Fw: Children's Medicaid Simplification Threatened

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Date: Wednesday, March 05, 2003 04:14:22 PM

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March 5, 2003 Contact: Anne Dunkelberg, Dunkelberg@... No. 183

CHILDREN'S MEDICAID SIMPLIFICATION THREATENED

This Policy Page presents the executive summary of a new report by the

Center for Public Policy Priorities on the impact of Senate Bill 43 of the 77th

Texas legislature, Children's Medicaid Simplification. The Center gratefully

acknowledges the support of the Kaiser Commission on Medicaid and the Uninsured

in producing this report. The full report, entitled Simplified Eligibility for

Children's Medicaid in Texas: A Status Report at Nine Months can be accessed at

www.cppp.org, or at www.kff.org.

Also provided below is a quick update on the major reversals of Children's

Medicaid Simplification that have been proposed so far by members of the Texas

Legislature and in conjunction with the proposed HHSC budget cuts.

UPDATE ON CHILDREN'S MEDICAID SIMPLIFICATION IN TEXAS

The Comptroller's " E-Texas " report recommends postponing the extension of

continuous eligibility under children's Medicaid from the current 6 months to 12

months until June 2005. Representative Dianne Delisi, Chair of the House Select

Committee on State Health care Expenditures, has filed HB 728 which (as filed)

would enact this change.

The Texas Health and Human Services Commission (HHSC) budget under the

spending target set by the Legislative Leadership would repeal some major

components of Children's Medicaid Simplification (described below), and would

hold continuous eligibility at 6 months. According to HHSC's estimates, holding

continuous eligibility at 6 months (instead of going to 12, as required by S.B.

43) would reduce children's Medicaid caseloads by over 221,000 in 2005, and

reduce HHSC spending by approximately $255 million GR (state dollars) in 2004

and 2005.

In January, the Texas Conservative Coalition's State Finance Task Force

Report recommended repealing the continuous eligibility requirement to grant

children on Medicaid a one-time 3-month period of eligibility to allow for

orientation to the program, to be followed by month-to-month eligibility

thereafter. Many familiar with the Legislature expect that efforts will be made

to eliminate continuous eligibility in this manner.

The HHSC budget under the spending target would also reinstate mandatory

face-to-face interviews at a DHS office to apply for children's Medicaid; and

reinstate documentation of assets for children's Medicaid. HHSC estimates these

provisions would further reduce children's Medicaid caseloads in 2005 by another

180,000; that is, the combined effect of all HHSC proposals to roll back

Children's Medicaid Simplification would be enrollment of 400,000 fewer children

than projected under current law for 2005. Disturbingly, HHSC proposes to

maintain the mandatory face-to-face interviews and increased documentation

requirements even if funding levels for the agency are restored. No one is

suggesting that these below-poverty children will receive insurance from any

other source.

SIMPLIFIED ELIGIBILITY FOR CHILDREN'S MEDICAID IN TEXAS:

A STATUS REPORT AT NINE MONTHS

EXECUTIVE SUMMARY

In 2002, Texas implemented a number of changes to its Medicaid program

designed to make it simpler and easier for families to apply for coverage on

their children's behalf, as well as to renew their children's coverage after

they are successfully enrolled. The changes have resulted in dramatic increases

in Medicaid enrollment among eligible children -- between September 2001 and

September 2002, an additional 350,000 children secured Medicaid coverage, an

increase of 30 percent. Despite the early and dramatic success of the state's

simplification efforts, it is not clear that the progress will continue. The

state currently is implementing a new requirement under which parents will not

be able to use the state's new, simplified mail-in renewal process unless the

state has documented that their children are current with all recommended

check-ups. The requirement presents a number of challenges for the Medicaid

program and could make it more difficult for many families to keep their

eligible children enrolled in coverage. In addition, the very success of the

state's simplification efforts will likely tempt Texas lawmakers, facing

inadequate revenues to support state services in 2004 and 2005, to re-impose

procedural barriers to child Medicaid participation as a means of reducing

Medicaid spending.

Medicaid Barriers Lead to Simplification Law

Prior to Texas' implementation of SCHIP in 2000, about 600,000 of the

estimated 1.4 million uninsured children in the state - close to half -- were

believed to be in families income-eligible for Medicaid. When it first

implemented SCHIP, the state opted to make it easy for families to enroll their

children in coverage by allowing them to mail-in application and renewal forms,

allowing self-declaration of assets, streamlining documentation requirements,

and offering 12 months of continuous eligibility. In contrast, the families with

children eligible for Medicaid enjoyed none of these simplifications. The

barriers generated by the far more onerous Medicaid enrollment process were

starkly apparent. In the first 10 months of SCHIP operations, 97,512 children

applying for SCHIP were referred to Medicaid because their family income fell

below the SCHIP eligibility level. Of these, only 24,299 (26%) successfully

navigated the Medicaid application process and were enrolled in Medicaid.

