Department  of Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
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>  OEI-O4-91-O1O5O  OFFICE  OF  INSPECTOR  GENERAL 
The  mission  of the  Office of Inspector  General  (OIG),  as mandated  by Public  Law 95-452, as 
amended,  is to protect  the  integrity  of the  Department  of Health  and Human  Services (HHS) 
programs  as well as the  health  and welfare  of beneficiaries  served  by those  programs.  This 
statutory  mission  is carried  out  through  a nationwide  network  of audits,  investigations,  and 
inspections  conducted  by three  OIG  operating  components:  the  Office of Audit  Services,  the 
Office of Investigations,  and the  Office of Evaluation  and Inspections.  The  OIG  also informs 
the  Secretary  of HHS  of program  and management  problems  and recommends  courses  to 
correct  them. 
OFFICE  OF  AUDIT  SERVICES 
The  OIGS Office of Audit  Services  (OAS)  provides  all auditing  services  for HHS,  either  by 
conducting  audits with its own audit  resources  or by overseeing-audit  work done  by others. 
Audits  examine  the  performance  of HHS  programs  and/or  its grantees  and contractors  in 
carrying out  their  respective  responsibilities  and are intended  to provide  independent 
assessments  of HHS  programs  and operations  in order  to reduce  waste,  abuse,  and 
mismanagement  and to promote  economy  and efficiency throughout  the  Department. 
OFFICE  OF  INVESTIGATIONS 
The  OIGS  Office of Investigations  (01)  conducts  criminal,  civil, and administrative 
investigations  of allegations  of wrongdoing  in HHS  programs  or to HHS  beneficiaries  and of 
unjust  enrichment  by providers.  The  investigative  efforts  of 01  lead to criminal  convictions, 
administrative  sanctions,  or civil money  penalties.  The  01  also oversees  State  Medicaid  fraud 
control  units which investigate  and prosecute  fraud and patient  abuse  in the  Medicaid  program. 
OFFICE  OF  EVALUATION  AND  INSPECTIONS 
The  OIGS Office of Evaluation  and Inspections  (OEI)  conducts  short-term  management  and

program  evaluations  (called  inspections)  that  focus on issues of concern  to the  Department,

the  Congress,  and the  public.  The  findings and recommendations  contained  in these  inspection

reports  generate  rapid,  accurate,  and up-to-date  information  on the efficiency, vulnerability,

and effectiveness  of departmental  programs.

OEIS Atlanta  Regional  Office prepared  this report  under  the direction  of Jesse  J. Flowers,

Regional  Inspector  General,  and Christopher  Koehler,  Deputy  Regional  Inspector  General.

Principal  OEI  staff included:

ATWINTA  REGION  HEADQUARTERS

Betty  Apt,  Project  Leader  Cathaleen  Ahern

Joe  Townsel  Wm. Mark  Krushat,  SC.D.

Peggy Daniel 
Jacqueline  Andrews 
For  additional  copies  of this report,  please  contact  the Atlanta  Regional  Office  at 404-331 -
5022.  EXECUTIVE  SUMMARY 
PURPOSE 
To  determine  the  extent  State  Medicaid  agencies  pay  employer  group  health  plan 
insurance  premiums  for  Medicaid-eligible  individuals. 
BACKGROUND 
Expenditures  for  Medicaid  benefits  have  grown  dramatically  in  recent  years.  From 
Calendar  Year  1989  through  1991,  Federal  and  State  spending  rose  49 percent, 
increasing  from  $59  billion  to  $88  billion. 
The  rate  of growth  in Medicaid  expenditures  is a major  concern  to  both  Federal  and 
State  governments.  Both  areseeking  ways  to  curb  spending.  Onemethodis  to  pay 
private  health  insurance  premiums  for  Medicaid-eligible  individuals.  Under  this 
method,  private  insurance  becomes  the  primary  payer  for  medical  services  and 
Medicaid  becomes  the  secondary  payer. 
J%rcha.nngEmployer  Group  Health  Plan  Insurance  for  Medicaid  Rectpienfi 
Effective  January  1, 1991,  Section  1906  of the  Social  Security  Act  mandated  State 
Medicaid  agencies,  when  cost  effective,  to  pay  premiums  for  employer  group  health 
plan  (EGHP)  insurance  for  Medicaid-eligible  individuals.  Individuals  must  enroll  in 
the  EGHP  as  a condition  of Medicaid  eligibility  when  a State  determines  it is cost 
effective  for  them  to  do  so.  Section  1906  also  requires  that  States  use  EGHP  fee 
schedules  rather  than  Medicaid  fee  schedules  when  paying  deductibles  and 
coinsurance. 
We  surveyed  the  50 States  and  District  of Columbia  to  determine  State  practices  for 
paying  EGHP  premiums.  We  completed  our  data  collection  April  30,  1993. 
FINDINGS 
Most  States  have  not purchased  EGHP  insurance  for  iWedicaid-eligMe  individual 
  Eighteen  States  had  paid  EGHP  premiums  for  Medicaid-eligible  individuals. 
	 Only  1 of the  18 States  that  paid  EGHP  premiums  also  used  the  EGHP  fee 
schedule  to  pay  deductibles  and  coinsurance. 
  One  State  had  begun  a pilot  program,  but  had  not  yet  purchased  insurance. 
	 Thirty  States  had  not  implemented  Section  1906  at  all,  and  two  States  did  not 
respond  to  our  survey. 
1  Substantial  savings  rex.dt from  pu~hasing  EGHP  insurance  for  Medicaid-eli@le 
individual 
Seven  of  the  18 States  that  purchased  EGHP  insurance  had  conducted  cost/benefit

analyses.  Officials  from  five  of the  seven  reported  a savings  of about  $2.7  million

resulting  from  private  insurance  companies  having  paid  for  medical  care  that

otherwise  would  have  been  paid  by Medicaid.  Of  the  remaining  two  States,  one

reported  saving  $24  for  every  $1 spent,  and  the  other  saved  about  $12  for  every  $1

spent.

We  estimated  that  $32,000,000  in Federal  and  State  Medicaid  funds  could  be  saved

annually  if all  States  purchased  EGHP  insurance  for  Medicaid-eligible  individuals

when  cost  effective  to  do  so.  We  based  our  estimate  on  cost/benefit  figures  provided

by four  of the  seven  States  that  had  conducted  cost/benefit  analyses.  Data  from  the

other  three  States  were  not  complete  enough  to  use  in our  calculations.  We

calculated  a weighted  average  savings  per  person  per  year  for  the  four  States  and

determined  the  four  States  ratio  of savings  to  Medicaid  recipients.  We  then  used  that

ratio  to  compute  potential  savings.

