Keeping it simple is one way states can substantially cut the administrative costs of their Medicaid and SCHIP programs, according to new study published today in Health Affairs.
Researchers from the New York Academy of Medicine, the Children's Defense Fund and Manatt, Phelps & Phillips, LLP, a New York law and consulting firm, conducted the study.
They estimate that going back to streamlined enrollment procedures similar to those adopted in the wake of the 9/11 terrorist attacks could slash the per-child enrollment costs in New York State by $112, to $168 from $280. A state computer system was damaged during the attacks, forcing the rules simplifications. The simplification features are being used in 10 other states.
These extra costs reoccur since children must be re-enrolled in these programs once a year, according to lead researcher Gerry Fairbrother of the New York Academy of Medicine, a not-for-profit public health education and advocacy organization.
"There's an eligibility period most states extend to 12 months," Fairbrother says. "In New York, our study shows, about half the kids fall off the rolls" each year due to failure by their parents to re-enroll them in a timely manner. "But, about 60% come back within 12 months."
A handful of states have relaxed enrollment standards similar to the less stringent emergency procedures enacted in New York in the wake of 9/11. Fairbrother says strict eligibility standards do little to curb fraud, because there is so little done by recipients to begin with, she says.
As evidence, Fairbrother says she also worked on a similar study, as yet unpublished, for the Center for Healthcare Strategies in Princeton, N.J., looking at the public healthcare coverage systems for children in Michigan.
"Michigan lets families self-declare income, and they've done studies, an audit, and there is not a lot of user fraud," she says.
Fairbrother says the study, which focused on the programs in New York state, did not calculate the total dollar cost to New York for the increased enrollment costs, nor did it determine how much the state saved in healthcare expenses from administratively taking off otherwise-eligible children.
About 2 million children are covered by insurance within the state, according to U.S. Census Bureau data, and around 620,000 New York children are uninsured. Of that number 300,000 are uninsured yet eligible for coverage under Medicaid, and 110,000 are uninsured but could be covered by SCHIP.