Streamlining Children s Eligibility Processing for Medi-Cal

Streamlining Children s Eligibility Processing for Medi-Cal Introduction The processes for determining Medi-Cal eligibility are complex, often inefficient, and not always consumer-friendly. Over the years, a number of suggestions have been made about ways to simplify and improve these processes, including a recommendation made by the California Performance Review in 2004 to centralize Medi-Cal, CalWORKs, and Food Stamp eligibility processing. In January 2005, as part of his proposed 2005 06 California State Budget, Governor Arnold Schwarzenegger offered a plan to redesign Medi-Cal, including a component aimed at streamlining Medi-Cal eligibility determination for children. Its stated goals were to improve the speed of the enrollment process and to reduce costly, duplicative functions. It would provide the opportunity to test the idea proposed by the California Performance Review of a centralized eligibility processing unit and [offer] promise of improved efficiencies in eligibility determinations. 1 This issue brief describes the proposed changes to eligibility processing for children outlined in the Medi-Cal Redesign proposal and discusses implications of the policy change for children and families, counties, and the state. It also provides perspectives on the issue of centralizing eligibility determination more broadly. Implications of Proposal to Streamline Eligibility Determination Children and Families: Some families may find the expedited eligibility determination process easier and more efficient. However, some children may lose coverage prematurely by being considered only for children s no-cost Medi-Cal and not for other Medi-Cal programs. Also, the shortened period for completing applications may result in delays or failures to secure coverage for children. Counties: Anticipated administrative savings would result in a reduction in enrollment funds paid to counties. However, if the county workload does not decrease as much as the state has predicted, counties could have to bear those costs. State: Based on available data, it is not clear whether the state would save money or face higher costs. The state would be required to play a greater role in monitoring/ overseeing the Single Point of Entry (SPE) vendor and in hiring, training, and supervising the state-level eligibility workers responsible for finalizing eligibility determination. What Does the Proposal Entail? This proposal will allow Medi-Cal applications for children received by the Healthy Families Program eligibility processing vendor, known as the Single Point of Entry (SPE), to be processed by the vendor instead of being forwarded to a county for processing. 2 The SPE provides a centralized process for the receipt, processing, and tracking of applications for children and pregnant women applying for ISSUE BRIEF REVISED JUNE 2005

Medi-Cal and for children applying for Healthy Families. The goals of the proposed change are both to improve (and standardize) the eligibility determination process for children and to reduce program and administrative costs through centralization. The California Department of Health Services (DHS) estimates approximate savings of $30 million ($15 million state funds) annually after the first year of implementation. 3 How Is Eligibility Determined Currently? Applicants for Medi-Cal federal poverty level percent programs for children ( children s no-cost Medi-Cal ) can currently apply through the county, in person, or by mail; or they may submit the joint application form for the Healthy Families Program (HFP) and children s no-cost Medi-Cal to the SPE, by mail or online. Those using the joint application form can select to be considered for one or both of the programs, neither of which requires an asset test for eligibility determination, per a state waiver. For some applicants, assistance with understanding and completing the joint application is available from Certified Application Assistors (CAAs). Until two years ago, the state paid a per-application fee to CAAs for helping applicants. No fees are currently paid by the state (selected counties and nonprofit organizations are covering costs in some areas), but there is a provision in this year s budget proposal to reinstate those fees, effective July 1, 2005. All children who apply for HFP are first screened to assure that they are not eligible for children s no-cost Medi-Cal, as required by federal law. If it then appears that the child may qualify for HFP, the HFP vendor (which is also the SPE vendor, Maximus, Inc.) directly processes the application and determines eligibility. Maximus also provides eligibility case management and re-determination services for those children. All children who appear in the first screen to qualify for children s no-cost Medi-Cal are placed on Accelerated Enrollment (AE), which provides them with temporary, full-scope Medi-Cal coverage; it begins immediately and lasts until either the child has been determined eligible for Medi-Cal or until the end of the month in which the child is found ineligible. The SPE then batches and sends by overnight courier the original paper application and related documentation to the appropriate county for final eligibility determination, case management, and eligibility redetermination services. When the applications arrive at the county, the data are manually entered into the county system. Counties are required to determine eligibility for complete applications