MAXIMIZING MEDICAID AND SCI IN NEW MEXICO

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MAXIMIZING MEDICAID AND SCI

IN NEW MEXICO

A SPECIAL REPORT BY

NM VOICES FOR CHILDREN AND THE NM CENTER ON LAW AND POVERTY FOR HEALTH ACTION NEW MEXICO AND

THE HEALTH CARE FOR ALL CAMPAIGN

INTRODUCTION

New Mexico has the second highest rate of uninsured people in the country, second only to Texas. The good news is that many people, including policy makers and elected officials, are more and more interested in finding major solutions. Businesses are getting weary of health insurance premiums rising each year, employees are feeling the pain of having to pay more out of pocket for health care, the uninsured are accessing care in emergency rooms or not getting care at all, and health care providers are struggling with the financial burden of uncompensated care.

This is a special report by New Mexico Voices for Children and the New Mexico Center on Law and Poverty for Health Action New Mexico and the Health Care For All Campaign (HANM/HCFA) to outline this serious problem and provide solutions through maximizing the Medicaid programs in our state which are funded in large part by the federal government and for which many New Mexicans are eligible but unenrolled. While ultimately, the health care crisis needs to be addressed through recognizing that health care coverage is a right which must be available to all New Mexicans, in the meantime, federally funded programs should be better funded, administered and utilized to begin to address the crisis.

Why Health Coverage is Important

People without health insurance tend to only get health care in emergency rooms or not at all, leading to poor health outcomes, and lower life expectancies. Uninsured adults get fewer preventive and screening services and on a less timely basis. Many uninsured people do not get any prevention services, such as screening for cervical and breast cancer or testing for high blood pressure or cholesterol. Cancer is more likely to be diagnosed at a later stage of illness, when treatment is less successful. Uninsured individuals are less likely to have a regular source of care, to see medical providers, or to receive recommended treatment or follow-up care.

The Problem of Health Coverage Affects ALL New Mexicans

The high rate of uninsured is not only impacting the lives of these individuals without insurance, but it is impacting every New Mexican. We have too few doctors, nurses, hospitals, and every type of health care provider; our health care infrastructure is severely inadequate. Health care costs, including commercial health care insurance premiums, continue to escalate, in good part, due to uncompensated care costs of the uninsured and insufficient utilization of federal health care dollars.

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Expanding Coverage Would Have a Major Economic Impact

Federal funds are available to help cover the majority of the uninsured in New Mexico. Bringing in these federal funds would have a beneficial financial impact on New Mexico, help economic development throughout the state and bolster the health care infrastructure. Every dollar the state invests in Medicaid generates $4.90 dollars in economic activity within the state.1

The Programs Exist—People Are Not Enrolled

Of the 405,000 uninsured New Mexicans most are eligible for existing programs but just not enrolled in those programs. As of May 2008, there are an estimated 189,308 adults that are eligible for Medicaid or State Coverage Insurance (SCI) but not signed up and 32,800 children are eligible for Medicaid/SCHIP but not signed up; for a total of slightly over 222,000 New Mexicans eligible for these Medicaid-related programs.2 There are many reasons why eligible New Mexicans are not enrolled in these public programs:

• The enrollment process is unnecessarily difficult because it is bureaucratic, cumbersome, difficult to navigate, and confusing. Once enrolled, it can be very difficult to stay enrolled due to the state’s administrative procedures;

• People do not know about the programs and there has been no effective marketing; • There is a perception that the programs are only for very poor people, and people

don’t think they will qualify;

• There are language and cultural barriers, especially in the enrollment and renewal processes; and

• State funding and enrollment policy has been inconsistent resulting in mixed messages about program availability. (For example, the SCI program stopped new enrollments in September 2008.)

More Funding Is Needed

While the majority of New Mexicans could be covered through Medicaid and SCI, this would require substantial additional funding and in all likelihood additional tax support.

1

New Mexico Voices for Children, Medicaid: An Integral Part of New Mexico’s Economy; October 2008.

2

Pam Hyde presentation to LFC 5/6/2008; and Fiscal Impact Report on Senate Bill 22, 2008 Special Session, Legislative Finance Committee. This assumes the 17,000 children funded in the 2008 Special Session will be enrolled.

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RECOMMENDATIONS

HANM/HCFA supports comprehensive health care reform that will result in quality, affordable coverage for all New Mexicans. But, in the short term, there is growing consensus among many groups that maximization of existing programs, particularly those which can leverage federal funds, is the best strategy for New Mexico to address the problem of health care coverage. This document provides detailed information on the various programs available to New Mexicans, analyzes the barriers to enrollment, and provides solutions and recommendations to the state. The report provides detailed recommendations on the following: Administration and Program Issues, Outreach and Marketing, Retention, Reporting and Accountability, and State Coverage Insurance.

We recommend the following actions:

• Through Executive Order, the Governor should immediately call for implementation of this report’s recommendations for improvements in the administration of Medicaid, as well as marketing and outreach, and reporting and accountability;

• Stakeholders (advocates, providers, health plans, business, etc.) should make recommendations to the Legislature and Governor for the best financing strategy for maximizing coverage of New Mexicans.

• The Governor should direct HSD to pursue coverage for adults who are eligible for SCI, through maximizing federal funding.

• The Governor and the Legislature should ensure that HSD’s plan to develop its new computer system includes meaningful community input, including stakeholder meetings, focus groups for clients and their advocates, and a process for incorporating community feedback into the design of the system.

• The Legislature should adopt a plan in the 2009 Regular Session to maximize coverage through existing programs by no less than coverage of all children and 50,000 adults over the next three years and adopt mechanisms to finance the state matching costs for this coverage, including any necessary general tax increases;

• The Legislature should pass legislation requiring quarterly reports from HSD on coverage in public programs, including accountability measures on administrative processing issues, and also include formal mechanisms for dealing with funding shortfalls during the fiscal year to ensure clear implementation of legislative intent for coverage.

We urge the Legislature to consider these recommendations and take these important steps to provide health care coverage to many New Mexicans while simultaneously pursuing the ultimate goal of comprehensive health care reform and coverage for all.

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STRATEGIES TO MAXIMIZE MEDICAID COVERAGE

Medicaid is a federal and state program which provides health care coverage to the disabled and to the poor. (See Appendix 1 for detailed information on Medicaid).

Approximately three-fourths of the state's Medicaid recipients are on Medicaid because they are financially eligible. These categories of financial eligibility are comprised almost entirely of low income children and women. Families who have Medicaid health care coverage based on financial eligibility must first apply and show the state that they qualify, and then, once a year, must demonstrate that they remain financially eligible. There are significant problems with the processes involved in enrollment and retention of individuals on Medicaid.

The Human Services Department (HSD) has recently undertaken administrative changes to attempt to deal with the fact that their caseworkers have great difficulty processing paperwork timely. We applaud these efforts and suggest continued improvements in this direction. Only by making the process as easy and all-inclusive as possible, and by thoroughly understanding the reasons that eligible New Mexicans cannot obtain Medicaid will we be able to maximize the Medicaid program in our state.

