Medicaid: States Reported That Citizenship Documentation	 
Requirement Resulted in Enrollment Declines for Eligible Citizens
and Posed Administrative Burdens (28-JUN-07, GAO-07-889).	 
                                                                 
The Deficit Reduction Act of 2005 (DRA) included a provision that
requires states to obtain documentary evidence of U.S.		 
citizenship or nationality when determining eligibility of	 
Medicaid applicants and current beneficiaries; self-attestation  
of citizenship and nationality is no longer acceptable. The	 
Centers for Medicare & Medicaid Services (CMS) issued regulations
states must follow in obtaining this documentation. Interested	 
parties have raised concerns that efforts to comply with the	 
requirement will cause eligible citizens to lose access to	 
Medicaid coverage and will be costly for states to implement. GAO
was asked to examine how the requirement has affected		 
individuals' access to Medicaid benefits and assess the 	 
administrative and fiscal effects of implementing the		 
requirement. To do this work, GAO surveyed state Medicaid offices
in the 50 states and the District of Columbia about their	 
perspectives on access issues and the administrative and fiscal  
effects of the requirement. GAO obtained complete responses from 
44 states representing 71 percent of national Medicaid enrollment
in fiscal year 2004. GAO also reviewed federal laws, regulations,
and CMS guidance.						 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-889 					        
    ACCNO:   A71629						        
  TITLE:     Medicaid: States Reported That Citizenship Documentation 
Requirement Resulted in Enrollment Declines for Eligible Citizens
and Posed Administrative Burdens				 
     DATE:   06/28/2007 
  SUBJECT:   Administrative costs				 
	     Beneficiaries					 
	     Citizenship					 
	     Documentation					 
	     Eligibility determinations 			 
	     Federal law					 
	     Federal/state relations				 
	     Health care programs				 
	     Medicaid						 
	     Program evaluation 				 
	     Reporting requirements				 
	     Surveys						 
	     Program implementation				 
	     Savings estimates					 

******************************************************************
** This file contains an ASCII representation of the text of a  **
** GAO Product.                                                 **
**                                                              **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced.  Tables are included, but    **
** may not resemble those in the printed version.               **
**                                                              **
** Please see the PDF (Portable Document Format) file, when     **
** available, for a complete electronic file of the printed     **
** document's contents.                                         **
**                                                              **
******************************************************************
GAO-07-889

   

     * [1]Results in Brief
     * [2]Background
     * [3]Many States Reported That the Requirement Resulted in Delaye

          * [4]States Reported Enrollment Declines Largely Driven by Delays
          * [5]State Enrollment Policies and Individuals' Enrollment Status

     * [6]States Reported Investing Resources to Implement Requirement

          * [7]State Resources Invested to Implement the Requirement and As
          * [8]Two Aspects of the Requirement Increased the Burden of Imple
          * [9]Estimates of Federal and State Fiscal Benefits May Be Overst

     * [10]Agency Comments and Our Evaluation
     * [11]Appendix I: List of Acceptable Documents for Proving Citizen
     * [12]Appendix II: Comments from the Centers for Medicare & Medica
     * [13]Appendix III: GAO Contact and Staff Acknowledgments

          * [14]GAO Contact
          * [15]Acknowledgments

               * [16]Order by Mail or Phone

Report to Congressional Requesters

United States Government Accountability Office

GAO

June 2007

MEDICAID

States Reported That Citizenship Documentation Requirement Resulted in
Enrollment Declines for Eligible Citizens and Posed Administrative Burdens

GAO-07-889

Contents

Letter 1

Results in Brief 4
Background 6
Many States Reported That the Requirement Resulted in Delayed or Lost
Medicaid Coverage for Some Individuals Who Appeared to Be Eligible 13
States Reported Investing Resources to Implement Requirement, with Fiscal
Benefits Uncertain 19
Agency Comments and Our Evaluation 26
Appendix I List of Acceptable Documents for Proving Citizenship and
Identity, as Defined under Federal Regulations 31
Appendix II Comments from the Centers for Medicare & Medicaid Services 34
Appendix III GAO Contact and Staff Acknowledgments 38

Tables

Table 1: Examples from the List of Acceptable Documents for Proving
Citizenship Defined under Federal Regulations, by Level of Reliability 11
Table 2: Administrative Measures Frequently Taken by States to Implement
the Requirement and Assist Individuals with Compliance 20
Table 3: Challenges Posed by Certain Aspects of the Requirement, as
Reported by States 24
Table 4: List of Acceptable Documents for Proving Citizenship, as Defined
under Federal Regulations 31
Table 5: Acceptable Documents for Proving Identity, as Defined under
Federal Regulations 33

Figures

Figure 1: Key Events in the Implementation of the Requirement 9
Figure 2: Effect of the Requirement on Medicaid Enrollment, as Reported by
States 14
Figure 3: Primary Reason Why Requirement Resulted in Medicaid Enrollment
Declines, as Reported by States 15
Figure 4: Comparison of the Effect of the Requirement on a Pregnant Woman
Applying for Medicaid and a Pregnant Woman at Redetermination 18
Figure 5: Effect of the Requirement on States' Level of Assistance and
Amount of Time Needed during Application and Redetermination 22

Abbreviations

CMS Centers for Medicare & Medicaid Services
DRA Deficit Reduction Act of 2005
FMAP Federal Medical Assistance Percentage
HHS Department of Health and Human Services
OIG Office of Inspector General
SSA Social Security Administration
TRHCA Tax Relief and Health Care Act of 2006

This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.

United States Government Accountability Office
Washington, DC 20548

June 28, 2007

The Honorable John D. Dingell
Chairman
Committee on Energy and Commerce
House of Representatives

The Honorable Henry A. Waxman
Chairman
Committee on Oversight and Government Reform
House of Representatives

In recent years, states have focused on efforts to streamline and simplify
the application and eligibility determination processes for Medicaid, the
joint federal-state health care financing program that in fiscal year 2004
covered nearly 60 million low-income individuals, including children,
families, and individuals who are elderly or disabled. For example, many
states have made application and enrollment processes more accessible
through mail-in applications. Some states have also simplified application
processes by minimizing documentation requirements, permitting
self-declaration of income, and automating systems. These streamlined
processes were part of an effort to increase enrollment of eligible
individuals in the program.

The Deficit Reduction Act of 2005 (DRA), which was enacted on February 8,
2006, contains many changes to Medicaid requirements, at least one of
which affects states' abilities to streamline certain program operations.1
Specifically, in addition to changes related to benefits, cost-sharing,
provider payment, and program integrity, the DRA includes a provision that
requires states to obtain satisfactory documentary evidence of U.S.
citizenship or nationality2 for nearly 40 million nonexempt Medicaid
beneficiaries within 1 year of the provision's July 1, 2006, effective
date, as well as for new applicants to the program, who constitute an
estimated 10 million individuals annually.3 While U.S. citizenship or
satisfactory immigration status has long been a requirement for Medicaid
eligibility, individuals in most states could previously attest, under
penalty of perjury, to their citizenship status in writing.
Self-attestation of citizenship is no longer acceptable.4 Instead, the DRA
requires that states implement an effective process for documenting
citizenship in order to obtain federal Medicaid matching funds. Although
the DRA did not provide any additional federal funds for costs associated
with complying with this requirement, states may seek federal matching
funds for such administrative expenditures. In implementing the DRA
provision, the Centers for Medicare & Medicaid Services (CMS)5 issued an
interim final rule that outlines a prescriptive process states must follow
to obtain satisfactory documentation of citizenship for Medicaid
applicants and existing beneficiaries and identifies a list of acceptable
documentation.6 Five months after the DRA provision took effect, the Tax
Relief and Health Care Act of 2006 was enacted, which exempted additional
populations from documenting citizenship, such as children in foster
care.7

1DRA, Pub. L. No. 109-171, 120 Stat. 4 (2006).

2For the purposes of qualifying for Medicaid as a U.S. citizen, the United
States is defined as the 50 states, the District of Columbia, Puerto Rico,
Guam, U.S. Virgin Islands, and the Northern Mariana Islands. Nationals
from American Samoa or Swain's Island are also regarded as U.S. citizens
for purposes of Medicaid. In this report, we combine references to the
requirements to document U.S. citizenship or nationality under the broader
rubric of documenting citizenship.

3DRA, Pub. L. No. 109-171, S 6036, 120 Stat. 80-81 (to be codified at 42
U.S.C. S1396b). The DRA exempted certain groups of individuals, including
individuals entitled to or enrolled in Medicare and certain Supplemental
Security Income beneficiaries, from documenting citizenship.

