Integrating Health and Human Services Eligibility and Enrollment Processes

Integrating Health and Human Services Eligibility and Enrollment Processes MAC TAYLOR • L E G I S L A T I V E A N A L Y S T • OCTOBER 30, 2014 AN LAO REPORT 2 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT EXECUTIVE SUMMARY What Is Integration of Health and Human Services (HHS) Programs? The integration of eligibility and enrollment processes of HHS programs, which provide assistance intended to meet a variety of needs of primarily low-income Californians, has long been an important issue for the state. In this report, we focus on the integration of three key HHS programs: the California Medical Assistance Program (Medi-Cal), CalFresh, and the California Work Opportunity and Responsibility to Kids (CalWORKs) program. Degree of Integration Varies Along a Continuum. Integration is a way of structuring programs that facilitates information sharing and coordinated administrative processes among programs with the goal of simplifying government administration and improving program beneficiaries’ access to services. Such sharing and coordination is often referred to as “horizontal integration.” It is best thought of in terms of a continuum of varying degrees of integration of multiple programs. Key factors that facilitate a greater degree of integration along the continuum include (1) aligned program eligibility requirements, (2) modernized processes and automation systems, and (3) a client-centered administrative culture. The higher the level of integration, the more seamless the interaction of multiple programs from the perspective of both government administrators and program beneficiaries. Assessment of HHS Integration in California State Has Taken Steps to Integrate HHS Programs. In the past, the state has taken some steps to promote HHS integration, the most significant of which is the decision to process eligibility and enrollment for Medi-Cal, CalFresh, and CalWORKs together using a statewide automated system. The level of resulting integration, however, has varied somewhat among counties, reflecting local flexibility and preferences. Patient Protection and Affordable Care Act (ACA) Presented Challenges and Opportunities for Integration. The ACA, which has resulted in significant changes in health care coverage in California, has placed new focus on HHS integration. In some ways, the ACA has made HHS integration more challenging, primarily by significantly altering the way that Medi-Cal is administered so that its eligibility and enrollment processes are now more different from those of other HHS programs. At the same time, the ACA encourages states to integrate HHS programs, and the state has taken several steps to both preserve and enhance the level of integration that existed prior to the ACA. For example, the state has implemented processes that streamline enrollment of human services recipients into Medi-Cal, as well as processes to help ensure that Medi-Cal recipients have improved access to human services programs for which they may be eligible. Policy Choices Have Led to Moderate Degree of HHS Integration, Additional Opportunities Remain. We find that past efforts to promote integration of HHS programs, including recent steps taken during ACA implementation, have resulted in the state achieving a moderate degree www.lao.ca.gov Legislative Analyst’s Office 3 AN LAO REPORT of integration. Additional opportunities remain for further increasing integration; however, limitations in federal law and the state’s decentralized administration of many key HHS programs continue to pose challenges. Legislative Next Steps Legislature Should Weigh in on Priorities for Integration. With initial ACA implementation completed, we believe now is an appropriate time for the Legislature to take stock of recent actions taken by the administration relative to HHS integration and determine whether further efforts to strengthen integration are warranted. We think that key steps in this process should include (1) holding hearings to review administration-led efforts to increase integration, (2) considering various key issues relevant to integration, and (3) enacting legislation that memorializes the Legislature’s vision for HHS integration. Such a vision would serve as a useful guide when considering proposals to change eligibility requirements, change administrative practices, or support new or modernized automation systems, by enabling the Legislature to assess whether the proposals move the state toward realizing the goals established for integrating HHS programs. 4 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT INTRODUCTION The state, federal, and local governments throughout this report. The state’s horizontal operate many HHS programs that provide integration efforts have been affected by assistance intended to meet a variety of needs, implementation of ACA, also known as federal mainly to low-income Californians. Many health care reform, primarily by making significant individuals qualify for two or more of these changes to Medi-Cal eligibility and administration. programs. For example, more than one million At the same time, however, the ACA has presented Californians are enrolled at the same time opportunities to enhance horizontal integration of in Medi-Cal, which provides health services; HHS programs. Throughout ACA implementation, CalFresh, which provides food assistance; and various stakeholders, including the Legislature, CalWORKs, which provides cash assistance and the administration, program beneficiaries, and welfare-to-work services to families with children. advocates, have expressed an ongoing commitment Because many HHS programs serve overlapping to preserving and improving horizontal integration. populations, it makes sense to integrate the In this report, we describe the three key programs’ eligibility and enrollment processes in programs—Medi-Cal, CalFresh, and CalWORKs— order to avoid duplicative processes and streamline where the state has focused its horizontal the enrollment process from the beneficiary’s integration efforts over the past several years. We perspective. In the past, the state has taken steps to also describe how the implementation of ACA promote integration among certain key programs, has both challenged and facilitated horizontal particularly the three mentioned above, while integration efforts, and we give a status report on other HHS programs are less integrated, meaning where horizontal integration now stands. Given they have not been structured to facilitate sharing the potential substantial benefits of horizontal information and coordinating administrative integration in terms of both improved government processes to the extent that they could be. efficiency and improved beneficiary experience, we The integration of health programs and outline key concepts for the Legislature to consider human services programs is sometimes referred as it formulates long-term horizontal integration to as horizontal integration, a term we will use policy and describe steps the Legislature can take to move forward in the short term. WHY INTEGRATION OF HHS PROGRAMS MATTERS What Is Integration? exist among HHS programs to varying degrees and may be understood in terms of a continuum. Integration is a way of structuring programs At one end of the continuum, HHS programs are that facilitates information sharing and fully “siloed” and there is no information sharing coordinated administrative processes among or coordination of processes among programs, programs with the goal of simplifying government while at the opposite end of the continuum, there is administration and improving the access of clients seamless interaction of programs. (individuals who receive services through HHS programs) to services. In general, integration can www.lao.ca.gov Legislative Analyst’s Office 5 AN LAO REPORT What Would Complete Integration Look Aligned Program Eligibility Requirements Like? Completely integrated HHS programs Allow for Cleaner Overlap and Simpler would allow applicants to learn about, and apply Integration of Eligibility Determinations. for, a broad range of programs through unified Programs can more easily streamline their access points. One of these access points could collective application and administrative processes be a single online portal that would screen for when their eligibility requirements align. For eligibility and take applications for all HHS example, if Program A serves individuals with programs. For applicants seeking in-person help income at or below 110 percent of the federal at county human services offices, (where many poverty level (FPL), while Program B serves HHS programs are administered) staff would be individuals with income at or below 115 percent available to connect applicants to the programs of the FPL—but otherwise the two programs that address all of their needs (such as nutritional have identical eligibility requirements—the assistance or prenatal care). Additionally, programs largely serve overlapping populations. information shared with one program either Serving overlapping populations allows program online or in-person would automatically be shared administrators to more easily identify when an with other relevant programs as needed, while individual may be eligible for multiple programs taking steps to preserve confidentiality of personal and could more easily connect individuals to information. For example, once residency programs for which they may be eligible. In information was verified by one program, it would these cases, the programs may more easily share not need to be verified by subsequent programs. application and eligibility determination processes, This would simplify the enrollment experience resulting in a less burdensome experience for for applicants and reduce administrative burdens program administrators, applicants, and clients. In for the state and local administrators, which contrast, the more distinct eligibility requirements would no longer need to duplicate enrollment and are among programs, the more likely that eligibility processes. After enrollment, ongoing documentation and application processes differ, eligibility would be automatically checked from which complicates cross-enrollment for program time to time using existing electronic information, administrators, applicants, and clients. In this case, reducing or eliminating the need for program programs may be more likely to operate in silos. clients to provide additional verification to Modernized Processes and Systems Facilitate continue to receive program services. Finally, Information Sharing and Reduce Administrative complete integration need not be limited to HHS Burdens. Modernized administrative processes programs. It could extend to other government and automation systems make it possible service providers with which program clients for programs to share information with one interact, such as schools and the courts. another efficiently and accurately, while also helping to reduce duplicate work for program Factors That Facilitate Integration administrators, applicants, and clients. Modernized Below, we discuss several factors that affect administrative processes—such as allowing for where HHS programs are along the integration electronic verification of eligibility information— continuum, as illustrated in Figure 1. It is streamline operations, enhance access, and important to note that these factors interrelate and facilitate integration. The automation systems are not mutually exclusive. that support HHS programs perform many 6 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT of the