Medicaid and SCHIP: Comparisons of Outreach, Enrollment Practices, and
Benefits (Letter Report, 04/14/2000, GAO/HEHS-00-86).

Pursuant to a congressional request, GAO reviewed the Medicaid program
and State Children's Health Insurance Program (SCHIP), focusing on the
differences between both programs with regard to outreach, application
and eligibility determination, screening and enrollment, and benefits.

GAO noted that: (1) across GAO's sample of 10 states, Medicaid and SCHIP
programs are similar in terms of their outreach mechanisms, but have
differences in the way they enroll children and the scope of benefits
they offer; (2) certain information that is federally required for
Medicaid eligibility determination is not required for SCHIP; (3)
however, half of the states GAO surveyed required more documentation for
Medicaid than for SCHIP, and states often required more documentation
for Medicaid than was federally required; (4) states do have the
flexibility under federal law to streamline requirements for Medicaid
and SCHIP; (5) while all of the states in GAO's sample reported policies
and procedures to ensure that eligible children were appropriately
enrolled in Medicaid rather than SCHIP, the ease with which
Medicaid-eligible children were enrolled varied; (6) in some cases,
persons applying for Medicaid for their children were required to fill
out additional forms or appear in person in order to determine
eligibility and obtain coverage; and (7) GAO's review of five optional
benefits (dental, hearing, mental health, prescription drugs, and
vision) shows that while states' SCHIP programs offer many of the same
benefits as Medicaid, SCHIP imposes more limits on these benefits.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  HEHS-00-86
     TITLE:  Medicaid and SCHIP: Comparisons of Outreach, Enrollment
	     Practices, and Benefits
      DATE:  04/14/2000
   SUBJECT:  Health insurance
	     Health care programs
	     Disadvantaged persons
	     Comparative analysis
	     Children
	     Federal/state relations
	     State-administered programs
	     Eligibility determinations
	     Public assistance programs
IDENTIFIER:  Medicaid Program
	     State Children's Health Insurance Program
	     Alabama
	     Arkansas
	     California
	     Colorado
	     Florida
	     Kansas
	     North Carolina
	     New York
	     Pennsylvania
	     Utah

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GAO/HEHS-00-86

Appendix I: Medicaid and SCHIP Outreach Activities

12

Appendix II: Application and Eligibility Determination

16

Appendix III: Screening and Enrollment

21

Appendix IV: Benefits

24

Appendix V: Comments From the Health Care Financing
Administration

27

Table 1: Enrollment Practices for Medicaid and SCHIP in 10
States 22

Table 2: SCHIP Coverage Limitations on Optional Benefits in 10
States 24

Figure 1: Extent of Combined Outreach for Medicaid and SCHIP
in 10 States 13

Figure 2: Additional Information and Documentation Required
for Medicaid in 10 States 18

EPSDT Early and Periodic Screening, Diagnostic, and Treatment

FPL federal poverty level

HCFA Health Care Financing Administration

SCHIP State Children's Health Insurance Program

SSN Social Security number

Health, Education, and
Human Services Division

B-285033

April 14, 2000

The Honorable John D. Dingell
Ranking Minority Member
Committee on Commerce
House of Representatives

Dear Mr. Dingell:

Two federal-state partnerships, Medicaid and the State Children's Health
Insurance Program (SCHIP), offer states the opportunity to provide health
insurance coverage to low-income children. Medicaid, established in 1965 to
provide health care coverage to certain categories of low-income adults and
children, reported enrollment of 22.3 million children as of September 1998.
SCHIP, established in 1997 to expand health care coverage to uninsured
low-income children not eligible for Medicaid, reported enrollment of nearly
2 million children as of September 1999. In designing SCHIP, states had the
option of expanding their Medicaid programs, constructing a stand-alone
program that operates separately from Medicaid, or developing some
combination of both approaches. More than half of the states have chosen
SCHIP approaches that are, to varying degrees, separate from their Medicaid
programs.

Concerned that program differences may create inadvertent disparities
between SCHIP and Medicaid, you asked us to review enrollment practices and
benefits available in a sample of states. In this context, we analyzed the
differences between both programs with regard to outreach, application and
eligibility determination, screening and enrollment, and benefits. For this
study, we analyzed responses to questions on these issues given by Medicaid
and SCHIP officials in 10 states with SCHIP programs that were essentially
separate from their Medicaid programs; we also obtained documentation, such
as applications, on their Medicaid and SCHIP programs.1 We also interviewed
officials from the Health Care Financing Administration (HCFA), which has
oversight responsibilities for both SCHIP and Medicaid. We performed our
work in March and April 2000 in accordance with generally accepted
government auditing standards.

