More than 100,000 Medicaid enrollees found ineligible for the program

by Jonathan Ingram Illinois law has long required that the Illinois Department of Healthcare and Family Services, or HFS, perform annual eligibility checks to ensure that those receiving Medicaid benefits were actually eligible for the program. After years of HFS failing to adequately perform these annual eligibility checks, lawmakers enacted 305 ILCS 5/11-5.2, which allowed...

by Jonathan Ingram

Illinois law has long required that the Illinois Department of Healthcare and Family Services, or HFS, perform annual eligibility checks to ensure that those receiving Medicaid benefits were actually eligible for the program. After years of HFS failing to adequately perform these annual eligibility checks, lawmakers enacted 305 ILCS 5/11-5.2, which allowed HFS to bring in independent experts to verify income, residency and identity eligibility for all Medicaid applicants.

Medicaid is a prime target for wasteful spending, winding up on the U.S. Government Accountability Office’s list of high-risk programs. The U.S. Department of Health and Human Services, or HHS, estimates that nearly 10 percent of total Medicaid spending is improper. That means that, nationwide, up to $40 billion in annual Medicaid spending is wasteful and/or fraudulent. HHS officials indicate that eligibility determination errors account for most of that waste.

HFS contracted with Maximus, an independent vendor that specializes in this type of work, to launch the enhanced verification program in January. So far, the vendor has reviewed eligibility for more than 195,000 individuals currently enrolled in Medicaid.

Of those, they identified more than 101,000 who were ineligible for benefits. Another 23,000 individuals were eligible for some benefits, but enrolled in the wrong program. For example, some individuals enrolled in Medicaid may only qualify for programs with greater cost-sharing. That means that of the 195,000 case files reviewed so far, nearly 64 percent had eligibility errors.

But this progress could be held up by a legal challenge filed by the union representing state workers. The American Federation of State, County and Municipal Employees, or AFSCME, challenged the project earlier this year, arguing that Illinois shouldn’t have hired independent experts that specializes in this kind of work, but should have instead hired hundreds of new state workers to do the job. It’s clear why AFSCME would want the state to hire more state workers to do this type of work. After all, the more state workers that Illinois hires, the more union dues AFSCME collects.

But it’s also clear that AFSCME workers have neither the expertise or the capacity to actually do the work. The Auditor General has frequently noted major problems with the eligibility checking processes used in the past, when state workers were doing the job. For example, the Auditor General found that several cases were missing documentation in their eligibility files in fiscal year 2012, the year before the state hired an outside expert to perform the checks.

Some files were missing evidence that income had ever been verified. Indeed, in some cases, state workers didn’t bother to collect paystubs, but simply “verified” the applicants’ wages verbally, through handwritten notes or by comparing it to previous applications. Other files were missing evidence that the state workers had verified Social Security numbers, citizenship or residency. In fact, some files were missing the redetermination applications altogether.

And those problems were just for the annual checks that the state workers bothered to do at all. The Auditor General also noted that between 15 percent and 20 percent of cases were overdue for their annual redetermination. The delays for these cases ranged anywhere from three months to more than five years.

An arbitrator recently ruled in AFSCME’s favor and the Quinn administration has yet to decide whether or not to appeal the ruling. But one thing is clear: AFSCME’s challenge puts the entire project in danger. If Quinn won’t appeal the decision, lawmakers must act swiftly to ensure the project can move forward.