4In a July 2005 report regarding states' oversight of the self-declaration
of U.S. citizenship, the Office of Inspector General (OIG) of the
Department of Health and Human Services (HHS) identified 47 states that
allowed self-attestation of citizenship for U.S. citizens and nationals.
However, the HHS OIG reported that nearly all of these states had a
written or informal "prudent person policy," which required individuals to
submit documentary evidence when eligibility staff questioned the validity
of their attestations. The remaining 4 states independently required U.S.
citizens and nationals to provide documentary evidence of their
citizenship status in order to qualify for their state Medicaid programs.
HHS, OIG, Self-Declaration of U.S. Citizenship for Medicaid (July 2005).

5CMS is the agency within HHS responsible for administering the Medicaid
program, including oversight of the citizenship documentation requirement.

6Medicaid Program; Citizenship Documentation Requirements, 71 Fed. Reg.
39,214 (July 12, 2006). For the purposes of this report, we refer to the
requirement to document citizenship in the DRA and the related
requirements identified in the implementing federal regulations as "the
requirement."

7Tax Relief and Health Care Act of 2006, Pub. L. No. 109-432, title IV,
S405(c), 120 stat. 2922, 2998-2999 (2006) (to be codified at 42 U.S.C.
S1396b(x)(2)).

Interested parties, including states and advocacy organizations, have
raised concerns about the requirement, such as stating that the need for
the requirement had not been established,8 that efforts to comply with the
requirement will result in eligible citizens losing access to Medicaid
coverage, and that it will be costly for states and individuals. You asked
us to evaluate the effect of the requirement on eligible individuals'
access to the Medicaid program and the administrative and fiscal burden
the requirement imposed on individuals, states, and the federal
government. For this report, we (1) examined how the requirement has
affected individuals' access to Medicaid benefits and (2) assessed the
administrative and fiscal effects of implementing the requirement.

To conduct our work, we surveyed state Medicaid offices in the 50 states
and the District of Columbia about the effects of the requirement and
obtained responses from 96 percent of them (49 of 51).9 Of the 49
responses, 1 state's response was largely incomplete and 4 states reported
they had not implemented the requirement as of January 2007,10 so we
excluded those 5 states from our analysis, leaving 44 usable responses.11
States submitted responses in March and April 2007. With regard to the
effects on individuals' access to Medicaid benefits, we asked states for
their perspectives about (1) changes in enrollment as a result of the
requirement, (2) the reasons for any enrollment declines,12 (3) the groups
most affected, and (4) expectations of how long reported changes would
continue. We also asked about state policies regarding the amount of time
states allow individuals to comply with the requirement before denying
coverage or terminating enrollment. With regard to the administrative and
fiscal effects of the requirement, we asked states about (1) measures
taken to implement the requirement and assist individuals with compliance,
(2) changes in the number of individuals needing assistance during the
eligibility determination process and the amount of time necessary for
states to make eligibility determinations after implementing the
requirement, (3) the average number of pending and completed eligibility
determinations before and after implementing the requirement, (4) the
challenges they and individuals faced in meeting the requirement, and (5)
the budget implications of the requirement in state fiscal years 2007
through 2010.13 We did not independently validate the trends or the data
states provided. The results of our survey represent only the views of the
44 state Medicaid offices that completed it.

8Specifically, in response to the July 2005 report by the OIG of HHS
regarding states' oversight of the self-declaration of U.S. citizenship,
CMS acknowledged that the OIG did not find problems regarding false
allegations of citizenship and further noted that CMS was not aware of any
such problems.

9Throughout this report, the term "state" refers to the 50 states and the
District of Columbia.

10Three of the 4 states reported taking steps to implement the
requirement, such as conducting data matches for existing beneficiaries,
but, for example, were awaiting issuance of state regulations before fully
implementing. The remaining state reported that it implemented the
requirement in April 2007. As of May 2007, CMS was aware that not all
states had fully implemented the requirement.

11These 44 states accounted for 71 percent of national Medicaid enrollment
in fiscal year 2004, the most recent year that CMS data are available. The
2 states not responding to the survey represented 5 percent of Medicaid
enrollment in fiscal year 2004, and the 5 states excluded from our
analysis constituted the remaining 23 percent.

12In the survey, we asked states whether they thought enrollment declines
were due, in part, to individuals who appeared to be eligible citizens
experiencing delays or losses in Medicaid coverage. We believed that
states' assessments of individuals' citizenship were appropriate given
their reliance on prudent person policies to make such determinations
under their prior self-attestation policies.

In assessing the administrative and fiscal effects of the requirement, we
also reviewed federal laws, regulations, and CMS guidance to states
related to the requirement, and compared the requirement with citizenship
documentation requirements applied by other federal agencies, including
the Social Security Administration (SSA). In addition, we interviewed CMS
officials regarding certain aspects of the requirement. We also obtained
CMS's estimates of the administrative and fiscal effects of the
requirement on states and the federal government. We performed our work
from November 2006 through June 2007 in accordance with generally accepted
government auditing standards.

Results in Brief

States reported that the requirement resulted in barriers to access to
Medicaid, such as delayed or lost coverage for some eligible individuals.
Twenty-two of the 44 states reported declines in Medicaid enrollment due
to the requirement, and a majority of these states attributed the
enrollment declines to delays in or losses of Medicaid coverage for
individuals who appeared to be eligible citizens. Of the remaining states,
12 reported that the requirement had no effect on enrollment, and 10
reported that they did not know the effect of the requirement on
enrollment. Not all of the 22 states reporting enrollment declines as a
result of the requirement could quantify the decline. One that had begun
tracking the effect, however, identified 18,000 individuals in the first 7
months of implementing the requirement whose applications were denied or
who had coverage terminated due to the inability to provide the necessary
documentation, though the state generally believed them to be eligible
citizens. States that reported a decline in enrollment varied in their
impressions of the effects of the requirement on enrollment beyond the
first year of implementation. The effect of the requirement on
individuals' access to Medicaid could have been influenced by state
enrollment policies and whether an individual was an applicant or an
existing beneficiary. For example, states that relied primarily on mail-in
applications prior to implementing the requirement were more likely to
report declines in enrollment than were states where individuals most
frequently applied in person. In addition, the requirement may affect
Medicaid applicants more adversely than beneficiaries because applicants
in some states were given less time to comply and were not eligible for
Medicaid benefits until they documented their citizenship.

13States define their fiscal years differently. For example, some states'
fiscal years are the same as the federal fiscal year (October 1 through
September 30), while in other states, the fiscal year runs from July 1 to
June 30.

Although states have invested resources to implement the requirement,
potential fiscal benefits for the federal government and states are
uncertain. All of the 44 states reported taking a number of administrative
measures, such as training eligibility workers and hiring additional
staff, to implement the requirement and assist individuals with
compliance. In addition, 10 states reported that a total of $28 million
was appropriated for the requirement in state fiscal year 2007, and 15
states budgeted funds for state fiscal year 2008. Despite these measures,
states reported that the requirement resulted in the state spending more
time completing applications and redeterminations and individuals needing
more assistance in person during the process. States reported that two
aspects of the requirement increased the burden of the requirement on
individuals and states, namely (1) that documents must be originals and
(2) the list of acceptable documents was complex and did not allow for
exceptions. For example, states reported that individuals who previously
would have applied for Medicaid through the mail will not part with
original documents, such as driver's licenses, and are instead presenting
them in person, which has increased the workload of states' eligibility
workers. CMS officials noted, however, that the agency took a number of
steps to minimize the administrative burden of the requirement, including
substantially expanding the list of acceptable documentation beyond what
was included in the DRA provision. In addition to the ongoing challenges
to states and individuals, federal estimates of the financial benefits of
the requirement for the federal government and states may be overstated.
CMS estimated the requirement would result in savings of $50 million for
the federal government and $40 million for states in fiscal year 2008 as a
result of terminations of eligibility for noncitizens inappropriately
receiving Medicaid benefits. State responses indicated, however, that
CMS's estimate of savings may be overstated because the estimate did not
account for the increases in administrative expenditures reported by
states and the intended effect of the requirement--to prevent ineligible
noncitizens from receiving Medicaid benefits--may be less prevalent than
CMS expected. For example, among the states that reported expecting the
requirement to result in a decrease in Medicaid expenditures, only one
state reported potential savings as a result of individuals being denied
or terminated from coverage who were determined ineligible because of
their citizenship status.

In commenting on a draft of this report, CMS raised concerns about the
sufficiency of the underlying data and made several comments about our
findings on the administrative and fiscal effects of the requirement. In
particular, CMS expressed concern that the report overstated the
significance of states' reports of declines in enrollment due to the
requirement and the challenges that states and individuals faced in
complying with it. CMS nevertheless agreed the requirement posed
challenges for individuals and states, though the agency stated that it
believed these challenges had decreased and would continue to do so. Our
findings represent the views of state Medicaid offices, which stated that
the requirement has resulted in enrollment declines and has posed
administrative burdens to states and individuals. Further, our survey
results indicate that the effects states experienced in the first year may
continue at least to some extent in the future.

