Medicare Savings Programs: Implementation of Requirements Aimed at Increasing Enrollment
Published: 2012-09-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Congress established four MSPs and the LIS program to help low-income beneficiaries pay for some or all of Medicares cost-sharing requirements. Historically low enrollment in MSPs has been attributed to lack of awareness about the programs and cumbersome enrollment processes through state Medicaid programs. MIPPA included requirements for SSA and state Medicaid agencies aimed at eliminating barriers to MSP enrollment. Most notably, MIPPA created a new pathway to MSP enrollment by requiring SSA, beginning January 1, 2010, to transfer the information from a LIS application to the relevant state Medicaid agency, and the state must initiate an application for MSP enrollment. MIPPA also required GAO to study the effect of these requirements. This report describes (1) SSAs implementation of the requirements; (2) how MSP enrollment levels have changed from 2007 through 2011 and the factors that may have contributed to those changes; and (3) the effects of the MIPPA requirements on states administration of MSPs.
GAO reviewed documents and data on SSAs efforts to transfer applications and implement other MIPPA requirements, analyzed MSP enrollment data from CMS, surveyed Medicaid officials from the 50 states and the District of Columbia, and contacted officials from 6 states selected, in part, because they accounted for over 20 percent of MSP enrollment.
section_title: What GAO Found
paragraphs: The Social Security Administration (SSA) took a number of steps to implement the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) requirements aimed at eliminating barriers to Medicare Savings Program (MSP) enrollment and spent about $12 million in fiscal years 2009 through 2011 to do so. SSA reported transferring over 1.9 million Low-Income Subsidy (LIS) program applications to state Medicaid agencies between January 4, 2010 and May 31, 2012. SSA also took steps to make information available to potentially eligible individuals, conduct outreach, and train SSA staff on MSPs. In fiscal years 2009 and 2010, SSA spent $9.2 million of the $24.1 million appropriated by MIPPA for initial implementation costs, and in fiscal year 2011, SSA spent about $2.5 million of the $3 million appropriated by MIPPA for ongoing administrative costs. SSA officials told GAO that implementing the MIPPA requirements has not significantly affected its overall workload and that SSA expects funding provided under the law to be sufficient to carry out the requirements.
Using data from the Centers for Medicare & Medicaid Services (CMS), GAO estimates that MSP enrollment increased each year from 2007 through 2011. The largest increases occurred in 2010 and 2011 (5.2 percent and 5.1 percent respectively), the first 2 years that the MIPPA requirements were in effect. Several factors may have contributed to the higher levels of growth in MSP enrollment during these 2 years, including SSA application transfers and outreach, other MIPPA provisions related to MSPs, and the economic downturn. For example, while there are no nationwide data demonstrating the effects of the SSA application transfers, officials from 28 states reported that MSP enrollment had increased as a result of the transfers.
Officials from most of the six states GAO contacted to supplement its survey reported that the SSA application transfers led to changes in eligibility systems and had increased the state's workload, that is, the time spent processing MSP applications. The extent to which the application transfers resulted in system or workload changes may have depended on whether states accepted SSA's verification of the information transferred, as allowed under CMS policy. In response to GAO's survey, officials from 35 states reported that the state required the applicant to reverify at least some of the information. GAO found from interviews with officials from selected states that requiring reverification from applicants included multiple steps by the state and applicant. In contrast, officials from two states that accepted SSA's verification of the information told GAO that the state was able to enroll some of the applicants transferred by SSA with little to no work required by caseworkers. Differences in how SSA and states count income and assets when determining eligibility for LIS versus MSPs may have driven states' decisions to require verification from applicants. States have the flexibility under federal law to align methods for counting income and assets for MSPs with those for LIS and doing so may reduce the administrative burden of processing the transferred applications. However, doing so would likely increase enrollment and, therefore, increase state Medicaid costs. SSA, in an e-mail, agreed with GAO's description of its implementation of MIPPA requirements.