Across our sample of 10 states, Medicaid and SCHIP programs are similar in
terms of their outreach mechanisms, but have differences in the way they
enroll children and the scope of the benefits they offer. Certain
information that is federally required for Medicaid eligibility
determination is not required for SCHIP.2 However, half of the states we
surveyed required more documentation for Medicaid than for SCHIP, and states
often required more documentation for Medicaid than was federally required.
States do have the flexibility under federal law to streamline requirements
for Medicaid and SCHIP. Additionally, while all of the states in our sample
reported policies and procedures to ensure that eligible children were
appropriately enrolled in Medicaid rather than SCHIP, the ease with which
Medicaid-eligible children were enrolled varied. In some cases, persons
applying for Medicaid for their children were required to fill out
additional forms or appear in person in order to determine eligibility and
obtain coverage. Finally, our review of five optional benefits (dental,
hearing, mental health, prescription drugs, and vision) shows that while
states' SCHIP programs offer many of the same benefits as Medicaid, SCHIP
imposes more limits on these benefits.

Authorized under title XIX of the Social Security Act, Medicaid is a joint
federal-state entitlement program that annually finances health care
coverage for more than 40 million low-income individuals, over half of whom
are children. Medicaid coverage for children is comprehensive, offering a
wide range of medical services and mandating coverage based upon family
income in relation to the federal poverty level (FPL). Federal law requires
states to cover children up to age 6 from families with incomes up to 133
percent FPL, and children ages 6-15 up to 100 percent of FPL.3 Medicaid
benefits are particularly important for children because of Medicaid's Early
and Periodic Screening, Diagnostic, and Treatment (EPSDT) services. EPSDT,
which is mandatory for categorically needy children,4 provides
comprehensive, periodic evaluations of health and developmental history, as
well as vision, hearing, and dental screening services to most
Medicaid-eligible children.5 Under EPSDT, states are required to cover any
service or item that is medically necessary to correct or ameliorate a
condition detected through an EPSDT screening, regardless of whether the
service is otherwise covered under a state Medicaid program.

SCHIP, created under title XXI of the Social Security Act, authorized nearly
$40 billion in federal matching funds over fiscal years 1998 to 2008 for
states to offer coverage to children in families with incomes up to 200
percent of the FPL who do not qualify for Medicaid.6 In designing their
SCHIP programs, most states chose to establish separate, stand-alone
components, often concurrent with a Medicaid expansion.7 As of September 30,
1999, the majority of the almost 2 million SCHIP enrollees--nearly 1.3
million--were in states' stand-alone programs, while about 700,000 were in
Medicaid expansions. While states with a SCHIP Medicaid expansion must
provide the same coverage available to other children enrolled in Medicaid,
states with SCHIP stand-alone components have a wide range of options to use
in designing their benefit packages, including the benefits available under
a state's Medicaid program. SCHIP stand-alone components must cover basic
benefits such as physician services, inpatient and outpatient hospital
services, and laboratory and radiological services. However, states have
discretion to provide optional benefits such as prescription drugs and
hearing, mental health, dental, and vision services on a more limited basis,
or not at all.

States with SCHIP stand-alone components are required to coordinate with
Medicaid, other public programs, and private insurance. One coordination
provision requires states to initially screen all SCHIP applicants for
Medicaid eligibility to ensure that Medicaid-eligible children are enrolled
in Medicaid--a process called "screening and enrollment."8 States must
specify in their SCHIP plans how they have established a system that
identifies, refers, and enrolls eligible children in the appropriate
program. HCFA recently proposed regulations for SCHIP that emphasize the
need for states to facilitate enrollment of eligible children by offering
outreach activities and enrollment mechanisms similar to those in Medicaid.
HCFA encouraged but did not require states to streamline and coordinate
their outreach efforts, applications and processing time requirements,
enrollment options and enrollment sites; and to use continuous and
presumptive eligibility for both programs.9

Medicaid and SCHIP differ in some of their eligibility determination
requirements. Although self-reporting of required information is allowed by
both programs, Medicaid has post-eligibility requirements for verification
of income and assets through the use of an income eligibility verification
system; Medicaid also requires an applicant's SSN. For both programs,
non-citizens are required to document their immigration status or to have
their immigration status verified. While states are allowed to require
documentation from families to determine eligibility, HCFA noted, in its
September 1998 guidance to state Medicaid directors, that states have the
flexibility to determine documentation requirements.

Practices and Benefits Differ

Medicaid and SCHIP programs are similar in terms of their outreach
mechanisms, but differ in the way they enroll children and the scope of the
benefits they offer. With regard to outreach, the states in our sample
employ a variety of approaches to inform families about the health coverage
programs available, and to assist them in the application process. More than
one-half of the states report using similar outreach mechanisms for Medicaid
and SCHIP--such as toll-free hotlines, posters, and brochures. However,
states differed in the extent to which they combined their outreach
strategies for the two programs. While some states found it useful to
combine such efforts, other states (such as Kansas and Pennsylvania) mostly
preferred a separate SCHIP outreach approach. These states indicated that
separate outreach strategies are intended in part to overcome potential
enrollment barriers that may exist due to the perceived stigma of Medicaid
in their states.