In 2001, Texas lawmakers concluded that children's Medicaid application

and renewal processes should be reformed to match the SCHIP model, and adopted

legislation which made the enrollment procedures nearly identical (Medicaid

eligibility was set at 6 months, rather than 12). While they streamlined

enrollment procedures on the one hand, the lawmakers also added two new

requirements to Medicaid that increased the chances families would find it

difficult to renew their children's coverage. As a condition of using the

mail-in renewal process in Medicaid, parents must attend an orientation session

and they must keep their children up to date on recommended check-ups. Parents

failing to meet these standards can be required to go to the welfare office for

a face-to-face interview to renew their children's coverage. In comparison, the

parents of children on SCHIP are not required to attend an orientation session

or demonstrate they have kept their children up-to-date with check ups as a

condition of being allowed to use a mail-in renewal form.

Simplification Improves Medicaid Participation Dramatically

After the implementation of Texas's Medicaid simplification law, the

number of children enrolled in Medicaid surged upward. By September 2002,

enrollment had jumped 30 percent over the prior year's level and the number of

children with Medicaid coverage had reached more than 1.5 million children. Over

this same period, the number of adults on Medicaid (who did not enjoy the same

simplifications) increased only 6%, suggesting that it was primarily the

simplifications that generated the enrollment increases among children rather

than economic conditions that also would have driven enrollment increases among

adults.

The enrollment among children has increased in large part because of

significant improvements in the rate at which families' successfully complete

the initial application process under the simplified policies. In the 16-month

period prior to implementation, the average monthly approval rate for

applications was 57.5%. After implementation of the state's simplification law,

the application approval rate increased to 70.1%. Since simplification, the

state also has experienced an increase in the rate at which families

successfully complete the process for renewing their children's coverage. The

renewal rate increased from 73 percent in the four-month period preceding

implementation of simplification to 78 percent in the first nine months

following simplification.

The New Health Care Orientation Requirement

To date, the requirement that parents of newly-enrolled Medicaid children

attend a " health care orientation " (HCO) session or lose the opportunity to

renew their children's coverage using a mail-in form does not appear to have

adversely affected renewal rates. The HCO informs parents of the value of

check-ups for children, as well as of the benefits of establishing a stable

relationship with a primary care provider and using that provider (rather than

the emergency room) to secure care. The HCO has been delivered to 75 percent or

more of parents within 60 days of enrollment, and to 84 percent within 120 days.

EPSDT Requirement Presents a Challenge

In contrast, the requirement that parents assure their children are

current with their check-ups as a condition of using the mail-in renewal process

could pose more challenges. (The series of check-ups are known in Texas as the

" Texas Health Steps " or " THSteps " check ups, and they are determined by the

Medicaid EPSDT requirement for children.) Although it is not possible to provide

data on the effect of the requirement because it is only now being implemented,

it appears likely that the state will find it difficult to monitor the extent to

which parents have complied with the requirement. In the latest evaluation of

Texas Medicaid Managed Care data, only 49% of well-child check-ups found in

children's medical records were correctly entered in their HMOs' computer files.

Fee-for-service Medicaid data also historically have been dated and incomplete.

In addition, chronic shortages of providers willing to conduct THSteps check-ups

in many areas of the state may make it difficult for even the most willing

parents to comply with the requirement; a recent survey by the Texas Medical

Association shows that only 49 percent of Texas physicians are accepting new

Medicaid patients, down from 66.8 percent two years ago.

Texas EPSDT Statistics

Fiscal year Participant Ratio

1991 .18

1992 .25

1993 .29

1994 .35

1995 .43

1996 .51

1997 .55

1998 .66

1999* .62

2000 .63

2001 .52

*new methodology began

Source: HCFA/CMS 416 reports

Texas' Participant Ratios for THSteps medical check-ups improved from

1991-1998, but from 1999 to 2001 the ratios dropped from the 1998 level of .66,

to .52 in 2001. According to the Texas Department of Health, just under half the

decline from 1998 to 1999 was due to the changes in federal methodology for

EPSDT reporting, and the rest is thought to be the result of actual decline

combined with unreliable Medicaid Managed Care check-up data. With so little

certainty, it is impossible to know to what extent these unimpressive statistics

are due to inadequate data collection and reporting, rather than actual low

check-up utilization. In either case, the statistics suggest the magnitude of

the challenge faced by the state in implementing this aspect of the law.

Conclusion

Texas' simplification efforts in Medicaid have been a major success in

removing barriers to participation, as evidenced by a 30 percent increase in

children's Medicaid enrollment from September 2001 to 2002. The next six to nine

months will reveal how well the Medicaid program's procedures for implementing

the new EPSDT requirement can compensate for the shortcomings of data systems

and provider networks.

However, the greatest challenge to the success of eligibility

simplification is the state's looming revenue shortfall. Texas lawmakers are

likely to consider reversals or even outright repeal of children's eligibility

simplification as they attempt to write a budget within projected revenues. To

keep the promise of the 2001 eligibility simplification legislation will

undoubtedly require the identification of additional revenues. The 2003

Legislative session will thus put to the test Texans' commitment to child health

care access.

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