Background

Medicaid programs generally represent an open-ended entitlement under
which the federal government is obligated to pay its share of expenditures
for covered services provided to eligible individuals under each state's
federally approved Medicaid plan.14 Under federal Medicaid law, to qualify
for Medicaid coverage, individuals generally must fall within certain
eligibility categories--such as children, pregnant women, adults in
families with dependent children, and those who are aged or disabled--and
meet financial eligibility criteria.15 In addition, since 1986, federal
law has required that, as a condition of Medicaid eligibility, individuals
declare under penalty of perjury that they are citizens or nationals of
the United States or in satisfactory immigration status.16 Eligibility is
determined at the time of application, and for individuals enrolled in the
program, at a regular basis referred to as redetermination.17

14Under a statutory formula, the federal government may pay from 50 to 83
percent of a state's Medicaid expenditures, known as the Federal Medical
Assistance Percentage (FMAP). States with lower per capita incomes receive
higher FMAP matching rates. The FMAP for administrative costs is the same
for all states and is generally 50 percent for administrative costs. 42
U.S.C. SS 1396b(a), 1396d(b).

States differ in how they determine eligibility for Medicaid, and many
took steps before 2006 to streamline their enrollment processes. While
some states conduct all eligibility screening and determinations within
the state's Medicaid agency, other states contract with different state
agencies, counties, or other local governmental entities to conduct or
assist with eligibility determinations. In some cases, states also utilize
community-based organizations to assist with outreach and education in
their Medicaid programs. Over the past decade, states have also made
efforts to simplify the application process to make Medicaid programs more
accessible to eligible families. As part of these efforts, many states
implemented mail-in applications and ended requirements for face-to-face
interviews. States also began coordinating Medicaid eligibility
determinations with other public programs, such as school lunch programs
and Temporary Assistance for Needy Families.

Enacted in February 2006, the DRA includes a number of new requirements
for state Medicaid programs.18 Most relevant to this report, as of July 1,
2006, the DRA required states to document citizenship of applicants and
beneficiaries as a condition of receiving federal matching funds for their
Medicaid expenditures.19 Under this provision, Medicaid applicants and
beneficiaries who are undergoing redeterminations of eligibility must
provide "satisfactory documentary evidence" of citizenship.20 Documenting
citizenship is a onetime event completed by individuals either at
application or, for those already enrolled, at their first redetermination
of eligibility. (Fig. 1 illustrates the sequence of key events regarding
the requirement from enactment of the DRA through February 2007.)

15See 42 U.S.C. S 1396a(a)(10).

16Immigration Reform and Control Act of 1986, Pub. L. No. 99-603, S 121,
100 Stat. 3359, 3384-3391 (1986) (codified, as amended, at 42 U.S.C. S
1320b-7). Under this law, individuals who declared themselves aliens in
satisfactory immigration status were required to present specific
documentary evidence of their status, while those who declared themselves
citizens were not. Individuals in satisfactory immigration status include
aliens who are lawful permanent residents, refugees, and other aliens
under special circumstances.

17Federal Medicaid regulations require states to redetermine the
eligibility of a Medicaid beneficiary at least once every 12 months or
more frequently if the state receives information that may affect the
eligibility of the Medicaid beneficiary. 42 C.F.R. 435.916.

18For example, the DRA provided states with the ability, under a State
Plan Amendment, to restructure Medicaid benefit packages based on newly
defined criteria and to impose varying levels of cost-sharing for certain
Medicaid populations. See DRA, Pub. L. No. 109-171, SS 6041-6044, 120
Stat. 81-92 (2006) (to be codified at 42 U.S.C. SS 1396o-1, 1396u-7).

19DRA, Pub. L. No. 109-171, S 6036, 120 Stat. 80-81 (2006) (to be codified
at 42 U.S.C. S 1396b). The DRA, however, did not impose any additional
requirements for Medicaid applicants and beneficiaries who declare
themselves aliens in satisfactory immigration status.

20"Satisfactory documentary evidence" is defined as a list of specific
documents, such as a U.S. passport, and includes those documents that the
Secretary of HHS determines, under federal regulations, to provide proof
of citizenship and a reliable means of identification.

Figure 1: Key Events in the Implementation of the Requirement

The DRA explicitly exempts certain individuals from having to document
citizenship, specifically those entitled to or enrolled in Medicare,
certain individuals receiving Supplemental Security Income, and any
additional populations as designated by the Secretary of HHS.21 In
December 2006, Congress expanded the list of populations that are exempt,
adding individuals receiving Social Security disability insurance benefits
and children in foster care or children who are receiving adoption or
foster care assistance.22

In implementing the DRA provision, CMS first provided guidance to states
in a June 2006 letter to state Medicaid directors and subsequently
published an interim final rule on July 12, 2006, almost 2 weeks after the
DRA provision went into effect.23 In the interim final rule, CMS expanded
upon the list of acceptable documents identified in the DRA and published
regulations that grouped the documents by level of reliability, creating a
hierarchy in the list and restricting the use of less reliable documents.

21The DRA permits such a designation only when the Secretary of HHS finds
that satisfactory documentary evidence of citizenship had been previously
presented.

22See Tax Relief and Health Care Act of 2006, Pub. L. No. 109-432, title
IV, S 405(c), 120 Stat. 2922, 2998-2999 (2006) (to be codified at 42
U.S.C. S 1396b(x)(2)).

As required under the DRA, certain documents, such as U.S. passports, are
considered sufficient evidence of citizenship. The DRA requires that if an
individual does not have one of these primary documents, the individual
must produce specific types of documentation establishing citizenship,
such as a U.S. birth certificate, as well as documentation establishing
personal identity. The regulations published by CMS similarly identify
primary, or tier 1, documents to establish citizenship. Under the
regulations, if individuals do not have primary evidence, they are
expected to produce secondary, or tier 2, evidence of citizenship, such as
a military record showing a U.S. place of birth, as well as evidence of
identity, such as a state-issued driver's license. If neither primary nor
secondary evidence of citizenship is available, individuals may provide
third tier evidence of citizenship to accompany evidence of identity. If
primary evidence of citizenship is unavailable, secondary and third tier
evidence do not exist or cannot be obtained in a reasonable time period,
and the individual was born in the United States, then the individual may
provide fourth tier evidence of citizenship, along with evidence of
identity. (See table 1 and app. I.)

23As of June 2007, CMS indicated that a final rule is forthcoming.

Table 1: Examples from the List of Acceptable Documents for Proving
Citizenship Defined under Federal Regulations, by Level of Reliability

Level of                                                   Other documents 
documentation Examples of acceptable documents             required        
Tier 1 (most     o U.S. passporta                          None            
reliable)        o Certificate of naturalizationa                          
                    o Certificate of citizenshipa                             
Tier 2           o U.S. birth certificateb                 Verification of 
                    o Report of birth abroad of a U.S.        identityc       
                    citizenb                                                  
                    o U.S. citizen I.D. card issued by the                    
                    Immigration and Naturalization Serviceb                   
                    o Final adoption decree showing the                       
                    child's name and U.S. birthplace                          
                    o U.S. military record showing U.S. place                 
                    of birth                                                  
Tier 3           o Hospital record showing a U.S. place of Verification of 
                    birth                                     identityc       
                    o Health insurance record showing a U.S.                  
                    place of birth                                            
Tier 4 (least    o Federal or state census record showing  Verification of 
reliable)        U.S. citizenship or place of birth        identityc       
                    o Nursing home admission papers showing a                 
                    U.S. place of birth                                       
                    o U.S. vital statistics official notice                   
                    of birth registration                                     

Source: GAO analysis of the DRA and regulations published by CMS.

Notes: This table is not a comprehensive list of documents CMS considers
reliable evidence of citizenship. Further, the table does not detail CMS's
restrictions for using particular documents. For example, in tier 2, a
U.S. birth certificate must be issued before the individual turned 5 years
of age. In tier 3, hospital records must be on hospital letterhead and
created at least 5 years before the date of the individual's application
for Medicaid. Appendix I provides a more complete list of documents and
accompanying restrictions as well as a list of acceptable documents for
verifying identity.

aUnder the DRA, this document was determined to be satisfactory evidence
of citizenship.

bUnder the DRA, this document was determined to be satisfactory evidence
of citizenship when accompanied by documentation of identity.

cAcceptable evidence of identity includes such documents as driver's
licenses, school identification cards, and, for children under 16, school
records.

In addition to prescribing a list of acceptable documents for verifying
citizenship, the regulations issued by CMS specify, with one exception,
that documents must be originals or copies certified by the issuing
agency. The exception is that for a U.S. birth certificate, which is a
tier 2 document, states may use a cross match with a state vital
statistics agency to document a birth record. The regulations allow states
to accept original documentation from individuals in person or through the
mail.

