies were not overcompensated for the work they performed.

“ECHN and Waterbury HEALTH provided detailed patient data to the State of Connecticut’s Department of Health in order to be reimbursed for the COVID testing services provided,” said Nina Kruse, a chief communications officer for the two health care companies. “We have reviewed the number of tests performed and the amounts received and can confirm we did not receive any overpayment for this testing.”

Officials at DPH also pushed back against the audit findings. They explained that the agency's lack of oversight with the insurance payments was due to the fast-paced nature of the pandemic and the corresponding crisis that played out at nursing homes across the state.

DPH officials said there was not enough time to fully review the work of each testing company during the public health emergency while the residents and staff at the nursing homes were at severe risk of contracting the virus.

“The urgency to perform these testing services was necessitated by the pandemic and the imminent crisis at these facilities," DPH officials wrote in response to the audit.

“The process of review, vetting and validating the numerous weekly payment requests from the care partners prior to making payments was determined to be a burden to the exceptionally time sensitive and critical nature of the COVID-19 testing services at these nursing home facilities,” the agency added.

DPH officials told the CT Mirror that the agency is in the process of reviewing all of the work performed by the 10 testing providers and determining whether any of those companies owed the state money.

The contracts that the testing companies signed allow the state health agency to perform follow-up audits to ensure the businesses didn't overbill the state for testing or pocket any additional profits.

“The Department of Public Health is thoroughly reviewing all providers’ submissions for compliance with their contracts,” said Chris Boyle, a spokesman for DPH. “This process was underway, even prior to the release of this audit. DPH is working with the auditors and will continue to update them on our progress.”

If any companies were overpaid for the lab testing or failed to pass insurance payments on to the state, Boyle said, DPH would seek to collect on those debts.

“The results of that thorough review will determine if funds are to be returned to DPH,” he said. “If needed, DPH will take action to provide for the prompt return of those monies.”

The testing providers may need to wait a little longer for those results.

State officials told the CT Mirror that the review of the testing contractors may not be finished until late November.

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