The Department earlier unveiled a proposal for a multi-pronged outreach effort to enroll the estimated 17,000 children that were to be funded by the $20 million August 2008 special appropriation. This proposal included some of the proposals discussed below, which was very promising. However, it was developed for a specific effort related to a specific appropriation. The outreach initiatives proposed by HSD for children’s enrollment under the special appropriation should become the basis for how the Department conducts all of its outreach for its Medicaid programs on an ongoing and sustained basis.

Despite HSD’s efforts, there are still problems and we have compiled a list of suggestions for administrative and programmatic improvements which HSD could implement. All of these changes would work to mitigate the hurdles that eligible New Mexicans currently face when attempting to obtain and retain the Medicaid health care coverage to which they are entitled.

MEDICAID ADMINISTRATION AND PROGRAM ISSUES

Applications are Automatically Denied by Computer Even for Eligible Applicants

In 1994, HSD changed the way it programs its computers and instituted an “auto-denial” function. This computer function is different from “automatic closure” which many have heard about. Auto-denial is the computer function which results in HSD’s computer automatically denying an application 45 days after the applicant submitted it, with a computer generated notice stating that HSD is denying the Medicaid application for failing to provide the necessary information to complete the application. The problem is

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that, according to HSD’s data, half of the applicants who are automatically denied have not first been informed what they need to provide in order to complete the process. Others have been told that they have provided all the information but they still get the auto-denial notice, indicating that the proper information was not entered into the computer before the auto-denial date kicked-in.

Federal regulations require the state to process all Medicaid applications within 45 days of receipt. The state is also required to give each application an individualized review, and approve or deny the application on the merits.3 Applicants for Medicaid have a right to a needs-based decision by the 45th day after they submit their application.

Moreover, the law requires that Medicaid applicants are told what information and/or documentation they need to provide to complete the application, and that they be given at least 10 days to do so before the state denies their application. By law, caseworkers should not allow the computer to automatically deny a case simply because the application is incomplete.4

New Mexico is illegally depriving tens of thousands of people their due process rights through auto-denial. This must be stopped, both to decrease the outrageous numbers of people who are uninsured, and to avoid exposing the state to legal action.

Recommended Solution: Eliminate the auto-denial function on the computer and institute other procedures to ensure timely and proper processing of applications.

Lost Paperwork

It is not uncommon for families to have to bring in their paperwork to HSD two or three times before it is finally processed. Although HSD is supposed to give clients a receipt for their paperwork, this often does not happen, and clients do not know to ask for one. State regulations require that caseworkers provide receipts for all documents submitted.5 Yet, according to HSD’s own data, 25 – 37% of all applicants are not given receipts for documents they provide. This is significant because without a receipt, if HSD loses a piece of documentation, misplaces an application, or fails to process an application timely, the applicant is simply left to start anew. If the applicant has a receipt, the applicant can insist that the Medicaid approval is back-dated to the date of the original application.

Recommended Solution: HSD should always give clients a copy of their application and a receipt documenting the date it was turned in to HSD. HSD should do better training of all workers to provide receipts, as well as develop easier to use receipt forms.

3 NMAC 8.100.130.11B 4 NMAC 8.100.130.8B. 5 NMAC 8.100.130.9E.

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Long Wait Times

Clients regularly wait a very long time to see a caseworker, and sometimes are told to come back the next day, after waiting for hours in the waiting room. Clients cannot reach their caseworkers on the phone, and although they leave messages, caseworkers do not seem to have the time to return phone calls.

Recommended Solutions: HSD should expand utilization of nonprofit organizations to assist in the enrollment process, as is currently done with the New Mexico Primary Care Association. This is more efficient and can be done at no cost to the state since this outreach and enrollment work can be paid for with federal pass-through funds.

HSD should also do more outstationing of Income Support Division (ISD) workers at clinics, doctor’s offices, and hospitals. Currently, children can obtain presumptive eligibility for 60 days through certain providers that have presumptive eligibility/Medicaid Off-Site Application Assistants (PE/MOSAA) workers on hand, but they still need to apply at the county office for permanent benefits, either by mail or in person. It would be preferable to out-station eligibility workers at these sites so that the entire process can be completed at these sites without the need for sending paperwork to ISD.

HSD Caseloads Are Too High

HSD caseworkers have caseloads that are two and three times higher than other comparable states. The average caseload statewide is over 600 cases per worker per month and in some areas of the state caseworkers have to handle over 800 cases a month. Without a significant decrease in these intolerable caseloads, paperwork will continue to be lost, long wait times will continue, and the Department will continue to rely on the computer for functions that only human beings should perform.

While some of the other recommendations in this report call for outsourcing more of the enrollment process and expanding the number of nonprofits involved in these activities in every county, there is still a need for more caseworkers, especially as HSD has to handle major increases in enrollment and renewal. A benchmark caseload that would be appropriate is 350 active cases per month per worker, based on comparisons with other states.

Recommended Solution: HSD should request and the Legislature should approve funding that would provide for staffing at a level of no more than 350 cases per worker per month.

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Hearing Process is Difficult

If clients know to request an administrative hearing, they can try that route, but the hearings bureau has a significant backlog, and hearings can take months. Moreover, most clients do not know to request a hearing, and if they eventually learn that they can do so, they are routinely told by ISD employees not to bother. And once they get to the hearings, they often do not have the proof they need to make their case since they were not provided with receipts for or copies of the paperwork they submitted.

Recommended Solution: A simple large-print flyer on the hearing process should be provided to all applicants and explained to them. Letters sent from HSD to clients should be more clear and easier to read and understand.

Eligible Immigrants Face Additional Barriers to Enrollment

While the actual applicants for Medicaid must be citizens or qualified immigrants in order to be eligible, federal law is clear that the citizenship status and social security numbers of non-applicant members of the household are not relevant, and thus are unnecessary, to determining an applicant’s eligibility for Medicaid.6 Also, many different legal immigrants are entitled to Medicaid, not just legal permanent residents. Until recently, HSD’s general application for benefits incorrectly demanded the social security numbers and citizenship status of every member of the household, even those who were not applying for benefits. Under a federal court order, the Department changed its application so that it no longer requires the social security number and citizenship status of non-applicants.

We frequently hear reports from applicant families who are immigrants that receptionists and caseworkers improperly demand the citizenship status or social security numbers of non-applicants. We also hear reports of caseworkers mistreating families because some non-applicant members are undocumented. Likewise, legal immigrants who qualify for Medicaid even though they are not citizens face extra hurdles to convince HSD staff that they are indeed qualified.

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Recommended Solutions: To remedy these problems, HSD should better train its staff about the many different categories of immigrants who are “qualified immigrants” under federal law and are eligible for benefits. Alternatively, because this is extremely complex, HSD could implement an application processing system that refers all non-citizen applications to specialized workers who know these special eligibility rules.

Additionally, to ensure that qualified members of mixed-status households can enroll in Medicaid, HSD should post signs informing families that social security numbers and citizenship status are only required for applicants. HSD should encourage citizen children in immigrant families to enroll in Medicaid, and not scare off these families by making unnecessary and illegal demands for irrelevant information.