The amount of state money allocated or spent on outreach for each program
also differed considerably. Among the states able to provide amounts for
both programs, two states indicated that more was allocated or spent for
SCHIP outreach than for Medicaid outreach. For example, Colorado estimated
$10,000 in Medicaid outreach funds and about $700,000 budgeted for SCHIP. In
contrast, Utah reported more spending for Medicaid outreach ($716,000) than
for SCHIP ($50,000). (Additional details on the outreach mechanisms and
states' spending on outreach are available in app. I.)

In many states in our sample, applying for Medicaid requires more
self-reported information, documentation from families, or both to determine
eligibility than for SCHIP. Although 7 of the 10 states use, or are moving
toward using, a joint application for Medicaid and SCHIP, the eligibility
determination requirements were often not the same for the two programs. In
fact, for Medicaid, most states required additional information,
documentation, or both that was not required for SCHIP. For example, two
states--Arkansas and Utah--required families to document assets for
Medicaid, but not for SCHIP. One state--Alabama--required income to be
documented for Medicaid, but not for SCHIP. In addition, two
states--Arkansas and New York--required in-person interviews for enrollment
in Medicaid, whereas SCHIP applications could be completed by mail.10 Of the
10 states, four states offered continuous eligibility--regardless of changes
in family income or circumstances--for SCHIP but not Medicaid, while one,
New York, offered it for Medicaid but not SCHIP. Recertification
requirements were more similar for the two programs than states' application
and eligibility requirements, although one state required an interview for
Medicaid but not SCHIP. (See app. II for additional details.)

While all of the states in our sample have established policies and
procedures to ensure that Medicaid-eligible individuals are enrolled in
Medicaid rather than SCHIP, the ease with which children were enrolled in
Medicaid varied. Some of the states used a central clearinghouse in which
Medicaid workers, other state employees, and/or private contractors
processed SCHIP and Medicaid applications jointly.11 In those states in
which the Medicaid and SCHIP staffs were located separately, the
applications were often transferred by mail. In three states--Alabama,
California, and New York--applicants with incomes below SCHIP requirements
were allowed to choose whether their application would be processed for
Medicaid.12 Additionally, in 6 of the 10 states--Alabama, Arkansas,
California, New York, Pennsylvania, and Utah--additional steps were required
to complete a Medicaid application. (See app. III for additional details.)

Our review of five optional benefits (dental, hearing, mental health,
prescription drugs, and vision) shows that while states' SCHIP programs
offer many of the same benefits as Medicaid, SCHIP programs place more
limits on these services than Medicaid programs do. Most commonly, mental
health and vision benefits are more limited under SCHIP than under Medicaid.
For mental health care, eight of the states in our sample limit the number
of outpatient visits or inpatient days allowed per year. Colorado does not
cover dental benefits under SCHIP, and seven states--Alabama, Arkansas,
Kansas, New York, North Carolina, Pennsylvania, and Utah--limit selected
dental services, primarily orthodontics. In addition, while all 10 of the
states in our sample cover hearing screening examinations, at least three
states place limitations on hearing services. For example, Arkansas' ARKids
First program does not provide hearing aids. Finally, four states in our
sample--Alabama, Colorado, New York, and North Carolina--have limitations on
all five of the optional benefits. (See app. IV for additional details.)

We provided HCFA and Medicaid and SCHIP program officials from the 10 states
in our sample an opportunity to comment on this report.

HCFA officials concurred with our findings. In doing so, HCFA stressed the
importance of outreach activities for both Medicaid and SCHIP programs and
noted guidance it had provided to states in an effort to simplify Medicaid
eligibility and better coordinate activities between SCHIP and Medicaid.
HCFA further said that, while variation exists across states with regard to
outreach mechanisms, progress has been made over the past few years. In
particular, HCFA believes that SCHIP outreach efforts have inspired Medicaid
outreach for the first time in many states. HCFA also stated that screening
and enrollment procedures could be accomplished more effectively in some
states, and that reviews of these procedures have been an important
component of HCFA's reviews of state programs. In addition, HCFA stated that
the differences between Medicaid and SCHIP application
procedures--specifically in-person interviews and additional reporting and
verification requirements--could be eliminated largely by states under
existing law. The full text of HCFA's comments appears in app. V.

HCFA and states' Medicaid and SCHIP program officials provided technical
comments and additional information, which we have incorporated where
appropriate.

As agreed with your office, we plan no further distribution of this report
until 7 days from its date of issue, unless you publicly announce its
contents. We will send copies of this report to the Honorable Nancy-Ann Min
DeParle, HCFA Administrator, and other interested parties, and we will make
copies available to others on request. If you or your staff have any
questions regarding this report, please contact me at (202) 512-7114 or
Carolyn Yocom at (202) 512-4931. Other contributors to this analysis were
Catina Bradley, JoAnn Martinez, and Deborah A. Signer.