Compliance  with  current  legidation  could  reduce potential  savings  resulting from  EGHP 
insurance 
Seventeen  of  the  18 States  that  purchased  EGHP  insurance  for  Medicaid-eligible 
individuals  did  not  use  the  EGHP  fee  schedule  to  pay  deductibles  and  coinsurance. 
Instead,  they  used  their  established  Medicaid  fee  schedules.  They  did  so because  (1) 
the  EGHP  fee  schedule  is higher  (more  costly  to  Medicaid)  than  State  Medicaid  fee 
schedules,  and  (2)  using  the  EGHP  fee  schedule  would  require  unnecessarily  high 
administrative  expense. 
RECOMMENDATIONS 
We  have  two  recommendations  that  could  increase  cost  savings  from  EGHP, 
1.	 The  Health  Care  Financing  Administration  (HCFA)  should  continue  to  strongly 
support  States  implementing  Section  1906  of the  Social  Security  Act.  HCFA 
can  do  so  by transferring  technology  horn  States  that  have  developed  systems 
and  procedures  for  1906  programs  to  States  without  such  systems  and 
procedures. 
2.	 HCFA  should  propose  legislation  that  allows  States  to  pay  EGHP  deductl%les 
and  coinsurance  using  Medicaid  fee  schedules  rather  than  EGHP  fee  schedules. 
ii  AGENCY  COMMENTS 
The  Assistant  Secretary  for  Management  and  Budget  (ASMB)  and  the  HCFA 
Administrator  commented  on  our  draft  report. 
ASMB  remarked  that  HCFAS  Office  of the  Actuary  estimated  $230  million  in 
Medicaid  savings  in  1994  if States  purchased  EGHP  insurance  for  eligible  individuals 
when  cost  effective.  The  methodologies  used  for  HCFAS  estimated  savings  and  our 
estimate  differ,  and  both  have  limitations.  Our  estimate  is based  on  actual  experiences 
of four  States.  It is possible  that  those  States  are  different  in some  important  ways 
from  the  rest  of the  nation.  HCFAS  estimate  is based  on  census  data  and  certain 
assumptions  about  the  extent  to  which  Medicaid  recipients  have  access  to  EGHP 
insurance  that  is cost  effective  for  States  to  purchase.  Therefore,  HCFAS  estimate 
represents  theoretical  savings. 
HCFA  agreed  with  our  recommendation  that  they  should  continue  to  strongly  support 
States  implementation  of Section  1906.  However,  they  deferred  comment  on  our 
recommendation  that  HCFA  should  propose  a legislative  change,  noting  that  the 
requirements  of Section  1906  of the  Social  Security  Act  may  change  under  the 
proposed  health  reform  plans  Congress  is presently  considering.  We  believe  HCFA 
should  closely  watch  legislative  activity,  and  at  the  appropriate  opportunity,  propose 
the  necessary  legislative  change  if it is not  superseded  by  the  broader  legislative 
reform.  Revising  legislation  would  likely  be  an  incentive  for  States  to  implement  an 
EGHP  program. 
... 
111  TABLE  OF  CONTENTS

EXECUTIVE  SUMMARY 
INTRODUCTION  .  . . . . . . . . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1 
FINDINGS 
Few  States  Purchased  EGHP  Insurance  . . . . . . . . . . . . . . . . . . . . . . . . . . . ...4 
Substantial  Savings  Resulted  from  Purchasing  EGHP  Insurance  . . . . . . . . . . . .  6 
Current  Legislation  Could  Reduce  Potential  Savings  . . . . . . . . . . . . . . . . . . . .  8 
RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 
AGENCY  COMMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ...11 
TABLE 
1.  States  Paying  Private  Insurance  Premiums  . . . . . . . . . . . . . . . . . . . . . . . . . . ..4 
APPENDICES 
Profile  of  States  Paying  Premiums  for  EGHP  . . . . . . . . . . . . . . . . . . . . . . . .  A-1 
Projected  Savings  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..  B-1 
Agency  Comments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..  C-1  INTRODUCTION

PURPOSE 
To  determine  the  extent  State  Medicaid  agencies  pay  employer  group  healths  plan 
insurance  premiums  for  Medicaid-eligible  individuals. 
BACKGROUND 
Medicaid  &ogram 
The  Medicaid  program,  authorized  by Title  XIX  of the  Social  Security  Act,  provides

health  care  coverage  for  specified  individuals  who  have  low  incomes  and  few  assets.

States  administer  the  Medicaid  program  under  Federal  laws  and  guidelines.

Generally,  States  pay  health  care  providers  who  treat  and  provide  care  to  Medicaid-

eligible  individuals.  States  set  their  own  fee  schedule,  or  payment  rate,  for  medical

services  provided  to  Medicaid-eligible  individuals.  Health  care  providers  who  accept

Medicaid-eligible  patients  agree  to  treat  them  for  the  rate  established  by a State.

The  Federal  government  pays  a percentage  of Medicaid  benefits,  based  on  a States

per  capita  income.  Generally,  poorer  States  receive  a larger  Federal  contribution  than

affluent  States.  In Fiscal  Year  1993,  the  Federal  share  ranged  from  50 percent  to  79

percent.  Within  the  Department  of Health  and  Human  Services,  the  Health  Care

Financing  Administration  (HCFA)  has  Federal  responsibility  for  Medicaid.