same basic functions, such as accepting general philosophical approach to administering applications, determining program eligibility, HHS programs) found in state agencies and in tracking application statuses, managing cases, and county human services departments can directly renewing benefits. When automation systems are affect the extent of integration of programs. linked, application information can more easily Administrative culture that is client-centered will be shared electronically for these purposes. For tend to approach administration of HHS programs example, information collected and verified by from the perspective of meeting the multiple one program to determine eligibility—such as needs of program applicants and clients. Rather household income—could be shared and used than focusing on whether applicants and clients for eligibility determination for other programs. are eligible for only the particular programs for Modifications to automation systems that which they expressed interest, a client-centered enhance integration can include (1) “front-end” administrative culture will connect applicants improvements that simplify the application process and clients to all programs for which they may be and facilitate access to programs for individuals eligible. Administering programs with a client- and families and (2) “back-end” improvements centered focus will generally result in greater that make the eligibility determination process integration of HHS programs, and may lead to more efficient for program administrators. In some the modernization of automation processes and cases, modernized systems and processes can also systems. On the other hand, program-centered compensate for unaligned program eligibility administration will generally result in Gdercarepahseidc Sign Off requirements by using shared information to sort integration, even in the presence of modernized Secretary out eligibility for multiple programs automatically, processes and systems. Analyst limiting the need for additional information or The Potential for Integration: MPA time from caseworkers and applicants. Benefits and Costs Deputy Client-Centered Administrative Culture Facilitates Integration of Multiple Programs. Benefits of Integration. Streamlining and In conjunction with modernized processes better integrating HHS programs can be beneficial and systems, the administrative culture (or the in two main ways. First, better integrating Figure 1 Factors That Facilitate Integration No Integration Aligned Eligibility Requirements Complete Integration (cid:127) Siloed administration (cid:127) Unified access points Modernized Processes and Systems (cid:127) No information sharing (cid:127) Automated information sharing (cid:127) No coordination of processes (cid:127) Coordinated processes Client-Centered Administrative Culture INTEGRATION CONTINUUM www.lao.ca.gov Legislative Analyst’s Office 7 ARTWORK #130734 Template_LAOReport_mid.ait AN LAO REPORT programs through simplified and aligned clients to all services for which they may be eligibility and enrollment processes may result eligible would likely result in higher enrollment, in decreased administrative burdens for counties at least in the short run, as individuals participate (as program administrators) and for clients. For at higher rates in programs for which they are counties, decreased workload could result in eligible. Increased enrollment in an uncapped, additional time being made available for county primarily federally funded program (such as workers to more adequately assess and address CalFresh), would have relatively little state client needs or potentially in budgetary savings (General Fund) or county fiscal impacts. However, for the state and counties. (Budgetary savings the state and county impacts of increased would depend on whether county administrative enrollment in programs where the state and/or funding is reduced, after accounting for counties and the federal government have their overall county workload and the funding respective cost share (such as Medi-Cal), or in provided therefore.) Integration can also reduce programs where the state receives fixed federal administrative challenges and create efficiencies block grant funding (such as CalWORKs), would for program applicants and clients, who may be much greater, potentially putting pressure on no longer be required to provide the same limited state and county resources that fund other information to multiple programs. Second, better legislative or local priorities. integrating HHS programs may increase clients’ Legislative Interest in Integration ability to achieve greater economic stability and self-sufficiency. The HHS programs are structured The Legislature has already expressed its in such a way that they are fragmented, with each interest in strengthening the integration of HHS generally serving a relatively specific subset of programs by approving key pieces of legislation needs, such as health, nutrition, or job training. and budget proposals. As will be described Increasing the extent to which individuals in greater detail later in this report, some with multiple needs can access the full range legislation required specific changes to program of programs for which they are eligible could administrative processes or the related automation provide greater stability to these individuals and systems so that information can more easily flow households. back and forth across programs, while other Cost of Integration. The state must allocate legislation called for the formation of workgroups resources to implement the administrative that would be charged with identifying additional process changes and build the automation opportunities for strengthening integration. systems that strengthen integration of HHS Additionally, the Legislature approved budget programs. The processes and systems involved proposals that allocated resources tasked with with administering HHS programs are complex. further advancing integration and supported Making these changes can be costly and subject to improvements to automation systems. The risks of delay. following sections will describe what integration Other Fiscal Impacts on State and Counties. of HHS programs looked like prior to the ACA, Streamlining and better integrating HHS how the ACA affected the state’s pre-existing level programs would also have other fiscal impacts on of integration, and how the state has responded to the state and counties. Focusing on connecting changes related to the ACA. 8 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT THE PRE-ACA STATE OF INTEGRATION As noted above, while the ACA has put and CalWORKs caseloads in June 2013, prior to increased focus on the issue of horizontal the implementation of the ACA. As shown in the integration, integration was a feature of HHS figure, at that point in time roughly 1.2 million programs in California prior to the ACA. Below, individuals were enrolled in all three key HHS we provide a description of this pre-existing programs. These individuals represent 92 percent integration, focusing on Medi-Cal, CalFresh, and of the CalWORKs caseload, 28 percent of the CalWORKs. CalFresh caseload, and 15 percent of the Medi-Cal caseload at that time. This is consistent with Key Programs Serving Overlapping CalWORKs having more restrictive eligibility Populations Offer Opportunities requirements than the other two programs, for Integration such that CalWORKs recipients are generally HHS Programs Address a Variety of Needs. automatically eligible for the other two programs. As noted above, the state and federal governments Additionally, roughly 3.2 million CalFresh operate several HHS programs that provide clients (including 1.2 million who also received assistance intended to help meet various needs CalWORKs assistance and 2 million who did not) of vulnerable Californians, primarily those with were also enrolled in Medi-Cal, which represents low income. The needs that these programs 76 percent of total CalFresh clients and 40 percent seek to address include lack of access to medical of total Medi-Cal clients. As can be seen in the care, poor nutrition, insufficient income to figure, many families have multiple needs and obtain basic necessities, and unemployment are served by multiple programs. This overlap is or underemployment. Among HHS programs, one motivation for the state’s previous efforts to three programs—Medi-Cal, CalFresh, and integrate eligibility and enrollment processes across CalWORKs—are characterized by (1) the large the key HHS programs, and for future actions that number of overlapping clients they serve; (2) their might be taken to strengthen that integration. focus on providing means-tested assistance that Administrative Processes Partially is intended, at least in part, to help low-income Supported Integration individuals achieve greater economic stability; and (3) local administration by county human Prior to the implementation of the ACA, services departments. As a result of these common certain state decisions, described below, led to features, the majority of the state’s past focus some integration of administrative processes on HHS-related integration has been on these for Medi-Cal, CalFresh, and CalWORKs. At the programs, which we will refer to as “key” HHS same time, differences in county processes and programs throughout the remainder of the report. administrative culture resulted in some variation in The box on page 10 and 11 provides background the level of integration across the state. information on the three programs. General Steps in Eligibility and Enrollment Key HHS Programs Serve Overlapping Process Common Across Key Programs. Prior to Populations. The three key HHS programs serve January 2014, when the ACA became effective, similar populations that overlap. Figure 2 (see page the basic process of determining eligibility was 12) displays the overlap in Medi-Cal, CalFresh, substantially similar for Medi-Cal, CalFresh, and www.lao.ca.gov Legislative Analyst’s Office 9 AN LAO REPORT CalWORKs. Having the same general steps in some more technical aspects of the eligibility and eligibility and enrollment processes for the three enrollment processes of Medi-Cal, CalFresh, and key programs made them conducive to integration. CalWORKs prior to the ACA. As an example, the However, similar processes do not guarantee amount of resources a household could have and complete integration. Figure 3 (see page 13) shows still qualify for CalFresh and CalWORKs was a high-level view of the main steps in this general aligned. Similarly, whenever possible, the points eligibility and enrollment process. in time during a year at which eligibility was State Took Action Prior to ACA predetermined were generally aligned for clients Implementation to Promote Process Integration. enrolled in both the CalFresh and CalWORKs The state and counties also took steps to integrate programs when the same individuals in the Description of Key Health and Human Services (HHS) Programs In the past, the state’s efforts to integrate HHS programs has focused on the following three programs. Medi-Cal. In California, the joint federal-state Medicaid Program is administered by the Department of Health Care Services (DHCS) as Medi-Cal. Medi-Cal is by far the largest state- administered health services program in terms of annual caseload and expenditures. As a joint federal-state program, federal funds are available to the state for the provision of health care services for most low-income persons. In 2013-14, total Medi-Cal costs were estimated to be $62.3 billion— $39.5 billion federal funds, $16.6 billion General Fund, and $6.2 billion other nonfederal funds (including county funds, provider taxes, and fees). Until recently, Medi-Cal eligibility was mainly restricted to low-income families with children, seniors, persons with disabilities, and pregnant women. California generally receives a 50 percent federal share of costs for these populations— meaning the federal government pays one-half of Medi-Cal costs for these populations. As part of the Patient Protection and Affordable Care Act (ACA), beginning January 1, 2014, the state expanded Medi-Cal eligibility to include additional low-income populations—primarily childless adults who did not previously qualify for the program. The federal government will pay 100 percent of the costs of providing health care services to this newly eligible Medi-Cal population from 2014 through 2016, with the federal cost share phasing down to 90 percent in 2020 and thereafter. In 2013-14, which includes the first six months of ACA implementation, DHCS estimates an average of 9.4 million individuals (roughly 25 percent of the state’s population) received Medi-Cal coverage each month. The DHCS expects Medi-Cal to provide health coverage to about 11.5 million individuals (roughly 30 percent of the state’s population) in 2014-15. Although overseen at the state level by DHCS, Medi-Cal is administered locally by county human services departments. CalFresh. The CalFresh program is California’s version of the federal Supplemental Nutrition Assistance Program (SNAP), which provides food assistance to qualifying low-income households. It is overseen at the state level by the Department of Social Services (DSS) and administered locally by county human services departments. During 2013-14, an average of 4.3 million individuals (roughly 11 percent of the state’s population) received CalFresh assistance each month. The cost of 10 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT household participated in both programs. This programs. The multi-program application allowed allowed the reporting of identical eligibility counties to process applications for all three information to take place only once for each programs simultaneously, without having to period of enrollment, reducing reporting gather redundant information for each program burdens for clients and county administrators. individually. Although we have described these For individuals applying for CalWORKs or for policies and practices as existing prior to the ACA, more than one of the other key HHS programs, they continue today. the state also required counties to use a multi- County Practices Reflected Local Adaptation program application that captured all the and Thus Varying Levels of Integration. Broadly information necessary to apply for all three speaking, county administrative practices prior to food benefits in the CalFresh program, which totaled $7.6 billion in 2013-14, is paid almost entirely by the federal government. (A small share of total benefit costs—less than one percent—is paid for from the General Fund for certain legal noncitizens who are ineligible for federal benefits.) Costs to administer the CalFresh program are shared among the federal government, the state, and counties. Total budgeted administrative costs in 2013-14 were $1.9 billion ($957 million federal funds, $662 million General Fund, and $280 million county funds). Despite significant recent increases in the CalFresh caseload, many households in California that are eligible for CalFresh assistance do not participate. The United States Department of Agriculture, which administers SNAP at the federal level, estimates that in federal fiscal year 2011, only 57 percent of eligible Californians received CalFresh assistance. The low CalFresh participation rate has been a source of concern for the Legislature in recent years, resulting in numerous policy changes intended to increase participation among those who qualify, some of which have yet to be fully implemented. CalWORKs. The California Work Opportunity and Responsibility to Kids (CalWORKs) program is California’s version of the federal Temporary Assistance for Needy Families (TANF) program, which provides cash assistance and welfare-to-work services for families with children whose income is inadequate to meet their basic needs. It is overseen at the state level by DSS and administered locally by county human services departments. During 2013-14, an average of about 1.3 million individuals (roughly 3 percent of the state’s population), mostly children, received assistance through the CalWORKs program each month. The CalWORKs program is funded by a combination of the state’s annual federal TANF block grant allocation (fixed at $3.7 billion each year), the state General Fund, and county funds. In 2013-14, total CalWORKs costs were estimated to be almost $5.4 billion—$2.7 billion TANF, $1.1 billion General Fund, and $1.6 billion county funds (including roughly $1.5 billion provided through state-local realignment that directly offset state General Fund costs). Since the state’s annual TANF block grant—the federal funding source for CalWORKs—is fixed and fully allocated in the state budget, incremental costs and savings that occur because of higher or lower caseloads or state policy changes generally accrue to the General Fund. This differentiates CalWORKs from the CalFresh and Medi-Cal programs, in which a fixed percentage share of costs is funded by the federal government. www.lao.ca.gov Legislative Analyst’s Office 11 AN LAO REPORT implementation of the ACA followed the general did not initially intend to apply. Since counties flow shown in Figure 3. However, the specific had discretion in the detailed implementation of county processes varied somewhat, reflecting local administrative processes and worker training, the circumstances, resources, and preferences. For extent to which HHS programs might have been example, some counties had specialized eligibility considered integrated varied among counties. staff that processed applications only for specific Counties continue to have discretion over their HHS programs, while other counties had staff that administrative processes today. were trained to process applications for multiple Automation Systems Partially programs. Counties also had significant discretion Supported Integration over practices that could lead to applicants being Graphic Sign Off made aware of other programs and services for While the state’s HHS automation systems which they may have been eligible. One county were partially integrated prior to the ACA, some Secretary we spoke with while preparing this report noted aspects of the automation landscape complicated Analyst that its eligibility workers were specifically trained integration. Two automation systems primarily MPA to examine the needs of applicants holistically. have supported the enrollment, eligibility Deputy Such workers offered all programs for which determination, and case management functions the applicant was potentially eligible, even if the for the key HHS programs: the Statewide applicant was not aware of these programs or Automated Welfare System (SAWS), which Figure 2 Overlap in Major Health and Human Services Caseloadsa 77,000 1.2 Million Program (Total Caseload) Medi-Cal (7.9 million) CalFresh (4.2 million) 1 Million 4.6 Million CalWORKs (1.3 million) Three programs overlap 2 Million Two programs overlap No programs overlap a Figure displays point-in-time overlap in caseload for June 2013, prior to the implementation of the Patient Protection and Affordable Care Act. 12 Legislative Analyst’s Office www.lao.ca.gov ARTWORK #130734 Template_LAOReport_lrg.ait AN LAO REPORT consists of three county-run systems known as both to redundancy and variation in how these consortia, and the Medi-Cal Eligibility and Data functions are carried out in different parts of the System (MEDS), which is a statewide is a statewide state. Having multiple SAWS consortia is one database that consolidates utilization and benefits reason that other systems, such as the state-run Graphic Sign Off data. (Boxes on pages 14, 15 and 16 describe MEDS, are needed to bridge between the systems the systems and provide a history of the SAWS and provide a centralized repository of sStaetecwreidtea ry consortia.) In terms of supporting integration, client information. In the past, efforts to develop Analyst the consolidation of eligibility, enrollment, a single SAWS that supports eligibility and MPA and case management functions for Medi-Cal, enrollment for HHS programs have been stymied Deputy CalFresh, and CalWORKs within SAWS meant by technical, programmatic, and administrative that many eligibility and enrollment processes challenges. could be coordinated and information could be utilized across the programs with relative ease. The Figure 3 three consortia General Steps in Eligibility and Enrollment Process for a Medi-Cal, CalFresh, and CalWORKs that comprise SAWS each offered an online Intake portal through Eligibility Determination which applicants (cid:127) Individual submits application in (cid:127) Eligibility worker determines person at county human services eligibility by verifying information could learn office, by mail, or online. against state databases. about and apply (cid:127) In the case of paper applications, (cid:127) Eligibility worker processes case county eligibility worker enters and benefit cards are issued. for Medi-Cal, information into automation system. Data from online application is CalFresh, and automatically filled in. CalWORKs. In Case Maintenance recent years, these Interview (cid:127) Beneficiaries report any changes in online portals circumstances. (cid:127) When applicable, the eligibility have become (cid:127) Eligibility worker periodically worker interviews the applicant. redetermines eligibility. increasingly This interview could be in person or over the phone. (cid:127) Eligibility worker maintains electronic important as case file by tracking processed changes in client circumstances a means for and redeterminations of eligibility. clients to apply Document Submission for services. On (cid:127) Applicant submits supporting documents, such as birth certificates, the other hand, immunization records, Social Security cards, bank statements, rental having multiple agreement, and pay stubs. SAWS consortia, each providing a the same basic Reflects processes prior to the Patient Protection and Affordable Care Act. functions, leads www.lao.ca.gov Legislative Analyst’s Office 13 ARTWORK #130734 Template_LAOReport_mid.ait AN LAO REPORT THE ACA: NEW CHALLENGES AND OPPORTUNITIES FOR INTEGRATION The implementation of the ACA created T he ACA F undAmenTAlly significant changes to eligibility and enrollment A lTers h eAlTh C Are C overAge processes for Medi-Cal that have in some ways The ACA is resulting in significant changes to complicated horizontal integration efforts. At the health care coverage in California. A primary goal same time, the ACA has presented opportunities to of the ACA is to reduce the number of uninsured enhance horizontal integration of HHS programs. by expanding access to affordable health insurance In the following sections, we provide background coverage. The ACA seeks to accomplish this goal in on the ACA and describe the ways that the ACA several ways, as described below. both complicates and provides opportunities to Establishes New Requirements for Private strengthen integration. Health Insurers and Individuals. Among other Key Automation Systems Supporting Health and Human Services (HHS) Programs Various automation systems have supported and currently support the state’s HHS programs. The following section