Sincerely yours,

Kathryn G. Allen
Associate Director, Health Financing
and Public Health Issues

Medicaid and SCHIP Outreach Activities

The states in our sample employ a variety of outreach approaches to inform
families about the health coverage programs available and to assist them in
the application process. Such approaches range from toll-free hotlines to
radio and television advertisements to community involvement. More than half
of the state officials in our sample indicated that they have similar
outreach mechanisms in place for both programs. Despite the reported
similarities, however, the existence of similar outreach mechanisms for both
Medicaid and the State Children's Health Insurance Program (SCHIP) does not
necessarily illustrate the utility or effectiveness of the mechanisms in
place. For instance, while one state noted it maintained toll-free hotlines
for both programs, the phone lines differed considerably, with one
permitting callers to request that an application be sent to them by mail,
while the other instructs the caller to apply at the local county assistance
office. Other differences between Medicaid and SCHIP outreach include the
use of media such as radio and TV for SCHIP, as well as the existence and
use of SCHIP Internet sites that provide program information and, in some
instances, allow individuals to download applications.

A HCFA official informed us that the agency has been encouraging states to
combine outreach mechanisms for SCHIP and Medicaid. While efforts are
underway to coordinate Medicaid and SCHIP outreach, some differences exist
in the extent to which some states combine their Medicaid and SCHIP outreach
strategies (fig. 1).

Figure 1: Extent of Combined Outreach for Medicaid and SCHIP in 10 States

aThe responses generally reflect answers from both SCHIP and Medicaid
officials. However, where reported information varied in any way between
Medicaid and SCHIP, responses from SCHIP officials only are noted above, and
the differences are described in the footnotes below.

bAn Alabama Medicaid official indicated that some of the toll-free hotline
efforts and brochures are combined with SCHIP, given that the phone line
refers people to SCHIP and then mails out SCHIP brochures. Additionally,
Alabama Medicaid indicated that most community efforts are combined because
all Medicaid outreach workers provide information about both programs.

cA Colorado Medicaid official reported that some of the toll-free hotline
efforts and brochures are combined, while for school or community
involvement, Medicaid is not combined with SCHIP.

dUtah reported that it uses a mix of strategies in that some printed
material and information phone lines are combined, while others are not.

Source: GAO Survey of States, Mar. 2000.

Even when outreach efforts are not formally combined, advertising for one
program may also reach children eligible for the other program. For example,
Utah officials asserted that an outreach campaign targeting a SCHIP or
Medicaid population could not be confined to that discrete population.
According to these officials, a campaign targeting Medicaid will identify
children eligible for SCHIP, and outreach aimed at SCHIP families will
discover individuals potentially eligible for Medicaid. Therefore, outreach
strategies, whether distinct or combined, may reach families eligible for
either program. Medicaid and SCHIP officials in Kansas similarly indicated
that SCHIP advertising also reaches children who are eligible for Medicaid.
However, Kansas is beginning to streamline SCHIP and Medicaid into one
program under the same name. While the state is not currently coordinating
most outreach mechanisms between SCHIP and Medicaid, efforts are underway to
adopt a seamless approach.

In six states that reported separate outreach spending or allocations for
SCHIP and Medicaid, differences did exist in the extent to which they were
able to identify and report outreach efforts--and in the amounts of
spending. Some examples follow.

Two states indicated that more funds were available for SCHIP outreach than
for Medicaid. Colorado estimated $10,000 in state spending for Medicaid
outreach brochures, and about $700,000 budgeted for SCHIP. Pennsylvania
reported that $500,000 in state funds has been allocated for Medicaid
outreach compared to $808,250 in state funds for SCHIP.

Two states reported spending more for Medicaid outreach than for SCHIP. Utah
identified $716,000 for Medicaid outreach spending, which includes the cost
of outstationed workers who also process SCHIP applications. For SCHIP, the
state reported $50,000 in state spending on outreach.13 New York also
reported spending more for Medicaid once federal funds were added into the
total. In particular, the state reported spending $11.7 million in federal
funds associated with welfare reform for Medicaid outreach to children and
families; coupled with state spending of $1.2 million, Medicaid outreach
spending was much higher than SCHIP, which reported $3.38 million in state
spending for outreach.

Two states were able to provide data on outreach spending for only one
program. Alabama reported $359,738 in total SCHIP outreach spending, with
$77,380 in state spending, but indicated that such information on Medicaid
outreach is not currently available. Arkansas reported $400,000 in state
spending for its regular Medicaid program, but could not provide spending
amounts for its ARKids First program.

The remaining four states did not delineate spending within each program,
but rather provided a combined dollar figure for both Medicaid and SCHIP
outreach. For instance, California officials reported that the state spent
about $10 million relating to education and outreach for SCHIP and
Medicaid.14 Florida also provided a combined outreach figure of $550,000 in
state funds for both programs, Kansas reported $1.1 million for both
programs, and North Carolina indicated that the state spent more than $1.3
million in federal, state, and grant funds for SCHIP and Medicaid outreach,
$129,250 of which was state funding.

Application and Eligibility Determination

In addition to supporting combined outreach efforts, HCFA has been
encouraging states to combine Medicaid and SCHIP enrollment efforts as much
as possible. The agency reported providing technical assistance and has
issued guidance about ways to best accomplish the coordination of
enrollment. While 7 of the 10 states in our survey currently use, or are
about to use, a joint application, HCFA's monitoring visits to states also
emphasized the importance of looking beyond the joint application forms and
into the requirements associated with each program.15 In the 10 states we
surveyed, eligibility determination requirements for both information and
documentation were typically not the same for Medicaid and SCHIP.