Concern  Over Medicaid  Cosb 
Expenditures  for  Medicaid  benefits  have  grown  dramatically  in  recent  years.  From 
Calendar  Year  1988  through  1991,  Federal  and  State  spending  rose  49 percent, 
increasing  from  $59  billion  to  $88  billion.l 
The  rate  of growth  in Medicaid  expenditures  is a major  concern  to  both  Federal  and 
State  governments.  Both  are  seeking  ways  to  curb  spending.  One  method  is to  pay 
private  health  insurance  premiums  for  Medicaid-eligible  individuals.  Under  this 
method,  private  insurance  becomes  the  primary  payer  for  medical  services  and 
Medicaid  becomes  the  secondary  payer. 
Health  Care  Financing  Administration,  HCE4  1992 Statistics,  September 1992 
1  Purchastng Wvate  Iksurance  for  Medicaid  Reapients 
Two  sections  of  the  Social  Security  Act  allow  States  to  use  Medicaid  funds  to  pay 
private  insurance  premiums  for  Medicaid-eligiile  individuals. 
For  several  years,  Section  1905(a)  of the  Social  Security  Act  has  allowed  States  to  use 
Medicaid  funds  to  pay  a Medicaid  recipients  private  insurance  premiums.  States  may 
choose  this  option  when  a Medicaid-eligible  individual  is expected  to  have  high 
medical  costs.  When  States  choose  this  option,  private  insurance  pays  for  the  majority 
of medical  care,  and  Medicaid  pays  the  amount  that  exceeds  the  third  partys  liability 
up  to  the  Medicaid  rate.  States  use  their  established  Medicaid  fee  schedule  to 
determine  the  amount  they  will pay  toward  the  difference. 
The  Omnibus  Budget  Reconciliation  Act  of  1990  established  Section  1906  of the 
Social  Security  Act.  Effective  January  1, 1991,  Section  1906  required  State  Medicaid 
agencies,  when  cost  effective,  to  pay  premiums,  deductibles  and  coinsurance  for 
employer  group  health  plan  (EGHP)  insurance  for  Medicaid-eligible  individuals. 
Individuals  must  enroll  in  an  EGHP  as  a condition  of Medicaid  eligibility  when  a State 
determines  it is cost  effective  for  them  to  do  so.  When  a non-Medicaid-eligible  family 
member  must  be  enrolled  in an  EGHP  in order  for  the  Medicaid-eligible  member  to 
receive  coverage,  the  State  must  pay  the  premiums  (not  deductibles  and  coinsurance) 
for  the  non-eligible  member.  Section  1906  also  required  that  States  use  an  EGHP  fee 
schedule  rather  than  their  established  Medicaid  fee  schedule  when  paying  deductibles 
and  coinsurance. 
States  still  have  the  option  of following  the  payment  guidelines  of Section  1905(a)  and 
pay  premiums  for  insurance  other  than  EGHP--for  example,  Medicare  supplements 
and  cancer  policies.  States  may  pay  EGHP  premiums  and  use  the  Section  1905(a) 
payment  guidelines  if they  have  determined  it is not  cost  effective  to  use  Section  1906 
guidelines. 
tirchasihg  l?nvate Ikwrance  For Non-Medicaid  Recipients 
A  third  part  of  the  Social  Security  Act,  Section  1902,  allowed  States  to  use  Medicaid 
funds  to  pay  EGHP  premiums  for  non-Medicaid-eli@de  individuals. 
The  Consolidated  Omnibus  Budget  Reconciliation  Act  (COBRA)  of  1985  required 
employers  to  provide  individuals  an  opportunity  to  continue  their  group  health 
insurance  when  they  leave  employment  or  reduce  hours  of  employment.  Under 
Section  1902,  States  can  pay  EGHP  insurance  remiums--but  not  deductibles  and 
1?
coinsurance--for  certain  low  income  individuals  when  they  consider  it cost  effective. 
States  may  use  this  option  to  purchase  EGHP  insurance  for  individuals  who  (1)  have 
21ndividuals who are  not eligible  for Medicaid,  but have incomes  below  the poverty  level and assets 
less than  twice the maximum  allowed  for Supplemental  Security  Income  (SS1) eligibility. 
2  health  problems  that  are  expensive  to  treat,  and  (2)  are  likely  to  become  Medicaid-
eligible  in the  future. 
SCOPE 
This  report  focuses  on  the  extent  that  State  Medicaid  agencies  (1)  purchase  EGHP 
insurance  for  Medicaid-eligible  individuals  when  cost  effective  to  do  so,  and  (2)  pay 
deductibles  and  coinsurance  at  the  EGHP  rate.  We  surveyed  all  50 States  and  the 
District  of Columbia  to  identify  any  private  insurance  States  purchased  with  Medicaid 
funds  in  State  Fiscal  Year  (FY)  1992.  This  report  reflects  what  States  told  us  they 
were  doing  as  of April  30,  1993.  We  did  not  conduct  a compliance  review. 
METHODOLOGY 
We  mailed  a standardized  questionnaire  to  all  51 jurisdictions  on  July  15,  1992.  A 
total  of 49  States  returned  completed  questionnaires  by December  1992.  As  needed, 
we  conducted  telephone  interviews  with  State  Medicaid  staffs  to  obtain  clarification 
and  elaboration  on  responses  to  the  mailed  questionnaire.  Florida  and  Ohio  did  not 
respond  to  the  survey. 
To  review  State  program  operations,  we visited  two  State  agencies  that  reported  they 
had  implemented  Section  1906.  One  State,  Iowa,  implemented  the  program  in July 
1991.  The  other  State,  New  York,  implemented  a program  making  it mandatory  to 
pay  insurance  premiums  in  1982--nine  years  prior  to  the  enactment  of Section  1906. 
We  interviewed  staffs  from  HCFA  and  the  American  Public  Welfare  Association 
(APWA)  to  get  their  opinion  on  State  implementation  of Section  1906.  APWA  is an 
advocacy  group  representing  State  welfare  and  Medicaid  agencies. 
We  conducted  this  inspection  in accordance  with  the  Quali~  Standards  for  Inspections 
issued  by  the  Presidents  Council  on  Integrity  and  Efficiency. 
3For convenience  in summarizing  survey results,  we counted  the District  of Columbia  as a 51st 
State. 
3
 FINDINGS

MOST  STATES  HAVE  NOT  PURCHASED  EGHP  INSURANCE  FOR 
MEDICAID-ELIGIBLE  INDIVIDUALS 
Section  19060fthe  Social  Security  Act  required  State  Medicaid  agencies,  when  cost 
effective,  to  pay  (1)  EGHP  premiums,  and  (2)  deductibles  and  coinsurance  using 
EGHP  fee  schedules. 
	 Eighteen  States  paid  EGHP  insurance  premiums  for  Medicaid-eligible 
individuals.  One  other  State  had  implemented  a pilot  EGHP  program,  but  had 
not  paid  any  premiums  (see  Table  lj.  Appendix  A shows  a piofiie  of each  of 
the  19 States. 
	 Only  1 of the  18 States  that  paid  EGHP  insurance  premiums  also  used  the 
EGHP  fee  schedule  to  pay  deductibles  and  coinsurance.  The  other  17 States 
used  their  Medicaid  fee  schedules  when  paying  coinsurance  and  deductibles. 
Officials  from  2 of the  17 States  told  us  that  they  will  pay  deductibles  and 
coinsurance  at  the  EGHP  rate  if a provider  requests  it.  However,  at  the  time 
of our  study  no  providers  had  done  so. 
	 Thirty  States  had  not  implemented  Section  1906  at  all,  and  two  States  did  not 
respond  to  our  survey. 
TABLE  1

