Dental Loan Repayment Program Department of Public ... - …

[Pages:34]Dental Loan Repayment Program Department of Public Health and Environment

Performance Audit June 2010

OFFICE OF THE STATE AUDITOR

LEGISLATIVE AUDIT COMMITTEE 2010 MEMBERS

Senator David Schultheis

Chair

Senator Lois Tochtrop

Vice-Chair

Senator Morgan Carroll Representative Jim Kerr Representative Frank McNulty

Representative Joe Miklosi Senator Shawn Mitchell Representative Dianne Primavera

OFFICE OF THE STATE AUDITOR

Sally Symanski

State Auditor

Cindi Stetson

Deputy State Auditor

Sarah Aurich

Legislative Audit Manager

Jarrod Musick

Legislative Auditor

The mission of the Office of the State Auditor is to improve the efficiency, effectiveness, and transparency of government for the people of Colorado by providing objective information, quality services, and solution-based recommendations.

STATE OF COLORADO

OFFICE OF THE STATE AUDITOR

303.869.2800 FAX 303.869.3060

Sally Symanski, CPA State Auditor

Legislative Services Building 200 East 14th Avenue Denver, Colorado 80203-2211

June 23, 2010

Members of the Legislative Audit Committee:

This report contains the results of a performance audit of the Department of Public Health and Environment, Dental Loan Repayment Program. The audit was conducted pursuant to Section 2-3-103, C.R.S., which authorizes the State Auditor to conduct audits of all departments, institutions, and agencies of state government. The report presents our findings, conclusions, and recommendations, and the responses of the Department of Public Health and Environment.

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Dental Loan Repayment Program

Purpose, Authority, and Scope

The Dental Loan Repayment Program (Dental Loan Program, Program) provides student loan repayment assistance to dentists and hygienists that agree to serve a traditionally underserved population. Section 25-23-101, C.R.S., states that the purpose of the Dental Loan Program is to encourage and enable dental professionals to provide care to underserved populations in Colorado by the use of a financial incentive program. In other words, the Program was created to increase the number of dental providers willing to serve underserved individuals and areas. Statute [Section 25-23-102(5), C.R.S.] states that the intended population to be served by dental and hygienist participants should include, but not be limited to, those enrolled in Medicaid and the Children's Basic Health Plan, as well as the medically uninsured. In addition, the Department of Public Health and Environment (Department), which administers the Dental Loan Program, has determined that beneficiaries under the Colorado Old Age Pension Program are to be considered part of the underserved population for the purposes of the Dental Loan Program. Since the Dental Loan Program's inception in Fiscal Year 2003, Dental Loan Program providers have provided about 250,000 dental client visits to underserved clients.

The Dental Loan Program is funded through the Tobacco Master Settlement Agreement of 1998 (Tobacco Settlement). The Tobacco Settlement between the tobacco industry and 46 states, five commonwealths and territories, and the District of Columbia was established to resolve all past, present, and future tobacco-related health claims at the state level. We discuss Tobacco Settlement funds in the following section of this report.

This audit was conducted pursuant to Section 2-3-103, C.R.S., which authorizes the State Auditor to conduct audits of all departments, institutions, and agencies of state government. Section 2-3-113(2), C.R.S., requires that the State Auditor conduct audits of programs that receive Tobacco Settlement funds. Statute directs the State Auditor to conduct evaluations to determine whether those programs are effectively and efficiently meeting their stated goals. This audit reviewed the Dental Loan Program to determine whether it is meeting its intended goal of increasing services to the underserved population. The audit focused on the Department's efforts to solicit and select Program applicants, as well as how the Department monitors participating dental providers' contracts to ensure that they are providing the agreed-upon number of client visits listed in their contracts. The

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Dental Loan Repayment Program ? June 2010

Office of the State Auditor conducted a previous evaluation of the Dental Loan Program in 2004.

Audit work was performed from January through June 2010. We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Tobacco Settlement-Funded Programs

Statute [Section 24-75-1104.5(1)(d), C.R.S.] directs an annual appropriation of $200,000 in Tobacco Settlement funds to the Dental Loan Program, at the discretion of the General Assembly. Under current statutes, the Dental Loan Program is expected to remain active for the duration of the State's receipt of Tobacco Settlement payments, which are projected to continue through 2025. If the Dental Loan Program is to continue after 2025, it would need to be funded by other funding sources.

Other Tobacco Settlement-funded programs are authorized by Section 24-751103(3), C.R.S., which directs the State to dedicate a majority of the Tobacco Settlement moneys it receives to improving the health of Colorado citizens. Statute outlines program categories that should benefit from Tobacco Settlement funds, including tobacco use prevention, education, and cessation programs, as well as related health programs. Under Section 24-75-1104.5(1), C.R.S., about 65 percent of Tobacco Settlement funding must be directed to 12 "first-tier" programs, or those programs that must be fully funded before any additional programs receive Tobacco Settlement funds. In Fiscal Year 2010, about $64 million in Tobacco Settlement funding was appropriated to first-tier programs.