Medicaid and SCHIP differ in some of their eligibility determination
requirements, mostly in requiring the state to verify self-reported
information for Medicaid applicants.

Both Medicaid and SCHIP allow applicants to self-report their income and
assets for purposes of eligibility determination. However, once an applicant
is determined eligible for Medicaid, states are required to have an income
and eligibility verification system that is used to verify an applicant's
income and resources by requesting information from other federal and state
agencies.16 States have the authority to eliminate asset tests for
Medicaid.17 SCHIP has no income or asset verification requirements. Social
Security numbers (SSN) are required for Medicaid applicants but not for
SCHIP applicants.18

The states in our survey generally required the same information about
income and age of the child for both programs. However, most states required
more information for Medicaid than for SCHIP on other items. For example,
Arkansas, Colorado, and Utah required information about assets for Medicaid,
but not for SCHIP. Two states--Alabama and Arkansas--required information
about the parent's SSN even when the parent was applying for a child, while
none of the states we surveyed required this information for SCHIP.19

Similarly, 5 of the 10 states required more documentation from families for
Medicaid than for SCHIP on one or more eligibility criteria. For example,
although most states required families to provide documentation of income
for both programs, Alabama required income to be documented for Medicaid,
but not for SCHIP. Alabama, New York, and Utah also required applicants for
Medicaid to document deductions from income, such as deductions for
childcare, while this was not generally required for SCHIP. Two states also
required documentation of assets for Medicaid but not for SCHIP (Arkansas
and Utah), and two states required documentation of the child's SSN for
Medicaid but not for SCHIP (Alabama and New York). (See fig. 2.) In some
cases, states have more than one Medicaid application and the documentation
requirements can vary significantly. For example, in addition to its joint
Medicaid/SCHIP application for children, Florida has a Medicaid application
for families that includes food stamps and cash assistance; using this
application requires documentation of income, assets, income deductions, and
SSNs, as well as an in-person interview. Utah, in addition to its shortened
Medicaid application for children, also has a more extensive application
form for families applying for Medicaid and other programs.

Figure 2: Additional Information and Documentation Required for Medicaid in
10 States

aAlabama Medicaid noted that it can sometimes obtain this information from
its state verification and exchange system.

bAccording to state officials, the application is not denied or held up if
the family does not provide this information.

cThe state requires this information only if the applicant is a noncitizen.

dThe state requires this information only if the parent is applying for
Medicaid.

eThe Florida responses in our table reflect requirements only for
applications submitted through the joint Medicaid and SCHIP application
process.

fIf the child is not a citizen or if citizenship is in question, the state
requires documentation of immigration status.

gSCHIP has more requirements than Medicaid.

hA North Carolina Medicaid official told us that the application is not held
up if this information is not provided.

iA Pennsylvania SCHIP official told us that citizenship documentation is
required for SCHIP only if citizenship is in question.

Source: GAO Survey of States, Mar. 2000.

The states' applications reflected several strategies for handling the
different requirements for eligibility determination under the two programs.
State strategies included (1) requiring additional follow-up from
Medicaid-eligible applicants (for example, Alabama, New York, Pennsylvania,
and Utah); (2) asking SCHIP applicants for information not required by the
program (for example, Colorado's application asks for asset information,
although asset information was required only for Medicaid; and Alabama,
Arkansas, and Colorado applications ask for both the child's and parent's
SSNs); (3) indicating that some questions were optional (for example,
California's joint application indicates that SSNs are not required for
SCHIP); and (4) indicating that some sections of a joint application related
to only one program (for example, Colorado).

Of the 10 states, four offered continuous eligibility for both Medicaid and
SCHIP (Alabama, Florida, Kansas, and North Carolina).20 Five other states
offered continuous eligibility for SCHIP but not Medicaid (Arkansas,
California, Colorado, Pennsylvania, and Utah), while New York offered it for
Medicaid but not for SCHIP. Most states provided for 12 months of continuous
eligibility when it was offered, except in Florida, where Medicaid children
under age 5 had 12 months of continuous eligibility and Medicaid children
over age 5 and all SCHIP children had 6 months of continuous eligibility.

Under current Medicaid law, without the continuous eligibility option,
states must recertify the eligibility of a Medicaid beneficiary whenever the
beneficiary's financial circumstances change.21 Recertification requirements
for Medicaid and SCHIP were more similar in the states we surveyed than
application and eligibility requirements. Nine states required
recertification after 12 months for both programs. Florida required
recertification after 12 months for Medicaid and after 6 months for SCHIP.
The most common methods for recertification involved mailing a form or a new
application, but New York also required an interview for Medicaid
recertification but not for SCHIP. Nearly all states required information
about income for Medicaid and SCHIP; several states required information
about income deductions, primarily for Medicaid. Arkansas and Utah required
information about assets for children applying for Medicaid. Alabama's
Medicaid program also required information about the child's and parent's
SSNs, citizenship, and age of the child.