section_title: Letter
paragraphs: Medicare, which is administered by the Centers for Medicare & Medicaid  Services (CMS), provided health insurance coverage for a broad array of  services, including hospital, physician, home health, and other services,  to almost 49 million Americans in 2011 who were elderly, disabled, or had  end-stage renal disease. Medicare beneficiaries pay a portion of the  program’s costs through cost-sharing provisions—including premiums,  deductibles, and coinsurance—that can be difficult to afford for low- income beneficiaries. In 2010, an estimated one third of all Medicare  beneficiaries had annual incomes that were less than 150 percent of the  federal poverty level (FPL), which in 2012 means an annual income  below $16,755 for a single person. Between 1989 and 1998, to assist  low-income beneficiaries, Congress established four Medicare Savings  Programs (MSP)—the Qualified Medicare Beneficiary (QMB), Specified  Low-Income Medicare Beneficiary (SLMB), Qualifying Individual (QI), and   MSPs help  Qualified Disabled and Working Individual (QDWI) programs.pay for some or all of Medicare beneficiaries’ cost-sharing requirements,  each with differing income eligibility requirements and levels of benefits.  Under MSPs, state Medicaid programs—under the oversight of CMS— pay Medicare beneficiaries’ premiums and, for some beneficiaries,  deductibles, copayments and coinsurance. In 2003, Congress created  the Low-Income Subsidy (LIS) program, which is a separate program  administered by the Social Security Administration (SSA) and states to  assist low-income Medicare beneficiaries with the costs of outpatient  prescription drug coverage under Medicare Part D.
While federal law generally requires state Medicaid programs to provide  MSP benefits to individuals who apply and meet federal eligibility  requirements, there are financial incentives for states to enroll some  beneficiaries and disincentives to enrolling others. Enrolling beneficiaries  in an MSP can reduce state Medicaid spending for certain beneficiaries.  For example, for beneficiaries eligible for full Medicaid benefits, paying  beneficiaries’ Medicare premiums ensures that Medicare is the primary  payer for certain services rather than the state Medicaid program. For  beneficiaries who are only eligible for Medicaid coverage of Medicare cost  sharing and no other Medicaid benefits, there is no immediate financial  incentive for the state to enroll the beneficiary in MSPs. In these cases,  providing MSP benefits generally increases the costs of the state  Medicaid program.
Historically, MSPs have had low enrollment rates. For example, in 2004,  the Congressional Budget Office estimated that only 33 percent of eligible  beneficiaries were enrolled for QMB benefits and only 13 percent were  enrolled for SLMB benefits. Other researchers have found that  beneficiaries’ lack of awareness and a cumbersome eligibility  determination and enrollment process are the main barriers to enrollment.  Congress has taken a number of steps to increase enrollment rates. For  example, in 2000, Congress passed the Medicare, Medicaid and SCHIP  Benefits Improvement and Protection Act, which included provisions  requiring SSA to notify low-income Medicare beneficiaries that they may  be eligible for MSP benefits. More recently, the Medicare Improvements  for Patients and Providers Act of 2008 (MIPPA) included new  requirements for SSA and state Medicaid agencies aimed at eliminating  barriers to MSP enrollment. Most notably, MIPPA created a new  pathway to MSP enrollment by requiring SSA, beginning January 1, 2010,  to transfer the information from an LIS application to the relevant state  Medicaid agency and requiring the state Medicaid agency to use that  information to initiate an application for MSP enrollment. MIPPA also  required SSA to make information on MSPs available to potentially  eligible individuals, coordinate LIS and MSP outreach, and train  personnel in explaining MSPs. MIPPA appropriated $24.1 million to SSA  for initial implementation of these requirements and up to $3 million per  year—to be provided by CMS to SSA under a funding agreement— beginning in fiscal year 2011 for the ongoing administrative costs of  meeting these requirements.