Language Barriers

Many organizations report that their clients who do not speak or read English are severely hampered by the inadequate language access services at HSD. Some advocates believe that a lack of language services is the primary barrier to accessing benefits. Many clients cannot read the notices that are sent to them in English, and they cannot communicate with their assigned caseworkers because the caseworkers only speak English. Spanish speaking clients regularly report being transferred to an English voice mail system, or being hung up on by a person who speaks no Spanish.

Additionally, HSD has no system in place to identify clients who do not speak English and to ensure that those clients receive interpretation and translation services. While HSD does employ quite a few Spanish speaking caseworkers, HSD does not have a system in place to ensure that those caseworkers are proficient in Spanish, or to ensure that Spanish speaking clients are assigned to a Spanish speaking worker. Staff who are asked to interpret have not been trained to do so. The most critical notices – approvals, denials and terminations – are not translated. While HSD does have a contract with an interpretation phone line, HSD records show that it is almost never used. Clients are not informed of their right to an interpreter. The overall picture is that clients who do not speak English have a very difficult time accessing services, and there is no plan or policy to ensure quality service to limited-English-proficiency (LEP) clients. Federal and state law requires otherwise.

Agencies providing services using federal funds must ensure meaningful access to their programs and activities by persons who do not speak English as their primary language.7 This principle is grounded in Title VI of the Civil Rights Act, and the Equal Protection clauses of our state and federal constitutions which prohibits discrimination based on national origin.

7

See Guidance to Federal Financial Assistance Recipients Regarding Title VI and the Prohibition against National Origin Discrimination Affecting Limited English Proficient Persons – Summary, available at

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The federal Department of Health and Human Services (DHHS) has indicated that agencies which receive federal funding may not utilize “criteria or methods of administration which have the effect of subjecting individuals to discrimination because of their race, color or national origin…” The DHHS prohibits recipients of federal funds from “deny[ing] an individual any service or the opportunity to participate in the program…” based on that individual’s national origin. 8

Executive Order 13166 reiterates the requirement that federal fund recipients must ensure that their program provides equal access to LEP clients. The federal State Medicaid Manual § 2101 instructs state agencies to “make arrangements to provide information to [Medicaid] beneficiaries who do not read or speak English.”

Additionally, many state regulations require that HSD serve clients who are not proficient in English.9 The Income Support Division must assist by explaining written information orally in the applicant’s language and/or by providing an interpreter as needed; ISD employees must communicate in language that is understood by the recipient; social workers should take steps to ensure clients’ comprehension, including arranging for a qualified interpreter or translator whenever possible.10

All of the above laws, regulations and guidance statements require that recipients of federal funds take reasonable steps to ensure meaningful access to their programs, activities and services for LEP persons.

Recommended Solution: Improve language access services at HSD so that clients who are of limited English proficiency are able to complete the application process. HSD should post signs informing clients of their right to free interpretation and translation services; enter clients’ language into computer system to ensure future communications in appropriate language; train workers on when and how to access interpretation services; train bi-lingual staff to be interpreters; and implement self-monitoring system to ensure that clients of limited English proficiency are being well served.

Confusing Procedures and Notices of Actions

For families receiving Medicaid, before terminating a client’s Medicaid, HSD must send the recipient a termination notice (called an “adverse action notice”) at least 10 days before termination.11 Moreover, clients who request a hearing within 13 days have a right to continued Medicaid during the pendency of the appeal.12

8

45 C.F.R. 80.3(b)(2). 9

See, for example, NMAC 8.100.130.8 10 NMAC 8.100.100.16(D), NMAC § 16.63.16.8(C)(2) 11 42 C.F.R. § 431.211; NMAC 8.200.430.12A 12 42 C.F.R. § 431.230 and 8.100.180.10(C)(1)(e)

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Currently, HSD has an internal policy which mandates that Medicaid termination notices are not sent out until four or five days before the Medicaid termination, in direct violation of federal and state law.13 Even worse, clients regularly receive their termination notices after they have lost their Medicaid, leaving them with no time to attempt to remedy the situation before they lose their health insurance. HSD needs to amend its internal policies and re-program its computers so that adverse action notices are sent out within 10 days of the termination, giving the clients time to contact HSD and correct any errors that are leading to wrongful terminations, before the termination occurs.

Additionally, for clients trying to get on Medicaid and being denied, state law requires that when HSD denies a Medicaid application, it ensures that the applicant receives an individualized correct notice about the reason for the denial.14 Additionally, the law requires that applicants who are denied for failure to complete the process can do so within 60 days of the denial without having to start the application process anew.

HSD’s denial notices which deny people for failing to complete the application process do not provide detailed, correct information about the reason for the denial or what more the client must do to complete the process. The notices also do not inform people that they could still complete the process within 60 days and not have to start over. This would be helpful information to include since it would prevent clients from having to submit multiple applications to try to get on Medicaid.

Recommended Solution: Improve HSD's notices so that applicants are timely informed of the Department's decisions, so that they can understand the reason for the decision, and so that they are also fully informed of their legal rights to complete the process (if

necessary) within 60 days without having to begin anew.

Proof of Income

The state can use electronic data matches to verify household income, thus saving both consumers and caseworkers paperwork and time. (Currently, HSD does this for Medicaid renewals, but not for the original application, even though it is permitted by federal law.) Currently, 13 states allow applicants to “self-declare” their income (not provide proof of income) in children’s Medicaid and/or SCHIP programs. Most of these use some form of data matching to verify income on behalf of the applicant.15

Recommended Solution: Allow self-declaration of income by applicants to be verified with state data matches that already exist.

13 ISD-GI-06-13 14 NMAC 8.200.430.12B. 15

Statehealthfacts.org; Table: Allows Self-Declaration of Income Under Medicaid and SCHIP, 2008; http://www.statehealthfacts.org/comparetable.jsp?ind=230&cat=4

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In-Person Application Requirements

By law, a Medicaid applicant is not required to have an interview, and is permitted to complete the entire application process via the mail, the internet or the phone.16 However, few applicants are aware of this option. HSD could ease the Medicaid application process and inform people from the start that they need not appear at an interview, or in person at the ISD office. This would be a win-win situation -- cutting back on the volume of visits to the ISD offices and making it easier for families’ applying. Currently, the Department is allowing Medicaid recipients to renew by phone or email. The same should be implemented for new applicants. Currently, 47 states do not require a face-to-face interview for children’s Medicaid enrollment and 40 states do not require a face-to-face interview for parents enrolling in Medicaid.17

Recommended Solution: Allow new applicants to apply via internet or phone. Do outreach and education so that people know about this option for enrolling and renewing eligibility.

Citizenship and Identification Requirements

To be enrolled in Medicaid, an individual has to be a citizen or a qualified immigrant. In the past, qualified immigrants had to prove their qualified immigrant status, but citizens simply could declare their citizenship and proof was only required if there was some reason to disbelieve this declaration.

