Fiscal Fitness: How States Cope

States finding ways to regain Medicaid/SCHIP clients who have dropped their enrollment

Retention of children in Medicaid and SCHIP is considered a problem when otherwise eligible recipients lose coverage after an initial period of enrollment, often due to complicated renewal procedures.

Efforts to reduce the number of low-income uninsured children and families have focused on expanding eligibility for public insurance programs and finding ways to facilitate enrollment in those programs. Another key factor that contributes to reducing the number of uninsured is the retention of eligible beneficiaries once they are enrolled.

Retention has become an increasing priority in recent years, and the Center on Budget and Policy Priorities' Pat Redmond says in a 2005 report that a number of states are pursuing effective and cost-efficient strategies to ensure appropriate retention.

"Our research shows that families who don't renew often don't have information on what they need to do or lack the proper forms," Ms. Redmond tells State Health Watch.

Families typically must complete a renewal form and attach proof of their income in order to keep their children enrolled in coverage, she says. And in some states additional steps are also required.

"In response to difficult fiscal conditions and pressure to curtail enrollment in publicly funded health coverage programs, a number of states have recently changed their renewal procedures," she says, "making it more difficult for families to renew their coverage. Five states took such steps in 2004, by eliminating a guarantee of full-year coverage and making families renew their children's eligibility more frequently or by requiring families to attend a face-to-face interview at a government office when their child's coverage is up for renewal. When states increase the procedural barriers to renewing coverage, the likelihood increases that eligible children will lose coverage."

Ms. Redmond says managed care organizations (MCOs) have incentives to avoid "churning" — the situation that occurs when individuals lose coverage and regain it again after a short period of time, often because of unnecessary burdens in the eligibility renewal process. Interrupted periods of eligibility make it difficult for health plans to manage members' care and deliver preventive services. Also, when enrollees continually enter and exit plans, it is difficult to maintain the membership stability that is essential to financial viability. Reducing churning also has an advantage for state agencies, Ms. Redmond says, since they incur unnecessary administrative expenses when eligible children lose coverage and reapply soon after and must be re-enrolled in the program.

"What MCOs bring to the table," she tells SHW, "is engagement in the issue, a relatively easy way of communicating with enrollees, and an understanding of state requirements."

Streamlining activities supported

In conversations with managed care plan staff, Ms. Redmond learned that all of them support efforts by states to simplify and streamline the procedures families must follow when renewing coverage.

"From every point of view — family, managed care, the state — a paper-heavy process is a ridiculous process," a representative of a regional consortium of plans told her. "A renewal process that is rigorous to an extreme undermines the principles of managed care that we are trying to put in place. Even individualized assistance can't compensate for a burdensome renewal process."

Ms. Redmond says in her interviews with managed care plan staff on retention strategies, she often heard first about the need for policy-makers to understand that difficult renewal procedures impede continuity of care. For example, they said, as a result of complicated paperwork requirements, eligible children may miss out on immunizations they should be receiving at specified points in their lives. Some plan representatives also told her of having to conduct outreach to members and then provide new physical examinations for people with chronic conditions. In such cases, they said, care was interrupted and the plan had to start all over again with the patient, an expense that could have been avoided had the person remained enrolled.

Promoting renewal

Some MCOs began promoting renewal with their members shortly after the states in which they were located shortened the renewal period from 12 months to six, or imposed other barriers. By working directly with their members or conducting publicity campaigns, MCOs can address the problem directly. When Texas shortened its SCHIP renewal period from 12 months to six months, Amerigroup Corp., with operations in Austin, Houston, Dallas, and Fort Worth, opened a public awareness campaign using billboards with a photo of a happy mother and toddler and the message, "Your Medicaid renewal notice is coming. It may look different and longer, but it's not hard." The message was reinforced in posters and fliers distributed throughout the communities and radio ads carried a "don't lose it" message about health coverage.

Amerigroup also wrote for state approval a script used in outbound phone calls to members whose coverage was due to expire in two months. Staff checked to see that members had received the appropriate forms and answered questions about the process.

Coalitions help retention efforts

MDwise, a managed care organization operating in the central Indiana, found from a telephone survey that half their members were unaware of steps they needed to take to retain coverage. The plan partnered with statewide and local Covering Kids and Families coalitions funded by the Robert Wood Johnson Foundation to increase participation by eligible children in Medicaid and SCHIP. MDwise used grant funding and in-kind donation of office space to support three outreach workers to be stationed at MDwise and a coalition office. Local coalition members referred families who had lost eligibility to the outreach workers, who helped them navigate the process to become re-enrolled.

Ms. Redmond identified four common obstacles to managed care plans undertaking more aggressive one-on-one outreach activities: obtaining members' renewal dates, establishing effective processes for working with local eligibility offices, addressing concerns about the marketing implications of providing direct assistance to members, and determining whether there is sufficient return on investment for the activities.

She says there are steps states should consider to involve MCOs in efforts to improve retention of eligible children in Medicaid and SCHIP:

Collaborate with MCOs to create guidelines on appropriate and effective retention strategies. States should clarify how any state safeguards to protect beneficiaries' free choice of plans might affect renewal activities that managed care plans want to undertake and should explicitly describe the activities plans are free to conduct to encourage members to renew. Contracts with MCOs should require the plans to implement basic renewal activities such as communicating with members about the need to renew and the renewal process and encourage plans to pursue and track the success of more intensive renewal strategies. States should give plans information on members' renewal dates well in advance so the plans can take steps to assist their members.

Assist MCOs to develop relationships with local Medicaid/ SCHIP eligibility offices to facilitate processing member renewal forms. States should encourage local eligibility offices to collaborate with MCOs working to improve renewal rates and should consider providing MCOs with a liaison to eligibility offices so problems can be resolved.

For their part, she says, MCOs should consider;

  • Promoting the importance of renewal and providing one-on-one assistance to their members.
  • Tracking the cost and effectiveness of renewal activities. MCOs should document the impact of brief enrollment periods on members' health, focusing particularly on breaks in enrollment of members who later re-enroll. To the extent possible, MCOs should analyze which retention activities significantly improve renewal rates among members and should develop methods of measuring the return on investment for renewal activities.
  • Sharing best practices with trade groups, states, and community organizations. MCOs can build support for their efforts by sharing successes and developing partnerships with groups such as community organizations that might be able to expand their activities' reach.

Ms. Redmond cautions that the budget reconciliation approved by President Bush in February contained provisions such as the need to document citizenship that can make the renewal process even more difficult. "There has been a tremendous concern that if the process becomes more difficult, the need for assistance will grow and plans won't be able to compensate for what is happening," she says.

[Contact Ms. Redmond at (215) 563-5848, ext. 40, or e-mail her at]