MIPPA also directed GAO to report on the effects of the MIPPA  requirements on participation in MSPs and on SSA and states. In this  report, we describe (1) SSA’s implementation of the requirements aimed  at eliminating barriers to MSP enrollment; (2) how MSP enrollment has  changed from 2007 through 2011 and what factors may have contributed  to those changes; and (3) any effects the requirements have had on  states’ administration of MSPs.
To describe SSA’s implementation of the MIPPA requirements aimed at  eliminating barriers to MSP enrollment, we reviewed documents and data  on SSA’s efforts to transfer applications to states to initiate MSP  applications, make information available, coordinate outreach for LIS and  MSPs, and train staff. We also reviewed documents on SSA spending of  the $24.1 million appropriation it received for initial costs associated with  implementing these requirements and documents related to funding  agreements between SSA and CMS for expenses related to  administering these requirements in fiscal years 2011 and 2012; and we  reviewed SSA data on how implementing the requirements affected  workload. To supplement this review, we spoke with SSA officials about  implementation of the requirements, including any challenges  experienced.
To describe the change in MSP enrollment from 2007 through 2011, we  used CMS data to estimate the annual change in enrollment. The data,  reported by states to CMS, included state-level information on the number  of Medicare beneficiaries for whom states will pay the Medicare Part B   In our estimates we used data from December of each year.  premium.The data do not reflect QDWI enrollment, which CMS officials estimated  at less than 300 beneficiaries nationally as of March 2012. In addition, the  data reflect some Medicare beneficiaries who are not eligible for the  QMB, SLMB, or QI programs but for whom states finance the Part B  premium. We were able to exclude some but not all of these beneficiaries  from our estimates. We took a number of steps to assess the reliability  of CMS’s data, including interviewing CMS officials on the limitations of  the data and reviewing the CMS policy manual outlining the requirements  states must follow in reporting the data. We determined the data to be  sufficiently reliable for the purposes of estimating the changes in MSP  enrollment nationally over time; where relevant we stated the limitations  of the data in the findings. (See app. I for more information on our  analysis of the CMS data and our assessment of the data’s reliability.) To  describe the factors that may have contributed to changes in MSP  enrollment, we surveyed state Medicaid officials on the effects of the  application transfers on MSP enrollment and received responses from all  50 states and the District of Columbia.also contacted Medicaid officials from 6 selected states—Arizona,  Colorado, Florida, Louisiana, Pennsylvania, and Texas—on the factors  that may have contributed to changes in MSP enrollment and reviewed  these states’ data on the outcomes of the application transfers where  available. We selected these 6 states because together they accounted  for over 20 percent of MSP enrollment in 2011, are geographically  diverse, and vary in terms of their MSP eligibility requirements. In addition  to the information collected from states, we reviewed SSA data on the  outcomes of the application transfers. We also reviewed other MIPPA  provisions that may have contributed to changes in enrollment.
To supplement our survey, we  To describe any effects of the requirements on states’ administration of  MSPs, we asked officials from our six selected states about any changes  the state made to information technology systems, business processes,  or personnel—in particular, to receive and act upon the application  transfers—and how the requirements have affected the state’s workload.
We reviewed data from the selected states on the numbers of MSP  applications received the year before transfer requirements took effect  (2009) and in the first 2 years after the requirements took effect (2010  and 2011) when available. Finally, in our survey, we asked state Medicaid  officials whether they required applicants to verify the information  transferred by SSA, and we reviewed open-ended survey responses for  any evidence of effects of the application transfers on state administration  of MSPs.
