Systems failures ail Medicaid

Systems failures ail Medicaid

The Medicaid welfare tangle

  • States were slow to upgrade eligibility determination systems after Congress mandated welfare reform in 1996.

  • Most states use the same systems to establish eligibility for Medicaid, food stamps and cash assistance, but the 1996 welfare reform law separated the programs.

  • The federal Health Care Financing Administration has alerted states that some qualified families are losing benefits because software hasn't been updated.

  • The welfare reform law allocated $500 million for outreach and systems upgrades, but some states have not sought the funds.

  • Federal law requires states to ensure that systems do not improperly deny or cut off Medicaid.

  • HCFA directed states to submit reinstatement plans, including system upgrades.

  • Susan Wood, Wisconsin's health care eligibility director, says the federal government should increase states' funding to upgrade Medicaid systems.

    States may face deadline to bring code up to date


    Thousands of low-income individuals and families have improperly lost their Medicaid health insurance coverage because several states have failed to upgrade code in their eligibility determination systems, welfare officials and policy analysts said.

    Last spring, officials of the Health Care Financing Administration, the federal agency that administers Medicare, Medicaid and the State Children's Health Insurance Program, wrote to state Medicaid directors about concerns that eligible families were being denied benefits.

    Stephanie Kaminsky, HCFA eligibility enrollment outreach technical director, said HCFA has not yet imposed a deadline on states to get their systems in order. But the federal agency is developing a plan to give states additional guidance that may have some deadlines attached, she said.

    A burden worth bearing

    'We understand that making the systems changes is time-consuming and costly,' Kaminsky said. 'But it is in states' best interests to make sure benefits are not being lost to eligible families.'

    Most states use the same systems to establish eligibility for Medicaid, food stamps and cash assistance, even though eligibility rules for the programs were separated following the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA).

    Formerly, families who were qualified for welfare were automatically qualified for Medicaid. But the 1996 law severed eligibility tie-ins for cash assistance, now known as Temporary Assistance for Needy Families (TANF), and Medicaid.

    In many cases, when individuals or families don't qualify for cash assistance or move from welfare to work, state systems have been following the old rules and denying or ending their Medicaid benefits, officials said.

    Wisconsin, for instance, mistakenly cut off Medicaid benefits for 15,000 recipients because of a computer problem with food stamp system changes, officials said. The state restored benefits quickly, but solving the computer problem took several months.

    In some states, caseworkers must intervene manually and use workarounds because the automated systems that determine eligibility are not programmed to meet PRWORA rules.

    But using workarounds is risky. If caseworkers neglect to make the manual changes, families can be denied medical benefits.

    Federal law requires states to ensure that their systems do not improperly deny or cut off Medicaid benefits.

    Marilyn Ellwood, a senior fellow at Mathematica Policy Research Inc. of Cambridge, Mass., said most state eligibility systems are designed and operated to meet the needs of welfare, not Medicaid.

    'The automated eligibility system for every state has to serve several masters, all of which have slightly different approaches for similar things,' Ellwood said. 'Medicaid has not gotten the attention it needs.'

    Ellwood studied Medicaid and welfare issues for the Urban Institute's Assessing the New Federalism project, which analyzed the devolution of responsibility to states for federally funded social services.

    After computer problems surfaced, HCFA directed states to submit a reinstatement plan to the federal government. The agency told states to identify those who had lost their Medicaid benefits, either through computer error or an improper benefits redetermination, and reinstate the benefits.

    As part of the 1996 welfare reform law, Congress provided $500 million to states for both outreach to clients and redesign of state Medicaid systems. But states have been slow to upgrade their systems. Some states blame the delays on the year 2000 conversion. And code changes required by TANF rules have ranked as a higher priority, officials said.

    Funds are available

    But Kaminsky said some states simply have not sought the federal funds.

    'We are frustrated and disappointed,' Kaminsky said. 'There is still a chunk of money that is available that many states have not requested.'

    Some states used most of their shares of the $500 million kitty to inform families about available health care coverage rather than for systems upgrades, officials said.

    HCFA officials said if programming changes couldn't be made immediately, states must deploy an interim system to override computer errors to ensure no eligible person loses Medicaid benefits.

    Long before HCFA requested reinstatement plans, Maryland, Pennsylvania and Washington were modifying their systems.

    George Hoover, Pennsylvania's director of health services for the Public Welfare Department, said many states' welfare officers have studied Pennsylvania's alterations for guidance on how to adjust systems to meet requirements.

    The commonwealth made several changes to its Client Information System application over the last two years.

    The state added warning messages to computer screens to remind caseworkers to review Medicaid eligibility when denying or closing cash benefit cases. It automated Medicaid eligibility to eliminate a paper process.

    Early in 1999, Pennsylvania tested a program that would automatically extend medical coverage when a caseworker entered data to close a cash assistance case.

    Officials implemented the program statewide within three months. And by last spring, the commonwealth had adjusted its systems so that when people went off welfare, applicant data was automatically entered for Medicaid.

    The commonwealth's eligibility system resides on a Unisys 2200 mainframe running the Unisys DMS 1100 operating system.

    Other states are upgrading their eligibility systems, but funding is tight.

    Susan Wood, Wisconsin's health care eligibility director, said the federal government needs to allocate more funds specifically for Medicaid system upgrades.

    Wisconsin has completely overhauled its health care coverage programs. It launched BadgerCare, a program for low-income working families, in July 1999. About 78,000 adults and children were enrolled in the program last year. The state covers about 500,000 people overall under Medicaid.

    Getting it together

    Wood said the state recently integrated several departments and programs into its eligibility system and adopted a comprehensive paperless system for applications.

    'When a person comes in to apply for welfare, they are automatically screened for Medicaid and BadgerCare,' Wood said. 'Applicants talk to a worker once and are able to be screened immediately for all assistance programs without completing several pages of different applications.'

    The state's Client Assistance for Reemployment and Economic Support application runs on a GS2115C mainframe from Amdahl Corp. under IBM OS/390 Version 2.8.

    Wood said one of the state's greatest assets for ensuring that low-income families have coverage is its Eligibility Outstationing pilot that sends caseworkers into the community to collect eligibility data.

    Lauren Fox, Kenosha County Economic Support Services outstationing project supervisor, said caseworkers using notebook PCs cover a lot of territory and reach eligible people who might not otherwise apply for medical coverage.

    Out and about

    'Our folks don't work in four walls,' Fox said. 'They get out into the community and affect the folks that need the assistance.'

    Fox said caseworkers in the program travel to outstations at health department offices, medical clinics, hospitals and churches.

    County workers use 350-MHz Pentium II Satellite Pro notebooks with 64M of RAM from Toshiba America Information Systems Inc.

    Caseworkers connect to the state's system wirelessly using Motorola SLN 3032A connectors attached to Profiler 300 cell phones from Ameritech Corp. of Jersey City, N.J.

    Caseworkers scan documents while out of the office using Strobe Pro NT portable scanners from Visioneer of Pleasanton, Calif.

    After outstation caseworkers have screened applicants and processed their information, they can print results using portable DeskJet 340 printers from Hewlett-Packard Co.

    'This is an invaluable project that I hope will spread to other counties and states,' Fox said.

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