A few years, ago, Congress passed the Deficit Reduction Act, which included requirements that all people who are on Medicaid as citizens must prove their citizenship and their identification, through producing either a passport, a birth certificate and picture ID, or other documentary forms of proof. New Mexico quickly implemented certain procedures to ease these difficult proof requirements, including setting up a link with the Department of Vital Records to find birth certificates on line for people born in New Mexico.

HSD also developed a federally approved affidavit of identity for children under 16 since children often do not have picture identifications. Despite these good steps, many New Mexicans who are citizens of the United States have encountered difficulties obtaining Medicaid due to the citizenship/identification requirements -- especially people who were born in other states and thus have a much harder time obtaining their birth certificate.

16

NMAC 8.100.110.8 D and E. 17

Statehealthfacts.org; Table: Has Eliminated Face-To-Face Interviews for Medicaid and SCHIP Enrollment, 2008;

http://www.statehealthfacts.org/comparetable.jsp?ind=227&cat=4&sub=59&yr=63&typ=5&sort=288; and Cohen Ross, Donna, et al. Health Coverage for Children and Families in Medicaid and SCHIP: State Efforts Face New Hurdle - A 50 State Update on Eligibility Rules, Enrollment and Renewal Procedures, and Cost-Sharing Practices in Medicaid and SCHIP in 2008 (Kaiser Commission on Medicaid and the Uninsured: Washington, DC, January 2008)

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Recommended Solutions: To ease these burdens, New Mexico could develop inter-state agreements to make it easier for people to obtain their birth certificates from other states. Likewise, New Mexico could set up a fund for low-income New Mexicans to use to pay the costs of obtaining out-of-state birth certificates which can sometimes be as high as $50. (Note: This type of assistance currently exists for contractors with the New Mexico Primary Care Association through funding from Molina Health Plan.) Additionally, more training needs to be done of off-site eligibility workers as well as caseworkers about the requirements of the DRA, as well as how to assist applicants in obtaining proof of citizenship and identity, including use of the Department of Health web portal to verify birth certificates, and the availability of Declaration of Identity for children under 16. Finally, the Department’s outreach materials must be corrected so that it clearly states what documentation is required, what help is available for obtaining it, and that citizenship still is not necessarily a requirement of Medicaid (i.e. qualified immigrants are still eligible).

The State Should Explore Cross-Eligibility Between Various Public Programs

Some public programs such as food stamps, TANF, etc. have lower income thresholds than Medicaid. Mechanisms could be explored to allow “auto-eligibility” for Medicaid based on determination of eligibility for other public programs.

Recommended Solution: New Mexico should investigate and pursue any necessary federal legislation or waivers to allow eligibility for other public programs such as food stamps, TANF, free or reduced price school lunches, etc. to make clients automatically eligible for Medicaid. The state should also investigate the possibility of using data matches with the state income tax database to determine or indicate eligibility for Medicaid.

OUTREACH AND MARKETING

Many New Mexicans do not know they are eligible for Medicaid or other public programs. Some families simply don’t know about the program at all; some think their income is too high; some think their children may not be eligible because the parent is not a citizen; some may have been on Medicaid in the past and had a problem with the renewal process and thus are no longer on the program. There are many ways the program could be marketed to families for maximum effectiveness.

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Recommended Solutions:

School Solutions Develop a coordinated process with every school district in the state to inform families about Medicaid and promote enrollment. This could include: sending Medicaid information, applications and instructions on how to apply home with school children at the beginning of every school year; holding enrollment events at the time of school registration; and sending flyers to parents whose children receive free or reduced price lunches and following up with phone calls to those families to set appointments for enrollment through a local organization rather than the state offices. Some states and municipalities, like Indiana, Utah, New York City and Chicago, and now Houston, have conducted one time data matches with school lunch programs, identifying children who may qualify for Medicaid or SCHIP but are not enrolled. Once the agency receives the names of these children, they conduct follow-up with the families to get them enrolled.

Immigrant Family Solutions Educate immigrant families about eligibility and application requirements for children of immigrants. Many families do not realize that if their child was born in the United States they are eligible for a state program, even if the parent is an immigrant. This could be done through outreach from schools, churches, and nonprofit organizations like community health centers. Caseworkers also need to be educated about the eligibility of many different qualified immigrants, as well as the citizen children of undocumented parents.

Nonprofit Marketing and Outreach Solutions The state should expand its use of nonprofit community based organizations to provide outreach and enrollment. For example, New York designated community organizations to provide “facilitated enrollment” into its child health programs, Medicaid, and Family Health Plus, a step found to be highly effective.18 New Mexico currently contracts with the New Mexico Primary Care Association to do enrollment into Medicaid. This program should be continued and expanded. Legal services organizations could be involved, as could more hospitals, schools, and other local groups. It should be noted that this is currently done through no cost to the state because it is financed with pass-through federal funds. The state should also hold more PE/MOSAA training events as currently they are very infrequent and insufficient to meet the demand for training.

Provider Solutions Most physicians and other health care providers in New Mexico are not directly involved in promoting enrollment. Physician offices can be a very effective method to encourage patients to sign up for programs. A plan should be developed for every county on how to engage local providers in this issue and have them help promote coverage programs. This could be done through the community health councils in each county or through the New Mexico Primary Care contractors that do enrollment activities.

18

Lawler, Kate and Anne Marie Costello, Community-Based Facilitated Enrollment: Meeting Uninsured New Yorkers Where They Are (New York: Children’s Aid Society, 2005).

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State Websites

Currently, HSD’s website is difficult to navigate and confusing for clients and others. Recently, the Insure NM website has been significantly improved.

Recommended Solution: Improve HSD’s website so that the application procedure is explained in plain language and Medicaid-specific terms are defined when it is necessary to use them. Access to applications should be easy and should not assume the applicant knows which category of Medicaid they are eligible for. Provide easy to access links to websites of other programs on the HSD website.

RETENTION PROBLEMS

Renewal Process

In October of 2007, HSD implemented a pilot project to allow clients to renew their Medicaid eligibility by phone, fax, email or mail. We applaud this initiative. This new renewal procedure still needs to be set in regulation and needs to be fully adopted. Additionally, other problems still exist with retention which could be addressed by implementing additional best practices for Medicaid renewal.

Currently, HSD notifies families 45 days before their eligibility ends. But at least 10 states that have expanded their Medicaid programs to serve children under SCHIP give families 60 days notice before eligibility ends.19 Giving this extra time to families could help retain coverage. (This can be done whether or not the state changes auto-closure.) Currently, 11 children’s Medicaid programs and 9 SCHIP programs in other states do not require income verification for renewals.20 HSD still does not allow ex parte renewals, which would allow HSD caseworkers to take action to determine if a recipient is still eligible for Medicaid, and if so, renew that recipient’s Medicaid rather than letting the case close. Moreover, as other states have shown, if the culture within HSD were to become one in which caseworkers were invested in the process of keeping New Mexicans on Medicaid in order to improve the health of our state, our retention rates would improve. Overall, our goal should be to ensure that very few Medicaid recipients are terminated from Medicaid for an alleged “failure to renew,” otherwise known as

19

Kaye, Neva, et al. Charting SCHIP III: An Analysis of the Third Comprehensive Survey of State Children’s Health Insurance Programs (National Academy for State Health Policy: Washington, DC, September 2006).