We conducted this performance audit from February 2012 to September  2012 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Medicare covers almost 49 million beneficiaries. Individuals who are  eligible for Medicare automatically receive Part A benefits, which help pay  for inpatient hospital, skilled nursing facility, hospice, and certain home  health services. A beneficiary generally pays no premium for this  coverage unless the beneficiary or spouse has worked fewer than   40 quarters in his or her lifetime, but the beneficiary is responsible for  required deductibles, coinsurance, and copayment amounts. Medicare- eligible beneficiaries may elect to purchase Part B, which helps pay for  certain physician, outpatient hospital, laboratory, and other services.  Beneficiaries must pay a premium for Part B coverage, which generally   Beneficiaries are also responsible for  was $99.90 per month in 2012.Part B deductibles, coinsurance, and copayments. Beneficiaries electing  to obtain coverage for Medicare services from private health plans under  Part C are responsible for paying monthly Part B premiums and,  depending on their chosen plan, may be responsible for a monthly  premium to the Medicare plan, copayments, coinsurance, and  deductibles. Finally, under Medicare Part D, beneficiaries may elect to  purchase coverage of outpatient prescription drugs from private  companies. Beneficiaries who enroll in a Part D plan are responsible for a  monthly premium, which varies by the individual plan selected, as well as  copayments or coinsurance. Table 1 summarizes the benefits covered  and cost-sharing requirements for Medicare Part A and Part B, referred to  together as Medicare fee-for-service.
Many low-income Medicare beneficiaries receive assistance from  Medicaid to pay Medicare’s cost-sharing requirements. For Medicare  beneficiaries qualifying for full Medicaid benefits, state Medicaid programs  pay for Medicare’s Part A (if applicable) and Part B premiums and cost- sharing requirements up to the Medicaid payment rate as well as for  services that are not generally covered by Medicare. To qualify for full  Medicaid benefits, beneficiaries must meet their state’s eligibility criteria,  which include income and asset requirements that vary by state. In most  states, beneficiaries that qualify for Supplemental Security Income (SSI)  automatically qualify for full Medicaid benefits. Other beneficiaries may  qualify for full Medicaid benefits through one of several eligibility  categories that states have the option but are not required to cover, such  as the medically needy category, which includes individuals with high  medical costs.
Congress created several MSPs—QMB, SLMB, QI, and QDWI—and,  more recently, the LIS program to further assist low-income Medicare  beneficiaries with their premium and cost-sharing obligations. Each  program has different benefits, and beneficiaries qualify for different  levels of benefits depending on their income. (See table 2.)  Beneficiaries must also have limited assets to qualify for MSPs or LIS.  MIPPA amended the asset limits for the QMB, SLMB, and QI programs to  more closely align with the LIS limits beginning January 1, 2010. This  raised the MSP asset limits for the first time since 1989 and ensured that  those limits would be adjusted for inflation in the future. As with other  Medicaid benefits, states have the flexibility to extend eligibility for MSP  benefits to a larger population than federal law requires to be covered by  implementing less restrictive income and asset requirements, for example  by eliminating asset limits or not counting certain types of income.  Therefore, eligibility requirements for MSPs vary across states, while  requirements for LIS, which is administered by SSA, are uniform  nationwide.
MIPPA included several new requirements aimed at eliminating barriers  to MSP enrollment. Specifically, MIPPA required SSA to, beginning  January 1, 2010, transfer data from LIS applications, at the option of  applicants, to state Medicaid agencies, and it required state Medicaid  agencies to use the transferred information to initiate an MSP application.  SSA was also required to make information on MSPs available to those  potentially eligible for LIS, coordinate outreach for LIS and MSPs, and  train staff on MSPs.included a number of other provisions related to MSPs. As mentioned  earlier, MIPPA amended the asset limits for QMB, SLMB, and QI to more  closely align with the limits for LIS. It also required CMS to translate a  previously developed model MSP application into 10 languages other   In addition to the above requirements, MIPPA  than English. In addition, MIPPA included funding for states and other  organizations to perform outreach for LIS and MSPs. Beginning January  2010, MIPPA also exempted certain types of income and assets from  being counted when SSA makes a determination of LIS eligibility. For  example, the law required that SSA not count the value of a life insurance  policy as an asset. The law did not extend these changes to MSPs, but  states have the option to make comparable changes to their programs.  The treatment of the value of life insurance is one example of a potential  difference in how LIS and MSPs count income and assets in determining  program eligibility.