Screening and Enrollment

While all of the states in our sample have established policies and
procedures to assure that Medicaid-eligible individuals are enrolled in
Medicaid rather than SCHIP, the ease with which children were enrolled in
Medicaid varied. Some of the states used a central clearinghouse in which
Medicaid workers, other state employees, and/or private contractors
processed SCHIP and Medicaid applications jointly. Six states--Colorado,
Florida, Kansas, North Carolina, Pennsylvania, and Utah--implemented a
variety of approaches to ensure that Medicaid-eligible applicants were
automatically enrolled in or referred to Medicaid. For example, Kansas and
North Carolina utilized an eligibility system that simultaneously screens
and enrolls children in Medicaid or SCHIP. Even though Pennsylvania does not
have one standard SCHIP application, the state has evoked an "any form is a
good form" policy, whereby it transfers all applications for Medicaid
eligibility determination. In Utah, the SCHIP program contracted with the
state Medicaid agency to determine Medicaid and SCHIP eligibility and to
enroll applicants in the appropriate program.22 Three states--Alabama,
California, and New York--allowed applicants the option of not being
enrolled in Medicaid.23 The remaining state, Arkansas, required applicants
to submit separate applications for Medicaid. (See table 1.)24

Table 1: Enrollment Practices for Medicaid and SCHIP in 10 States

              If SCHIP applicant appears
              Medicaid-eligible
                                                         Additional steps
 States       Automatic     Notification of Applicant    required for
              enrollment in potential       can          Medicaid
              Medicaid      Medicaid        "opt-out" of
                            eligibility     Medicaid
                                                         Documentation,
 Alabama                                    X
                                                         telephone
                                                         interview
                                                         New application
                                                         (ConnectCare),
 Arkansas                   Xa                           documentation,
                                                         appear for an
                                                         interview
                                                         Self-reported
 California                                 X            information,
                                                         documentationb
 Colorado     X                                          None
 Florida                    X                            None
 Kansas       X                                          None
                                                         New application
                                                         for Medicaid,
 New York                                   Xc           documentation,
                                                         appear for an
                                                         interviewd
 North
 Carolina     X                                          None
                                                         Self-reported
 Pennsylvania               X                            information,
                                                         documentation
                                                         Self-reported
 Utah                       X                            information,
                                                         documentation

aIn Arkansas, the individual must submit a separate application for
Medicaid.

bCalifornia commented that in the event the entire joint Medicaid/SCHIP
application is completed, no further documentation would be required.
However, the application indicates that some information is only necessary
for Medicaid; in the event an applicant was seeking SCHIP eligibility,
additional information and documentation would be required for Medicaid if
the applicant was deemed ineligible for SCHIP.

cUnder New York's new joint application, applicants will no longer be able
to opt-out of consideration for Medicaid.

dWhile New York will still require in-person interviews for Medicaid
eligibility determinations, it will ease the process through "facilitated
enrollment," which will begin in April 2000.

Source: GAO Survey of States, Mar. 2000.

Finally, some of the states in our sample reported that SCHIP screening and
enrollment policies have been an effective means of reaching
Medicaid-eligible children. For example,

ï¿½ Alabama reported that approximately 40,000 SCHIP applications were
referred for eligibility determination for Medicaid during the program's
first fiscal year,25

ï¿½ California reported that over 54,000 SCHIP applications were referred for
eligibility determination for Medicaid from April 1999 through March 2000,
and

ï¿½ North Carolina reported enrolling approximately 37,000 children into the
Medicaid program for state fiscal year 1999.

Benefits

SCHIP limitations on benefits represent a departure from those offered to
children under Medicaid, primarily because of Medicaid's Early and Periodic
Screening, Diagnostic, and Treatment (EPSDT), which covers any service or
item that is medically necessary. While nine of the states in our sample
cover all five of the selected optional benefits (prescription drugs, and
vision, mental health, hearing, and dental services) many of those services
are covered on a limited basis. (See table 2.) For example,

ï¿½ Colorado does not cover dental benefits under SCHIP and seven
states--Alabama, Arkansas, Kansas, New York, North Carolina, Pennsylvania,
and Utah--limit dental services, primarily orthodontics.

ï¿½ Similarly, a number of states place limitations on vision and hearing
benefits. Most commonly, states limit the number of eyeglasses or hearing
aids allowed per year.

ï¿½ Four states--Alabama, Colorado, New York, and North Carolina--have service
limits on all five benefits. However, a North Carolina SCHIP official
asserted that its Medicaid and SCHIP benefit limitations are essentially the
same because the state uses an internal review process for SCHIP children to
determine whether service needs that are beyond the scope of coverage cited
below are medically necessary.

