How increased data matching burdens states and enrollees with little benefit in finding fraud
Current Data Matching Requirements
The House Energy & Commerce Committee reconciliation bill proposes a tired, ineffective idea that would increase the frequency of residency data matches from quarterly to monthly for Medicaid enrollees. The stated goal of the bill is to identify improper payments made for people receiving benefits from two states. However, the likely result will be an increase in coverage terminations for those who are eligible. The process of matching data to identify enrollees that have moved from one state to another has been in place for 30 years. The Republican proposal makes no significant improvements to the existing processes but does require them to be performed more frequently. The proposal will not identify significant waste in Medicaid but will instead generate administrative costs for the states and harm for the individuals who lose coverage because of these administrative burdens.
Data matching to identify enrollees’ changing circumstances already occurs
States perform significant data matching. This includes periodic matching when an eligibility period triggers an eligibility renew process. Over two-thirds (35) of states use verified data from SNAP and TANF to identify any changes that could affect Medicaid eligibility. 15 states check external data sources such as quarterly wage and unemployment statistics, and 11 state does both. Medicaid enrollees are also required to report any change that may affect their eligibility, including moving out of state.
States use data sources that are specifically focused on identifying people who receive public benefits in multiple states. Since 2009, Medicaid agencies are required to use the Public Assistance Reporting Information System. States’ eligibility systems are required to include PARIS data matching in order to receive matching funds from the federal government for automated data systems which include eligibility and claims/billing system. PARIS collects a greater amount of data than the reconciliation bill, including Social Security numbers, names, dates of birth, addresses, case numbers, public benefits received, and the dates they were received. ACF (Administration for Children & Families) is the administering agency. Each quarter, in February, May August and November, states send data to ACF. States must submit data for the match in August. After each quarter’s match, they receive a matching data file. PARIS has not been used by many states and not for reasons that the reconciliation bill would address. According to reports, state technology issues and limited capacity of staff are the reasons why states do not submit accurate information to PARIS in all quarters. Even valid matches are not very efficient. The matches only result in a valid termination of benefits less that half of the time. States often choose to not pursue the recovery of these improper payments, because they lack the resources or it would take too much time.
Recovering payments is often of limited value when compared to the time and effort it takes to identify these payments and recoup them. In one study, for example, 18% out of the verified matches totaled only $6,200. These minimally effective matches are costly to both the states and those affected by the administrative processes.
Increased Matching Will Be Burdensome and Expensive for StatesIncreased matching frequency comes at a systems and administrative cost. It is often expensive to change the Medicaid eligibility and enrollment system of a state
. As an example, when the Affordable Health Care Act (ACA), introduced the
Federal Data Services hub, to facilitate eligibility-related matching data for all insurance affordability programs. Nearly half of the states sought temporary or permanent waivers to avoid the Hub. Thus, like PARIS, its data is only as good as state contributions. The increased frequency of data checks will lead to increased eligibility reviews and coverage cancellations, which will generate additional work for the states at significant cost. The proposed changes will increase “churn,” which is the process in which people lose Medicaid or CHIP and re-enroll shortly thereafter, often because of administrative barriers. Churn is a major administrative and financial burden for states. For instance, when enrollees lose eligibility for procedural reasons, eligibility workers end up processing multiple applications
for individuals who were eligible but still lost their eligibility and cycled off coverage.Given the minimal returns states experience from PARIS and the substantial financial and administrative costs associated with updating states’ eligibility and enrollment systems and increasing the frequency of eligibility checks, implementing a system that does many of the same functions as PARIS is not likely to be worth the investment.Increased Data Checks Will Increase Coverage Loss & Harm More frequent data matching, in addition to being administratively burdensome, increases the risk of coverage terminations
. Eligible individuals can lose coverage through procedural terminations,
i.e.
, administrative issues, the likelihood of which increases with additional renewal processes. These terminations are not due to ineligibility, but because the person did not return the required information or the state failed to process it. Recent data shows that more than 70 percent of Medicaid disenrollments during the continuous coverage unwinding were for solely procedural reasons, with enrollees complaining of incomprehensible notices and dysfunctional state systems that limited their ability to understand and submit information. And as recently as December 2024, the majority of enrollees disenrolled at renewal were disenrolled for procedural reasons as opposed to being found ineligible.Enrollees who remain eligible but lose Medicaid must undertake the administrative burden of re-enrolling in coverage. Many will not enroll, either because they believe they are not eligible or because they cannot navigate the re-enrollment procedure. Medicaid is the only source of insurance for most Medicaid-eligible adult. 70%
adults who were disenrolled during the dewinding of Medicaid became uninsured. Uninsurance can have huge consequences on the health and finances impacted individuals. People who successfully re-enroll in coverage are affected, too: even brief periods without coverage are associated with increased emergency room usage and inpatient hospital admissions. Uninsurance also places a significant burden on hospitals in the form of uncompensated care and increased usage of costlier emergency department services. These effects are particularly acute in rural areas where high rates of non-insurance contribute to financial difficulties and hospital closings which disproportionately impact older individuals and those with chronic conditions. ConclusionCreating a new system to perform the same function of PARIS, with simply more frequency and burden on states ignores the efficacy the system and other mechanisms states use to identify individuals who are no longer eligible. The loss of coverage will not be limited to those who are ineligible. This coverage loss will increase the cost of health care for both individuals who lose coverage and taxpayers due to delayed care.