In addition to the application transfers required under MIPPA, there are a  number of other pathways to enrollment in MSPs. First, when a person  applies for Medicaid, states may screen them for eligibility for MSPs.  Second, some states offer a streamlined application to apply specifically  for enrollment in MSPs. Finally, more than half of states automatically  enroll beneficiaries whom SSA has determined to be eligible to receive  SSI benefits. Once enrolled in MSPs, states periodically determine  whether beneficiaries remain eligible for the program and either renew or  cancel enrollment. States have different processes for doing this, some of  which require more steps by the enrollee than others.
section_title: SSA Transferred Applications, Conducted Outreach and Training, and Reported That These Efforts Did Not Significantly Affect Workload
paragraphs: In implementing the MIPPA requirements, SSA reported transferring over  1.9 million applications to states, made information available on MSPs to  potentially eligible individuals, conducted outreach, and provided training  to staff on MSPs. SSA spent about $12 million in the first 3 years in  implementing the MIPPA requirements, and officials reported that these  efforts did not significantly affect its workload.
subsections: section_title: SSA Transferred over 1.9 Million Applications to States, Made Information on MSPs Available to Potentially Eligible Individuals, and Trained Staff
paragraphs: As required by MIPPA, SSA began transferring applications in January  2010, and SSA reported transferring over 1.9 million applications to states  between January 4, 2010, and May 31, 2012. SSA officials told us that all  states were able to receive LIS data when the transfers began in January  2010 and that applications are transferred to states each business day.  Through the application transfer, SSA provides states with the following  information: (1) all of the information reported by the applicant or modified  by SSA, including information on household composition, income, and  assets; (2) whether SSA approved or denied LIS enrollment and the  reasons for denials; and (3) the date that the LIS application was  submitted, as eligibility for SLMB, QI, and QWDI is retroactive to that  date. SSA decided that transfers would occur after SSA determined  eligibility for LIS, which generally occurs within 30 days. As a result, a  number of elements of the application information transferred to states  have been verified by SSA.affect benefits for certain applicants. Specifically, for those individuals  enrolling in the QMB program, where benefits do not begin until the  month after the state’s determination of eligibility, waiting for the SSA data  transfer may result in the loss of a month or more of benefits.
However, the timing of the transfer can  SSA coordinated with CMS officials and state Medicaid agency officials  about how to structure the exchange of application data. For example,  SSA developed a standard data transfer agreement and signed an  agreement with each state. In the months prior to implementation, SSA  tested the data exchange with states in order to identify and resolve any  concerns states had in receiving and using the transferred data. Finally,  SSA programmed its data systems to transfer the applications as agreed  with the states. SSA officials also told us that the agency designed the  process to eliminate duplicate applications, applications with insufficient  address data, and applications where the individual has opted out of the  data transfer. In response to concerns raised by states once the transfers  began, SSA also decided to delay the transfer of applications from  individuals not yet eligible for Medicare until the applicant is within   1 month of eligibility. For 2011, SSA reported transferring 66 percent of all  LIS applications where SSA determined eligibility to states to initiate an  application for MSPs; and 13 percent of applications had applicants who  opted out of the transfer and thus were not transferred. SSA officials told  us the remaining 21 percent were not transferred for various other  reasons beyond the applicant opting out of the transfer, such as the  applicant was not yet eligible for Medicare or the applicant submitted a  duplicate application.
To implement the requirements to make information available to  potentially eligible individuals and coordinate outreach, SSA took several  steps. SSA made information, such as the model MSP application  developed by CMS, available through its website and in local offices. SSA  conducted an outreach campaign in 2009 to provide information on LIS  and MSPs, including the changes that MIPPA made to the eligibility  requirements for both programs. As part of the campaign, SSA held  events and issued new promotional materials, which the agency provided  to local Social Security offices, community organizations, and health  providers’ offices. SSA also sent about 2 million outreach letters in 2009  to individuals previously denied LIS benefits alerting them that eligibility  requirements for LIS and MSP would be changing in January 2010 and  they could now be eligible for LIS as well as MSPs. Since January 2010,  SSA has sent letters describing LIS and MSPs to several categories of  potentially eligible individuals. (See table 3.)