STATES  PAYING  EGHP  INSURANCE  PREMIUMS 
SZAZZ?  MEDIG41D  SZAZE  MEDICALD  SzrrE  MEDICAID 
mwpm~  RECIPIEJ@  RwIpml 
Alabama  2  Montana3
 202
 0regon3  1257 
Colorado  50  Nebraska
 40
 S. Carolina3  43 
Connecticut  29  Nevada
 5
 S. Dakota  1 
Idaho2  115  N. Hampshire-y
 33
 Tennessee  5 
Iowa3  1417  New Jers#
 77
 Vermon#  20 
Minnesota  3000  New Yorl$
 20,000
 Washington  199 
lApprommatenumberof MedicaidindividualscoveredunderSection1906.  VirginiahasanEGHP pi[otprogram 
underway. WeexcludedVirginiaji-omthetablebecausetheStatehad notyetbegunpayingpremiumsatthetime 
thk report wm writ~en. 
II
2Statethatroutinelypaysdeductiblesand coinsuranceusingEGHPfee schedules. 
3StatesthatalsopayinsurancepremiumsunderSection1905(a). Datafi-omNewJersey,New York andSouth 
Carolinadidnot distinguishnumberof individualscoveredbySections1905(a)and 1906. 
4
 7he  Extent  of EGHPInsurance  Coverage  Varied Among  States 
As  shown  by Table  1, the  number  of  individuals  for  whom  States  paid  EGHP  varied 
widely  among  States. 
Many  factors  can  contribute  to  the  variation  in purchasing  EGHP  insurance  among 
States.  For  example,  State  financial  condition  and  commitment  to  the  EGHP  program 
could  partly  account  for  the  differences  among  States.  While  we  did  not  compare  one 
State  to  another  in terms  of providing  EGHP  coverage,  we  observed  three  factors  that 
partly  accounted  for  extent  of EGHP  coverage  provided  in  a given  State. 
	 Date  of  Implementation  - At  the  time  of our  survey,  most  States  had  operated 
their  1906  programs  less  than  two  years.  To  start  programs,  States  usually  pay 
premiums  for  only  a few  individuals.  As  problems  are  identified  and  solved, 
States  begin  purchasing  insurance  for  more  individuals.  Thus,  States  with  older 
programs  usually  had  more  individuals  included. 
	 Dem-ee  of Automation  - States  that  have  computer  technology  to  perform 
functions  such  as  determining  cost  effectiveness  have  larger  EGHP  caseloads 
than  States  that  perform  such  functions  manually. 
	 Dem-ee  of Tar~etinR  Cases  - Some  States  target  EGHP  premium  payments  only 
for  individuals  they  know  will  have  high  medical  expenses,  such  as  pregnant 
women.  Other  States  determine  cost  effectiveness  of purchasing  EGHP  for  all 
individuals  who  are  entitled  to  EGHP  coverage. 
Reasons  for  Not  Purchmng  EGHP  Insurance 
Officials  in  18 of the  30 States4  (60  percent)  that  had  not  purchased  EGHP  insurance 
and  paid  deductibles  and  coinsurance  as  required  by Section  1906  said  they  did  not  do 
so because  of the  high  administrative  costs  and  lack  of resources. 
To  illustrate,  to  purchase  EGHP  insurance  and  pay  deductibles  and  coinsurance,  a 
State  must  first  determine  that  it is cost  effective  to  do  so  for  each  potentially  eligible 
person.  Several  State  officials  expressed  particular  concern  over  this  requirement. 
They  said  they  did  not  have  resources  to  obtain  automated  systems  for  determining 
cost  effectiveness.  Further,  doing  so  manually  is very  labor  intensive.  At  the  time  of 
our  inspection,  only  six of the  30 States  said  they  had  needed  automation  technology 
to  determine  cost  effectiveness  of purchasing  EGHP. 
To  determine  cost  effectiveness  of purchasing  EGHP,  a State  must  compare  the  cost 
and  potential  benefits  of purchasing  EGHP  to  the  average  Medicaid  cost  for  a person 
who  had  characteristics  (e.g.,  age,  gender,  class  of assistance)  similar  to  an  individual 
4Excludes  two States  that  did not  respond  to our survey. 
5  who  would  be  entitled  to  EGHP.  These  calculations  sometimes  include  examining  the 
medical  needs  of specific  individuals  which  may  require  reviewing  their  medical 
records  and  previous  insurance  claims.  This  analysis  indicates  the  potential  of  a State 
Medicaid  program  to  save  money  by purchasing  EGHP  insurance  for  a specific 
individual. 
State  officials  also  cited  several  other  cost  and  resource  needs  that  have  partly 
prevented  their  implementation  of an  EGHP  program.  They  noted  that  additional 
staff  and  system  resources  would  be  needed  to 
  pay  premiums  to  insurance  companies, 
  pay  premiums  to  individuals  when  premiums  are  withheld  from  wages, 
	 pay  premiums  for  non-Medicaid-eligible  individuals  in  order  to  enroll  Medicaid-
eligible  family  members, 
  update  Medicaid  recipient  files,  and 
	 redetermine  cost  effectiveness  of EGHP  when  premium  and  fee  schedules 
change. 
HCFA  is aware  that  States  are  experiencing  such  problems  implementing  EGHP 
programs.  To  assist  States  in  implementation,  HCFA,  in conjunction  with  APWA, 
conducted  a workshop  on  Section  1906  at  the  1991  National  Medicaid  Management 
Information  System  (MMIS)  / Third  Party  Liability  (TPL)  Conference.  The  1993 
National  Conference  included  three  workshops  in which  five  States  that  have 
implemented  EGHP  programs  shared  their  experiences.  In  1992,  HCFA  regional 
offices  conducted  conferences  for  the  States  in their  respective  regions.  Section  1906 
was  an  agenda  topic  at  each  regional  conference.  In  addition,  HCFAS  TPL  Trends 
newsletter  highlighted  Iowas  and  Idahos  EGHP  programs  in the  September  1992 
issue.  HCFA  continues  to  provide  technical  assistance  to  States  on  an  ongoing  basis 
and  is monitoring  State  performance  through  System  Performance  Reviews  and 
Management  Reviews. 
SUBSTANTIAL  SAVINGS  RESULT  FROM  PURCHASING  EGHP  INSURANCE 
FOR  MEDICAID-ELIGIBLE  INDIVIDUALS 
Officials  from  the  18 States  that  had  purchased  EGHP  insurance  for  Medicaid-eligible 
individuals  said  they  had  realized  substantial  savings.  The  savings  resulted  because 
private  insurance  companies  now  pay  for  medical  care  that  otherwise  would  have  been 
paid  by Medicaid.  Generally,  the  difference  between  what  Medicaid  would  have  paid 
for  medical  care  and  what  it did  pay  in EGHP  insurance  premiums  is considered  a 
savings  to  the  Medicaid  program. 
6
 Repotied  Savings  by States  with  EGHP  programs 
Seven  of the  18 States  that  purchased  EGHP  insurance  for  Medicaid-eligible