describes the two key systems. Statewide Automated Welfare System (SAWS). The SAWS is made up of multiple systems that support eligibility and benefit determination, enrollment, and case management, among other functions, at the county level for some of the state’s HHS programs, including Medi-Cal, California Work Opportunity and Responsibility to Kids (CalWORKs), and CalFresh. The systems perform similar functions, but each system serves a distinct group of counties and is known as one of the SAWS “consortia.” The three consortia systems that currently make up SAWS are Consortium-IV (C-IV), CalWORKs Information Network (CalWIN), and Los Angeles Eligibility, Automated Determination, Evaluation, and Reporting (LEADER) System. The SAWS consortia have been a sizable financial commitment for the state, taking multiple years and hundreds of millions of state and federal dollars to develop and maintain. Efforts are underway to consolidate the total number of SAWS consortia. The LEADER System will be updated in a project known as the LEADER Replacement System (LRS) project. When complete, C-IV counties will be transferred, or migrated, into LRS. At that point, LRS and CalWIN will be the remaining two consortia systems. Medi-Cal Eligibility Data System (MEDS). Unlike the SAWS consortia, which are county- administered systems that determine eligibility, process enrollment, and manage client cases, MEDS is a statewide database that consolidates information—including utilization and benefits data—on individuals who have applied for or are receiving public benefits from various programs administered by the Department of Health Care Services and the Department of Social Services— including the three key HHS programs that are the focus of this report. (Data maintained in MEDS originates from California’s 58 counties, state and federal agencies, and health plans.) The data found in MEDS is accessed by each of the SAWS consortia (through an interface) to check program 14 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT things, beginning in January 2014, the ACA Creates Health Benefit Exchanges, Offers prohibits private health insurers from denying Coverage Subsidies. The ACA further promotes coverage to any applicant, including high-risk coverage by creating health benefit exchanges individuals with pre-existing conditions for whom through which individuals and small businesses providing health care is generally more expensive. are able to research and obtain health coverage To compensate for this cost, the ACA also requires from a continuum of health coverage options. most U.S. citizens and legal residents, including (States had the option to establish their own state- low-risk individuals for whom providing health based exchange or the federal government would care is relatively inexpensive, to obtain health operate an exchange on their behalf. California coverage or pay a penalty. The inclusion of low-risk opted for a state-based exchange.) Creating this individuals in health insurance coverage is an continuum of coverage options has required the important counterbalance to the cost of including modification of Medi-Cal to allow it to be linked high-risk individuals. with the new health coverage subsidies created by the ACA. Individuals with low income may applicants’ benefit history. In an environment where eligibility is determined in a decentralized manner—through county-based eligibility systems—MEDS allows counties to check utilization data and prevent duplication in the provision of services to an individual (for example, when an individual applies for the same program in multiple counties). The MEDS is over 30 years old and relies on old technology that is difficult and time-consuming to modify. The state is engaged in preliminary efforts to modernize MEDS, but there is currently no timeline set for the completion of this modernization project. Other Systems. Various other automation systems also support HHS programs. Some of these programs include: • The income and Eligibility Verification System, which verifies whether the income information that applicants provide during enrollment intake matches the income information contained in other databases. • The Electronic Benefit Transfer System, which provides an automated system for the electronic payment of various types of public assistance benefits. • The Statewide Fingerprint Imaging System, which detects fraud in certain HHS programs by matching the fingerprints of program applicants against a database containing fingerprints of persons who are already receiving aid. • The Case Management Information and Payrolling System II, which performs payroll and case management functions for all In-Home Supportive Services providers and recipients. • The Child Welfare Services/Case Management System, which manages child welfare services cases. www.lao.ca.gov Legislative Analyst’s Office 15 AN LAO REPORT History of the Statewide Automated Welfare System (SAWS) Consortia In 1995, the Legislature approved the development of four automation systems that would serve groups of counties—known as consortia—after the state had unsuccessfully attempted for several years to design and build a single statewide system. In 2006 legislation, the Legislature expressed its preference to reduce the number of consortia. Over the years, the Legislature has consolidated the total number of SAWS consortia, reducing the state’s financial burden of maintaining multiple systems and also assisting in standardizing the eligibility determination processes of the state’s health and human services operations. Chapter 7, Statutes of 2009-10 Fourth Extraordinary Session (ABX4 7, Evans), directed the Department of Health Care Services (DHCS) and the Department of Social Services (DSS) to implement a statewide enrollment determination process for many of the programs administered by the SAWS consortia. The goals of Chapter 7 included (1) using state-of-the-art technology to improve the efficiency of eligibility determination processes and (2) minimizing the overall number of technology systems performing the eligibility process. The statute required DHCS and DSS to develop a comprehensive plan, including an evaluation of the costs and benefits of building a single statewide system, to streamline the eligibility determination process. To ensure the Legislature was kept informed of the plan, Chapter 7 required that the administration submit a strategic plan prior to a request for an appropriation to begin work on a new system related to eligibility determination process changes. While the administration did take initial steps to implement Chapter 7, a plan was never submitted to the Legislature for its review. Ultimately, the administration suspended planning when the Patient Protection and Affordable Care Act (ACA) was enacted in 2010 (with implementation beginning largely in January 2014). In large part, this was due to the fact that the ACA created significant changes to eligibility and enrollment processes for Medi-Cal and therefore impacted the automation system that supports it. Additionally, ACA created health benefit exchanges that need to interact with SAWS for information and data exchange. Anticipating that program changes related to the ACA would necessitate significant changes to the SAWS, the administration paused in planning for a new system. In 2011, the Legislature enacted Chapter 13, Statutes of 2011-12 First Extraordinary Session (ABX1 16, Blumenfield), which stated the Legislature’s policy to decrease the number of SAWS to two, rather than to a single statewide system. Additionally, this legislation specifies that the reduction will occur by migrating, or moving, 39 counties from the existing Consortium—IV system to Los Angeles County’s new modernized replacement system, currently under development. This effort is expected to be completed in 2019. 16 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT qualify for coverage through Medi-Cal, while the T he ACA A FFeCTs P re -e xisTing ACA provides new subsidies that offset the cost o PPorTuniTies For i nTegrATion of health insurance coverage for individuals with The implementation of federal health care higher incomes (up to 400 percent of FPL). The reform created significant changes to eligibility health benefit exchange that serves California, and enrollment processes for state health known as Covered California, brings the coverage programs. This, in turn, required the state to options available together into one place and reevaluate the administration of the Medi-Cal assists clients in selecting coverage. Program and make modifications to the state’s Expands Coverage Through Medi-Cal and automation systems in ways that had significant Simplifies Medi-Cal Eligibility Determination implications for integration, as discussed below. Process for Many Applicants. The ACA allows states to expand the role of Medicaid in the Linking Medi-Cal to Covered coverage continuum by expanding eligibility. California Required Reevaluation Effective January 2014, California expanded of Medi-Cal Administration Medi-Cal coverage to most adults under age State Considered Options for Medi-Cal 65 with incomes at or below 138 percent of Administration in Light of ACA. Prior to the FPL. In addition to expanding eligibility, the ACA, counties were responsible for reviewing ACA also significantly simplified the Medi-Cal applications, determining eligibility, and eligibility determination process in several managing cases for Medi-Cal clients using the ways. Most significantly, the ACA introduced three SAWS consortia. Implementation of federal a new methodology for calculating income health care reform required new automation for certain households, known as Modified functions not available in the SAWS consortia. Adjusted Gross Income (MAGI). Under the Specifically, SAWS consortia did not support (1) previous methodology, a household’s income the new MAGI rules for determining eligibility would have to be less than specified thresholds for the bulk of the Medi-Cal population and (2) after several deductions and exemptions were functionality to allow clients to select coverage applied. Under MAGI, income deductions and and obtain a health coverage subsidy through exemptions are largely eliminated and income Covered California. The state evaluated a few is defined simply in terms of the adjusted gross different approaches to obtaining the needed income used for federal income tax purposes. technical functions to implement the ACA Also of significance, the limit on assets that within the complex automation landscape that a household could have and still qualify was supports existing HHS programs, including removed for most households. For certain other the administration of the Medi-Cal Program households, primarily seniors and persons with at the county level. The state considered three disabilities, the previous Medi-Cal eligibility alternatives. determination methodology will continue to • Option 1: Adding ACA Eligibility apply. For the balance of this report, we will refer and Enrollment Functions to SAWS to this population as the “non-MAGI” Medi-Cal Consortia. Under this option, the state population. would add functionality for MAGI Medi-Cal and the other functions www.lao.ca.gov Legislative Analyst’s Office 17 AN LAO REPORT needed to support Covered California through Covered California, including to the SAWS consortia (eligibility non-MAGI Medi-Cal. This approach determinations and case management for would result in less duplication relative to non-MAGI Medi-Cal cases would remain option 1, but effectively would weaken the with SAWS). Building this capacity