To train staff, SSA developed two video trainings for its employees on the  MIPPA changes to LIS and MSPs and made the video trainings available  on-line. SSA required those staff that would be interacting with individuals  potentially eligible for LIS or MSPs to view the video trainings prior to  January 2010. SSA also updated its policies and procedures manual to  include instructions for employees in handling individuals’ questions about  MSPs during routine contacts. For example, SSA’s policies and  procedures manual instructs employees to tell individuals about the  availability of MSPs and that in applying for LIS the individuals can initiate  an MSP application with their state Medicaid agency unless they opt out.  SSA’s manual also instructs employees not to help complete MSP  applications but to refer individuals with MSP questions to either their  local Medicaid office or to State Health Insurance Assistance Programs,  which help individuals complete applications for Medicare and Medicaid  benefits.
section_title: SSA Spent about $12 Million in the First 3 Years and Reported That Implementing the Requirements Did Not Significantly Affect SSA’s Workload
paragraphs: In fiscal years 2009 through 2011, SSA spent about $12 million to  implement the MIPPA requirements. Of the $24.1 million appropriated by  MIPPA for the initial costs of implementing the requirements, SSA spent  $9.2 million combined for fiscal years 2009 and 2010 ($4.5 million and  $4.7 million respectively). The remaining $14.9 million in unspent funds  remains available to SSA for future costs in meeting the requirements. In  fiscal year 2011, SSA spent about $2.5 million of the $3 million  appropriated under MIPPA for the ongoing administrative costs of  carrying out the requirements. These costs were financed through its first  annual agreement with CMS. For fiscal year 2012, CMS agreed to fund  $2.8 million. SSA officials told us that, based on data available as of July  2012, they expected SSA’s workload, and therefore costs, to remain  constant for fiscal year 2012.
SSA officials told us that implementing the MIPPA requirements has not  affected SSA’s overall workload significantly as measured by the staff  time committed to implementation and to handling inquiries and calls  about MSPs. For example, SSA officials reported that implementation  required 17 full time equivalents (FTE) in 2009, 32 in 2010, and 8 in 2011  and indicated that the ongoing cost in staff time of meeting the  requirements is relatively small. SSA officials told us that a larger  amount of staff time was used in 2009 and 2010 because that was when  SSA conducted its outreach campaign and designed and launched the  application transfers, the latter of which required programming data  systems, developing new procedures, and training staff. According to  officials, some of the ongoing staff time will be dedicated to responding to  inquiries and calls about MSPs. While SSA data indicated that the volume  of field office inquiries and calls to its toll-free line related to MSPs  increased since the requirements took effect, the volume was relatively  small compared to the overall volume of inquires and calls SSA received.  For example, in fiscal year 2011, SSA received about 53,000 calls related  to MSPs out of a total of 76.8 million fielded through the toll-free line.
SSA officials also reported that, for fiscal year 2011, SSA was under a  hiring freeze. As a result, SSA officials noted that FTEs that had been  devoted to MSP work have been diverted from some of SSA’s more  traditional workloads, such as processing claims for Social Security  benefits or issuing Social Security numbers. However, the funding  appropriated under MIPPA supported the relatively small number of FTEs  used to implement the requirements and will continue to do so through  the funding agreements with CMS. MIPPA prohibits SSA from using its  own administrative funding to carry out the MSP requirements, and,  therefore, SSA intends to continue to rely on funding provided under the  CMS funding agreements for these activities.
section_title: Estimated MSP Enrollment Increased from 2007 through 2011 with the Largest Increases Occurring after the Requirements Took Effect
paragraphs: Using CMS data, we estimated that MSP enrollment increased each year  from 2007 through 2011. The largest increases in MSP enrollment  occurred in 2010 and 2011 (5.2 percent and 5.1 percent respectively), the  first 2 years that the MIPPA requirements were in effect. (See table 4.)  During this period, Medicare enrollment also grew by approximately 2 to   3 percent each year, from about 44.4 million people in 2007 to about   48.7 million people in 2011.