individuals  had  conducted  cost/benefit  analyses  of their  programs.  Officials  from  five

of the  seven  States  reported  about  $2.7  million  in savings  during  Fiscal  Year  1992.

The  remaining  two  States  had  not  computed  total  savings,  but  they  reported

substantial  cost  benefits  from  purchasing  EGHP  insurance  for  Medicaid-eligible

individuals.  One  reported  saving  $24  for  every  $1 spent,  and  the  other  about  $12  for

every  $1  spent.

Other  States  had  not  completed  cost/benefit  analyses,  but  they  provided  anecdotal

examples  indicating  substantial  savings.  One  State  Medicaid  official,  for  example,  was

in process  of completing  a cost/benefit  analyses.  This  official  had  already  identified

one  individual  for  whom  the  State  paid  EGHP  insurance  and  saved  $97,000.  This

savings  alone  almost  equaled  the  States  total  investment  in EGHP  insurance.

Potential  Savings  Resulting  jiom  a Nationwide  EGHP  I?rogram 
We  estimated  that  $32  million  in  Federal  and  State  Medicaid  funds  could  be  saved

annually  if all  States  purchased  EGHP  insurance  for  Medicaid-eligible  individuals

when  cost  effective  to  do  so.  (The  90  percent  confidence  interval  for  our  nationwide

estimate  of savings  is $15,736,000  to  $48,816,000.)  We  based  our  estimate  on  the

cost/benefit  figures  provided  by four  of the  seven  States  that  had  completed  cost/

benefit  analyses.  We  did  not  include  the  cost/benefit  studies  of the  other  three  States

in  our  analyses  because  they  did  not  have  adequate  information.  Specifically,  they  did

not  have  the  number  of months  that  they  had  purchased  EGHP  per  individual.  Thus,

we  could  not  use  their  EGHP  experience  in our  savings  calculation.

our  estimate  of $32  million  is a much  lower  estimate  than  the  estimate  prepared  by

the  HCFA  Office  of  the  Actuary.  HCFA  estimated  that  $230  million  savings  would

result  in  1994  from  purchasing  EGHP  insurance.  The  methodologies  used  for  HCFAS

estimated  savings  and  our  estimate  differ,  and  both  have  limitations.  Our  estimate  is

based  on  actual  experiences  in four  States.  It is possible  that  those  States  are

different  in some  important  ways  from  the  rest  of the  nation.  HCFAS  estimate  is

based  on  census  data  and  certain  assumptions  about  the  extent  to  which  Medicaid

recipients  have  access  to  EGHP  insurance  that  is cost  effective  for  States  to  purchase.

Appendix  B contains  (1)  our  methodology  and  assumptions  for  estimating  the  savings

that  would  result  from  a nationwide  EGHP  program,  and  (2)  a short  description  of

the  methods  HCFA  used  to  determine  savings.

7
 COMPLIANCE  WITH  CURRENT  LEGISLATION  COULD  REDUCE 
POTENTIAL  SAVINGS  RESULTING  FROM  EGHP  INSURANCE 
Currently,  Section  1906  of the  Social  Security  Act  requires  that  when  cost  effective, 
States  purchase  EGHP  insurance  for  Medicaid-eligible  individuals  and  use  an  EGHP 
fee  schedule  to  pay  deductibles  and  coinsurance.  However,  17 of the  18 States  that 
purchased  EGHP  insurance  for  Medicaid-eligible  individuals  in their  States  did  not  use 
the  EGHP  fee  schedule  as  required  to  pay  deductibles  and  coinsurance.  Instead,  they 
used  their  established  Medicaid  fee  schedules.  Thev  did  so  because  (1)  the  EGHP  fee 
.
schedule  is higher  (more  costly  to  Medicaid)  than  State  Medicaid  fee s~hedules,  and 
(2)  using  the  EGHP  fee  schedule  would  require  unnecessarily  high  administrative 
expense. 
The  following  hypothetical  example  shows  the  difference  in  Medicaid  cost  sharing 
obligations  using  an  EGHP  fee  schedule  and  a Medicaid  fee  schedule.  Further,  it 
shows  that  using  the  required  EGHP  fee  schedule  could  reduce  potential  savings 
resulting  from  purchasing  EGHP  insurance  for  Medicaid-eligible  individuals. 
A  medical  service  costs  $100.  The EGHP  allows  $100 for  the service  and 
pays  80 percent  ($80).  The States  Medicaid  fee  schedule  allows  $90 for 
the service. 
Using  the EGHPs  fee  schedule,  ~edicaidk  payment  for  the  coinsurance 
would  be  $20. 
$100  Allowed  by  EGHP  fee  schedule 
-~  Paid  by  Insurance 
$20  Medicaids  Payment  for  coinsurance 
Using the  Medicaid  fee  schedule,  Medicaidk  payment  for  the  coinsurance 
would  be $10. 
$90 Allowed  by  A4edicaids  fee  schedule 
-&  Paid  by  Insurance 
$10  Medicaids  Payment  for  Coinsurance 
Although  this  hypothetical  example  illustrates  a Medicaid  savings  of $10,  State  officials 
reported  much  greater  differences  usually  exist  between  the  Medicaid  and  EGHP  fee 
schedules.  Frequently  when  using  the  Medicaid  fee  schedule,  Medicaid  does  not  have 
any  cost  sharing  obligation.  This  situation  results  because  the  amount  paid  by  the 
EGHP  insurance  is sometimes  more  than  the  amount  allowed  by  a State  Medicaid  fee 
schedule. 
8
 State  officials  told  us the  administrative  costs  of  using  an  EGHP  fee  schedule  to  pay 
claims  for  deductibles  and  coinsurance  is prohibitive  because  those  claims  must  be 
paid  manually.  States  said  they  cannot  simply  add  EGHP  fee  schedules  to  their 
automated  systems.  State  systems  are  designed  for  the  State  Medicaid  fee  schedule. 
Those  systems  will  not  accommodate  EGHP  fee  schedules  which  vary  by  plan.  There 
is no  single  EGHP  fee  schedule  at  which  to  program  State  systems.  It is possible  for 
each  EGHP  policy  to  have  a different  fee  schedule.  Therefore,  a State  like  Minnesota 
may  need  a different  automated  program  for  each  policy  held  by  the  3000  recipients 
enrolled  in EGHPs.  If the  State  did  not  have  an  automated  system  to  process  EGHP 
claims  for  deductibles  and  coinsurance,  staff  would  have  to  process  EGHP  claims 
manually. 
9
 RECOMMENDATIONS

