February 8, 2013

FOR IMMEDIATE RELEASE

Contact: Steve Buckstein
               503/242-0900

Whistleblower Lawsuit Claims Oregon Department of Human Services Falsely Inflated “Healthy Kids Connect” Enrollment

…Cascade Policy Institute first reported inflated enrollment in its 2010 publication, “Facing Reality”

Portland, Ore. ― A former state employee has filed a $6.7 million whistleblower lawsuit against the Oregon Department of Human Services (DHS), saying she lost her job after pointing out financial irregularities and inflated enrollment projects for the state’s Healthy Kids Connect program.

Enrollment problems in the Healthy Kids Connect program were highlighted in “Facing Reality,” a report published by Cascade Policy Institute and Americans for Prosperity – Oregon in October 2010:

“Proponents of the program and DHS projected that the additional tax revenues would provide health insurance coverage to 80,000 Oregon children by the end of the 2009-11 biennium. However, with only a few months remaining in the biennium, the program has yet to enroll 26,000 more children to reach its projections.”

The complaint filed with the Marion County circuit court shows that as early as November 2009, there was evidence that the DHS projections were inflated:

“The press release draft stated Healthy Kids had a target enrollment of 80,000 kids. Plaintiff relied on three internal sources and the data revealed there were not 80,000 uninsured kids in the state.”

The complaint also alleges that DHS director, Bruce Goldberg, issued a directive regarding the method for counting the number of children enrolled in Healthy Kids. The method appears to be designed to inflate the number of children enrolled:

“In response to a question Plaintiff asked, [Healthy Kids staff member Melissa] Hanks provided Plaintiff with a document which outlined Goldberg’s directive on how the agency would calculate the number of enrollees. The document read, ‘For monthly caseload reporting on Healthy Kids Plan, we propose attributing any children’s caseload changes after June 30, 2009 to the HKP. This would generate the largest child count attributable to the HKP. That number will represent changes in caseload once Healthy Kids begins, and “Healthy Kids” become indistinguishable from all children.’ Plaintiff understood that any child enrolled in any state program was counted as ‘Healthy Kid’ for purposes of reporting enrollment. Enrollment was all children new to the program and all returning clients who have a gap in enrollment, which could be as short as one month. Plaintiff believed Healthy Kids took credit for the enrollment which predated the start of the program.”

In “Facing Reality,” Cascade Policy Institute called for ending the Healthy Kids Connect program. With the program sunsetting this year, the Legislature should make sure this troubled program ends with the sunset.

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