20

Cohen Ross, Donna, et al. Health Coverage for Children and Families in Medicaid and SCHIP: State Efforts Face New Hurdle - A 50 State Update on Eligibility Rules, Enrollment and Renewal Procedures, and Cost-Sharing Practices in Medicaid and SCHIP in 2008 (Kaiser Commission on Medicaid and the Uninsured: Washington, DC, January 2008)

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“automatically closed” or “procedural denial.” Louisiana improved their Medicaid renewal procedures, as a result of which their procedural closure rate fell from 22% to less than 1%. Simply by emulating Louisiana, we can vastly improve our Medicaid retention rate.

Recommended Solutions: Issue regulations concerning Medicaid renewal procedures which include that clients can phone, fax, email, or mail in their renewal papers, that they will get a follow up letter if they do not respond, that they will get a phone call if they do not respond, and that recipients only have to prove what has changed, and that they do not need to verify their income has stayed the same in order to successfully renew.

Implement ex parte renewal in which, at time of renewal, caseworkers check for continued eligibility through the food stamps, child support or Department of Workforce Solutions date. If continued eligibility is determined, the recipient is simply informed that their Medicaid coverage will continue for another year.

Educate HSD staff about the importance of Medicaid renewal and engage staff in renewal efforts, including staff as important part of our efforts to improve health of our children and our state.

During the renewal process, if a Medicaid recipient does not respond to notification of time to renew, the state should phone that family directly, document phone calls and efforts to reach the family and make it supervisor priority to ensure phone calls are made and documented.

Include Medicaid expiration dates on Medicaid cards so clients know when it is time to renew.

Give at least 60 days notification to families before their eligibility ends.

Ensure that families do not get a second notice saying they need to renew when in fact family has submitted renewal information

Implement passive (or automatic) renewal measures as used in three other states.21 This means that the agency sends families a renewal form with some or all of the information they reported in their previous application, often in the form of an application that is pre-populated with that family-specific information. Families are required to send the form back only if their information has changed. A "nonresponse" is presumed to indicate that nothing on the application has changed, and the child remains eligible.

21

Schott, Elizabeth and Sharon Parrott, How States Can Align Benefit Renewals Across Programs (Center on Budget and Policy Priorities: Washington DC, June 2005).As of 2005, GA, NV, and HI used passive renewal.

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12-Month Certification Period vs. 12-Month Eligibility

While New Mexico currently has a 12-month certification period for children, if a family’s income fluctuates during that 12-month period, the family must still report the change and the child can become ineligible for Medicaid or SCHIP. This is not required by federal law, and in fact, with no waiver from the federal government, New Mexico could use what is called a “continuous eligibility” system and keep the child on for the full 12 months, even if the family’s income changes after the application is processed but during the 12 month period. This should also reduce the workload for HSD staff and alleviate gaps in coverage for Medicaid-eligible New Mexicans. Currently, 29 states have 12-month continuous eligibility for children in their Medicaid and/or SCHIP programs.22

Recommended Solutions: Institute 12-month continuous eligibility for children, which allow children to remain eligible for Medicaid or SCHIP regardless of fluctuations in their family’s income during the year. It should be noted that SCI already has a 12-month continuous eligibility and adult programs should not have more generous eligibility procedures than children’s programs.

Waiting Periods for Children

Currently, New Mexico mandates a six month “waiting period” for families that prevents a family that has voluntarily dropped coverage within the past six months from enrolling in SCHIP. 23 Although waiting periods are supposed to reduce “crowd out” (the substitution of public coverage for private coverage), research suggests that SCHIP has not affected employers’ decisions of whether or not to offer coverage. Rather, when low-income families choose SCHIP over private coverage, it is often because they cannot afford the employee share of premiums or their children need benefits that are not covered or are unaffordable in commercial plans.24 According to the 2006 survey of Medicaid and SCHIP programs by the Kaiser Commission on Medicaid and the Uninsured, 16 states do not have a waiting period. States are not permitted to have a waiting period in SCHIP-funded Medicaid expansions unless they use a waiver. Among states that do use waiting periods, 17 states use shorter periods than does New Mexico, ranging from 1 month to 4 months; and some states specifically exempt families from waiting periods if their employers’ offer of coverage was too expensive or inadequate.25 New Mexico could amend their SCHIP waiver to eliminate or modify this barrier to coverage.

22

Statehealthfacts.org; Table: Has Continuous EligibilityUnder Medicaid and Separate SCHIP Programs, 2008; http://www.statehealthfacts.org/comparetable.jsp?ind=233&cat=4&sub=60&yr=63&typ=5&o=a.

23

This waiting period is in New Mexico’s regulations at HSD 8.232.400.11C. 24

U.S. Congressional Budget Office, The State Children’s Health Insurance Program (May 2007). 25

Cohen Ross, Donna, et al. Resuming the Path to Health Coverage for Children and Parents: A 50 State Update on Eligibility Rules, Enrollment and Renewal Procedures, and Cost-Sharing Practices in Medicaid and SCHIP in 2006

(Kaiser Commission on Medicaid and the Uninsured: Washington, DC, January 2007) and Kaye, Neva, et al.

Charting SCHIP III: An Analysis of the Third Comprehensive Survey of State Children’s Health Insurance Programs (DC: National Academy for State Health Policy, 2006).

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Recommended Solution: Eliminate the six month “waiting period” for families that prevents a family that has voluntarily dropped coverage within the past six months from enrolling in SCHIP. Alternatively, adopt clear and reasonable standards for exceptions for the 6-month waiting period.

Helping New Mexico’s Neediest Children Transition from Children’s Coverage to Adult Coverage

Currently, New Mexico’s Medicaid program covers children up to age 19. Under federal law, the state has the option to extend this coverage to age 21 for children who meet income and resource requirements for TANF, or who are disabled, in foster care, or have an adoption assistance agreement.26 In 2005 New Mexico passed legislation to allow adult children up to age 25 to be covered under their parent’s commercial insurance policies. Similarly, we should allow longer Medicaid coverage for our neediest children.

Recommended Solutions: Allow eligible children to stay on program up to 21 years old.

Newborn Coverage Issues

Currently, HSD has a good and legal policy that newborns born to mothers who are eligible for Medicaid (including Emergency Medical Services for Aliens or “EMSA”) are to be deemed eligible for Medicaid for a full year, and do not have to supply a birth certificate to prove eligibility until the one year renewal date. However, providers report that this frequently does not happen and that newborns are kicked off of Medicaid after approximately one month, and ISD workers inform parents that they have to re-apply, with birth certificates, in order to put their newborns back on Medicaid. This appears to be a training problem, combined with a computer programming problem which churns out the terminations after a few weeks.

