Tech Tuesday – Technology Takes Over to Verify Medicaid Eligibility Electronically

With new high-performing IT systems, states will be able to use cost-effective, trusted and secure electronic data sources to verify eligibility including income, citizenship, immigration status, and other criteria. States have some discretion in how they verify eligibility (i.e. what data sources they use) but they cannot require individuals to provide documentation or more information than is requested on the application except when: 1) information needed to verify eligibility cannot be obtained electronically, or 2) the information obtained electronically is not “reasonably compatible” with information provided by the applicant or beneficiary. Whoa, I realize we are dangerously close to getting into weeds using wonky terms. But, please read on if you want a better understanding of how your state will verify eligibility going forward.

Find out how your state will verify Medicaid and CHIP eligibility in 2014 and beyond: request a copy of the state’s verification plan. Federal regulations require states to develop a verification plan that outlines their procedures in using electronic data to verify eligibility. In February, CMS released guidance and a template for states to use in submitting their eligibility verification plans (which were due March 20). The plan describes how your state will use electronic data to eliminate or minimize red tape and paperwork.

The plan details the specific eligibility factors that will be verified. The first section of the template lists common eligibility criteria such as income, citizenship, date of birth, and “other” eligibility factors. For each of the criteria, states must identify if self-attestation is accepted, what electronic data sources will be used to verify eligibility, and when states will require paper documentation from the individual if data cannot be verified electronically.

The plan lists the data sources that will be used to electronically verify eligibility. The second section of the plan identifies specific data sources including the IRS, SSA, state wage and unemployment databases, other public benefit programs and commercial databases, some of which states are required to use (i.e. using SSA data to confirm citizenship). The state must indicate whether they consider each of these databases to be useful and how they reached that conclusion based an assessment of the accuracy, timeliness, ability to access, and comprehensiveness of the data. For each data source, the state must specify if it will be used at application, renewal and/or post-enrollment, along with the frequency of post-enrollment checks. A third section then matches the data sources to each of the eligibility criteria to be verified. So for example, the plan will disclose that the state will use its vital statistics database to verify date of birth and age at enrollment only.

The plan will reveal how the state will determine if information reported by the individual and that obtained from electronic sources is reasonable compatible. The best way to describe reasonable compatibility is to use an example. A family of three lists income of $2,150 per month on their application but quarterly wage database indicates the monthly average income is $2,202. The income cutoff for Medicaid at 138% of the poverty level is $2,246 per month for this family. Both sources of data are below the $2,246 income guidelines and therefore the difference doesn’t affect eligibility – it’s reasonably compatible. In this case, the federal regulations on reasonable compatibility of income are clear and helpful – when the electronic data source and reported income are both either above, at or below the income standard, states must accept the data as reasonably compatible without requesting an explanation or documentation. But for other discrepancies, states have more latitude to determine what is reasonably compatible and when they will accept a reasonable explanation from the individual or revert to asking for paper documentation.

There is no explicit requirement for public disclosure, so be persistent (which is what great advocates do best!). These plans offer a first glimpse of the extent to which states will rely on electronic data rather than red tape and paperwork to determine eligibility and promote enrollment and retention. Unfortunately, there is no requirement for public process or posting of the plans. There is also no federal approval process required but certainly CMS can use the information to ensure that states are in compliance with the new rules that move us to a more data-driven, real-time eligibility process, a process that is expected to be accurate, fast and cost-effective.

New verification processes are likely to prompt a revision of state administrative rules relating to procedures and verification of eligibility. Generally states have a public process for proposing and approving new administrative rules and procedures. So even if you can’t get a copy of the verification plan, keep an eye on the administrative rules calendar in your state, which will give you an opportunity to weigh in on your state’s plan.

Expect the verification plan to be a work in process. Verifying eligibility electronically is a cornerstone the ACA’s vision for a fast, friendly consumer experience in connecting to coverage. But given that states are still in the throes of eligibility system development and working out data sharing agreements with other agencies, what is contained in the verification “plan” is just that – it’s a plan. Whether states will be in a position to fully implement the plan on October 1 remains to be seen. And like any plan, it will continue to be a work in process that can be improved over time with savvy and informed advocacy.

[For more on this topic, view the Tech Tuesday blog series by Tricia Brooks.]

Tricia Brooks is a Research Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.