Table 2: SCHIP Coverage Limitations on Optional Benefits in 10 States

Continued

 Optional benefits       State      Coverage limits on benefits for SCHIPa

                    Alabama         Require generic unless no equivalents
                                    are available
                    Arkansasa       No limitations cited
                    California      No limitations cited

                    Colorado        Require generic unless no equivalents
                                    are available
                                    Require generic unless no equivalents
                    Floridab        are available or brand name is
 Prescription drugs                 medically necessary
                    Kansasc         No limitations cited

                    New York        Medically necessary prescriptions only;
                                    no experimental drugs

                    North Carolina  USDA-approved drugs only; no
                                    experimental drugs
                    Pennsylvania    No limitations cited

                    Utah            Medically necessary prescriptions only;
                                    no experimental drugsd
                    Alabama         One exam and one set of glasses/year
                    Arkansas        One exam and one set of glasses/year
                    California      One set of glasses or contacts/year

                    Colorado        $50 annual maximum toward purchase of
                                    vision hardware
                    Floridab        One set of glasses every 2 years
 Vision
                    Kansasc         No limitations cited
                    New York        One set of glasses/yeare
                    North Carolina  One set of glasses or contacts/year
                    Pennsylvania    Two sets of glasses/year

                    Utah            One exam every 24 months for eye
                                    refractions, examinations

                    Alabama         Inpatient: 30 days/year; outpatient: 20
                                    visits/year

                    Arkansas        No inpatient psychiatric care;
                                    outpatient limited to $2,500/year
                    California      No limitations cited

                    Colorado        Inpatient: 45 days/year; outpatient: 20
                                    visits/year

                    Floridab        Inpatient: 30 days/year; outpatient: 40
                                    visits/year
                    Kansasc         No limitations cited
 Mental health
                    New York        Inpatient: 30 days/year; outpatient: 60
                                    visits/year
                                    Prior approval needed for both
                                    inpatient and outpatient visits;
                    North Carolina  outpatient visits limited to 26
                                    visits/year; additional visits covered
                                    if approved in advance

                    Pennsylvania    Inpatient: 90 days/year; outpatient: 50
                                    visits/year

                    Utah            Inpatient: 30 days/year; outpatient: 30
                                    visits/year
                    Alabama         Screening and hearing aids only
                    Arkansas        Screening, no hearing aids
                    California      Screening and hearing aids

                    Colorado        Hearing screening and hearing aids up
                                    to $800/year
                    Floridab        Routine screening and hearing aids
 Hearing            Kansasc         No limitations cited

                    New York        One exam/yearf

                    North Carolina  Screening covered; prior approval is
                                    necessary for hearing aids
                    Pennsylvania    One hearing aid set per year

                    Utah            One exam every 24 months and hearing
                                    aids

                    Alabama         Two checkups/year with cleaning;
                                    $1,000/year maximum
                    Arkansas        No orthodontics
                    California      No limitations cited
                    Colorado        Not covered

 Dental             Floridab        No limitations cited
                    Kansas          No orthodontics
                    New York        No orthodontics
                    North Carolina  No pulling of impacted teeth
                    Pennsylvania    No cosmetic or orthodontics
                    Utah            No orthodontics, crowns, or root canals

aFor Arkansas, the benefit limitations cited in this table are for the
ARKids First program, which is separate from the state's regular Medicaid
program. The benefit package for Arkansas' SCHIP Medicaid expansion program
is the same as Medicaid's.

bBenefits for Florida's Healthy Kids program are reflected in the table. The
state's MediKids program and the Children's Medical Services Network for
children with special health care needs use Medicaid benefits.

cWhile there are no apparent limitations on prescription drugs, vision,
mental health or hearing for Kansas SCHIP, the medical services must be
deemed medically necessary by the managed care contractors.

dUtah's SCHIP plan language explicitly states that the fact that the
provider may prescribe, order, recommend, or approve a prescription drug,
service, or supply does not, of itself, make it an eligible benefit, even
though it is not specifically listed as an exclusion. A prescription must be
medically necessary regardless of the relief the drug provides for a medical
condition.

eNew York supplies additional lenses and frames if medically necessary.

fNew York provides additional exams for hearing deficiencies.

Comments From the Health Care Financing Administration

(201050)

Table 1: Enrollment Practices for Medicaid and SCHIP in 10
States 22

Table 2: SCHIP Coverage Limitations on Optional Benefits in 10
States 24

Figure 1: Extent of Combined Outreach for Medicaid and SCHIP
in 10 States 13

Figure 2: Additional Information and Documentation Required
for Medicaid in 10 States 18
  

1. The 10 states we reviewed are Alabama, Arkansas, California, Colorado,
Florida, Kansas, North Carolina, New York, Pennsylvania, and Utah. Within
its Medicaid program, Arkansas has two distinct components: ConnectCare and
ARKids First. The state is hoping to use ARKids First as a SCHIP stand-alone
component. Arkansas has about 900 children enrolled in its SCHIP Medicaid
expansion as of fiscal year 1999.

2. For example, Medicaid requires that applicants provide the Social
Security number (SSN) of children who are applying for benefits, while SCHIP
does not.

3. Children ages 15-18 are generally covered if their family incomes are
below the state's cash assistance standard for families in effect on July
16, 1996.