within 45 days, though many applications take much longer. What Would Change if this Proposal Were Implemented? Under the Medi-Cal Redesign proposal, the applications received by the SPE for children who are screened as appearing to qualify for children s no-cost Medi-Cal and whose applications do not indicate that the family also wants coverage would stay at the SPE for eligibility determination rather than being forwarded to the counties for processing. These children would continue to be placed on AE after the initial screening. Final eligibility would be determined by state workers in coordination with the SPE private vendor, Maximus, as federal law requires that government workers must determine final eligibility. It is important to note that applicants who opted not to use the joint application could still apply (in person or by mail) at county offices for children s no-cost Medi-Cal. In all cases, eligibility case management and re-determination would continue to be the responsibilities of the counties. See Table 1 for additional details about how the proposal would change the eligibility determination process for children s no-cost Medi-Cal applications received by the SPE. 2 CALIFORNIA HEALTHCARE FOUNDATION

Table 1. Current Medi-Cal Eligibility Determination for SPE Applications Compared to Proposed Changes PROCESS STEP Current Process Proposed Process Application Submission Mail in Online (through Health-e-App, where available) In-person assistance available at county offices and selected community groups (CAAs) No change Initial Screening Name, date of birth, self-reported income, family size Applications with missing data needed for initial screening will be contacted by the SPE vendor by telephone (5 attempts) SPE vendor has 4 business days to complete No change Other Applications Sent to Counties for Eligibility Determination Children already enrolled in other Medi-Cal programs Adult family members interested in benefits for themselves Pregnant women No change Accelerated Eligibility (AE) After the initial screening, children with completed applications (data listed above) who appear to be eligible for federal poverty level no-cost Medi-Cal are added to the Medi-Cal rolls No change Eligibility Determination Counties responsible for process Hard copies of the application and all related documentation for each of these children is sent via overnight courier to the appropriate county for final eligibility determination and case management Counties have 45 days to finish the process for complete applications (90 days if a disability is involved) SPE vendor responsible for process Verify income (e.g., pay stubs) Verify immigration status Unclear exactly how long SPE vendor will have to finish process for complete applications: depends on requirements for interfacing with state databases to verify income and immigration; could be in range of 10 to 15 days; for incomplete applications, should be approximately 30 days. Process to Handle Missing Documentation County eligibility workers follow up with applicants Process differs by county (usually a phone call followed by a letter, with 20 days for applicant to provide needed information) SPE vendor follows up with applicants Letter sent to applicant detailing missing information; applicant has 17 business days to provide information If application is incomplete at end of that 17 business day period, letter is sent to applicant stating that application could not be processed due to missing information If applicant provides all required information within 60 days of application receipt date, SPE vendor processes initial application; if information is received after the 60 days, a new application is required Customer Service Inquiries Differs by county Available Mon to Fri (usually during business hours, sometimes other hours, such as 7 a.m. to 3 p.m.) Threshold language and cultural matches made for assistance Toll-free call center: Mon to Fri: 8 a.m. to 8 p.m. Sat: 8 a.m. to 5 p.m. Assistance available in 11 languages Streamlining Children s Eligibility Processing for Medi-Cal 3

Table 1. Current Medi-Cal Eligibility Determination for SPE Applications Compared to Proposed Changes, cont. PROCESS STEP Current Process Proposed Process Final Determination of Medi-Cal Eligibility County eligibility workers (who may receive applications from CAA, in some cases) make final determinations State eligibility workers (who may or may not be co-located at SPE vendor site) make final determinations (state requested 19.5 FTE) Case Management and Medi-Cal Re-Determination County Medi-Cal case managers provide case management and re-determination No change (hard copies of all related documentation for each of the eligible children would be sent to the appropriate county after final eligibility determination) Appeals Process Initial appeal: county administration Additional recourse: local process hearing officers (in the county) Initial appeal: state-designated DHS staff Additional recourse: local process hearing officers (in the county) How Many Applications Would Be Affected? Some 142,000 applications for about 255,000 children would be affected by the change annually, according to DHS. 4 This represents 5 to 7 percent of all Medi-Cal applications. 5 Currently, approximately 65 percent of all applications going to the SPE are processed for HFP eligibility; 30 percent (including applications for adults) are sent to counties for Medi-Cal consideration; and 5 percent are routed through both programs (most likely, siblings eligible for different programs who applied using a single application). 