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Medicaid check: 48% still eligible

Others asked for proof of income by Andy Davis | July 7, 2015 at 5:36 a.m.

The state Department of Human Services has used its partially completed electronic enrollment and eligibility verification system to check the incomes of about 100,000 private-option enrollees and other Medicaid recipients over the past three weeks, department officials told legislators Monday.

Mark White, deputy director of the department, told the Legislative Joint Auditing Committee's Medicaid Subcommittee that 48 percent of those whose incomes were checked were found to still be eligible for coverage.

The remaining participants were asked to provide additional information because wage information from the state Department of Workforce Services indicated their incomes had changed by 10 percent or more since they were first approved for coverage a year or more ago.

The enrollees were given 10 days to provide pay stubs or other records showing they are still eligible for coverage. If they fail to do so, their coverage will be terminated.

Many enrollees whose incomes have changed may still be eligible but will have to provide proof of their income. Proof is required for those whose incomes have decreased as well as those whose incomes have increased -- as long as the change was by at least 10 percent.

The department plans to begin "closing cases" of enrollees found to be ineligible as early as today, department spokesman Amy Webb said.

Those people will be sent notices informing them that their coverage will end at the end of this month.

White and other Human Services Department officials on Monday briefed the Medicaid Subcommittee on the eligibility reviews that will be conducted for hundreds of thousands of Medicaid recipients, including tens of thousands of private-option enrollees, whose eligibility is governed by federal rules that went into effect Jan. 1, 2014, under the 2010 Patient Protection and Affordable Care Act.

Federal regulations require enrollees' eligibility to be checked annually, but the Human Services Department was unable to begin doing that until last month because of delays in building the electronic system.

The system is used to determine eligibility for about 600,000 Medicaid recipients, including more than 250,000 Arkansans who became eligible for coverage under the private option, the state's expansion of the Medicaid program, last year.

Webb said she didn't have information on how many of those recipients are due or overdue for the annual eligibility checks.

The delays in building the electronic system have not affected the department's ability to check the eligibility of about 200,000 Medicaid recipients, including nursing home residents, who were not affected by the rules that went into effect last year.

The department is continuing to use its older eligibility verification system to check those recipients' incomes.

The new enrollment system was needed because the old one, built 25 years ago, was unable to determine eligibility using the new rules, department officials have said.

In July 2012, the department solicited bids from vendors and selected Noridian Healthcare Solutions of Fargo, N.D., which bid $60 million, as the winner.

But the department couldn't agree to the terms of a contract with Noridian and was told by state procurement officials that it could not negotiate with one of the other bidders.

Facing an Oct. 1, 2013, deadline to begin enrollment in the state's expanded Medicaid program, the department hired companies using an existing contract for technology services available to all state agencies.

Work on the project began in April 2013, White said. Initially, work proceeded on schedule, with the part of the system that determines eligibility being completed in time for the start of open enrollment.

But delays in completing other parts of the system surfaced in the middle of last year, White said, and the project's estimated cost doubled to about $200 million.

In January, the department replaced Calverton, Md.-based EngagePoint, its lead vendor on the project, with Princeton, N.J.-based eSystems.

The department has also appointed a project manager and hired another company to help monitor the work.

Work is nearly finished on a part of the system that will be used to determine eligibility for food stamps starting with a pilot project next year in Washington, Craighead and Saline counties, White said. And the department is on track to meet a Sept. 30 deadline to complete the overdue Medicaid eligibility checks.

Meanwhile, he said, programmers are working to fix "serious defects" with the Medicaid enrollment system that have caused "unacceptable wait times" for applications to be approved.

Those defects should be fixed within six to eight months, he said.

"It seems that we've turned a corner in many ways," White said.

He noted, however, that questions remain about the maintenance cost and functionality of the system.

Under a $400,000 contract, the state Department of Information Systems has hired Gartner Inc. of Stamford, Conn., to evaluate the project, including whether the Human Services Department should continue implementing it with IBM software or scrap it and start over using different software.

Rep. Josh Miller, R-Heber Springs, said he's heard from people around the state who should be "shoo-ins" for coverage under the ARKids program for children or under traditional Medicaid, but who are "literally having to wait months" for a decision on their applications.

"These are the type of people that these programs were set up intending to help," Miller said.

Meanwhile, he noted, the department has continued to enroll thousands of Arkansans each month in the private option, which uses Medicaid funds to buy commercial insurance for Arkansans who became eligible for coverage under the expansion of the state's Medicaid program.

Sen. Bryan King, R-Green Forest and a chairman of the Legislative Joint Auditing Committee, complained that the department officials will not seek reimbursement from private-option recipients who received coverage after becoming ineligible.

"They've milked the system and milked the taxpayers out of free insurance," King said.

Human Services Department Director John Selig said Workforce Services Department records that are reviewed as part of the annual eligibility checks don't provide information about an enrollee's past income, so the department won't know when an enrollee became ineligible.

He said the federal government could seek reimbursement based on information in a recipient's tax return.

King also complained after the meeting that Human Services Department officials didn't tell legislators about problems with the enrollment system as they began surfacing last year.

Webb said she didn't know when the department first briefed legislators on the problems, but she said it hasn't tried to hide anything.

"We want to keep legislators informed," she said.

Earlier Monday, Mark Storey, chief financial officer for the Medicaid program, told the Legislature's public health committees that state and federal Medicaid spending in the state totaled almost $4.6 billion from July 2014 through March 2015.

That was an increase of 25 percent compared with the same months a year earlier, but the increase was almost entirely because of spending of federal funds on coverage for newly eligible adults.

Excluding spending for the newly eligible adults, spending for the nine months increased just over 2 percent compared with a year earlier, he said.

The federal government pays the full cost of coverage for newly eligible adults and 70 percent of the cost of coverage for most other Medicaid recipients.

The state's total Medicaid spending increased 1.4 percent in fiscal 2013 and 2.14 percent in 2014, Storey said.

A Section on 07/07/2015

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