Under the regulations issued by CMS, states must provide applicants and
Medicaid beneficiaries a "reasonable opportunity" to document their
citizenship before denying or terminating Medicaid eligibility. States
have flexibility in defining the length of the reasonable opportunity
period. The regulations further explain that current Medicaid
beneficiaries must remain eligible for benefits during this period but
that states may terminate eligibility afterward if they determine that the
beneficiary has not made a good faith effort to present documentation. In
contrast, applicants are not eligible for Medicaid coverage until they
submit the required documentation. The regulations also require states to
assist individuals who are physically or mentally incapable of obtaining
documentation and do not have a representative to assist them. However,
the regulations do not specify criteria for determining who is capable or
the level of assistance states should provide. CMS intends to monitor
state implementation of the requirement, including the extent to which
states use the most reliable evidence available to establish citizenship
based on its hierarchy. States that do not comply with the regulations may
face either denied or deferred payment of federal matching funds.

In the interim final rule, CMS assessed potential administrative and
fiscal effects of the requirement. For example, CMS estimated that
individuals would need, on average, 10 minutes to acquire and provide the
state with acceptable documentary evidence and that states would need 5
minutes per individual to verify citizenship and maintain current
records.24 In addition, CMS determined that implementing the rule would
have no consequential effect on costs for state, local, or tribal
governments or the private sector.25 Under the rule, states may seek
federal Medicaid matching funds for administrative expenditures associated
with implementing the requirement at a 50 percent federal matching rate.

24In order to meet its obligations under the Paperwork Reduction Act of
1995, CMS solicited comments on these estimates.

25CMS did not perform a detailed analysis of the costs and benefits prior
to issuing this rule, as would otherwise be required under the Unfunded
Mandates Reform Act of 1995, because it determined that the cost would be
less than $100 million (or approximately $120 million in 2006 dollars) for
any 1 year.

Many States Reported That the Requirement Resulted in Delayed or Lost Medicaid
Coverage for Some Individuals Who Appeared to Be Eligible

States reported that the requirement resulted in barriers to access, such
as delayed or lost Medicaid coverage for some eligible individuals. Of the
44 states, 22 reported a decline in Medicaid enrollment due to the
requirement. Most that reported a decline in enrollment attributed it to
delays in or losses of coverage for individuals who appeared to be
eligible citizens, and all states reporting a decline reported that
children were affected by the requirement. States that reported a decline
in enrollment varied in their views of the effects on access to Medicaid
coverage after the first year of implementation. State enrollment policies
and whether an individual is an applicant or a beneficiary at
redetermination are two factors that may have influenced the effect of the
requirement on individuals' access.

States Reported Enrollment Declines Largely Driven by Delays in or Losses of
Medicaid Coverage for Eligible Citizens

Half the states that reported implementing the requirement noted that the
requirement resulted in declines in Medicaid enrollment.26 Of the 44
states, 22 states reported a decline in enrollment due to implementing the
requirement, 12 reported no change in enrollment as a result of the
requirement, and 10 reported that they did not know the effect of the
requirement on enrollment (see fig. 1). Of the 22 states that reported a
decline in enrollment due to the requirement, all responded that children
were affected by the requirement, and 21 reported that adults were
affected, with 2 specifying pregnant women. A few also responded that the
aged and blind and disabled were also affected.

26Of the 44 states, all reported implementing the requirement as of
January 2007: 33 implemented the requirement in July 2006, the month that
the requirement became effective, 8 did so within the 2 months following,
and 3 did so within 6 months of the July 1, 2006, effective date.

Figure 2: Effect of the Requirement on Medicaid Enrollment, as Reported by
States

Note: Numbers reflect responses from 44 states.

Though states often cited a combination of reasons for the decline in
Medicaid enrollment, when asked the primary reason, the majority of states
(12 of 22) reported that enrollment declined because applicants who
appeared to be eligible citizens experienced delays in receiving coverage.
In addition, 5 of the 22 states identified the primary reason for the
enrollment decline as current beneficiaries losing coverage, with 4 of the
5 states reporting that those individuals appeared eligible. Two states
reported that declines were largely driven by denials in coverage for
individuals who did not prove their citizenship. It was unclear from
survey results, however, whether these individuals were determined
ineligible because they were not citizens or simply because they did not
provide the required documents within the time frames allowed by the
state. (See fig. 3.) Two of the remaining 3 states reported that the
primary reason for the decline was that individuals were discouraged from
applying because of the requirement or were not responding to states'
requests for documentation of citizenship.27

Figure 3: Primary Reason Why Requirement Resulted in Medicaid Enrollment
Declines, as Reported by States

Notes: Numbers do not sum to 22, the number of states reporting a decline
in Medicaid enrollment as a result of implementing the requirement,
because 2 states reported other reasons, namely that individuals were
discouraged from applying or were not responding to states' requests for
the documentation, and 1 state did not answer the relevant survey
question.

aIt is unclear from the survey results whether these individuals lost or
were denied coverage because they were not citizens or because they did
not provide the required documentation.

The extent of the decline in Medicaid enrollment due to the requirement in
some individual states or nationally was unknown because not all states
track the effect of the requirement on enrollment. However, 1 state that
had begun tracking the effect reported (1) denying an average of 15.6
percent of its monthly applications because of insufficient citizenship
documentation in the first 7 months following implementation and (2)
terminating eligibility for an average of 3.2 percent of beneficiaries at
redetermination per month over the same period and for the same reason.
Overall, these denials and terminations represented over 18,000
individuals, who the state generally believed were eligible citizens.28
While not tracking the effect of the requirement on enrollment explicitly,
10 other states that attributed enrollment declines at least in part to
applicants who were delayed or denied coverage also reported increases in
monthly denials ranging from 1 to 14 percent after implementing the
requirement.

27The last state did not answer the survey question about the reasons that
the requirement led to a decline in enrollment.

28This state's total Medicaid enrollment was about 970,000 in fiscal year
2004, the most recent year of enrollment data available.

States reporting a decline in Medicaid enrollment differed in their views
of the effects of the requirement on enrollment after the first year of
implementation. Of the 22 states that reported a decline in enrollment, 17
states responded that they expected the downward enrollment trend to
continue. Five of these states indicated that the declines would level off
within approximately 1 year of implementation, citing, for example, a
drop-off in terminations once their current beneficiaries have
successfully documented their citizenship. Ten of the 17 states reported
that they were unsure how long enrollment declines would continue or
generally expected the trend to continue indefinitely.29 A few of these
states noted concern about the ongoing effect on new applicants who will
be unfamiliar with the requirement and may be denied enrollment or
discouraged from applying. The remaining 5 of 22 states reported that they
did not expect the decline to continue.30

State Enrollment Policies and Individuals' Enrollment Status May Have Influenced
Effect of Requirement on Access to Medicaid

Variation in the effects of the requirement on individuals' access may
have resulted from different state enrollment policies. For example,
states that reported a previous reliance on mail-in applications and
redeterminations were more likely to report a decline in Medicaid
enrollment. About two-thirds of the 22 states that reported a decline in
enrollment indicated that individuals most commonly applied by mail before
the requirement was implemented. In contrast, the majority of the 12
states that reported no change in enrollment reported that individuals
most frequently applied in person before the requirement was implemented.
In addition, prior to implementation, 6 states had documentation policies
in place that were similar to the requirement. Three of these 6 states
reported no change in enrollment, with 1 explaining that it was because
the state already required (1) proof of birth to verify age and family
relationship and (2) proof of identity for adults. Two of the 6 states
reported a decline in enrollment caused by the requirement.31

29The remaining 2 states did not indicate how long the trend would
continue.

30Of these 5 states, 2 noted that they had already documented citizenship
for current Medicaid beneficiaries; 1 reported that it accepts photocopies
of acceptable documentation; and the remaining 2 expected people
eventually to provide the necessary documents and qualify for Medicaid.

Another enrollment policy that may have influenced the requirement's
effect on access to Medicaid coverage was the amount of time states
allowed individuals to comply with the requirement--otherwise known as
reasonable opportunity periods. In total, 33 states reported the number of
days they allowed applicants and beneficiaries to meet the requirement
before denying applications or terminating eligibility, with limits
generally ranging from 10 days to 1 year. Nine of the 33 states reported
allowing applicants 30 days or less, and 4 of these states also reported a
decline in enrollment due to the requirement.32 A few states reported
allowing applicants and beneficiaries an indefinite amount of time to
obtain and submit the necessary documentation, provided they were deemed
as making a good faith effort. Some states' written policies indicated
that the reasonable opportunity period could be extended, provided the
individual notified the state that he or she was making a good faith
effort to obtain the documentation but needed more time.33

The effect of the requirement on access may have also depended on whether
the individual was a new applicant or a beneficiary at redetermination.
Applicants who declare themselves citizens are not eligible for Medicaid
coverage until they submit the required documentation, while beneficiaries
at redetermination maintain their eligibility while collecting documents
as long as they are within the reasonable opportunity period allowed by
the state or deemed as making a good faith effort to comply with the
requirement. For example, a pregnant woman at redetermination is eligible
to have her 20-week ultrasound covered by Medicaid, even though she has
not yet submitted her documentation to the state. In contrast, a pregnant
woman who is a new Medicaid applicant would not be determined eligible for
coverage until she submits her documentation (see fig. 4).34 In addition,
applicants who were born out of state may have faced additional delays
while attempting to obtain documentation from their birth state. For
example, one state noted that it could take 6 months or more to obtain a
birth certificate from another state.