6 Perspectives on the Proposal To prepare this brief, the authors interviewed stakeholders representing a range of views on this proposal, including state and county officials and consumer advocates. In addition to support from DHS and the governor s office, the proposal has been supported by the Legislative Analysts Office (LAO), which recommended that the proposal be adopted on a limited term basis, with revised staffing (17.5 FTEs instead of the 19.5 requested). 7 Those who have concerns about the proposed changes include consumer advocates, county workers, and county administrators who are primarily concerned about the potential impacts on children and families. However, some consumer advocates were open to the possibility that a centralized process could be beneficial to families if implemented well, with the appropriate level of oversight and monitoring. Potential Implications for Children and Families Medi-Cal Coverage for Eligible Children There is no anticipated change in timing for placement in AE for a child initially screened as potentially eligible for Medi-Cal. Under the proposal, children who are initially screened by the SPE as appearing to be eligible for children s no-cost Medi-Cal will continue to be placed in AE immediately. There will likely be a significant decrease in the length of time between application receipt and the final determination of eligibility for many applicants. Counties are currently required to complete Medi-Cal eligibility determination for complete applications within 45 days, but many applications take much longer. (The state legislature provided an exception to the 45-day limit in 2003, allowing counties to provide additional time for applicants to complete applications.) Under the proposed changes, many eligible children may get settled into their medical homes sooner, some in 10 to 15 days and all within 60 days. This is 4 CALIFORNIA HEALTHCARE FOUNDATION

especially relevant for children in managed care counties, who cannot enroll in managed care plans until a final eligibility determination has been made. Applications for children who are ultimately determined not eligible will also be processed more quickly, and consequently some children may lose their AE sooner than they otherwise would have. A DHS review of data on 16,300 children applying at the SPE and placed on AE found that more than half (9,000) were ultimately determined ineligible; 4,000 of those children were on AE for more than two months, and 28 percent (or approximately 2,520 children), received AE for more than six months. 8 Many applications for children ultimately deemed eligible take similar amounts of time to be processed. Some children may lose coverage prematurely by being considered only for children s no-cost Medi-Cal and not for other Medi-Cal programs. Different Medi-Cal categories of eligibility offer different coverage. For example, the 1931(b) Medi-Cal program provides 6 to 12 months of transitional coverage for family members if their income rises above the limits for children s no-cost Medi-Cal (children s no-cost Medi-Cal does not provide transitional coverage). Because the SPE does not screen for 1931(b) or other programs that require information about assets, a child applying for Medi-Cal through the SPE will not be considered for this more comprehensive coverage. Because of the complexity of the Medi-Cal programs and the cultural and language barriers of many applicants, they may not understand the range of benefit programs for which they might qualify; therefore they may not be aware of the implications of applying through the SPE as opposed to a county office that screens for a broader range of programs. Application Process Families with straightforward applications may find the expedited eligibility determination process more efficient. Some families find it onerous to go in person to county offices to meet with eligibility workers during business hours, which usually means taking time away from work. (Mail-in applications are currently accepted, but many counties strongly encourage applicants to come to the offices for appointments.) In addition, advocates cite numerous complaints about the county-based process, including long waits in line to make appointments with eligibility workers, extensive delays in application processing, and poor customer service. In an effort to address these complaints, the County Welfare Directors Association (CWDA) meets quarterly with statelevel and local advocacy organizations to discuss and resolve areas of concern. Many county administrators also meet with their local advocacy organizations on local issues. Other families may find it difficult to complete their applications (i.e., supply the necessary documentation) in the shortened time period. This may result in a greater number of incomplete applications and re-applications, delays in securing ongoing coverage for children, and increases in the number of uninsured children. Some families may find it difficult to understand and comply with the application requirements within the proposed time frame. Under the proposal, people with incomplete applications after 20 days would receive a letter stating that their application could not be processed due to lack of information (though the vendor will still process the application if the full information is received within 60 days). Follow-up assistance for families who need help correcting information or compiling their documentation will only be available over the phone. There is Streamlining Children s Eligibility Processing for Medi-Cal 5