into connection between Medi-Cal and human the existing eligibility systems would services programs delivered at the county support horizontal integration as the level, potentially making it more difficult administration of Medi-Cal, CalFresh, for individuals and families to receive all and CalWORKs would remain with the the benefits for which they are eligible. counties. However, this option would also State Elected Option 2. Ultimately, the state be duplicative and potentially expensive as chose to move forward with the second option automation changes would be required in described above—a central automation system each of the three consortia systems. for the functions related to Covered California (including subsidized coverage and MAGI • Option 2: Developing a Centralized Medi-Cal determinations) that leverages existing Eligibility and Enrollment System for infrastructure for ongoing case management. ACA, Linking to Counties for Medi-Cal The new central automation system—known as Processing and Case Management. the California Health Eligibility, Enrollment, Under this option, the state would develop and Retention System (CalHEERS)—is jointly a new central automation system to administered by Covered California and the support eligibility determination for both Department of Health Care Services (DHCS). MAGI Medi-Cal and functions related The CalHEERS allows for real-time eligibility to subsidies available through Covered determinations both for Medi-Cal under the new California, while retaining existing MAGI rules and subsidized coverage; health plan SAWS consortia to support eligibility certification, recertification, and decertification; determinations for non-MAGI Medi-Cal reporting and tracking of data for federal, state, cases and ongoing case management for and local purposes; and consumer assistance. The all Medi-Cal cases. This approach would CalHEERS is designed to leverage information require relatively limited modifications and automation processes existing in other state to existing consortia systems and would systems—including SAWS and other health- preserve ongoing case management of related systems—so as to reduce duplication, Medi-Cal in the SAWS consortia with the and was built using flexible technology to allow key human services programs. for future integration. This decision to pursue • Option 3: Developing a Centralized the second option reflects a balance between Eligibility and Enrollment System for the competing objectives of limiting cost ACA, Including All Medi-Cal Eligibility and complexity by reducing duplication and Determinations (MAGI and Non-MAGI). maintaining integration of HHS programs by Under this option, the state would develop preserving the link between Medi-Cal and human a new central automation system to services programs at the county level. administer all coverage options available 18 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT Post-ACA Eligibility and Enrollment be asked to provide physical verification Processes for Medi-Cal Now Differ More of eligibility if reasonably compatible From Those of Human Services Programs electronic verification is not available. The CalFresh and CalWORKs programs, As noted above, the ACA made significant however, continue to generally require changes to eligibility and enrollment processes for that physical documents be presented for Medi-Cal. Specifically, MAGI was introduced as verification of eligibility. a new streamlined methodology for how income is counted and how household composition and • Recertification Simplified for Medi-Cal size are determined for the majority of Medi-Cal Clients, While Human Services applicants. These changes were made in order to Programs Require Clients to Provide allow Medi-Cal clients to transition seamlessly Documentation to Recertify. As discussed between Medi-Cal and coverage subsidies as their previously, individuals enrolled in HHS circumstances change. At the same time, these programs must periodically recertify and certain other changes mean that Medi-Cal their eligibility to continue to receive eligibility processes now differ to a greater assistance. Prior to the ACA, Medi-Cal, extent from eligibility processes for CalFresh CalFresh, and CalWORKs clients were and CalWORKs than they did previously. While required to provide updated information the differences make eligibility determinations related to their eligibility and provide simpler for Medi-Cal, the ACA generally made no documentation related to any changes. corresponding simplification for human services Failure to provide this information or programs, and the now greater differences in required verification generally resulted in requirements make integration of processes more discontinued assistance. Pursuant to the challenging. Some of these differences are: ACA, county administrators now are to • Electronic Data Verification Now Reduces proactively attempt to verify continued Application Burden for Medi-Cal, but Not MAGI Medi-Cal eligibility each year for Human Services Programs. Prior to the using available electronic sources. If ACA, individuals applying for Medi-Cal, electronic sources confirm eligibility, CalFresh, and CalWORKs were required the individual is automatically certified to provide verification of the information for an additional 12 months of coverage. needed to determine eligibility, often in the If electronic sources are insufficient to form of paper documents such as pay stubs verify eligibility, the individual is sent a or medical bills. Pursuant to the ACA, renewal form with known information many pieces of information needed to filled in that requires verification of only determine a Medi-Cal applicant’s eligibility those aspects of eligibility that could not are required to be verified electronically be verified electronically. In contrast, by accessing existing state and federal individuals receiving assistance through databases, such as information available the CalWORKs and CalFresh programs from the Employment Development are still generally required to have a Department and the Franchise Tax Board recertification interview and provide to verify residency. Consumers are only to documentation supporting continued www.lao.ca.gov Legislative Analyst’s Office 19 AN LAO REPORT eligibility. Failure to attend a scheduled interoperability standards that facilitate enrollment recertification interview or provide in HHS programs. Interoperability allows for required documentation results in programs to connect and share information (a term discontinued assistance. we view as generally equivalent to integration). The standards are not mandatory requirements • Household Definition Now Differs but rather are intended to encourage adoption of More Among Key Programs. Prior modernized automation systems and processes to the ACA, household definitions in that allow clients to seamlessly access the full Medi-Cal, CalFresh, and CalWORKs range of HHS benefits for which they are eligible. differed somewhat. In general, CalWORKs Although compliance is not mandatory, some and Medi-Cal households consisted of federal funding for state automation investments family members residing in the same is conditional on compliance with interoperability home, whereas CalFresh households standards. Initially, the U.S. Department of HHS consisted of individuals that live and has called for common technology standards that prepare food together in the same home. enable efficient and transparent exchange of data Under the MAGI methodology brought between programs and strong privacy and security about through the ACA, a majority of standards that protect the personal information of Medi-Cal households are now defined applicants and clients. as an adult filing a federal income tax Provides Enhanced Federal Funding for return (including the adult’s spouse if a Automation System Enhancements. The federal joint return is filed) and any dependents government recognized that most states would claimed on that adult’s tax return. This need to make significant investments in automation new definition of households for Medi-Cal systems in order to meet the requirements of ACA purposes is significantly different than and to horizontally integrate HHS programs. the definition of CalWORKs households. To assist states’ implementation of necessary Accordingly, while the transition to MAGI technological changes, in April 2011 the Centers eligibility enables integration of Medi-Cal for Medicare and Medicaid Services announced with coverage subsidies, it also increases the availability of enhanced federal funding the differences in household definitions for designing, developing, and implementing among the key programs. automation systems for state-based exchanges (which would include determining eligibility for T ACA e i he nCourAges nTegrATion Medicaid using the new MAGI income definition). As described above, some aspects of the To encourage greater integration of state ACA challenged the state’s efforts to horizontally eligibility systems, the federal government also integrate HHS programs. However, other aspects of announced the availability of enhanced federal the ACA provided opportunities to pursue further funding for states investing in human services integration, as discussed below. eligibility and enrollment systems that also serve Sets Standards That Encourage Medi-Cal or other coverage options available “Interoperability” of HHS Programs. The through a state exchange. Traditionally, the cost ACA requires the U.S. Department of HHS, in of implementing or upgrading a human services consultation with other stakeholders, to develop automation system is generally shared by the 20 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT various programs that use the system. However, services furnished for the design, development, and under the ACA’s enhanced funding rules, states may implementation of human services-related eligibility implement or modernize eligibility and enrollment systems. Currently, both CalHEERS and the Los systems that serve both human services programs Angeles Eligibility, Automated Determination, and exchange-related health programs (such as Evaluation, and Reporting(LEADER) Replacement Medi-Cal), and receive 90 percent federal funding System (LRS) automation projects are leveraging for the total costs (as opposed to the traditional this enhanced federal funding. In addition, the 50 percent). This enhanced federal funding is expansion of call centers that support the SAWS available only for a limited time. States have until consortia by processing Medi-Cal applications over December 31, 2015 to incur costs for goods and the phone are also being funded with enhanced federal funding. STATE’S RESPONSE TO CHALLENGES AND OPPORTUNITIES POSED BY ACA The changes created by the ACA pose risks and at the county level could have been weakened. The offer opportunities for the state’s human services state chose to preserve the connection between programs and the clients enrolled in them. Given these programs by having counties ultimately changes resulting from the ACA discussed above, perform the eligibility determinations for the state took several actions, described below, MAGI Medi-Cal applicants, using the eligibility that in some cases preserved the existing level of determination functions built into CalHEERS. integration of HHS programs and in other cases (These functions are accessed through an interface further enhanced the level of integration. between CalHEERS and SAWS, described further later.) This means that counties will be able to s T A ACA’ TePs Aken To dAPT To s largely maintain the processes that link Medi-Cal e