31The sixth state responded that it did not know the effects of the
requirement on enrollment.

32Of the 5 remaining states, 3 reported they did not know the effect of
the requirement on enrollment, and 2 reported the requirement had no
effect on enrollment.

33However, states did not define what is considered a good faith effort.

Figure 4: Comparison of the Effect of the Requirement on a Pregnant Woman
Applying for Medicaid and a Pregnant Woman at Redetermination

In addition, applicants in some states were given less time than
beneficiaries to meet the requirement. Of the 33 states that provided
information on their reasonable opportunity periods, 13 states reported
that the time allowed for providing documentation was longer for
beneficiaries at redetermination than for applicants, with this difference
ranging from 24 to 320 days. Five of the 13 states reported allowing 45
days for applicants and 300 days or more for beneficiaries. States may
offer more flexibility to Medicaid beneficiaries as CMS officials told us
that for these individuals the state cannot terminate benefits without
documenting that the beneficiary has not made a good faith effort to
provide the necessary documentation.

34If the applicant is determined eligible, she generally would qualify for
Medicaid 3 months prior to the date of her application if she met
eligibility requirements during that period. Accordingly, she can be
reimbursed for the cost of an ultrasound provided during the retroactive
coverage period, but she may first be required to pay the full
out-of-pocket cost at the time of service, which many Medicaid-eligible
individuals may find difficult to afford.

States Reported Investing Resources to Implement Requirement, with Fiscal
Benefits Uncertain

Although states reported investing resources to implement the requirement,
potential fiscal benefits for the federal government and states are
uncertain. To implement the requirement and assist individuals with
compliance, all of the 44 states took a number of administrative measures,
such as providing additional training for eligibility workers and hiring
additional staff, and some also reported committing financial resources.
Despite these measures, however, states reported that as a result of the
requirement, individuals needed more assistance in person and it was
taking the state longer on average to complete applications and
redeterminations. According to states, two particular aspects of the
requirement increased the burden of implementing it: (1) that documents
must be originals and (2) the list of acceptable documents was complex and
did not allow for exceptions. While CMS estimated federal and state
savings from the requirement, the estimates may be overstated.

State Resources Invested to Implement the Requirement and Assist Individuals
with Compliance

All 44 states reported taking a number of administrative measures to
implement the requirement and assist individuals with compliance. Measures
most frequently taken by states included training eligibility workers,
revising application and redetermination forms, conducting vital
statistics data matches, and modifying information technology systems. For
example, 1 state reported that in addition to training 18,000 staff on the
requirement, it also provided training and information to community
agencies, consumer advocates, and providers on how to assist individuals
with compliance. Another state established data matches with Indian Health
Services to obtain hospital records that met the requirement and built a
Web site on which eligibility workers could search the state's vital
records to document citizenship. To supplement the efforts of eligibility
workers, 3 states reported having formed special units of staff focused
entirely on assisting individuals to meet the requirement, particularly in
difficult cases where eligibility workers had been unsuccessful in their
attempts to help individuals comply. One of those states reported that it
was in the process of expanding the size of its team from 22 workers to 40
workers. Table 2 lists the administrative measures frequently reported by
states.

Table 2: Administrative Measures Frequently Taken by States to Implement
the Requirement and Assist Individuals with Compliance

Measures taken by states                          Number of states (of 44) 
Conducted additional training for eligibility                              
workers                                                                 39 
Revised application and redetermination forms                           33 
Conducted data matches with the state's vital                              
statistics agency                                                       33 
Modified information technology systems                                 32 
Conducted educational outreach to individuals                           32 
Assisted individuals in paying for documents                            18 
Hired or allocated additional staff                                     15 
Authorized overtime pay                                                 11 
Added new application and redetermination methods                        9 
Increased third-party administrative contracts                           7 

Source: GAO survey of state Medicaid offices.

Beyond these administrative measures, 40 percent of the 44 states reported
having appropriated funds for implementation or planned to do so in future
years. Specifically, 12 states reported that funds were appropriated in
their state fiscal year 2007 to implement the requirement, which for the
10 states that specified the amount totaled over $28 million, with
appropriations ranging from $350,000 to $10 million in individual
states.35 Further, 15 states budgeted funds for implementation costs in
state fiscal year 2008.36 While many states did not specifically
appropriate funds toward implementing the requirement in state fiscal year
2007, this may have been due, in part, to the timing of the requirement
within the budget year. States may not be budgeting funds for future years
for various reasons, including that the burden of the requirement may
decrease after the first year of implementation or that the state may face
other budget constraints. For example, one state Medicaid office that
reported a significant backlog in applications and redeterminations as a
result of the requirement requested funds for implementation in state
fiscal year 2008 and planned to renew those requests in state fiscal years
2009 and 2010, but was not sure whether the state legislature would
appropriate the funds.

35In 2005, the most recent year of Medicaid expenditure data available
from CMS, the 10 states' Medicaid administrative expenditures ranged from
approximately $22 million to over $320 million. The amount of funds that
states reported were appropriated to implement the requirement represented
from 1 percent to 12 percent of each state's respective 2005 Medicaid
administrative expenditures.

36To the extent that states increase Medicaid administrative spending to
implement the requirement, the federal government will share in the costs.

Two Aspects of the Requirement Increased the Burden of Implementation

Despite investments of resources, most states reported that the
requirement resulted in the state spending more time completing
applications and redeterminations and individuals needing more assistance
in person during the process. Of the 44 states, 28 states reported
increases in the level of assistance provided to clients in person, and 35
states reported an increase in the amount of time it took the state to
complete applications and redeterminations. (See fig. 5.) States reporting
no change in the level of in-person assistance or time spent completing
applications and redeterminations since implementation were frequently
states where individuals primarily applied for and renewed Medicaid
enrollment in person prior to the requirement.

Figure 5: Effect of the Requirement on States' Level of Assistance and
Amount of Time Needed during Application and Redetermination

Notes: Numbers do not sum to 44 for level of assistance, because 1 state
reported that the amount of in-person assistance increased for
applications but did not change for redeterminations and therefore was not
counted, and another state did not answer the question related to
assistance provided in person. For changes in time spent by the state per
application and redetermination, numbers do not sum to 44 because 1 state
did not answer the related question.

Of the 35 states that reported increases in enrollment processing time,
most reported that the requirement added 5 or more minutes per case to the
processing time for applications and redeterminations. While only 1 of the
35 states expected an increase of less than 5 minutes per case, 9 states
estimated an additional 5 to 15 minutes per case, and 16 states expected
the requirement to add over 15 minutes of processing time per application
or redetermination, well above the 5 minutes estimated by CMS in the
interim final rule.37 One of these 16 states reported processing an
average of over 150,000 applications per month in the 8 months following
implementation. In that state, assuming an increase in processing time of
a minimum of 16 minutes per application since implementing the
requirement, this would have added at least 40,000 hours of staff time per
month. Other states emphasized that the effect of the requirement on
workload goes beyond the amount of time necessary to complete applications
and redeterminations. For example, one state reported a 60 percent
increase in phone calls (from 24,000 to 39,000 per month), a tenfold
increase in voice messages (from 1,200 to 11,000 per month), and an 11
percent increase in the amount of time spent on each call.38

37The remaining states (9 of 35) did not specify the amount of additional
state processing time resulting from the requirement.

Though the requirement represented a change in enrollment procedures for
most states, states reported that certain aspects of the requirement
specified under federal regulations by CMS increased their implementation
burden. More than 80 percent of states (36 of 44) reported facing
administrative challenges in implementing the requirement, and many
attributed the challenges to two specific aspects of the requirement
outlined in the regulations, namely (1) that documents must be originals
and (2) that the list of acceptable documentation was complex and did not
allow for exceptions. In fact, nearly all states (42 of the 44) reported
that having to provide original documentation posed a barrier to eligible
citizens' meeting the requirement. Further, many states also reported that
mandating originals affected state workload primarily because individuals
did not feel comfortable mailing the documents to the state and instead
began presenting them in person. With regard to the list of acceptable
documents, states reported that the list was complex, often confusing both
individuals and eligibility workers, and left states with no discretion to
allow exceptions. For example, 1 state that documented citizenship for
Medicaid prior to enactment of the DRA noted that when acceptable
documentation was not available, the state made an assessment based on a
preponderance of evidence, which included certain tribal documents
excluded from CMS's list. Thirty-four states reported that an individual's
inability to provide documents other than those defined under federal
regulations by CMS created a barrier to individuals' compliance with the
requirement. Table 3 presents some of the challenges reported by states to
implement the requirement.