more flexibility under the current system, which gives counties the discretion to provide additional time for completed applications and provides the option of in-person assistance. From April 2004 through March 2005, an estimated 60 percent of children whose applications were processed for HFP were deemed ineligible through a process very close to the one being proposed for children s no-cost Medi-Cal. Of those children s applications, 82 percent were not completed within the regulatory 20-day time frame, did not include required documentation, or both. 9 It is important to note that 30 percent of the children with incomplete applications were ultimately enrolled in the HFP after reviving their original applications or completing subsequent applications. 10 However, the high rate of initial incomplete applications highlights the significant need for reinstating state fees for CAAs. In-person assistance with the application process will still be needed by some families, especially those with limited English. Under the proposed changes this would still be available at county offices and at selected community organizations through CAAs. Currently, families applying for children s no-cost Medi-Cal through the SPE receive follow-up assistance with completing applications from county workers, often in person. With the proposed changes, the SPE would provide help via the telephone only. However, the rate of incomplete applications could be reduced with in-person assistance at the local level before families submit information to the SPE. Currently, about 12 percent of applications arriving at the SPE are missing so much data that an initial screening is not possible: 95 percent of those applicants did not receive help from CAAs, 11 demonstrating the value of local assistance with applications. CAAs can help families provide all documentation at the time of submission, precluding the need for the SPE to follow up through mail and telephone. Customer service concerns with the current SPE vendor have been identified. The current SPE vendor s contract with the state began in January 2004. During the subsequent transition from the previous vendor, consumer advocates identified a number of concerns regarding customer service for both paper and online applications. These included: lost applications and documentation; long wait times to reach an operator on the phone; conflicting or inaccurate information of application status given to applicants; less than courteous operators; and the problem of speaking only with operators and not the people actually screening applications. The California Managed Risk Medical Insurance Board (MRMIB), which oversees the SPE and the HFP, reports that Maximus has taken action to address and resolve these concerns, including increased staffing, additional training, and incorporation of new quality control measures. The LAO, which looked into the problems with the vendor last summer, acknowledged that some difficulties during the transition period were expected and confirmed that MRMIB was working to resolve the problems. 12 One-Stop Enrollment County workers may lose the opportunity to connect families to other programs. In the past several years, California counties and local coalitions have led the charge to expand coverage for low-income, uninsured children. At present, more than 70,000 California children are insured through local coverage expansion efforts in ten counties. Planning for similar initiatives is underway in some 20 additional counties. These initiatives are intended to provide coverage for children who don t qualify for other publicly 6 CALIFORNIA HEALTHCARE FOUNDATION

funded programs, such as Medi-Cal and Healthy Families. There is concern that the proposed change from a localized to a more centralized process will impact some county workers holistic approach to working with the family and that workers will lose the opportunity to connect families with such programs, as well as with other local resources (both government and private) that could be helpful. Some steps have been taken to address this concern. For many years, HFP has referred families to the Kaiser Cares for Kids program. With the influx of new county expansion programs, MRMIB has recently established a mechanism to identify children who are above 250 percent of the federal poverty level (and consequently do not qualify for children s no-cost Medi-Cal or Healthy Families) and refer those children to local communities where there are expansion programs. Under AB 495, local county funds may be used as a match to draw down federal State Children s Health Insurance Program (SCHIP) funds to pay for coverage of those children. In counties that have adopted One-e-App (a comprehensive, automated screening and enrollment process), applications will be submitted directly to the programs where children are most likely to qualify. Potential Implications for Counties County enrollment fund reductions would impact county budgets; some additional costs might need to be assumed by counties. The proposal anticipates administrative savings at the county level, which would mean a reduction in the administrative allocation from the state. There are concerns, however, that the workload may not decrease as much as predicted because some applicants to the SPE may still seek