Recommended Solution: Ensure that newborns are properly deemed eligible for one year through improved training of HSD staff and computer programming corrections.

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REPORTING AND ACCOUNTABILITY

Increase Accountability of Medicaid Enrollment and Retention Procedures

Currently, the Human Services Department provides less information about the Medicaid Program than it does about the other major benefits programs, even though Medicaid serves hundreds of thousands of more people than any other program, and costs the state millions more dollars than any other program. Improved reporting and accountability is needed for the Legislature and general public to have adequate information and public oversight over the programs. Moreover, data about the application and renewal procedures is the key to determining why eligible New Mexicans are not on the program. For example, without data concerning the efforts taken to renew a Medicaid case, both by the Department and by the recipients, the Department cannot determine why eligible people are losing their Medicaid at the renewal stage. While other states have collected data as the key to addressing the difficulties within their Medicaid program, HSD has taken a position that they do not have time to collect data since they are so busy serving clients. Data is not a luxury or an “extra.” It is a central part of a well run benefits delivery system and HSD should be more accountable to the taxpayers, providers and Medicaid beneficiaries.

Recommended Solutions: In order to fully assess the barriers to New Mexicans getting on and staying on Medicaid, HSD should analyze and make public information about how it processes Medicaid cases. HSD should report:

• Denial rates in Medicaid, just as HSD reports on denial rates in Food Stamps and TANF programs, as well as the Medicaid denials broken down by denial codes

• Number and percent of Medicaid and SCI applicants who are procedurally (and automatically) denied coverage for failure to provide sufficient information without first being informed in writing what they need to do to complete the process

• Number of cases terminated each month due to failure to renew

• Number of renewals that are submitted but not processed before autoclosure deadline • Number and percent of Medicaid renewals received, approved and denied each month • Number and percent of Medicaid cases that do not respond to written notice of time

to renew and percent of those cases in which the renewal workers make two phone calls to the family to seek their renewal

• Point in time data for Medicaid enrollment, including raw numbers of cases that are processed subsequently and then enrolled retroactively, as well as cases which are processed in the month received and enrolled that month

• Retention rates that show how many children and adults are enrolled beyond a full year. (Data on “continuous eligibility” was gathered and included in the “SCHIP Waiver Analysis and Evaluation” report prepared by NMMRA for HSD in September 2007.)

• The total number and breakdown by county of how many adults are eligible but not enrolled in Medicaid (not SCI).

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• The total number and breakdown by county of how many children are eligible but not enrolled in Medicaid/SCHIP.

• The total number and breakdown by county of how many adults are eligible but not enrolled in SCI.

• The total number and breakdown by county of how many low-income families are eligible for but not enrolled in JUL Medicaid

• Measures that indicate that people enrolled in HSD programs have improved access to health care and improved health outcomes would be helpful. HSD already measures the percent of children in Medicaid managed care receiving EPSDT services and dental care as well as the number of women enrolled in Medicaid receiving breast and cervical cancer screenings. Reporting on these measures should be required in statute. Additional measures could be: a) Emergency room utilization within Medicaid/SCHIP and SCI; b) Percent of Medicaid recipients with chronic illnesses participating in case management; c) Behavioral health screenings within Medicaid and SCI programs.

• Statistics on percentage and number of limited English proficient clients at HSD (broken out by county office and language spoken) and the percentage of those clients who received translation and interpretation services; as well as the method of service • Data on average wait time to be seen in each ISD office

• Average number of visits before eligible applicants are successfully enrolled in Medicaid

Incorporate community and client input into the modernization of HSD’s computer system

The Human Services Department (HSD) uses a computer system called Integrated Services Delivery 2 (ISD2) to enter client information, determine eligibility, and perform case management functions for all of the public benefits programs it administers, including TANF, Medicaid, and the Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps). The ISD2 system is over 20 years-old, and sorely needs replacing. HSD intends to modernize the system over the next few years, but the success of the project

depends critically on the inclusion of advocates and community members in the development of the new system. Thus far it is unclear how HSD plans to incorporate community input into the design of the system.

HSD announced recently that after surveying the systems used by a number of states, it plans to base its new system on two models used by Wisconsin and California. One reason for the relative success of these systems, however, was the incorporation of meaningful input from the community during the development process. In Wisconsin, for example, advocacy organizations were heavily involved in the design of the project, helping to organize focus groups in which clients and advocates gave extensive feedback about the usability of the system from the client perspective. The importance of a robust community input mechanism cannot be overstated. Many states, including Colorado, Texas, and California, have suffered major setbacks in their modernization efforts because of poor planning, wasting hundreds of millions of taxpayer dollars. Including meaningful input from clients and their advocates in

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the development of New Mexico’s new system will help ensure that the project remains on course and ultimately does what it promises to do—help clients and HSD workers alike to more efficiently manage their cases.

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NEW MEXICO’S STATE COVERAGE INSURANCE PROGRAM

The State Coverage Insurance program (SCI) was created in order to provide affordable health insurance to low-income adults from age 19-64 up to 200% of the federal poverty level (FPL). The program is for both parents of children eligible for Medicaid/SCHIP but who themselves are not eligible for Medicaid and for low-income childless adults. The program offers a health benefits package that is not as comprehensive as the Medicaid package and requires some cost-sharing by the enrollees. The program was approved by the federal government in 2002. (See Appendix 2 for detailed information about the SCI program and Table 1 for examples of SCI eligibility.) All SCI recipients are on the program due to financial eligibility, and SCI-eligible New Mexicans face many of the same difficulties as Medicaid clients in enrolling and staying on the program.

As of September 12, 2008 the state has stopped all new applications for SCI due to budget constraints. SCI is not an entitlement program like Medicaid but is instead a program approved by the federal government contingent upon available funding. HSD has now established a waiting list for SCI. At this time, it appears that HSD will continue coverage for existing SCI enrollees.

Given these circumstances, the focus is not on maximizing enrollment in SCI but working to preserve health care coverage for existing enrollees and developing a plan for either continuation of SCI or to cover those adults through the regular Medicaid program.

However, the recommendations for improvements within the Medicaid program discussed earlier are still relevant to the SCI discussion. The proposed improvements would help in terms of maintaining current coverage and enrollment for those adults already in the SCI program and when considering any revised or new public program administered by HSD designed to enroll uninsured New Mexicans in health care coverage and keep them enrolled so that they receive the care they need.

HISTORY AND WAIVER REQUIREMENTS

The SCI program was created through a Health Insurance Flexibility and Accountability (HIFA) waiver within the SCHIP program. The HIFA waiver was created by the Centers for Medicare and Medicaid Services (CMS) in 2001 to encourage states to use Medicaid and SCHIP funds to cover uninsured adults under initiatives that emphasized the use of private insurance. At that time, these waivers could include coverage for childless adults. In 2005, coverage of childless adults using waivers under SCHIP was prohibited by the Deficit Reduction Act of 2005.27

The waiver application, submitted by HSD, requested permission to enroll an estimated 40,000 residents of New Mexico with incomes at or below 200% of the federal poverty level, including

27

Artiga, Samatha and Cindy Mann; Family Coverage Under SCHIP Waivers; Kaiser Commission on Medicaid and the Uninsured, Issue Paper, May 2007.