38After implementing the requirement, some states also observed increases
in the number of pending applications per month and a decrease in the
number of redeterminations completed per month, indicating larger
caseloads for some eligibility workers. For example, 20 of the 26 states
with data available on applications reported an increase in the number of
pending applications per month after implementing the requirement, with
just over half of states observing increases of at least 30 percent. In 3
states, this increase represented an additional 10,000 pending
applications per month as compared to the average number of pending
applications per month prior to implementing the requirement.

Table 3: Challenges Posed by Certain Aspects of the Requirement, as
Reported by States

Aspect of                                                                  
requirement        Challenge posed   Description                           
Documents must be  Cost of obtaining Low-income families enrolled in       
originals          original          Medicaid often cannot afford to pay   
                      documents         for original documents such as birth  
                                        certificates, which can cost up to    
                                        $30 each. When individuals are        
                                        physically or mentally incapable of   
                                        obtaining documents for themselves,   
                                        doing so becomes the state's          
                                        responsibility, the cost of which has 
                                        raised concerns among several states. 
                      Original          Individuals cannot part with such     
                      documents needed  documents as driver's licenses for    
                      for daily living  the number of days it would take to   
                                        mail them and have them returned by   
                                        the state and do not want to risk     
                                        identity theft. As a result, more     
                                        individuals are submitting the        
                                        documents in person, which has        
                                        increased the volume of walk-in       
                                        clients at eligibility offices. In    
                                        some rural areas, individuals may     
                                        have to travel significant distances  
                                        to reach the nearest eligibility      
                                        office to present the documents in    
                                        person.                               
                      Management and    Some individuals are choosing to      
                      remittance of     submit driver's licenses and U.S.     
                      original          passports through the mail, causing   
                      documents         stress among eligibility workers who  
                                        want to return the documents as       
                                        quickly as possible. In addition,     
                                        returning the documents can increase  
                                        state mail costs.                     
Prescribed list of Complexity of     The complexity of the tiered list of  
acceptable         list              acceptable documents has confused     
documents                            individuals and local eligibility     
                                        workers. As a result, states have     
                                        invested more time answering calls    
                                        from customers and providing          
                                        technical assistance to local         
                                        offices.                              
                      Lack of state     The list lacks flexibility for states 
                      discretion to     to allow exceptions when an           
                      allow exceptions  individual, or the state on the       
                                        individual's behalf, cannot obtain    
                                        any of the documents.                 

Source: GAO survey of state Medicaid offices.

When developing its interim final rule, CMS officials said that CMS
considered the specifications of the DRA and other existing federal
policies on documenting citizenship, including policies of SSA. CMS
officials told us that after meeting the specifications of the DRA, the
agency modeled its regulations after the policy established by SSA for
documenting citizenship when individuals apply for a Social Security
number. Specifically, SSA's policy mandates that documents be originals
and includes a hierarchy of documents with restrictions on the use of less
reliable documents. Also, the list of acceptable documents identified by
CMS mirrors SSA's list with only a few exceptions. In contrast, however,
SSA's policy allows more flexibility in special cases. For example, when a
U.S.-born applicant for a Social Security number does not have any of the
documents from the list, SSA's policy allows staff to work with their
supervisors to determine what would be acceptable in those cases. CMS
officials told us that CMS's list of acceptable documents represents a
significant expansion of what was included in the DRA provision and is
exhaustive and that they were not aware of any case where an individual
was unable to provide any document from the list.

To assist states and individuals in complying with documenting
citizenship, CMS included some important tools in the regulations. For
example, the regulations allow states to use data matches with state vital
statistics agencies to verify citizenship and with other government
agencies to verify identity, which could alleviate the need for
individuals to submit original documents. While many states reported
conducting data matches on behalf of individuals, several also expressed
concerns that such matches required additional resources and could not be
done for individuals born out of state. One state reported conducting
60,000 on-line inquiries per month into the state's vital records system
after implementing the requirement. In one area of the state, however,
nearly all children were born across state lines and therefore the state
could not electronically verify their citizenship. The state reported that
verifying citizenship for children in that portion of the state was
especially difficult. While CMS officials confirmed that there is no
nationwide database for verifying citizenship, they also told us that
there are currently initiatives under way in more than one state to share
vital statistics with other states through data matches.39

Estimates of Federal and State Fiscal Benefits May Be Overstated

Though CMS expected some savings to result from the requirement in fiscal
year 2008, the estimate did not account for the cost to states and the
federal government to implement the requirement. CMS's Office of the
Actuary estimated that the requirement would result in $50 million in
savings for the federal government and $40 million in savings for states
in fiscal year 2008, with all savings resulting from terminations of
eligibility for individuals who were not citizens. Specifically, CMS
assumed that 50,000 noncitizen beneficiaries (which represent less than 1
percent of Medicaid enrollment nationwide) would prove ineligible for
Medicaid benefits and be terminated from the program. Though CMS
authorized states to claim federal Medicaid matching funds for
administrative expenditures related to implementing the requirement, and
15 states reported budgeting funds for 2008 in addition to the numerous
other measures being taken by states, CMS's estimate of savings did not
account for any increase in administrative expenditures by states or the
federal government. CMS expected, however, that states would experience
higher administrative costs during the first year of implementation with
these costs decreasing in later years.

39For example, according to CMS, the National Association for Public
Health Statistics and Information Systems, an association of vital
statistics agencies, is engaged in creating and making available a
database and linking system to permit interstate electronic verification
of vital statistics information.

In addition to not accounting for the cost of the requirement, survey
results indicated that CMS may have overestimated the potential savings
from the requirement because the intended effect of the requirement, that
is, to prevent ineligible noncitizens from receiving Medicaid benefits,
may be less prevalent than expected. When asked about potential savings
from the requirement, only 5 of the 44 states reported expecting the
requirement to result in a decrease in their expenditures for Medicaid
benefits in state fiscal year 2008, due in large part to individuals who
appeared to be eligible citizens who experienced delays in or lost
coverage. Only 1 of the 5 states expecting savings reported that
enrollment declines resulted in part from denials or terminations of
Medicaid coverage for individuals who were determined ineligible because
of their citizenship status. The remaining 39 states expected no savings
(20 states) or reported that it was too early to know (19 states). Several
of the 20 states that expected no savings in 2008 reported that though
some individuals have experienced delays in coverage, those individuals
were eligible citizens and would eventually provide the required
documentation and receive coverage. In addition, 2 of these 20 states
noted that they were not inappropriately financing Medicaid benefits for
noncitizens in the past and so expected no savings. Of the 19 states that
were unsure how the requirement would affect expenditures, 2 were still
tracking the effects of the requirement. Another of these 19 states--a
state that reported a decline in enrollment as a result of implementing
the requirement--noted that it was difficult to determine whether it would
result in lower costs or whether costs would increase, as the state
expected individuals would wait to enroll until they were ill or injured,
rather than receive preventive care that is less costly to provide.

Agency Comments and Our Evaluation

We provided a draft of this report to CMS for comment and received a
written response, which is included in this report as appendix II. CMS
also provided technical corrections, which we incorporated as appropriate.
CMS commented that it generally did not disagree with the approach of our
study, but raised several concerns regarding the sufficiency of the
underlying data for, and certain aspects of, our findings. In particular,
CMS characterized the report's conclusions as overstating the effect of
the requirement on enrollment, and stated it had concerns about the fact
that the states did not submit data to substantiate their responses to the
survey questions on which we based our findings. CMS also commented on our
findings related to the challenges posed by the requirement for states and
individuals and the cost to states of implementing the requirement.
Specific concerns raised and comments made by CMS, and our evaluation,
follow.

Regarding the sufficiency of underlying data for certain findings, CMS
commented that our survey asked states about the effects of the
requirement on enrollment, although states did not provide data to
validate their responses. In addition, CMS expressed concerns that the
draft report appeared to draw broad conclusions about the effect of the
requirement from data provided by one state. The purpose of our work was
to report on the initial effects of the requirement. Absent national CMS
data on the effects and because state Medicaid offices were largely
responsible for implementing the requirement, we determined they were the
best source for this information. Though not all states could quantify the
effect of the requirement on enrollment, 22 states reported that the
requirement resulted in decreases in enrollment, 12 reported that the
requirement had no effect on enrollment, and 10 reported not knowing the
effect of the requirement on enrollment. We disagree with CMS's assertion
that the draft report drew broad conclusions about the effect of the
requirement on enrollment from one state's data. The report clearly
indicates that these data are from a single state and further notes that
the extent of the decline in Medicaid enrollment due to the requirement in
some individual states and nationally is unknown.