Section 24-75-1104.5(1), C.R.S., sets the percent of annual Tobacco Settlement funds that each first-tier program receives and a maximum dollar amount that serves as a cap on funding to each program. The following table lists first-tier programs, the required percent of Tobacco Settlement funding that each program is statutorily eligible to receive during Fiscal Year 2010, the maximum funding amounts that statute authorizes to be appropriated to each first-tier program in any one year, and the actual Fiscal Year 2010 appropriation for each first-tier program.

Report of the Colorado State Auditor

3

Colorado Tobacco Settlement Funds Statutorily Required Funding for First-Tier Programs1

Fiscal Year 2010

Program

Percent of Tobacco

Maximum

Fiscal Year 2010

Settlement2

Funding Amount2 Appropriation

Children's Basic Health Plan

24%

$30,000,000

$24,955,000

Nurse Home Visitor Program

14

19,000,000

13,454,000

Fitzsimons Trust Fund

8

8,000,000

8,000,000

Read to Achieve Grant Program Comprehensive Primary and Preventative Care Grant Program Tony Grampsas Youth Services Program

5

8,000,000

4,991,000

3

5,000,000

594,000

4

5,000,000

3,993,000

AIDS Drug Resistance Program Colorado HIV and AIDS Prevention Grant Program

3.5

5,000,000

3,493,000

2

2,000,000

1,996,000

State Veterans Trust Fund

1

1,000,000

998,000

Autism Treatment Fund

-

1,000,000

1,000,000

Child Mental Health Treatment

Act

-

300,000

300,000

Dental Loan Repayment

Program

-

200,000

200,000

Total

64.5%

$84,500,000

$63,974,000

Source: Office of the State Auditor analysis of Colorado Revised Statutes Section 24-75-1104.5, C.R.S., and the Colorado Joint

Budget Committee Fiscal Year 2009-10 Appropriations Report. 1 First-tier programs are designated by Section 24-75-1104.5(1), C.R.S., and must be fully funded prior to funding any other

Tobacco Settlement funded programs. 2 Most first-tier programs are statutorily allocated a percent of Tobacco Settlement funds not to exceed a statutory maximum

dollar amount; a few are allocated a fixed dollar amount. Because the amount of Tobacco Settlement funds varies from year to year, these percentage allocations are capped at the dollar amount listed in the maximum funding amount column. No program

can receive more annual Tobacco Settlement funding than the dollar cap.

All other programs that receive Tobacco Settlement funding are considered "second-tier" programs, as they are only funded if the first-tier programs discussed above are fully funded based on the funding percentages outlined in statute. In Fiscal Year 2010, $30.9 million was appropriated to second-tier programs.

All programs that receive Tobacco Settlement funding are required by Section 251-108.5(2), C.R.S., to submit annual reports to the Department. The annual report must include information on the program goals, demographic information on the population served by the program, the actual number of persons served, and the

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Dental Loan Repayment Program ? June 2010

services provided through the program. Further, the annual report must provide an evaluation of the effectiveness of the program in achieving its stated goals.

In the following two sections, we discuss the underserved population targeted to benefit from services obtained through Dental Loan Program providers, as well as underserved areas that lack adequate dental services. Both the underserved population and information on underserved areas are key components in the Department's selection of dental providers to receive loan forgiveness through the Dental Loan Program.

The Underserved Population

According to the 2000 U.S. Surgeon General report on Oral Health in America, oral health is essential to the general health and well-being of all Americans. At that time 108 million children and adults lacked dental insurance, which is more than 2.5 times the number who lacked medical insurance. For low-income populations, dental care often is difficult to obtain. Providers accepting patients enrolled in Medicaid, the Children's Basic Health Plan, or the Colorado Old Age Pension Program must be willing to accept rates set by those programs.

According to a 2008 Kaiser Family Foundation report on dental coverage for lowincome children, there are documented linkages between oral diseases and ear and sinus infections, weakened immune systems, diabetes, heart and lung disease, and other serious health conditions. The report also states that a lack of dental treatment has the potential to affect speech, nutrition, growth and function, social development, and quality of life. Children with oral diseases are restricted in their daily activities and are estimated to miss more than 51 million hours of school each year.

The importance of oral health has long been recognized by the Colorado Departments of Public Health and Environment and Health Care Policy and Financing. With support from the Governor's Office, those departments pursued supplemental funding and formed the Colorado Commission on Children's Dental Health (Commission) in May 2000. The Dental Loan Program was one of nine recommendations that the Commission submitted to the Governor and General Assembly in December 2000. The Commission, in recognition of the shortage of dental providers willing to serve low-income populations, recommended offering educational loan repayments and other incentives to recent dental graduates to encourage them to serve the underserved population.

The Dental Loan Program is intended to increase the number of providers who serve individuals who are part of the underserved population. As stated previously, for the purposes of the Dental Loan Program the underserved population includes individuals participating in the Medicaid or Children's Basic

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