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Health reform means major overhaul of Medicaid's eligibility systems
Providing seamless enrollment procedures is still a work in progress for state Medicaid programs under the current eligibility system, but doing so under health care reform is a health information technology (HIT) challenge of epic proportions.
Medicaid programs, some facing severe fiscal challenges, will have to upgrade or replace their outdated eligibility systems. Since this will require significant expenditures, one concern is the lack of enhanced federal financial participation (FFP). While direct costs of automated processing of claims, payments, and reports used in Medicaid Management Information Systems (MMIS) systems are eligible for enhanced reimbursement at 75% or 90% FFP, costs of eligibility systems receive only about a 50% FFP rate.
"That will be a key issue for states as they move forward," says M. Reneé Bostick, MPA, a Columbus, OH-based principal of Health Management Associates and former chief administrative officer of Ohio Health Plans. "That is a higher rate that states will have come up with in order to undertake changes in their eligibility systems."
Though the impact of system upgrades and changes necessitated by health care reform encompass more than just Medicaid programs, Ms. Bostick says "the challenges will be exceedingly large in Medicaid. This is primarily because Medicaid eligibility systems have historically been tied to all social service programs."
Systems must share data
Today's systems have a modular structure, which allows data to be shared across programs. However, most eligibility programs used by states are decades-old legacy systems. This makes it difficult to change one aspect of the system without impacting the entire system.
In addition, Medicaid's systems will need to share data with the Health Insurance Exchanges (HIEs), a new mechanism for purchasing coverage included in the Patient Protection and Affordable Care Act. The HIEs are entities to be set up in states, and they will offer individuals a choice of health plans.
"What makes these types of projects so difficult is that they involve a very detailed understanding of eligibility policy," says Ms. Bostick. "In many states, this resides in the heads of a few people who understand the ins and outs of the eligibility program and know workarounds in eligibility systems."
These individuals also must have a keen understanding of the capabilities of modern technology, both in terms of web services and information sharing. In addition, all of Medicaid's various eligibility programs must be taken into account.
"One of the biggest things, I think, that holds promise for Medicaid is that you are not abandoning the social service structure," says Ms. Bostick. She says that first, Medicaid must determine the eligibility policies that need to be implemented through technology systems. Then, there must be a way to share that information across state programs, with appropriate controls for privacy and security. "The Department of Homeland Security, for example, shares information with the Department of Motor Vehicles. Similarly, these programs will need to share critical information but not be constrained by one another," says Ms. Bostick.
New mindset is needed
Aside from the purely technological aspects of revamping eligibility systems, another larger issue is on the horizon. This involves what Ms. Bostick refers to as "the rebranding of the Medicaid program externally."
"It is going to start with a big mindshift that Medicaid is a payer for health care and not a welfare program," says Ms. Bostick. "And that is not a shift that many states have made. They have focused more on other parts of the state system and less on understanding the interoperability needs across the larger health care system."
Some organizations have even suggested changing the name of the program, in order to convey that it's more than just a government program. "Medicaid may be mandated by the federal government, and administered through the state governments, but it is a system of providers at the local level who are providing services to individuals," says Ms. Bostick.
Another complicating factor is the "gatekeeper" approach currently used for the Medicaid eligibility process. "Historically, much of Medicaid's role has been, on some level, determining who cannot come into the program," says Ms. Bostick. "With the larger policy shift, it will now need to start to look at how to expand coverage. Workers will no longer be in their offices waiting for clients to come in. Instead, they will be conducting outreach activities to go out to where the clients are."
This is all part of "normalizing" health care coverage obtained through Medicaid, says Ms. Bostick. "It is really the final break to Medicaid being linked to welfare."
In order to revamp the eligibility process, "some Medicaid programs are thinking creatively," says Ms. Bostick. One example is identifying certain health care establishments to play a critical role in outreach, so that clients don't have to go to a social services office to be deemed eligible.
Databases can be used to validate a client's income, so a face-to-face contact isn't needed. Likewise, web capabilities can be used to determine eligibility for Medicaid, just as individuals can apply for unemployment benefits using a web application. "Information is validated by other sources, and communication and payment is all electronic," says Ms. Bostick. "Similar processes, I think, will be drivers in terms of Medicaid system reform."
New individuals coming onto the program will change the population mix of Medicaid. This means that systems will need to implement new outreach approaches. In addition, these new eligibles will need to be tracked separately, as health care reform will provide enhanced reimbursement for certain populations for certain time frames.
"As complicated as eligibility is today, it will become even more complicated for a while into the future," says Ms. Bostick. "Most eligibility systems struggle to keep current with the complexity of eligibility today. With future populations reimbursed at differing rates at different points in time, that is going to be a huge challenge."