CMS raised concerns about one survey question that asked states that
reported enrollment declines due to the requirement the reasons for those
declines and also about the level of information provided regarding the
degree to which the requirement deterred nonqualified aliens from applying
for Medicaid. With regard to the first concern, in responding to our
survey, states could check an option that said enrollment declines were
caused by the delays in or losses of coverage for individuals who appeared
eligible. CMS objected to the use of "appeared eligible," noting that the
term is vague and subjective and that it tends to lead the respondent to
certain conclusions. However, as we explain in the report, asking states
to assess the citizenship status of individuals is consistent with most
states' experience in making such determinations under the
self-attestation policies that were in effect prior to the DRA provision.
With regard to the second concern, we agree with CMS that our report
provides limited information about the extent to which the requirement is
deterring nonqualified aliens from applying for Medicaid. However, the
report does discuss whether CMS had evidence that such individuals were
falsely declaring citizenship when applying for Medicaid. Specifically,
our report notes that CMS in its comments to the 2005 OIG report on state
self-attestation policies acknowledged that the OIG did not find problems
regarding false allegations of citizenship, and CMS was not aware of any
such problems.

CMS commented that the draft report overstated the effect of the
requirement on enrollment because the majority of states reporting
enrollment declines attributed the declines primarily to delays in
receiving coverage rather than denials of coverage. Our report notes the
implications for individuals of such delays in coverage. The report points
out, for example, that a pregnant woman who is a citizen may be forced to
forgo needed prenatal care while her coverage is delayed by efforts to
meet the requirement. CMS also noted that its goal in implementing the
requirement was to minimize the incidence of delays in or denials of
eligibility due to the requirement.

In response to our findings that two aspects of the requirement specified
under regulations issued by CMS--namely that documents be originals and
that the list of acceptable documents is complex and does not allow for
exceptions--presented challenges to states and individuals, CMS commented
that the agency has attempted to provide as much flexibility as possible
and that other federal agencies require original documentation.
Nonetheless, our survey results clearly indicated that these two aspects
of the requirement are viewed by most states as posing barriers to access.
In particular, 42 of 44 states reported that having to provide original
documentation posed a barrier to eligible citizens' meeting the
requirement, and 34 states reported that an individual's inability to
provide documents other than those defined under federal regulations by
CMS created a barrier to compliance. Further, while the report explains
that CMS modeled its regulations after SSA's policy for documenting
citizenship when individuals apply for a Social Security number, the
report also notes that, unlike CMS, SSA provides for flexibility in
special cases.

CMS also commented on our finding that CMS's estimates of potential
savings from the requirement in fiscal year 2008 did not account for
administrative costs. Specifically, CMS agreed that its estimate did not
account for administrative costs incurred by states to implement the
requirement, but stated that any such costs would decrease after the first
year of implementation. Our report describes that some states reported not
having budgeted funds for the requirement in future years and explains
that one reason for this may be that the burden of the requirement may
decrease after the first year of implementation. However, the ongoing
costs of assisting applicants in complying with the requirement may
continue to be significant for some states, especially those states that
had to substantially modify their enrollment procedures. For example, as
noted in the report, due to the requirement, one state faced an additional
40,000 hours of staff time needed per month to process applications.

CMS commented that it was not surprised that states reported facing
challenges, given that the report's findings were based on states'
experiences after less than 1 year of implementing the requirement. While
agreeing that the requirement posed challenges for individuals and states,
CMS asserted that these initial challenges have diminished and will
continue to do so. Based on our survey responses, states largely do not
share CMS's optimism in this regard. In addition to describing the initial
effects of the requirement, which in states' perspectives have included
enrollment declines and increased administrative burdens, our report
includes additional indicators that the effects states experienced in the
first year will continue at least to some extent in the future. For
example, 17 of the 22 states that reported a decline in enrollment due to
the requirement reported that they expected the downward trend in
enrollment to continue, with some expecting the decline to continue
indefinitely. In addition, 15 states reported already having budgeted
funds for the requirement in state fiscal year 2008.

CMS also emphasized actions it has taken to implement the requirement,
such as issuing a letter to state Medicaid directors, publishing an
interim final rule, and working on a final rule to be issued shortly. Our
report describes the steps taken by CMS to implement the requirement. With
regard to CMS's work on a final rule, we modified our report to indicate
CMS's plans to issue such a rule shortly.

As arranged with your offices, unless you publicly announce the contents
of this report earlier, we plan no further distribution of this report
until 30 days after its issue date. At that time, we will send copies of
this report to the Secretary of HHS, the Administrator of the Centers for
Medicare & Medicaid Services, and other interested parties. We will also
make copies available to others on request. In addition, the report will
be available at no charge on the GAO Web site at [17]http://www.gao.gov .

If you or your staffs have any questions about this report, please contact
me at (202) 512-7114 or [18][email protected] . Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. GAO staff who made major contributions to this
report are listed in appendix III.

James C. Cosgrove
Director, Health Care

Appendix I: List of Acceptable Documents for Proving Citizenship and
Identity, as Defined under Federal Regulations

Federal regulations published by the Centers for Medicare & Medicaid
Services (CMS) identify primary, or tier 1, documents that are considered
sufficient to establish citizenship. Under the regulations, if individuals
do not have primary evidence, they are expected to produce secondary, or
tier 2, evidence of citizenship as well as evidence of identity. If
neither primary nor secondary evidence of citizenship is available,
individuals may provide third tier evidence of citizenship with
accompanying evidence of identity. If primary evidence of citizenship is
unavailable, secondary and third tier evidence do not exist or cannot be
obtained in a reasonable time period, and the individual was born in the
United States, then the individual may provide fourth tier evidence of
citizenship, along with evidence of identity. See table 4 for a list of
acceptable documents to prove citizenship and table 5 for acceptable
identity documents.

Table 4: List of Acceptable Documents for Proving Citizenship, as Defined
under Federal Regulations

Level of                                                                   
documentation        Acceptable documents     Restrictions                 
Tier 1 (primary)     U.S. passporta                                        
                        Certificate of                                        
                        naturalizationa                                       
                        Certificate of U.S.                                   
                        citizenshipa                                          
                        State-issued driver's    Limited to states that       
                        licensea                 require proof of citizenship 
                                                 or that verified the         
                                                 individual's Social Security 
                                                 number as a condition of     
                                                 issuance                     
Tier 2 (secondary)   U.S. public birth        Certificate must have been   
                        certificateb             issued before the individual 
                                                 was 5 years of age           
                        Certification of report                               
                        of birthb                                             
                        Report of birth abroad                                
                        of a U.S. citizenb                                    
                        Certification of birth                                
                        issued by the Department                              
                        of Stateb                                             
                        U.S. citizen                                          
                        identification card                                   
                        issued by the                                         
                        Immigration and                                       
                        Naturalization Serviceb                               
                        Northern Mariana                                      
                        identification card                                   
                        American Indian card     Limited to cards issued by   
                                                 the Department of Homeland   
                                                 Security to Texas Band of    
                                                 Kickapoos                    
                        Final adoption decree                                 
                        showing child's name and                              
                        U.S. place of birth                                   
                        Evidence of U.S. civil   Limited to individuals       
                        service employment       employed before June 1, 1976 
                        U.S. military record                                  
                        showing a U.S. place of                               
                        birth                                                 
Tier 3 (third level) Hospital record          Record must be on hospital   
                        indicating a U.S. place  letterhead and created at    
                        of birth                 least 5 years before initial 
                                                 application for Medicaid,    
                                                 or, for children under 16,   
                                                 near the time of birth or 5  
                                                 years before application for 
                                                 Medicaid                     
                        Life, health, or other   Record must be created at    
                        insurance record         least 5 years before initial 
                        indicating U.S. place of application for Medicaid     
                        birth                                                 
Tier 4 (fourth       Federal or state census  Record must also show        
level)               record showing U.S.      applicant's age              
                        citizenship or a U.S.                                 
                        place of birth                                        
                        Seneca Indian tribal     Record must show a U.S.      
                        census record            place of birth and have been 
                                                 created at least 5 years     
                                                 before application for       
                                                 Medicaid                     
                        Bureau of Indian Affairs Record must show a U.S.      
                        tribal census records of place of birth and have been 
                        the Navajo Indians       created at least 5 years     
                                                 before application for       
                                                 Medicaid                     
                        U.S. state vital         Notice must show a U.S.      
                        statistics official      place of birth and have been 
                        notice of birth          created at least 5 years     
                        registration             before application for       
                                                 Medicaid                     
                        U.S. birth record        Record must show a U.S.      
                        amended more than 5      place of birth and have been 
                        years after individual's created at least 5 years     
                        birth                    before application for       
                                                 Medicaid                     
                        Signed statement from    Statement must show a U.S.   
                        physician or midwife     place of birth and have been 
                        present at birth         created at least 5 years     
                                                 before application for       
                                                 Medicaid                     
                        Medical record           Record must show a U.S.      
                                                 place of birth and have been 
                                                 created at least 5 years     
                                                 before initial application   
                                                 for Medicaid or, for         
                                                 children under 16, near the  
                                                 time of birth or 5 years     
                                                 before application for       
                                                 Medicaid                     
                        Institutional admission  Papers must show a U.S.      
                        papers from nursing home place of birth               
                        or other institution                                  
                        Written affidavit        Affidavits may be used only  
                                                 in rare circumstances and    
                                                 must comply with several     
                                                 additional requirements      

Source: GAO analysis of the Deficit Reduction Act of 2005 (DRA) and
regulations published by CMS.

aDocument identified in the DRA as an acceptable document for proving
citizenship.

bDocument identified in the DRA as an acceptable document for proving
citizenship when accompanied by documentation of identity.