e i FFeCTs on xisTing nTegrATion to key human services programs, as before ACA The state made various decisions regarding the implementation. As shown in Figure 4 (see next administration of Medi-Cal and the automation page), Medi-Cal applications will come to counties systems supporting HHS programs in order to in several ways, depending on how a Medi-Cal respond to ACA’s effects on the existing level of applicant submits his/her application. integration of HHS programs. • Paper or Online Application Through Covered California. When applications Counties Continue to Administer Medi-Cal are submitted to Covered California as Counties Continue to Approve and Manage paper applications or through the web All Medi-Cal Cases. As noted previously, the ACA portal, CalHEERS performs eligibility required the state to reevaluate the administration calculations and sends the results to SAWS of the Medi-Cal Program. By deciding to build the through an interface. County workers rules for determining MAGI Medi-Cal eligibility then complete the eligibility determination into CalHEERS, the connection between MAGI and the SAWS becomes the system of Medi-Cal and human services programs delivered record for the case. Counties perform www.lao.ca.gov Legislative Analyst’s Office 21 AN LAO REPORT ongoing case management, including CalHEERS where eligibility calculations answering questions, processing changes are performed. The results are sent back to in circumstances, and performing SAWS through the interface, and a county administrative redeterminations. representative completes the eligibility determination for that applicant. • Telephone Application Through Covered California Call Center. When an • Paper, Online, Telephone, or In-Person applicant calls a Covered California service Application Through CountieGs. rCaopunhtiiecs Sign Off center, Covered California uses a series may also process applications through Secretary of basic questions to determine if the the interface between the SAWS and Analyst individual is likely eligible for Medi-Cal CalHEERS when individuals contact the (a process known as the “quick-sort”). county directly by phone, onlMineP, Awith a If this is the case, the call is transferred paper application, or in personD. eputy immediately to a county representative The decision to continue to have counties who enters eligibility information into perform Medi-Cal determinations and ongoing SAWS. This information is then sent to case management is significant for integration Figure 4 Pathways for Medi-Cal Eligibility Determination and Enrollment Covered California Online CalHEERS Eligibility information Paper Interface betweven CalHEERS and SAWS Covered California County Eligibility Quick-Sorta SAWS Determination Telephone Transfer to county to collect eligibility information Counties Online Paper Eligibility information Telephone In person a “Quick-sort” refers to a series of basic questions used by Covered California representatives to determine whether an applicant is likely eligible for Medi-Cal. Those likely eligible for Medi-Cal are transferred directly to county representatives to continue the application. CalHEERS = California Healthcare Eligibility, Enrollment, and Retention system and SAWS = Statewide Automated Welfare System. 22 Legislative Analyst’s Office www.laoA.cRa.TgoWvORK #130734 Template_LAOReport_mid.ait AN LAO REPORT because it preserves counties’ ability to assist if they are being done with SAWS, even though the Medi-Cal clients with additional needs should MAGI eligibility determination rules are built into they qualify for other HHS programs that are also CalHEERS. administered by the counties. MEDS Interface With CalHEERS. The CalHEERS interfaces with MEDS for the Integration With Existing Information verification of an applicant’s current enrollment Technology Systems status in state health programs. In addition, The implementation of the ACA required CalHEERS interfaces with MEDS to issue integration of CalHEERS with multiple federal, identification cards used by clients to access state, and county automation systems. In order services. to integrate, CalHEERS has a system of s T e i TePs Aken To nhAnCe nTegrATion interfaces, which allow for a back and forth flow of information with other automation systems. In addition to steps taken to accommodate Specifically, CalHEERS interfaces with the changes to the existing level of integration brought Federal Data Services Hub, which connects the about through the ACA, the state also took various state with federal data sources—such as those actions, described below, to go beyond the level of of the Internal Revenue Service, Department integration that existed prior to the ACA. of Homeland Security, and the Social Security Legislature Expressed Commitment Administration—to verify income, citizenship, to Integration of HHS Programs and identity. Implementation of the ACA has also required the linking of CalHEERS with state and As noted previously, the Legislature has county systems. The most significant interfaces are expressed a commitment to horizontal integration described below. through various actions. Of note, in 2012 the SAWS Interface With CalHEERS. As a result Legislature passed SB 970 (De León), which would of the state deciding to move forward with a have given individuals who apply for health new centralized system that supports eligibility coverage through Covered California the option of determinations for MAGI Medi-Cal and Covered forwarding their application information to county California subsidies while retaining existing human services offices so as to simultaneously systems that support non-MAGI Medi-Cal and initiate an application for CalWORKs and other HHS programs, the state developed the CalFresh. Additionally, the bill would have required necessary real-time interface between CalHEERS the California Health and Human Services and SAWS. The SAWS consortia are the systems Agency (HHSA) to convene a workgroup to of record for case management purposes for all identify additional opportunities for strengthening cases determined to be eligible for MAGI Medi-Cal integration of HHS programs. Ultimately SB 970 as a result of the implementation of the ACA. was vetoed; however, the Governor stated his The interface allows for application and case intentions to pursue horizontal integration without management information to be shared between legislation. As will be described in later sections, CalHEERS and SAWS. The interface therefore the ability to initiate applications for multiple HHS allows county workers to process both non-MAGI programs in conjunction with a health application and MAGI Medi-Cal eligibility determinations as is a key feature of more recent state efforts to strengthen integration. www.lao.ca.gov Legislative Analyst’s Office 23 AN LAO REPORT Targeting Existing Human Services CalFresh or at their annual recertification. The Clients for Medi-Cal Enrollment current waiver that allows Express Lane Eligibility expires at the end of 2015. Of the steps taken by the state to enhance integration of HHS programs, many are focused Targeting Medi-Cal Clients for on more effectively implementing the ACA (by Human Services Enrollment promoting enrollment of eligible individuals Through ACA implementation, the state into Medi-Cal) in addition to making the has taken action to strengthen integration by administration of HHS programs more effective facilitating enrollment in human services programs and efficient. These efforts have primarily centered to existing and new enrollees in health coverage on strengthening connections between Medi-Cal made available through the ACA. This integration and CalFresh, the two largest HHS programs and is being pursued in several ways described below. the two programs with the greatest overlap in These efforts are expected to increase the state’s caseload. CalFresh participation rate, which, as discussed Express Lane Eligibility of CalFresh Clients earlier, is low. for Medi-Cal. One way that the state has taken Human Services Referrals From Covered advantage of the opportunities created by the ACA California Health Application. The Covered to increase integration of programs is through California application for health coverage (whether a federal waiver that allows CalFresh eligibility on paper or online) has allowed applicants to to serve as a proxy for Medi-Cal eligibility. This indicate that they would like the information process, known as “Express Lane Eligibility,” is provided in the application to be shared with intended to expedite the enrollment of individuals county human services departments as a referral into Medi-Cal coverage who are known to for CalFresh and CalWORKs. This referral qualify for CalFresh without requiring a formal process places applicants in a queue until a county application. Pursuant to Chapter 4, Statutes of eligibility worker reaches out to applicants to 2013-14 First Extraordinary Session (SBX1 1, begin applications for the relevant programs. It Hernandez and Steinberg), DHCS obtained the is unknown how many individuals have enrolled federal waiver and implemented the Express in CalFresh and CalWORKs as a result of these Lane process beginning in early 2014. Under this referrals since the process was put in place. The process, CalFresh clients who have characteristics referral process is a step towards fulfilling the that indicate they would be eligible for Medi-Cal intent of SB 970—by facilitating enrollment but are not enrolled in Medi-Cal are sent a notice in human services programs through a health informing them that they qualify for Medi-Cal coverage application. The objective of SB 970 will coverage and can enroll by returning the notice. be more fully realized once the interface between Those that return the notices are enrolled in CalHEERS and SAWS is enhanced, as described in Medi-Cal without having to submit a separate the next section. application. As of September 2014, over 200,000 Enhancements to CalHEERS and SAWS adults and nearly 40,000 children enrolled in Interface. The 2014-15 Budget Act includes Medi-Cal using the Express Lane process. Going $22.7 million for enhancements to the interface forward, DHCS has instructed counties to use the between CalHEERS and SAWS that will Express Lane process to enroll interested CalFresh incorporate more real-time functionality and clients in Medi-Cal when they initially apply for 24 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT screening capabilities that streamline counties’ eligibility determinations for CalFresh clients. time processing of applications. Although the Automating the Express Lane process will reduce design for the enhanced interface is not complete, county manual workarounds and assist counties in the funds are intended to provide, among other correctly processing the Medi-Cal portion of the things, for a more robust referral process that case without data errors. will screen applicants for eligibility and take Additional Changes to Promote CalFresh interested applicants immediately to the SAWS Awareness Among Medi-Cal Clients. The state portal where applicants can complete and submit has taken additional steps to raise awareness of their applications for human services programs, CalFresh among Medi-Cal applicants and clients by Graphic Sign Off including CalFresh and CalWORKs. Once including information about CalFresh in Medi-Cal implemented, the enhanced interface between enrollment documentation. Many counties Secretary CalHEERS and SAWS—as illustrated in Figure 5— additionally use existing Medi-Cal enrollment data Analyst will expedite the referral process and maximize to