assistance at the county level. While the state looks at the actual time spent on Medi- Cal work in each county to reimburse costs, there are concerns that, with tight budgets, counties may need to absorb some additional costs. The public health care system may have to serve more uninsured children if fewer applicants are able to complete applications to qualify for children s no-cost Medi-Cal coverage as a result of the proposed changes and therefore do not have any insurance. These costs would impact county budgets via expenditures on medically indigent services. Potential Implications for the State It is not clear whether the proposed changes will result in savings for the state or will cost more. DHS identifies a net cost saving of $15 million annually for the state (general funds, after first year of start-up) with the proposed changes. Savings are to come primarily from two sources: (1) reduced administrative costs at the county level by moving the final eligibility tasks from the county to the SPE vendor; and (2) reduced program costs as a result of making faster eligibility determinations for children on AE (reducing the amount of time ineligible children are on AE). The key costs associated with the proposal include SPE vendor costs (including start-up expenses, technology enhancements, and the fees for eligibility determination) and DHS costs for 19.5 FTE additional workers who will determine final eligibility, per federal law. There are concerns about whether the projected savings accurately account for reductions in county administrative costs, vendor fees, or oversight costs for MRMIB. There is also concern about the costs associated with children deemed ineligible for children s no-cost Medi-Cal due to incomes that are too high but who then enroll in HFP; the savings associated with removing them Streamlining Children s Eligibility Processing for Medi-Cal 7

from AE earlier is included, but the related cost of enrolling them in HFP earlier is not. The proposed changes may help to protect the state from federal sanctions for allowing ineligible children to receive Medi-Cal. The state is currently vulnerable to federal sanctions for having ineligible children on the children s no-cost Medi-Cal rolls through AE (the federal government recently reclaimed money from the state for this reason). 13 The proposal would standardize the time limits for children on AE and expedite eligibility determinations. The state will need to ensure adequate monitoring and oversight of the private SPE vendor, and it may be more difficult to get information to investigate complaints and to provide third-party performance monitoring. There are concerns about using a private company instead of public workers to determine eligibility for benefits. Under the current system, consumers and their advocates can access an enormous amount of information and speak directly with public employees at DHS and at the county level. Key concerns about privatization include: the adequacy of monitoring and oversight; access to information; transparency of processes and procedures; and overall accountability. The state will need to hire, train, and supervise eligibility workers to finalize eligibility determinations. Concerns have been raised about the expertise of DHS in this area, although there are plans to recruit experienced county eligibility workers. Other States Experiences: Centralization of Eligibility Determination Little information has been compiled on other states experiences with local versus centralized eligibility determination processes for Medicaid and SCHIP. For the purposes of this issue brief, The Lewin Group conducted interviews with six states to learn more about the processes by which their joint or child-only applications for Medicaid/SCHIP are accepted, transmitted between programs, and assessed for eligibility. They found the experiences of four states Florida, Illinois, Virginia, and Washington to be most relevant to California s situation. Table 2 shows how each centralized SCHIP unit handles applications for Medicaid. The process in Florida is most like the current one in California: a private vendor processes applications for SCHIP, and applications that appear to be Medicaideligible are routed to regional centers for processing. Virginia s process is most like the one proposed for California. It has a contracted vendor for SCHIP with co-located state workers who determine eligibility for Medicaid. Washington and Illinois each have centralized SCHIP units staffed by state workers who also conduct eligibility determination for Medicaid. In both of these states, local offices maintain the Medicaid cases after the central office determines eligibility. States generally reported that the centralized function works well. Many families like the convenience and Table 2. Flow of Applications for Medicaid through State SCHIP Units Medicaid Medicaid State Centralized Processing By Applications Received Eligibility Determination Case Management FL Private vendor Directly Locally Local IL State workers Directly Centrally Local VA Private vendor with co-located state workers for Medicaid eligibility determination Directly Centrally Local WA State workers Screened locally Locally Local 8 CALIFORNIA HEALTHCARE FOUNDATION

