Medicaid chief Fink is asked to step down

The state Medicaid director is being ousted amid continuing problems with a new online eligibility system that is estimated to cost taxpayers as much as $144 million.

Kenny Fink, head of the Department of Human Services’ Med-Quest Division since 2008, said in an internal memo released Thursday to staff that he has been "asked to resign," but didn’t provide further details. He said his last day is Feb. 27.

In his resignation letter to DHS’ new director, Rachael Wong, Fink listed 15 accomplishments under his tenure, including overseeing implementation of the Kolea eligibility system since October 2013 to expand Obama­care enrollment.

Kolea has come under fire recently after widespread complaints by community health centers that for more than a year the system has constantly frozen up, frequently lost applicant information, didn’t update eligibility in a timely manner and couldn’t upload documents required for verification.

"I appreciate your giving me the opportunity to resign and allowing me to remain employed until this date," Fink said in the letter. "Working with the (Med-Quest Division) staff in service to the public has been a privilege and a pleasure. My entire career has been in public service working for the federal and state governments. As a division, we persevered and navigated through the great recession and the Affordable Care Act. This period has been arguably the most challenging in the history of Medicaid since its inception in 1965."

Lawmakers have criticized Medicaid officials for concealing the problems with the Kolea system and for how much it has spent on the faulty technology.

State Sen. Roz Baker (D, West Maui-South Maui) said it was time for a change at the top.

"He served at the pleasure of the DHS director," Baker said. "The director does have the ability to name a new individual, and apparently that’s what she’s planning to do, and I support her in that effort. The division does need fresh leadership, and we’re looking at really continuing to make great strides in health care transformation. Medicaid will be a part of that. It’s a very interesting (development) and one that I’ve been waiting for. That was something I was hoping would happen."

Beginning Feb. 28, Leslie Tawata will serve as acting administrator of the Medicaid program, which provides medical coverage for the state’s low-income population, Wong said in a separate staff memo.

"We will be working closely with her and the (Med-Quest Division) leadership team to ensure a smooth transition," she said. "You are well aware of and have been integral to the significant achievements accomplished by (the division) with Kenny as the division administrator. Thank you to Kenny for his years of public service and leadership at DHS."

Fink didn’t return calls seeking comment for this story. DHS spokes­woman Kayla Rosenfeld said the department does not comment on personnel issues.

Rosenfeld said she didn’t know Fink’s salary, but in past years he’s been ranked among the highest-paid state employees earning more than $200,000.

The DHS said that as of December it had spent $96 million of the $144 million contract with information technology developer KPMG LLP.

In addition, Med-Quest Division overtime since Kolea was implemented has soared 86 percent to $308,786 between October 2013 and September from $166,017 in the same period a year earlier. However, DHS said as of September there were 233,672 cases managed by the Med-Quest Division and 148 eligibility workers (or 1 worker per 1,579 cases) compared with 75,594 cases in September 2013 (or 1 worker per 511 cases).

Kolea was temporarily suspended for several days last month to complete upgrades intended to provide additional functionality and improve automation of the eligibility determination process.

The reviews have been mixed. Some community health centers that use Kolea to help clients apply for Medicaid say the system is improved; others say it is still "hit or miss."

"Just because a system works doesn’t mean that it can’t be improved or that issues that need to be fixed won’t be identified," Rosenfeld previously told the newspaper.

Problems at the state’s Medicaid program are reminiscent of the difficulties encountered by the Hawaii Health Connector, the Obama­­care health insurance program for those with incomes too high to qualify for Medicaid. The Connector was awarded $204 million in federal grants to build an online exchange that failed to open on time and frustrated users for months after it did launch.

KPMG was first contracted in 2012 to build Kolea in concert with the Connector to provide residents access to subsidized health insurance through Obama­­care. However, the two systems have not been integrated, which resulted in a backlog of 11,000 Connector applicants last year and low enrollment for the exchange.