determine which Medi-Cal clients are likely MPA enrollment of individuals in the programs for to be eligible for CalFresh and then providing Deputy which they are eligible. In addition, the funds information about CalFresh enrollment to these will automate Express Lane Eligibility for ACA households. implementation to expedite MAGI Medi-Cal Figure 5 Enhancements to Covered California Human Services Referral Process Original Referral Process Covered California County Queue SAWS Web Portal (CalHEERS) Applicant waits for County worker determines Applicant completes online Applicant indicates county worker to County worker initiates eligibility for human services health coverage application. interest in human follow up on referral. application and requests programs. services program additional information referral. necessary to complete application. Conceptual Enhanced Referral Process Covered California SAWS Web Portal SAWS Web Portal (CalHEERS) Applicant is redirected County worker determines immediately to online Applicant completes online Applicant indicates human services program Application initiated eligibility for human services health coverage application. interest in human application. automatically and programs. services program filled in with referral. information provided on Covered California health application. Applicant provides additional information necessary to complete application. CalHEERS = California Health Eligibility, Enrollment, and Retention System and SAWS = Statewide Automated Welfare System. ARTWORK #130734 www.lao.ca.gov Legislative Analyst’s Office 25 Template_LAOReport_mid.ait AN LAO REPORT Creation of Executive Office at DSS to Identify Interoperability Roadmap Outlines Short-, Horizontal Integration Opportunities Medium-, and Long-Term Goals. The principal product of the symposia in California was an As part of the 2013-14 Budget Act, the interoperability plan, or roadmap, with short-, Governor proposed and the Legislature approved medium-, and long-term objectives to developing the creation of new positions for an Assistant interoperable HHS systems: Director for the Office of Horizontal Integration and two additional staff at Department of Social • Short-term goals (within the first six Services (DSS) to facilitate an analysis of the months) focus on setting a strong human services program implications of the ACA foundation for future integration efforts and to identify options for further integrating by, among other things, cultivating HHS programs. Given tight federal time frames advocates for interoperability within the related to the state’s establishment of a health stakeholder community and formalizing a benefit exchange, integrating HHS programs governance model at the agency level that was secondary to the task of launching Covered would improve coordination and decision- California. However, with the launch of Covered making around efforts to improve California and the first open enrollment period interoperability. complete, greater attention can now be given to • In the medium term (6 to 24 months), the horizontal integration efforts. plan calls for staffing of the governance Interoperability Symposia Explored model; developing various policies, Issues Around Data Sharing procedures, and performance metrics for interoperability; and assessing active The federal government awarded California projects for interoperability opportunities. (and six other states) a one-year grant as part of the State Systems Interoperability and Integration • Beyond two years, the roadmap focuses on Project. This project was intended, among other implementing strong governance across things, to allow selected states to explore and plan HHSA and counties, adopting protocols for improved data sharing, or interoperability, that facilitate information sharing, and across HHS automation systems in order to help monitoring and measuring progress streamline administrative processes, among other towards a client-centered culture. goals. In California, the HHSA’s Office of Systems Status of Implementation of Interoperability Integration used the grant to host two symposia Roadmap. The administration has not in May and September 2013. The symposia put forward a proposal to implement the brought together state and local representatives interoperability roadmap in whole. However, a to (1) create a common awareness of the value recent budget action was, broadly speaking, in line of interoperability; (2) identify barriers to with the goals of the interoperability roadmap. information sharing, specifically to gain an Specifically, as part of the 2014-15 Budget Act, the understanding of how current governance, legal, Governor proposed and the Legislature approved technical, and cultural models could impede new permanent resources within the Office interoperability moving forward; and (3) identify of the Agency Information Officer—an office a strategy for improving interoperability and of the California Health and Human Services integration across HHS programs. 26 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT Secretary—to establish a formal agency-wide The resources are intended to help the agency governance and strategic planning program. consider ways to promote interoperability as it is developing automation projects. REMAINING CHALLENGES AND OPPORTUNITIES FOR INTEGRATION As discussed above, ACA implementation income thresholds or limits on the amount of has resulted in significant changes to health resources households may have and still qualify. care coverage but also focused attention on The Legislature could examine the cost and integration of HHS programs. During the period benefits of using its discretion to better align these between the passage of the ACA and the first requirements with other major HHS programs. open enrollment period for Covered California, For other programs, however, the state has much emphasis was appropriately placed on systems and less flexibility. Despite state efforts to align processes needed to support Covered California, eligibility requirements and processes for HHS while broader discussions of potential changes programs that serve overlapping populations, to enhance integration were, to some extent, many key differences between programs exist and deferred. At the same time, we find that significant many of these differences reflect requirements steps have been taken throughout the initial set in federal law. One example is the process period of ACA implementation that addressed for determining income eligibility for CalFresh. challenges posed by the ACA on the existing level Federal law requires that a household’s income of integration and also strengthened integration. be adjusted by various factors (such as housing Collectively, the progress made prior to the costs and child care expenses) before determining ACA and the steps taken because of the ACA to eligibility. These adjustments generally involve preserve and enhance integration have resulted an additional verification, adding complexity to in a moderate level of integration across HHS the eligibility determination process that is not programs. As discussed below, we find that while reflected in eligibility processes for other programs. some aspects of furthering integration remain The federal government also places limitations on challenging, some additional opportunities exist for how some eligibility processes may be structured, enhancing integration beyond those steps already for example, by limiting the use of certain sources taken. However, such opportunities will involve of the electronic verification of income, identity, trade-offs and likely require additional high-level and other matters. Specifically, federal guidance coordination and planning to implement. currently does not allow for electronic verifications provided through the Federal Data Services Hub Federal Law Limits Ability to (which is used to perform electronic verifications Align Many Program Eligibility for health coverage through Medi-Cal or coverage Requirements and Processes subsidies) to be used in determining eligibility for In some HHS programs, such as CalWORKs, any other program. The fact that many program the state has significant discretion over certain requirements are set through federal law limits eligibility requirements, including maximum the state’s ability to pursue further alignment of www.lao.ca.gov Legislative Analyst’s Office 27 AN LAO REPORT eligibility requirements and processes in many a single statewide eligibility determination system instances. Waivers of some federal regulations are for key HHS programs. However, the migration possible, but the state has had mixed success in of Consortium-IV counties into LRS will reduce receiving approval for such waivers in the past. the number of consortia systems to two and make some progress toward overcoming technological Decentralized Administrative impediments to further integration. Structure Complicates Efforts to . . . But Planned System Upgrades May Provide Modernize Systems and Processes Opportunity for Additional Modernization and As noted previously, local administration is a Enhanced Integration. Several key automation defining characteristic of California’s HHS delivery systems are currently undergoing or are likely in the system. Given the size and diversity of the state, future to undergo major development or enhancement local administration makes sense in many contexts. (including LEADER, MEDS, and the Child Welfare However, local administration also means that Services/Case Management System). Should the efforts to increase integration through modernizing Legislature wish to pursue additional integration processes and systems must involve many through automation system modernization, the stakeholders in different agencies at multiple levels of development of planned upgrades to existing systems government. would be an ideal time to consider how improvements County Practices, While Similar, Are Developed related to integration could be worked into upgrade and Implemented Independently. While the plans. One potential example of such an improvement overarching administrative processes for eligibility would be restructuring other systems to use a determination and case management are similar common identity verification function. Currently, across counties, varying county practices make it multiple HHS automation systems, including MEDS, difficult to create uniform administrative practices have the capacity to electronically verify the identity that serve the needs of all 58 counties. Making further of an applicant. Rather than have duplicate technology progress towards an integrated HHS environment in multiple systems, multiple HHS programs could would require engagement from a broad range of interface to share a common identity verification stakeholders at different levels of government. These function. The MEDS modernization project creates stakeholders would have to be willing to forego some an opportunity to build an upgraded system with the autonomy in favor of more standardized state-driven flexibility to share the identity verification function processes in order to advance integration. with other automation systems. Multiple Automation Systems Complicate Time Is Right for Legislature to Integration. . . The complex and sometimes Indicate Priorities for Integration duplicative automation landscape that remains in the state even after integration efforts also impedes Setting Legislative Priorities Could Help further horizontal integration. The multiple Drive Integration Efforts. Given that the first automation systems that support HHS programs— open