feel of this approach, which is unlike the traditional welfare application process with a face-to-face visit at a social services office. States noted that many applicants take advantage of alternate submission pathways such as email, Internet forms, and faxes, in addition to the mail. States also outlined the following considerations, some of which echo themes described previously: It is important to have both local and centralized options for applicants, since some families like the convenience of using mail, the Internet, or faxes, while others prefer the in-person attention that a county caseworker can provide. Many applicants are part of families that receive other forms of assistance ( companion cases ). In Illinois and Washington, Medicaid applications for children who have other family members with open cases (Medicaid or other) are forwarded to the local level for processing, to ensure coordination. Virginia is also considering moving all processing for children s applications that have companion cases to local offices. There are significant challenges with data and file transfer of primarily paper-based application information between the central unit and the local offices. As California considers moving toward a more centralized approach to eligibility determination, a more detailed analysis of other states experiences may be helpful in identifying lessons learned and best practices. A combination of centralized processing and local support is needed. Some families will always want and need in-person assistance to complete the application process. Others will prefer the option to submit their applications online at a convenient location of their choosing (such as a library, school, or their home). In all cases, a customer service-oriented approach is required. Communication and coordination between the state and counties need to be well managed. There will continue to be challenges in transferring information, in both electronic and paper formats. Therefore, efforts should be made to standardize data elements, transmission protocols, and business rules among systems to ensure more efficient data exchange. In addition, outreach and education efforts should be carefully coordinated to minimize redundancy and the potential for confusing consumers. Detailed planning, preparation, and testing, plus seamless implementation are key to success. All of these steps are required to minimize disruptions to children and families and to ensure clear communication and coordination. The state must ensure adequate oversight and monitoring. Californians should have timely access to information demonstrating that the eligibility determination process is fair and accurate. In order to accomplish this, capable and qualified state staff will be required to provide system oversight, problem resolution, and ongoing monitoring. Issues for Consideration While the implications noted in this brief are specific to the proposal currently under review, a number of the issues raised are relevant to any effort to centralize eligibility processing. If California is going to test the concept of centralized processing for Medi-Cal applications, state lawmakers should consider the following guiding principles: In deciding how to move forward, the state must address the reality that the current system for determining Medi-Cal eligibility in California is not working as well as it should. On the one hand, many applicants are dissatisfied with attributes of the countybased system, including long waits and inconvenient hours for working families. On the other hand, a large percentage of the applications sent to the SPE are Streamlining Children s Eligibility Processing for Medi-Cal 9

incomplete, and a number of customer service concerns with the current vendor have been raised. Whether or not the system is centralized, it will be effective only if customers can get the service and application assistance they need, when and where they need it. E NDNOTES 1. Health and Human Services Agency and Department of Health Services, State of California. Medi-Cal Redesign. January 2005. Sacramento, CA: January 2005. 2. Ibid. AUTHORS Diane Schweitzer, senior advisor and Kristen Putnam, M.S.W., principal consultant, Putnam Community Investment Consulting. 3. California Department of Health Services. May 2005 Medi-Cal Estimate. Sacramento, CA: May 2005; and Medi-Cal Redesign. January 2005 Summary Tables. 4. May 2005 Medi-Cal Estimate. 5. Legislative Analyst s Office. Kirk Feely testimony at California State Senate Budget and Fiscal Review Subcommittee No. 3 Health & Human Services hearing, April 4, 2005. 6. Maximus, Inc. SPE Applications Processed Statistics, Report #MM-029. Internal document: April 4, 2005; and Maximus, Inc. Healthy Families Program Children Ineligibility Statistics, Report #MM-012. Internal document: April 4, 2005. 7. See note 5. 8. California Department of Health Services. Stan Rosenstein testimony at California State Senate Budget and Fiscal Review Subcommittee No. 3 Health & Human Services hearing, April 4, 2005. 9. Maximus, Inc. HFP Applications Processed Statistics, Report #MM-011. Internal document: April 4, 2005; and Healthy Families Program Children Ineligibility Statistics. 10. Managed Risk Medical Insurance Board. Personal communication with staff member, June 20, 2005. 11. SPE Applications Processed Statistics; Healthy Families Program Children Ineligibility Statistics. 12. Legislative Analyst s Office. Personal communication with staff member, April 18, 2005. 13. California Department of Health Services. Personal communication with staff member, April 22, 2005. CALIFORNIA HEALTHCARE FOUNDATION 476 Ninth Street, Oakland, CA 94607 tel: 510.238.1040 fax: 510.238.1388 www.chcf.org