States  are  struggling  to  develop  ways  to  curb  the  escalating  costs  of Medicaid  benefits. 
Section  1906  programs  have  produced  savings  for  those  States  that  have  implemented 
them;  however,  170f  those  18 States  are  paying  deductibles  and  coinsurance  using 
Medicaid  fee  schedules.  If States  hadtobear  theadministrative  costs  ofusing  EGHP 
feeschedules,  thesavings  would  be  reduced.  Thecosts  ofstaying  abreast  of changes 
in EGHP  fee  schedules  and  paying  deductibles  and  coinsurance  manually  are 
prohibitive. 
Further,  using  EGHP  fee  schedules  could  create  inequitable  treatment  among 
Medicaid  recipients.  Higher  payments  would  be  made  for  those  recipients  for  whom 
States  pay  premiums  than  for  other  Medicaid  recipients.  Physicians  are  likely  to 
prefer  treating  Medicaid  recipients  for  whom  States  are  paying  EGHP  premiums  to 
get  the  higher  payment.  This  could  limit  the  choice  of providers  available  to  other 
Medicaid  recipients. 
As  more  States  implement  and  expand  1906  programs,  greater  Medicaid  savings  will 
be  realized.  We  have  two  recommendations  which  will  help  accomplish  this  objective. 
1.	 HCFA  should  continue  to  strongly  support  States  implementing  Section  1906  of 
the  Social  Security  Act.  They  can  do  so  by transferring  technology  from  States 
that  have  developed  systems  and  procedures  for  1906  programs  to  States 
without  such  systems  and  procedures. 
2.	 HCFA  should  propose  legislation  that  allows  States  to  pay  EGHP  deductibles 
and  coinsurance  using  Medicaid  fee  schedules  rather  than  EGHP  fee  schedules. 
10
 AGENCY  COMMENTS

The  Assistant  Secretary  for  Management  and  Budget  (ASMB)  and  the  HCFA 
Administrator  commented  on  our  draft  report.  Appendix  C shows  the  full  text  of their 
comments. 
ASMB  remarked  that  HCFAS  Office  of Actuary  estimated  much  larger  Medicaid 
savings  than  we  did  if States  purchased  EGHP  insurance  for  eligible  individuals  when 
cost  effective.  We  compared  HCFAS  methodology  for  estimating  savings  to  the 
methodology  we  used.  Both  methods  had  limitations.  We  revised  our  draft  report  to 
show  both  HCFAS  and  our  estimates  and  include  a comparison  of the  two 
methodologies.  (See  page  7 and  appendix  B.) 
HCFA  agreed  with  our  recommendation  that  they  should  continue  to  strongly  support 
States  implementation  of Section  1906.  However,  they  deferred  comment  on  our 
recommendation  that  HCFA  should  propose  a legislative  change,  citing  that  the 
requirements  of Section  1906  of the  Social  Security  Act  may  change  under  the 
proposed  health  reform  plans  Congress  is presently  considering.  We  believe  HCFA 
should  closely  watch  legislative  activity,  and  at  the  appropriate  opportunity,  propose 
the  necessary  legislative  change  if it is not  superseded  by the  broader  legislative 
reform.  Revising  legislation  would  likely  be  an  incentive  for  States  to  implement  an 
EGHP  program. 
In  response  to  HCFAS  technical  comments,  we  made  appropriate  revisions  to  the 
report. 
11
 APPENDIX  A

PROFILE  OF  STATES  PAYING  PREMIUMS  FOR  EGHP 
As  of April  30,  1993 
STATE  LENGTH  OF  DETERMINING  COST  EFFECIIVEITES!% 
(Approx.  No. In  TIME  WITH  BENEFTT 
1906 Program)  PROGRAM  HOW?  BY WHOM?  FOR?  STUDY 
Afabama  (2)  2 Years  Manually  State  Office  Recipients  Yes 
Colorado  (50)  2 Years  Computer  &  State  Office  Recipients  Yes 
Manually 
Connecticut  (29)  3 Years  Manually  State Office  Applicants  &  No 
Recipients 
Idaho  (115)  2 Years  Computer  &  State Office  Applicants  &  No 
Manually  Recipients 
Iowa (1417)  3 Years  Computer  &  State Office  Recipients  Planned 
Manually 
Minnesota  (3000)  3 Years  Manually  Local &  Applicants  &  Yes 
State Offices  Recipients 
Montana  (202)  2 Years  Manually  State  Office  Applicants  &  Yes 
Recipients 
Nebraska  (40)  2 Years  Computer  &  State  Office  Applicants  &  No 
Manually  Recipients 
Nevada  (5)  2 Years  Manually  State Office  Recipients  No 
New Hampshire  1 Year  Manually  Local &  Recipients  Yes 
(33)  State  Offices 
New Jersey  (77)  2 Years  Manually  State Office  Applicants  &  Yes 
Recipients 
New York (20,000)  3 Years*  Computer  &  Local  Applicants  &  No 
Manually  Offices  Recipients 
Oregon  (1257)  2 Years  Manually  Local &  Recipients  No 
State  Offices 
South  Carolina  (43)  2 Years  Manually  State Office  Applicants  &  Yes 
Recipients 
South  Dakota  (1)  2 Years  Manually  State  Office  Recipients  No 
Tennessee  (5)  2 Years  Manually  State  Office  Recipients  No 
Vermont  (20)  Over 2 Yrs.  Manually  State  Office  Recipients  No 
Virginia  Piloting Program  in Two Counties  -All Procedures  Not  Yet Developed 
Washington  (199)  Over 3 Yrs.  Computer  &  State  Office  Applicants  &  No 
Manually  Recipients 
*New York  has had a State  program  making it mandatory  to pay EGHP  premiums  since 1982. 
A-1
 APPENDIX  B