enrollment period for Covered California some operated by the state and others operated has passed and the Covered California automation locally—make it more challenging for programs to system infrastructure is in place, now would be an share information seamlessly and efficiently cross- appropriate time for the Legislature to indicate its enroll applicants. As noted previously, technical goals and priorities for integrating HHS programs challenges have prevented the state from developing going forward. The Legislature could elaborate on its 28 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT previously expressed commitment for integration, Interoperability Roadmap Is a Good Starting assess the extent to which these priorities have or have Point for Legislative Deliberations. In our view, the not been met through ACA implementation, and California Interoperability Symposia were effective at consider what further action may be appropriate. This bringing together state and local administrators and report is intended to facilitate the Legislature’s review other stakeholders to identify and discuss key issues by describing integration-related changes made relating to information sharing and integration of through the initial ACA implementation period. HHS programs more broadly. Should the Legislature However, the significant complexity involved with any wish to focus attention on further integration, the planning for further integration will naturally require goals outlined in the Interoperability Roadmap close collaboration with the administration and with would provide a useful starting place for legislative local program administrators as specific next steps are deliberations. identified. LEGISLATIVE NEXT STEPS Significant steps have been taken through passage of the ACA have been administration-led. the process of implementing the ACA to both Legislative hearings would update the Legislature preserve existing integration and also move the on what has been accomplished and better positon state further along the continuum of integration it to craft its vision for the future. Specifically, at of HHS programs. As we noted, we find that the such hearings we think it would be important for state has achieved a moderate level of integration. the Legislature to ask HHSA to do the following: If desired, strengthening the integration of the • Present the California Interoperability state’s HHS programs beyond what has already Roadmap and provide a status update on been accomplished will be a long-term initiative its efforts to implement the roadmap. that requires legislative direction and engagement. Legislative engagement in setting a common vision • Identify legal impediments to data sharing for integration that all stakeholders—executive that could stifle integration efforts and branch state officials, local representatives, and corresponding opportunities for the client advocates—can work toward will be critical Legislature to remove or mitigate the to the success of any future integration efforts. The impact of such impediments. following section outlines ways that the Legislature • Describe administration-led efforts to could build on the steps taken to date and craft its (1) align eligibility requirements for HHS vision for integration. programs, (2) standardize eligibility and Holding Legislative Hearings on enrollment processes, and (3) centralize or Horizontal Integration Efforts to consolidate automation systems. Date to Inform Legislative Vision Issues to Consider When Setting We think a necessary next step is for the Integration Priorities Legislature to hold hearings to review current and anticipated integration efforts. Many of We recommend that the Legislature consider the initiatives to advance integration since the the following questions as it holds the hearings www.lao.ca.gov Legislative Analyst’s Office 29 AN LAO REPORT described above, develops its vision, and or are likely in the future to undergo major determines what further efforts could be made enhancements. The Legislature should consider to strengthen the integration of eligibility and whether additional resources ought to be devoted to enrollment processes for HHS programs. researching and implementing options to promote What Is the Appropriate Balance Between integration of these systems. In considering these Local Control and Standardized Statewide kinds of enhancements, the Legislature would Automation Systems and Processes? As noted need to weigh the potential benefits of increased previously, the administration of HHS programs is integration (in the form of decreased duplication, complex, involving many stakeholders in different streamlined access, and data sharing) against agencies at different levels of government. Some likely increases in development costs, longer local variation is inherent in current eligibility implementation timelines, and potentially higher and enrollment practices. Further efforts to risk of project delays and cost overruns. increase integration would likely result in less What Additional Programs Should Be local autonomy. The Legislature should weigh the Integrated? This report has focused primarily on benefits of local variation, such as responsiveness three key HHS programs: Medi-Cal, CalFresh, to local needs and preferences, against the benefits and CalWORKs. However, the state administers of increased integration, including administrative additional HHS programs that could also at some efficiencies and improved client access to programs. point be integrated with these three programs. Completely eliminating all county variation in As the Legislature considers its broader vision eligibility and enrollment processes is likely neither for integration, it could prioritize programs for feasible nor desirable. In fact, local variation can inclusion in future integration efforts. In our view, be a source of innovative practices that merit the Legislature should consider giving priority to consideration for implementation statewide. For programs that (1) have the greatest overlap with example, when one of the SAWS consortia built in key HHS programs in the populations they serve, new functions for clients to more easily monitor (2) rely on some of the same automation systems benefits online, the other SAWS consortia have as other key programs, and (3) are administered recognized the value to clients and added similar by the same state or local agencies as other key functions to their systems. It is important to note programs. For example, the Women, Infants, and that increased standardization and integration Children (WIC) program would likely be a higher of eligibility and enrollment processes does not priority for integration under these criteria, as imply that other forms of local variation would (1) it serves individuals that often also qualify for necessarily be affected. For example, counties CalFresh or CalWORKs, (2) the Electronic Benefit currently have significant latitude with respect to Transfer System (which currently provides benefits the structuring of welfare-to-work services in the for CalWORKs and CalFresh clients) could be used CalWORKs program. This type of variation is not to distribute WIC benefits, and (3) in some cases related to eligibility and enrollment processes (and it is administered out of county human services would therefore not be part of integration efforts). departments. How Can Automation Systems Currently in How Should the State Manage the Costs Development Be Built to Strengthen Integration? of Increased Utilization? As noted previously, As noted previously, several key HHS-related integration is intended in part to make it simpler automation systems are currently undergoing for individuals to enroll in all HHS programs 30 Legislative Analyst’s Office www.lao.ca.gov AN LAO REPORT for which they are eligible, should they choose Enact Legislative Vision for to do so. Making these sorts of changes is likely Integrating HHS Programs to increase program participation rates, but also Based on what is learned through the legislative result in additional state costs, particularly in hearings and weighing issues identified above, the programs where the costs of additional enrollment Legislature would be better positioned to craft its are paid for primarily out of the General Fund vision for integration. (such as CalWORKs). Should the Legislature wish Enacting Legislation Memorializing to limit increased costs of utilization while still Vision for Horizontal Integration. One way encouraging participation in programs by those for the Legislature to provide its vision for HHS who are eligible, it could do so by tightening integration—to guide further integration efforts— eligibility requirements in affected programs (to would be to enact legislation that memorializes the the extent permissible under federal law) to focus vision. Such legislation could include a description limited General Fund resources on individuals of the experience that a HHS client would have in and families who are the highest priority to serve. a scenario that reflects the Legislature’s vision for This could ultimately represent a more equitable integration. The Legislature could determine that approach to allocating scarce state resources than the current level of integration is appropriate, or allocating resources based on certain factors choose to take steps to increase integration beyond that could lead one eligible household to obtain what has already been accomplished. The vision assistance rather than another (such as better put forward in such legislation would serve as a knowledge of available programs or greater capacity useful guide when considering proposals to change to navigate existing enrollment processes). On the eligibility requirements, to change administrative other hand, should the Legislature wish to allocate practices, or to support new or modernized resources to provide assistance to additional eligible automation systems, by allowing the Legislature to individuals, it could consider whether providing assess whether the proposals move the state toward existing services to individuals who are eligible but realizing the vision it established for integrating not enrolled is a higher priority than providing a HHS programs. higher level of service or expanding eligibility to currently ineligible populations. CONCLUSION Integration of HHS programs has long been an recent changes in HHS program eligibility and important issue in California, and implementation enrollment processes, and determine whether of the ACA has resulted in additional focus on further efforts to strengthen integration are this issue. By taking steps to respond to changes warranted. This report provides a review of these brought about by the ACA and also increase recent changes and highlights key issues for the integration of programs, the state has moved Legislature to consider as it develops its vision for further down the continuum of integration toward the future of integration of HHS programs and a more integrated HHS delivery system. Now evaluates next steps to continue to improve the that initial ACA implementation is complete, the efficiency and effectiveness of HHS programs in Legislature has an opportunity to take stock of California. www.lao.ca.gov Legislative Analyst’s Office 31 AN LAO REPORT LAO Publications This report was prepared by Lourdes Morales and Ryan Woolsey, and reviewed by Mark C. Newton. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an e-mail subscription service, are available on the LAO’s website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 32 Legislative Analyst’s Office www.lao.ca.gov