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both parents and childless adults, and an estimated per member per month cost of $210. New Mexico’s HIFA waiver was approved in 2002. The program began enrolling clients as of July 2005 and had over 37,334 enrollees as of September 2008. However, according to HSD, current projections are for 40,000 enrollees once all the applications that were submitted before September 12, 2008 are processed and some slots are left for new enrollees from existing employer groups.

Projected FY09 expenditures are $211 million, of which $56 million would be state general fund and $155 million would be federal matching funds.28 The SCI program is currently a “capped” program based on the amount of the SCHIP funding, rather than an “entitlement” program like Medicaid. While the original waiver estimated SCI enrollment over five years of 40,000 people, it also anticipated that the waiver would be amended at the point that the 40,000 enrollment level was reached. Governor Richardson’s reform plan in the 2008 regular legislative session assumed 211,000 individuals would eventually be enrolled in SCI.

UNM SCI Program

There is also a UNM-CI program which is similar to the regular SCI program, but which is only for UNM patients. These patients enroll at UNM Hospital into SCI, but are limited in their provider network to UNM and UNM partner providers, with plan administration by Molina Health Plan. As of November 2008, there were approximately 10,000 individuals in the UNM-CI program. Under UNM-CI, UNM pays the patient’s share of the premium and co-pay, if required. The state pays UNM $250 per person per month for its SCI program, compared to an average of $555 for men and $776 for women for the commercial SCI program.29 The UNM-CI program is a critical part of UNMH being able to fulfill its mission as a safety net hospital in the state.

FUTURE OF SCI

There are two significant uncertainties surrounding the SCI program. The first immediate concern is whether funding will be found to continue SCI. The second is whether, even if funding is found, the federal government will renew its approval of the SCI program and continued use of SCHIP funds.

Funding

New Mexico’s SCHIP waiver for SCI was based on using the unspent SCHIP funds available to New Mexico. New Mexico had unspent SCHIP funds because New Mexico had already increased eligibility levels within Medicaid for children to 185 percent of the federal poverty level when SCHIP was enacted. SCHIP allowed New Mexico to expand eligibility to 235 percent of the federal poverty level and SCHIP funds could only be spent on children in families with incomes between 186-235 percent of the poverty level. Because of this, in the early years of SCHIP, New Mexico was not able to fully use its federal allotment and reverted large amounts of

28

HSD Medicaid Advisory Committee financial projections from 10/08. 29

Human Services Department, “Costs of Providing Coverage for Uninsured Individuals in New Mexico: Presentation to Legislative Finance Committee”, May 6, 2008, p. 22

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funding back to the federal government. SCI was developed in part to be able to keep these federal funds in New Mexico to provide health coverage to the uninsured.

However, HSD is now reporting that given the significant increase in SCI enrollment over the past few months, the program will soon run out of funding. For the past few years, New Mexico’s annual federal SCHIP allotment was $52 million. Available carryover (“excess”) funds for the current fiscal year are $41 million. This means that for the current year, total available federal funding is $93 million.30

HSD’s initial estimates for the current fiscal year showed estimated total federal expenditures for SCI as $150 million, clearly more than available SCHIP funding. HSD’s estimates have since been revised to $156 million. Earlier projections showed that FY10 federal expenditures were drawing from both SCHIP and regular Medicaid funds. 31 This would indicate that HSD at some point expected to move some SCI enrollees into the regular Medicaid program.

An additional concern regarding SCI and one that could be contributing to its current funding shortfall is that the per member per month (pmpm) costs are much higher than originally estimated. It is unclear why the cost per SCI enrollee should be higher than the per member per month costs within Medicaid, which has a more extensive benefit package. FY08 pmpm costs for SCI were $555 for men and $776 for women. In contrast, FY08 pmpm costs within the Medicaid program were $419 (including adults and children.) The higher SCI costs may be because of start-up issues such as initial adverse selection or because the number of enrollees was initially small, in which case the pmpm cost should decrease as the enrollment increases. However, the disparity in costs between the UNM program and the other SCI programs, and between Medicaid and SCI suggests the need for increased transparency and accountability.32

Waiver

The second significant uncertainty concerning the SCI program is that New Mexico’s current waiver expires in 2010 and it is unclear whether CMS will agree to renew the waiver and continue coverage for adults in this manner, especially childless adults.33 HSD has expressed concern that even with a change of administration at the federal level, there is not much support for using SCHIP funds to cover adults.34 Recently, CMS has not renewed some waivers that provided coverage for adults (Illinois and Oregon) and agreed to extend some waivers with

30

Human Services Department; “New Mexico’s Medicaid Program: Presentation to the Legislative Finance Committee”; September 24, 2008, p. 13.

31

HSD Medicaid Advisory Committee financial projections from 5/08,8/08 and 10/08. 32

Human Services Department, “Costs of Providing Coverage for Uninsured Individuals in New Mexico: Presentation to Legislative Finance Committee”, May 6, 2008, p. 22; and Human Services Department, “New Mexico’s Medicaid Program: Presentation to Legislative Finance Committee”, September 24, 2008, p. 3 33

It is important to note that CMS included language in the SCI-SCHIP waiver that would allow it to terminate the waiver at any time. The language reads: “The CMS reserves the right to deny pending waiver requests or withdraw waivers at any time if it determines that granting or continuing the waivers would no longer be in the public interest.” CMS Special Terms and Conditions, Health Insurance Flexibility and Accountability, Section 1115 Demonstration Project, New Mexico State Coverage Initiative, p. 3.

34

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scaled-back coverage for adults or by shifting adult coverage to a “regular” Medicaid waiver (Wisconsin and Rhode Island).35

Under the waiver, New Mexico must use SCHIP funds to first enroll eligible children and then to enroll adults. If the SCHIP allotment runs out during the fiscal year, New Mexico can use regular Medicaid funds to pay for children under SCHIP but would have to use state general fund for the adult SCHIP enrollees or discontinue their coverage.36 Within the SCI-SCHIP waiver, New Mexico can close enrollment and institute a waiting list for adults; lower the federal poverty level used to determine eligibility; or discontinue coverage at any time. The Human Services Department (HSD) must notify CMS 60 days before doing so. The state could also propose to change benefits, copayments, and other cost-sharing.37

Under the current agreement with CMS (i.e. the waiver), if both the excess balances and current SCHIP allotments are not enough to cover both children and adults over the long term, then the following could happen:38

• Parents – New Mexico can move these adults into regular Medicaid under the waiver, but must show budget neutrality.

• Childless adults – Because New Mexico did not request within the current waiver to be able to use regular Medicaid funds for this population if SCHIP funds run out, New Mexico and CMS would need to negotiate a budget neutrality agreement which includes a source of Medicaid savings to offset the additional cost of this population to regular Medicaid, before putting childless adults onto Medicaid.