Currently, the largest population within the program consists of mothers and children; the aged, blind and disabled population is the next largest group. Medicaid's newly eligible population will consist largely of adults without children.
"This will be a big shift for the program," says Ms. Bostick. "This new population will largely be adults. One in six of those individuals coming onto the program are likely to have fair to poor health. At least a third will have chronic conditions that are likely to have worsened due to lack of preventive care."
Therefore, web capabilities are needed not only for eligibility, but also to get the new enrollees engaged in preventive care. Medicaid programs need to start thinking about how to "widen the on-ramps" for newly eligible individuals, says Ms. Bostick. For instance, text messages may be more effective for reaching certain populations.
"If you don't have real-time eligibility information, it makes it exceedingly difficult to do claims submission in real time, much less real-time clinical information exchange," says Ms. Bostick. "So, all of these are built on one another in a critically important way."
Some possible opportunities
Cindi Jones, acting director of Virginia's Department of Medical Assistance Services, says there are significant concerns regarding system capacity, as well as system changes that will be required based on the various provisions of federal health care reform.
"However, there are some opportunities for administrative simplification as well," says Ms. Jones. "We are eagerly anticipating guidance from CMS [the Centers for Medicare & Medicaid Services] regarding their interpretation of how states will deal with the expansion population relative to existing coverage groups."
This will help identify whether simplification can be achieved with the removal of categorical eligibility, and how the eligibility determination functions in Virginia will need to be altered under health care reform.
In many respects, the eligibility systems used in Virginia are somewhat dated and often difficult to modify. "But again, while this is a significant concern, we will not fully understand its implications until we better understand how CMS will interpret the reform changes," says Ms. Jones.
"For categories of eligibility which are essentially expanding based on higher income thresholds, the notion of administrative simplification is highly dependent on decisions at CMS regarding implementation," explains Ms. Jones.
She gives the example of parents and other caretaker adults who are categorically eligible today, albeit at a lower income level. It is not clear if any simplification can be achieved if the state must first apply the existing eligibility criteria to determine whether they would already have been eligible, before applying the new criteria associated with the expansion population.
However, due to the differing federal funding rates, some methodology must be developed to track this distinction.
"The same concern is there for childless adults, who may claim to be disabled, and whether or not a disability determination would need to be made," says Ms. Jones. "To the extent we must first rule out eligibility under current criteria before assessing eligibility under the new criteria, very little simplification will have been achieved."
Too many unknowns
Many decisions have not yet been made, any of which could change how new eligibility systems get built. "There are a whole set of unanswered questions that, depending on how they are answered by the federal government and their guidance to us, may change how we have to structure the eligibility systems," says Charles Duarte, administrator for Nevada's Division of Health Care Financing and Policy. "Within that array of risk, and not having answers, what is the most feasible approach?"
Duarte, in reviewing the requirements for eligibility systems with the head of Nevada's Division of Welfare and Supportive Services, came to the conclusion that the current system can't be replaced and can't be amended.
The current system services not only the Medicaid population, but also the Temporary Assistance for Needy Families, child welfare, and food stamp populations. "It's an old system, not easily amended or enhanced," says Mr. Duarte. "The time frames are short, from a state and IT perspective, between now and 2014. Given that, and the fact that there is a whole matrix of risk with unanswered questions out there, what we are looking at right now is how can we basically bolt on an interim eligibility engine that will interface with an exchange and the current eligibility system?"
A feasibility study will be needed to determine if this approach is indeed possible, and if so, what the cost would be. "We know we can't replace the system, and we know that the system is not capable of being readily reprogrammed to meet the requirements for the new Medicaid world. So what do you do? You have to basically design something that can attach to the current system," says Mr. Duarte.
The "unknowns," though, are creating a risk environment for states, which need to begin planning before they have answers, says Mr. Duarte. "There are a host of questions out there. Until they are answered, we will be operating the best way we can. We are making a whole set of assumptions that may or may not be correct," he says. "There is a lot of guessing going on here."
On the state level, it's not yet determined whether Nevada will run its own HIEs, partner in a regional exchange, or just use a national exchange. "Another question is, 'Will all eligibility be done on the exchange? Or will the exchanges just be the front end for eligibility?'" asks Mr. Duarte.
On the national level, Mr. Duarte says that he wants to know how the federal government ultimately is going to require states to determine eligibility, both for the newly eligibles and the current eligibles. "And how are the tax credits and subsidies going to be paid? These questions could ultimately drive the design of these systems," says Mr. Duarte. "To do a good job, we really should have started planning two years ago. But, we have to do the best we can right now, in an environment where there are a lot of unknowns."