PROJECllZD  SAVINGS  IF  ALL  STATES  PURCHASE  AVAILABLE  EMPLOYER 
GROUP  HEALTH  PIAN  INSUR4NCE  FOR  MEDICAID-ELIGIBLE 
INDIVIDUALS 
OIG  Methodolo~ 
Introduction 
We  estimated  that  $32,276,000  in Federal  and  State  Medicaid  funds  could  be  saved 
annually  if all  States  purchased  employer  group  health  plan  (EGHP)  insurance  for 
Medicaid-eligible  individuals  when  cost  effective  to  do  so.  This  figure  includes  the 
amount  States  with  1906  programs  are  currently  saving.  We  based  our  estimate  on  a 
weighted  average  savings  of $22,168  per  person  per  year  in four  States. 
Methods  and  Resulti 
Using  documentation  furnished  by Alabama,  Colorado,  New  Jersey,  and  South 
Carolina,  we  estimated  a dollar  savings  attributable  to  EGHP  enrollment  on  a per 
person  per  year  basis.  Many  Medicaid  recipients  are  enrolled  for  periods  of less  than 
one  year.  Thus,  we  converted  the  data  to  a standard  rate  per  person  year  for 
comparison  purposes.  The  following  table  presents  the  data  we  used. 
STATE  MEDICAID  MONTHS  ESlTMATED  PER PERSON 
REcrPIENN  COVERAGE  SAVINGS  PER YEAR 
II Colorado  I  50  I  145  I  $104,612  I  $8,643  II 
New Jersey  66  467  $1,300,000  $33,405 
S. Carolina  43  237  $395,751  $20,038 
Alabama  2  34  $100,000  $35,294 
The  unweighed  average  of the  savings  per  person  per  year  is $24,345  (90  percent 
confidence  interval  -- $14,083  to  $34,606).  Using  the  number  of recipients  per  State, 
the  weighted  average  savings  per  person  per  year  is $22,168  (90  percent  confidence 
interval  -- $18,222  to  $26,114).  We  feel  a weighted  average,  especially  since  it is more 
conservative,  is more  appropriate  than  a simple  average  due  to  the  wide  distribution 
of the  number  of recipients  in  the  four  States.  (The  two  Alabama  recipients  represent 
only  one  percent  of the  weighted  data.) 
Each  of the  States  included  in our  analysis  showed  positive  savings  under  their 
respective  EGHP  programs.  However,  the  data  furnished  by the  States  showed 
B-1  significant  variation,  indicating  that  only  certain  segments  of their  respective  Medicaid 
populations  had  potential  for  EGHP  enrollment. 
The  Health  Care  Financing  Administrations  Medicaid  Bureau  furnished  data  on  the 
number  of full  year  and  part  year  recipients  and  benefit  payments  for  FY  1992.  We 
converted  that  data  to  person  years  of experience  nationally  and  for  the  four  States  we 
used  as  a basis  for  our  analyses.  We  assumed  that  the  savings  the  four  States  reported 
to  us  represented  all  of the  savings  they  achieved  for  one  full  fiscal  year.  We  further 
assumed  that  the  same  level  of savings  could  be  achieved  nationwide  as were  achieved 
in the  average  of  the  four  States  if all  States  had  an  EGHP  program. 
The  total  benefit  payments  for  FY  1992  were  $91.48  billion  for  27,754,493  person 
years  of  Medicaid  experience.  The  four  States  included  in  our  analyses  represented 
$5.82  billion  in  payments  and  1,634,097  person  years  experience.  Using  ratio  estimates 
of the  savings  per  person  years  experience,  we  calculated  that  $32,276,000  (90  percent 
confidence  interval  -- $15,736,000  to  $48,816,000)  might  be  saved  by the  Medicaid 
program  should  a similar  EGHP  program  be  instituted  nationwide. 
Concluskon 
Because  of the  variability  in the  number  of Medicaid  recipients  in  the  four  States,  the 
precision  estimate  of  our  national  savings  projection  is about  50 percent.  Potentially 
the  four  States  represent  a biased  subset  of the  Medicaid  population.  However,  we 
believe  our  analyses  provide  a reliable  estimate  of  potential  savings  in Medicaid 
through  the  EGHP  program. 
HCFA  Methodolo~ 
HCFAS  estimate  of $230  million  is based  on  census  data  and  certain  assumptions

about  the  extent  to  which  Medicaid  recipients  have  access  to  EGHP  insurance  that  is

cost  effective  for  States  to  purchase.  Therefore,  HCFAS  estimate  represents

theoretical  savings.

At  our  request,  HCFAS  Office  of Actuary  provided  the  following  description  of the

methodology  for  estimating  Medicaid  savings.

Data  from  the  Current  Population  Survey  (CPS)  and  National  Medical

Expenditure  Survey  (NMES)  were  used  to  estimate  the  fraction  of

Medicaid  recipients  having  access  to  employer-sponsored  insurance

(ESI)  but  not  currently  enrolled  in it:  about  3 percent  for  children  and

one-half  percent  for  adults  (including  the  disabled).  We  [HCFA]

B-2
 assumed  that  about  75 percent  of these  individuals  would  be  subject  to 
the  group  health  enrollment  requirements. 
Other  major  assumptions  include  the  following.  We  [HCFA]  assumed 
that  ESI  premium  rates  are  based  on  utilization  which  is 80-90  percent 
of that  of Medicaid  enrollees  for  adults  and  children  and  30-40  percent 
for  the  disabled,  and  that  employers  pay  about  60-80  percent  of these 
premiums  on  average.  Employee  cost  sharing  was  estimated  at  20 
percent,  and  the  ratio  of Medicaid  to  employer  plan  recognized  charges 
was  assumed  to  be  about  two-thirds. 
Clearly,  there  is a large  difference  between  the  OIG  and  HCFA  savings  estimates.

