REPORT HIGHLIGHTS HEALTH BENEFITS FOR IMMIGRANT SENIORS AND ADULTS PERFORMANCE AUDIT Release Date: February 26, 2025 State of Illinois, Office of the Auditor General FRANK J. MAUTINO, AUDITOR GENERAL To obtain a copy of the Report contact: Office of the Auditor General, 400 West Monroe, Suite 306, Springfield, IL 62704-9849 (217) 782-6046 or TTY (888) 261-2887 This Report Digest and Full Report are also available on the worldwide web at www.auditor.illinois.gov BACKGROUND: Background: On November 7, 2023, the Legislative Audit Commission adopted Resolution Number 165, which directed the Office of the Auditor General to conduct a performance audit of the Illinois Department of Healthcare and Family Services’ (HFS) administration of the program of Medicaid services and coverage provided to undocumented immigrants (see Appendix A). In 2020, Illinois began to expand healthcare coverage to noncitizen immigrants. The first expansion, the Health Benefits for Immigrant Seniors program (HBIS), began in December 2020, and covered adult seniors 65 years of age and older. The second expansion began in May 2022 and covered immigrant adults between the ages of 55 and 64. The most recent expansion began in July 2022 and covered immigrant adults between the ages of 42 and 54. These two expansions are both part of the Health Benefits for Immigrant Adults program (HBIA). Key Findings: • Actual enrollment and actual costs exceeded the initial program estimates for both the HBIS and HBIA programs. Regarding estimated number of enrollees, in FY23: -- for HBIS (65+), the initial estimated number of enrollees was 6,700, while the actual number enrolled was 15,831; -- for HBIA (55-64), the initial estimated number of enrollees was 8,000, while the actual number enrolled was 17,024; and -- for HBIA (42-54), the initial estimated number of enrollees was 18,800, while the actual number enrolled was 36,912. • Regarding the initial cost estimates for all three fiscal years 2021, 2022, and 2023: -- for HBIS (65+) the total estimate was $224.0 million, while the actual total cost was $412.3 million or 84 percent higher; -- for HBIA (55-64) the total estimate was $58.4 million, while the actual total cost was $223.1 million or 282 percent higher; and -- for HBIA (42-54) the total estimate was $68.0 million, while the actual total cost was $262.2 million or 286 percent higher. • In FY21, 6,884 individuals were enrolled in HBIS (65+). HBIS (65+) enrollment increased to 11,362 in FY22, 15,831 in FY23, and decreased to 11,464 in FY24. The HBIA (55-64) enrollment increased from 6,675 in FY22, to 17,024 in FY23, before decreasing to 13,596 in FY24. The HBIA (42-54) enrollment increased from 5,823 in FY22, to 36,912 in FY23, before decreasing to 27,941 in FY24. According to HFS officials, the FY24 numbers exclude those who have been removed from the program due to redetermination or due to the change in eligibility that removed legal permanent residents from the program. • In total from FY21 through FY23, the expanded programs for immigrant seniors and adults cost just under $898 million. The cost for all three levels increased greatly in FY23. The HBIA (42-54) level was the largest and most costly in FY23 at $244 million. The HBIS (65+) level cost $211 million, and the HBIA (55-64) level cost $189 million in FY23. The cost for FY24 increased from FY23. In FY24, the HBIA (42-54) level was the most costly at almost $312 million. The HBIS (65+) level cost $211 million, and the HBIA (55-64) level cost $196 million in FY24. • For fiscal years 2021, 2022, and 2023, the three largest costs were for outpatient services, inpatient hospital services, and pharmacy services. Beginning in FY24 with the conversion to managed care, capitation payments became the largest cost at $265 million. Outpatient services ($145 million), inpatient hospital services ($94 million), and pharmacy services ($106.8 million) were the next highest costs. The total cost for the HBIS and HBIA programs since inception was just over $1.6 billion. • According to HFS, the redetermination process reviewed 64,244 HBIS and HBIA enrollees. HFS removed a total of 21,362 HBIS and HBIA enrollees as of January 2025. In total, 19,872 were removed from HBIS and HBIA for eligibility or procedural reasons, which involved not responding to redetermination requests. Additionally, another 1,490 were removed and were enrolled in another program. • Inpatient reimbursement through fee-for- service payments for services provided within the Cook County Health and Hospital System or the University of Illinois hospital system are subject to enhanced rates established by HFS by rule. According to HFS, the rates paid for HBIS and HBIA to enhanced rate hospitals are the same as is paid for Medicaid. • Auditors reviewed the eligibility data as of June 30, 2023, and identified 478 enrollees with two or more Recipient Identification Numbers. This was due to poor data entry and a lack of internal controls or system edits over the entry of this information. • During a review of the enrollment data, auditors identified 6,098 enrollees designated as “undocumented” who also had a Social Security Number. Auditors provided the 6,098 enrollees to HFS asking whether enrollees classified as undocumented enrollees should also have a Social Security Number. HFS officials reviewed and provided responses for a sample of 94 enrollees. Auditors determined that 19 of the 94 should have been recorded in the system as lawfully present or as being a legal permanent resident, not undocumented. This is an important distinction as after five years in the country, legal permanent residents become eligible for Medicaid and thus the State would receive federal matching dollars. • Auditors identified 688 enrollees who were enrolled in the HBIS (65+) program who were not 65 years of age or above. These 688 exceptions were provided to HFS for comment. After HFS’s review of 151, it was determined that 79 were signed up in error. Many of the errors occurred from incorrect birthdates provided by the enrollee, which were later corrected when documentation was provided. • During a review of the enrollment data, auditors identified 394 enrollees who appeared to have been enrolled in HBIS or HBIA after they had been in the country legally for over five years. These individuals are eligible for Medicaid, thus the State would receive federal matching dollars. These exceptions were provided to HFS for review and comment. HFS reviewed a sample of 17 and determined that 13 were approved incorrectly. Allowing ineligible enrollees in State-only funded programs should be avoided when possible. Key Recommendations: The audit report contains two recommendations: • HFS should review its eligibility data and the analysis conducted by auditors and should work with the Illinois Department of Human Services to remove any unnecessary duplicate enrollees to ensure fraudulent or duplicate payments are not made on their behalf. • HFS should work with the Illinois Department of Human Services to develop controls over eligibility determinations for the HBIS and HBIA programs to ensure ineligible individuals are not enrolled in violation of 305 ILCS 5/12-4.35. Additionally, HFS should seek federal reimbursement for any federal match lost due to the miscategorization of HBIS and HBIA enrollees who were otherwise eligible for federally funded programs. This performance audit was conducted by the staff of the Office of the Auditor General.