4. See 42 U.S.C. sec. 1396a(a)(10)(A).

5. The EPSDT benefit is optional for the medically needy population, an
optional category of eligibility for individuals who generally have too much
income to qualify for Medicaid, but have "spent down" their income by
incurring medical and/or remedial care expenses. See 42 U.S.C. sec.
1396a(a)(10)(C). If a state chooses to provide one EPSDT service, it must
provide all EPSDT services to all medically needy individuals under age 21.

6. Recognizing the variability in state Medicaid programs, the statute
allows a state to expand eligibility up to 50 percentage points above its
existing Medicaid eligibility standard. For example, Connecticut covers
children up to 300 percent of the FPL for SCHIP.

7. As of April 7, 2000, 15 states had stand-alone SCHIP programs, 18 states
had combination programs, and 23 were expanding coverage exclusively through
Medicaid, according to HCFA. Most states chose stand-alone components for
additional control over expenditures. A state with a SCHIP stand-alone
component may limit its annual contribution, create a waiting list, or stop
enrollment once the funds it budgeted for SCHIP are exhausted. See
Children's Health Insurance Program: State Implementation Approaches Are
Evolving (GAO/HEHS-99-65, May 1999).

8. See sec. 2102(b)(3)(B) of the Social Security Act.

9. Continuous eligibility allows states to provide beneficiaries with
continuous enrollment in the Medicaid and SCHIP programs for up to 12 months
without requiring an eligibility redetermination. Using presumptive
eligibility, states have the option of extending immediate Medicaid or SCHIP
coverage to children until a formal determination of eligibility is made.

10. While in-person interviews will still be required for Medicaid, New York
plans to ease the process through "facilitated enrollment," which will begin
in April 2000. Funded by the state, facilitators in community-based settings
(such as hospitals, clinics, schools, and libraries) will be delegated the
authority to conduct the required face-to-face interviews. The intention is
to make it possible for families to be interviewed during hours convenient
to their work schedules, including evenings and weekends.

11. In contrast to SCHIP, which does not limit eligibility determination to
particular employees, state or county employees must make eligibility
determinations for Medicaid according to federal law.

12. Beginning in April 2000, New York's joint application will not allow
applicants a choice; referrals to and enrollment in the Medicaid program
will be automatic.

13. Utah indicated that there are significant costs that are not tracked
directly because outreach is considered an important component of the normal
way of doing business. For example, workers will go to health fairs and
other activities to provide information on Medicaid, SCHIP, and other
programs.

14. California further noted that total spending for the state's joint
outreach campaign is $21 million annually in state and federal funds.

15. The seven states in our survey with joint applications are Alabama,
California, Colorado, Florida, Kansas, New York, and North Carolina. At the
time of our study, New York was planning to begin using a joint application
statewide in April 2000; previously it had conducted a pilot test of a joint
application in New York City and other locations in the state. The remaining
three states have separate applications. Arkansas plans to implement a joint
application in July 2000. Pennsylvania contracts with seven different health
plans to administer SCHIP throughout the state, and each of the contractors
uses a different application. Utah SCHIP has a Medicaid addendum form for
applicants who appear Medicaid-eligible, although applicants may submit the
additional information needed for Medicaid in any format. According to HCFA,
the vast majority of states with stand-alone or combination programs rely on
joint applications.

16. See 42 CFR 435.940 through 435.965.

17. See sec. 1902(r)(2) and 1931 of the Social Security Act. If a state
dropped its asset requirement after March 31, 1997, and wants to claim
enhanced matching funds for eligible children as a result of this change, it
will need to ask about assets to determine which children are eligible for
the SCHIP-enhanced match.

18. Sec. 1137(a)(1) of the Social Security Act requires SSNs to be supplied
only by Medicaid applicants and recipients. On September 10, 1998, HCFA
issued guidance for states that reiterated these requirements and noted that
SSNs of nonapplicant relatives are not required.

19. Alabama Medicaid officials noted that they do not deny a child's
application if the parent's SSN is not provided, but that they prefer to
have it to verify family income.

20. Continuous eligibility allows an applicant to remain eligible for
Medicaid, regardless of any changes in circumstances, for a specified period
of time.

21. Recertification requires applicants to report any changes in financial
circumstances to the Medicaid or SCHIP program, in contrast to continuous
eligibility.

22. Utah has a Medicaid addendum form for the SCHIP application for
applicants whose family income is in the state's eligibility range for
Medicaid. The applicants may submit the additional information in any
format. If this information is not provided, the application cannot be
considered for either SCHIP or Medicaid.

23. New York's joint application will make referrals to the Medicaid program
automatic.

24. While Arkansas is working on a combined form, the state currently has
separate applications for its ARKids First program, which covers
Medicaid-eligible children, and ConnectCare, which covers Medicaid-eligible
children and adults. In the event that an ARKids First applicant appears to
be eligible for ConnectCare, he or she is notified and sent an application.
The applicant may apply for ConnectCare or instead choose to enroll in the
ARKids First component of the state's Medicaid program.

25. Alabama implemented its SCHIP program in February 1998.
*** End of document. ***