The “budget neutrality” requirement means that expanding coverage to a population through a waiver that was not previously eligible under the state’s Medicaid program cannot cost the federal government more than what it had already projected to spend on the state Medicaid program without the waiver. States must show they can absorb the cost of the expansion within existing federal funding levels either by redirecting unspent federal dollars, reducing other program costs or some other cost savings.39

Eventually, New Mexico would need to re-new its current waiver and seek a new waiver in order to continue coverage for adults up to 200% FPL. Using Medicaid waivers to expand coverage for parents and to childless adults has been done in several other states (See Table 2 “Adult

Coverage in Medicaid”). The following are examples of what a few other states have done:40

35

Baumrucker, Evelyne; Status of SCHIP Adult Coverage Waivers (as of August 6, 2008); Congressional Research Service Memorandum, August 11, 2008.

36

CMS Special Terms and Conditions, Health Insurance Flexibility and Accountability, Section 1115 Demonstration Project, New Mexico State Coverage Initiative, p. 14

37

CMS Special Terms and Conditions, p. 7 38

CMS Special Terms and Conditions, p. 14 39

Dorn, Stan, et. al, Medicaid and Other Public Programs for Low-Income Childless Adults: An Overview of Coverage in Eight States, Kaiser Commission on Medicaid and the Uninsured, August 2004.

40

State Coverage.Net; Matrix Glossary: Medicaid, SCHIP and Federal Authority;

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Iowa

Section 1115 Waiver - Approved in July of 2005, the new IowaCare program expands a limited set of Medicaid benefits to all adults (19 - 64), including parents of Medicaid or SCHIP eligible children, using a limited provider network. The program is a capped, non-entitlement and converts uncompensated care funds into insurance coverage for adults.

Maryland:

Under the Maryland Primary Adult Care program, adults up to 116 percent FPL who are ineligible for Medicaid and Medicare will receive primary care, outpatient mental health, and pharmacy services. The Maryland Primary Adult Care program began enrollment in July 2006. Montana

Section 1115 Waiver - In January 2004, CMS approved a Medicaid Section 1115 waiver that would allow Montana to provide a limited Medicaid benefit package of optional services for Medicaid eligible parents aged 21 - 64 who are not pregnant or disabled. The optional services were excluded to align coverage with typical employer-sponsored insurance. This waiver was based on a previous Montana waiver, which provided a limited Medicaid benefit package to adults who are neither disabled nor pregnant, under the authority of Montana's welfare reform waiver in 1996.

New York

Section 1115 Waiver -In 1997, New York 's section 1115 Medicaid demonstration, the Partnership Plan, was approved. The demonstration moved approximately 2 million Medicaid beneficiaries from a primarily fee-for-service delivery system to a mandatory managed care environment. In 2001, the Family Health Plus (FHPlus) amendment was approved. FHPlus expanded health insurance to childless adults to 100 percent FPL, and expanded coverage to parents to 150 percent FPL. Prior to 2001, these populations were covered in the state's Safety Net program. FHPlus is delivered via managed care organizations and has a less comprehensive benefit package versus traditional Medicaid.

Another option available to New Mexico is to amend its state Medicaid plan to cover parents beyond current eligibility levels of 27% for non-working parents and 63% for working parents. It should be noted that 36 states have higher income eligibility levels than New Mexico for non-working parents, and 25 have higher levels for non-working parents in their state plans. Parents of children enrolled in Medicaid/SCHIP with incomes below 200% FPL are considered to be a “Medicaid eligibility group” (MEG) by CMS. According to CMS: “These are individuals who could be eligible for Medicaid under Section 1931 if the state further liberalized its eligibility criteria in the State Plan.”41 Moving parents into the state plan Medicaid program would make them eligible for the full Medicaid benefits package and remove any cost-sharing requirements. However, this option does not address the potential problem of coverage for childless adults who cannot be covered under the state plan.

According to a March 2008 report to the Center for Medicaid and Medicare Services submitted by HSD, total SCI enrollment in March 2008 was 17,221, of which 11,915 were childless adults

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(69%) and 5,306 were parents (31%). In both categories, the majority of the enrollees were below 100% FPL – 78% for childless adults and 76% for parents.42

Recommended Solutions/Options: There are several possible options to cover adults: • Under the current waiver, seek CMS approval to move parents into regular Medicaid

• Negotiate an additional waiver with CMS to move childless adults currently eligible for SCI into the regular Medicaid program. The state would have to show budget neutrality within the Medicaid program. Also, the benefits package would not have to be a Medicaid package and cost-sharing would be allowable. The state would continue to receive federal matching funds, just not at the higher SCHIP match rate.

• Amend the New Mexico State Medicaid Plan to increase eligibility for parents in regular Medicaid. Currently, New Mexico’s eligibility for parents (before disregards) starts at 85% of the federal poverty level. In order to move all parents currently on SCI into the regular Medicaid program, eligibility would have to be increased to 200% FPL (with significant income disregards). The cost of doing this is not known at this time. Required information would include the current number of parents enrolled in SCI and the state general fund cost for each additional parent enrolled. This option would not provide a solution for childless adults because they are not eligible under state plan Medicaid. Therefore, a new Medicaid waiver would have to be negotiated for the childless adults or the state would have to commit to funding this group solely with general fund.

• Continue SCI as a state-funded program outside of the Medicaid process. Appropriate

additional General Fund to cover the costs of the currently enrolled adults as well as continue new enrollment. This may cost $57 million in FY09 and more in future years as the program expands.43 This would remove the risk that CMS may disapprove the waiver in 2010 but also foregoes the benefit of federal matching funds.

• Analyze options for modifying SCI per member per month costs, benefits, and cost-sharing to allow funds to be stretched farther to cover more individuals.

42

State of New Mexico Human Services Department; State Coverage Insurance: Quarterly Narrative and Reporting Grid (Quarter ending 3-31-2008).

43

$57M calculated as difference between initially estimated $150M in federal funding and the $93M available for FY09.

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Table 1: Examples of SCI eligibility

Example 1

Single Individual makes $1,625 per month.

Total Income Per Month: $1,625 Less Work Allowance: - $ 125

Net $1,500

Minus ½ of Income: -$ 750 Countable Income: $ 750 100% FPL for Family Size of 1 = $ 867

Countable income is below 100% FPL and would qualify with no premium and only copay of $3 for prescription drugs.

Example 2

Family –2 adults, 3 children. Father works and makes $4,245 per month, mother has cancer and cannot work.

Total Income Per Month: $4,245 Less Work Allowance: - $ 225

Net $4,020

Minus ½ of Income: -$2,000 Countable Income: $2,025 % FPL for Family Size of 5 = $2,067

Countable income is below 100% FPL and both parents would qualify with no premium and only copay of $3 for prescription drugs.

Example 3

Business with 10 employees. Employees make wages as follows: 5 employees (single, no dependents) make $10 per hour

3 employees (married, with one child) make $20 per hour 2 employees (married, with two children) make $23 per hour All employees qualify for SCI and employer has no cost.

MAXIMIZING MEDICAID AND SCI IN NEW MEXICO