We  acknowledge  the  difficulties  inherent  in any  estimating  process  for  this  program.

In  any  event,  substantial  savings  can  be  achieved  through  stronger  implementation  by

the  States  of the  EGHP  provisions.

B-3
 APPENDIX  C 
AGENCY  COMMENTS 
Assistant  Secretary  for  Management  and  Budget 
Administrator,  Health  Care  Financing  Administration 
c-1  DEPARTMENT  OF HEALTH&  HUMAN  SERVICES  Officeof the%cmtafv 
20201 
WasMn@on,  D.C. 
41993 
Om 
, 
TO
 ..   Bryan  B.  Mitchell 
Principal  Deputy  InspectQr  General 
PROM  :  Kenneth  S.  Apfel 
Assistant  Secrets  agement  and  Budget 
mBJEcT  :  DRAFT  Report:  Medicaid Payments of Premiums for 
Employer Group Health Insurance,  OEI-O4-91-O1O5O 
We reviewed the indicated draft report and find the information

very enlightening.  However, we wish to comment on the

methodology used in estimating the potential Medicaid savings.

Using data supplied by four States,  report calculates average 
the 
weighted annual per person savings ($22,168) resulting frOm 
States purchasing Employer Group Health Plan (EGHP) insurance for 
eligible individuals when cost effective.  A ratio of the sample 
data to national statistics-is used to estimate nationwide 
savings of $32 million by instituting EGHP programs. 
The HCFA Office of the Actuary (OACT) estimates $230 million

total Medicaid savings in FY 1994 resulting from States providing

EGHP insurance to eligible individuals when cost effective.  This

estimate was included in a proposed rule sent through

Departmental clearance at the beginning of the month.

OACT used Current Population Survey data to determine the

fraction of Medicaid recipients having access to employer-

sponsored insurance but not currently enrolled.  This population

was multiplied by a standard cost which had been adjusted for 
private insurance rates, utilization, and  cost  Sharing= 
We believe that the OACT estimate yields  a more accurate

representation of the potential savings from providing EGHP

insurance.  The OACT estimate talcesinto account the size of the

eligible population and offsetting cost factors which are the

same principles used to develop the statute.  In contrast, the

OIG estimate is based solely on existing programs and has a high

probability of sampling error.

Hence, we recommend &at  the methodology for estimating potential

Medicaid savings be revised to incorporate

OACT.
 HealCtahr
 e 
DEPARTMENT OFHEALTH& HUMAN SERVICES  financing  Administration 
Memorandum 
WI 
8199b 
Date 
&b 
Bruce  C. Vlade  ~L 
From 
Administrator

%Y
Subject  Officoef InspectoGre neral(OIG)DraftRepo~. MedicaiPda yments  of Premiums
for Employer  Group  Health  Insurance  (OEI-O4-91-O1O5O) 
To 
June Gibbs Brown 
InspectoGre
neral

We  reviewed  the  subject  draft  report  which examines  the extent  to which state 
Medicaid  agencies  pay employer  group health plan  insurance  premiums  for Medicaid 
eligible  individuals. 
We  agreewithOIGSfirsrte commendatiotnh,a
 ttheHealthcareFinancing 
Administrati(oHnC FA) continuteo strongsluyp portS tateism plementinsge
ction
1906oftheSociaSle curitAyc t(theAct).Sincethisi sthecurrenlta
 w,we will

continuteo givepriorittoyt heStatesim plementatioofns ectio1n9
 06oftheAct.

We willa lsocontinuteo encouragaen dassistth oseStatewsh
 ichhavenotyet

implementetdh isp rovisionH.o wever,therequirementusn dersectio1n9
 06ofthe

Actmay changeundertheproposeHde althSecuritAyc t.Thereforwee,
 are

deferricnogm mentonthesecondrecommendatiotnh,a tHCFA proposel
egislation

thatallowSst atetso payemployegrr ouphealtphl an(EGHP) deductiblaensd
 

coinsuranucsei ngMedicaidf eeschedulersa thetrh
 anEGHP  fee  schedules,  pentig 
thesec hanges.S everatle chniccaolm mentsareattachefdo
 ryourconsideration.
Thankyoufortheopportunittoyr eviewa ndcommentonthisd rafrte portp.l
 ease

advisues ifyouwishtodiscusosu
rresponse.

Attachment 
...  --+ 
...  .  --    ! 
,,  Comments  of the Health  Care Financing  Administration  (HCFA~ 
on the Office  of Inmector  Generals  (OIG\  Draft  Rer)oti 
Medicaid Pavments of premiums  for Erndover  GrouD Health  bu  rance 
~~ 
[
Technical  Comments 
.=.  - The report indicates  that because  State systems are only designed  for the 
Medicaid  fee  schedule,  a State coui~  theoretically,  have a different  fee  schedule  for 
each  recipient  who has employer  group health plan (EGHP)  insurance.  Therefore, 
the report contends  that a State would  need  a different  automated  program  for each 
recipient.  We agree  the State will need  to design  a separate  system to accommodate 
the EGHP  fee  schedule.  However,  it is not clear  from the analysis that the  State will 
need  a different  program for each  fee  schedule. 
k?  - The  reporstu ggestthsa
 t using EGHP  fee  schedules  creates  inequitable 
treatment  among Medicaid  recipients  [since] higher payments would  be made  for 
those  recipients  for whom  States pay premiums  than for other Medicaid  recipients. 
We  do not believe  that OIG  has provided  data to support the implication  that 
Medicaid  recipients  who use  the same  Medicaid  provider necessarily  would  receive 
different  treatment  because  one  has EGHP  insurance  and the other does  not.  If 
there  is any disparity, it seems  more  likely it would  be among  different  providers 
since,  admittedly,  the EGHP  provider receives  full payment based  on the EGHP  fee 
schedule  rather than the lower  Medicaid  fee  schedule. 
We wouldsuggestth atifbothoftheseassertiornesm
 ainintherepo~ OIG include 
datainsupporotf them.Ifthisi nformatiiosnu navailablwee,recommendthatthese

commentsbeomittedf
romthereport.