Table 5: Acceptable Documents for Proving Identity, as Defined under
Federal Regulations

Level of documentation Acceptable identity documents                       
Tier 1                 Not applicable                                      
Tiers 2, 3, and 4         o Driver's license with photograph or other      
                             identifying informationa                         
                             o School identification card with photographa    
                             o U.S. military card or draft recorda            
                             o Identification card issued by federal, state,  
                             or local government with photograph or other     
                             identifying informationa                         
                             o Military dependent's identification carda      
                             o Native American Tribal documenta               
                             o U.S. Coast Guard Merchant Mariner carda        
                             o Certificate of Degree of Indian Blood or other 
                             tribal document with photograph or other         
                             personal identifying information                 
                             o Cross match with other government agency if    
                             the agency establishes and certifies true        
                             identity of individuals                          
                                                                              
                          In addition, for children under 16:                 
                                                                              
                             o School records                                 
                             o Written affidavit if no other identity         
                             documents on the list are available              

Source: GAO analysis of the DRA and regulations published by CMS.

aDocument identified in the DRA as an acceptable document for proving
identity.

Appendix II: Comments from the Centers for Medicare & Medicaid Services

Appendix III: GAO Contact and Staff Acknowledgments

GAO Contact

James C. Cosgrove, (202) 512-7114 or [19][email protected]

Acknowledgments

Kathryn Allen, Director, led the engagement through its initial phases. In
addition, Susan Anthony, Assistant Director; Susan Barnidge; Laura Brogan;
Elizabeth T. Morrison; and Hemi Tewarson made key contributions to this
report.

(290595)

GAO's Mission

The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.

Obtaining Copies of GAO Reports and Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO's Web site ( [20]www.gao.gov ). Each weekday, GAO posts
newly released reports, testimony, and correspondence on its Web site. To
have GAO e-mail you a list of newly posted products every afternoon, go to
[21]www.gao.gov and select "Subscribe to Updates."

Order by Mail or Phone

The first copy of each printed report is free. Additional copies are $2
each. A check or money order should be made out to the Superintendent of
Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
copies mailed to a single address are discounted 25 percent. Orders should
be sent to:

U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548

To order by Phone: Voice: (202) 512-6000
TDD: (202) 512-2537
Fax: (202) 512-6061

To Report Fraud, Waste, and Abuse in Federal Programs

Contact:

Web site: [22]www.gao.gov/fraudnet/fraudnet.htm
E-mail: [23][email protected]
Automated answering system: (800) 424-5454 or (202) 512-7470

Congressional Relations

Gloria Jarmon, Managing Director, [24][email protected] (202) 512-4400 U.S.
Government Accountability Office, 441 G Street NW, Room 7125 Washington,
D.C. 20548

Public Affairs

Paul Anderson, Managing Director, [25][email protected] (202) 512-4800
U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548

[26]www.gao.gov/cgi-bin/getrpt?GAO-07-889 .

To view the full product, including the scope
and methodology, click on the link above.

For more information, contact James Cosgrove at (202) 512-7114 or
[email protected].

Highlights of [27]GAO-07-889 , a report to congressional requesters

June 2007

MEDICAID

States Reported That Citizenship Documentation Requirement Resulted in
Enrollment Declines for Eligible Citizens and Posed Administrative Burdens

The Deficit Reduction Act of 2005 (DRA) included a provision that requires
states to obtain documentary evidence of U.S. citizenship or nationality
when determining eligibility of Medicaid applicants and current
beneficiaries; self-attestation of citizenship and nationality is no
longer acceptable. The Centers for Medicare & Medicaid Services (CMS)
issued regulations states must follow in obtaining this documentation.
Interested parties have raised concerns that efforts to comply with the
requirement will cause eligible citizens to lose access to Medicaid
coverage and will be costly for states to implement.

GAO was asked to examine how the requirement has affected individuals'
access to Medicaid benefits and assess the administrative and fiscal
effects of implementing the requirement.

To do this work, GAO surveyed state Medicaid offices in the 50 states and
the District of Columbia about their perspectives on access issues and the
administrative and fiscal effects of the requirement. GAO obtained
complete responses from 44 states representing 71 percent of national
Medicaid enrollment in fiscal year 2004. GAO also reviewed federal laws,
regulations, and CMS guidance.

States reported that the citizenship documentation requirement resulted in
barriers to access to Medicaid for some eligible citizens. Twenty-two of
the 44 states reported declines in Medicaid enrollment due to the
requirement, and a majority of these states attributed the declines to
delays in or losses of Medicaid coverage for individuals who appeared to
be eligible citizens. Of the remaining states, 12 reported that the
requirement had no effect and 10 reported they did not know the
requirement's effect on enrollment. Not all of the 22 states reporting
declines could quantify enrollment declines due specifically to the
requirement, but a state that had begun tracking the effect identified
18,000 individuals in the 7 months after implementation whose applications
were denied or coverage was terminated for inability to provide the
necessary documentation, though the state believed most of them to be
eligible citizens. Further, states reporting a decline in enrollment
varied in their impressions about the requirement's effect on enrollment
after the first year of implementation. States' enrollment policies and
whether an individual was an applicant or a beneficiary may have
influenced the requirement's effect on access to Medicaid. For example,
states that relied primarily on mail-in applications before the
requirement were more likely to report declines in enrollment than states
where individuals usually applied in person. In addition, the requirement
may have more adversely affected applicants than beneficiaries because
applicants were given less time to comply in some states and were not
eligible for Medicaid benefits until they documented their citizenship.

Although states reported investing resources to implement the requirement,
potential fiscal benefits for the federal government and states are
uncertain. All 44 states reported taking administrative measures to
implement the requirement and assist individuals with compliance. In
addition, 10 states reported that a total of $28 million was appropriated
in state fiscal year 2007, and 15 states budgeted funds for implementation
costs in state fiscal year 2008. Despite these measures, states reported
that the requirement has increased the level of assistance needed by
individuals and amount of time spent by states during the enrollment
process. States specified two aspects of the requirement as increasing the
burden for them and for individuals: that documents had to be originals
and the list of acceptable documents was complex and did not allow for
exceptions. Further, although CMS estimated the requirement would result
in savings for the federal government and states of $90 million for fiscal
year 2008, states' responses indicated that this estimate may be
overstated for two reasons. Specifically, CMS did not account for the
increased administrative expenditures reported by states, and the agency's
estimated savings from ineligible, noncitizens no longer receiving
benefits may be less than anticipated.

In commenting on a draft of the report, CMS raised concerns about the
conclusions drawn from the survey responses as to the requirement's effect
on access, mainly that states did not submit data to support their
responses.

References

Visible links
  17. file:///home/webmaster/infomgt/d07889.htm#http://www.gao.gov/
  18. file:///home/webmaster/infomgt/d07889.htm#mailto:[email protected]
  19. file:///home/webmaster/infomgt/d07889.htm#mailto:[email protected]
  20. file:///home/webmaster/infomgt/d07889.htm#http://www.gao.gov/
  21. file:///home/webmaster/infomgt/d07889.htm#http://www.gao.gov/
  22. file:///home/webmaster/infomgt/d07889.htm#http://www.gao.gov/fraudnet/fraudnet.htm
  23. file:///home/webmaster/infomgt/d07889.htm#mailto:[email protected]
  24. file:///home/webmaster/infomgt/d07889.htm#mailto:[email protected]
  25. file:///home/webmaster/infomgt/d07889.htm#mailto:[email protected]
  26. file:///home/webmaster/infomgt/d07889.htm#http://www.gao.gov/cgi-bin/getrpt?GAO-07-889
  27. file:///home/webmaster/infomgt/d07889.htm#http://www.gao.gov/cgi-bin/getrpt?GAO-07-889
*** End of document. ***