A number of factors may have contributed to the higher levels of growth in  MSP enrollment in 2010 and 2011, including SSA application transfers  and outreach, other MIPPA provisions and related changes to state  policies, and the economic downturn.
SSA application transfers. In response to our survey of state  Medicaid officials about the effects of the application transfers on  MSP enrollment, officials from 28 states reported that MSP enrollment  has increased as a result of the application transfers. In contrast,  officials from 12 states reported that the application transfers did not  have an effect on MSP enrollment, and officials from the remaining   10 states reported they did not know the effect of the transfers.  While there are no nationwide data that demonstrate the effects of the  SSA application transfers on MSP enrollment, 3 of the 6 states we  contacted to supplement our survey tracked some information on the  outcomes of applications transferred by SSA.application transfers from SSA in 2011, Arizona reported enrolling  about 800 of 16,000 applicants; Louisiana reported enrolling about   As a result of the  3,300 of about 21,800 applicants; and Pennsylvania officials reported  enrolling about 16,000 of 37,500 applicants. It is not clear, however, if  these beneficiaries would have enrolled in MSPs through other means  if the application transfers had not been in place. For example, these  enrollees may have instead enrolled by applying directly through the  state.
SSA outreach. As previously mentioned, SSA completed an outreach  campaign in 2009 and has sent letters with information about MSPs to  millions of potentially eligible individuals. Our prior work indicates that  letters sent by SSA to potentially eligible individuals in 2002 resulted  in more beneficiaries enrolling in MSPs than would have likely  enrolled without receiving an SSA letter.
Other MIPPA provisions. The MIPPA provision that more closely  aligned asset limits for MSPs with the limits for LIS expanded the  number of beneficiaries eligible for MSPs in 2010. Specifically, the  requirement effectively expanded eligibility in 41 states by increasing  the asset limits. In addition, MIPPA-funded outreach conducted by  states and other organizations that began in 2009 may have  increased the likelihood that applications resulted in enrollment.  According to data from the National Council on Aging (NCOA), the  national resource center funded to track the outreach, grantees  assisted about 200,000 individuals from January 2010 through  December 2011 in submitting a complete MSP application. NCOA  reported that grantees in most states are able to access the  applications transferred by SSA to identify those beneficiaries who  potentially need assistance completing the MSP application.
Economic downturn. It is unclear how the economy affects the  population potentially eligible for MSPs. In 2011, we reported that  during the economic downturn, from 2007 through 2010,  unemployment among those aged 65 and older doubled and food  insecurity increased. In addition, awards of SSA disability benefits to  those ages 50 to 64 increased. However, our past work also found  that the percentage of adults 65 and older with incomes below   200 percent of the federal poverty level did not increase.
section_title: States Reported That the Requirements Led to Various System Changes and Increased Workload
paragraphs: Officials from four of the six states we contacted to supplement our  survey reported making changes to Medicaid eligibility systems,  specifically, changes to both information systems and business  processes, to receive and act upon the applications transferred by SSA.  For example, officials from Arizona reported modifying the state’s  information system to accept the data and automatically create records  for the individuals in the eligibility system and generate notification letters  asking the applicants for additional information in order to complete the  application. Officials also said that the state established new business  rules for processing applications received through the transfers. Officials  from Colorado, one of the two states that did not report making changes,  told us that the state plans to make changes to its system pending the  availability of funding to implement the changes. Because the state did  not have the funds to make the necessary system changes, officials said  that they had to develop an interim process, under which transferred  applicants receive an assessment of MSP eligibility only if the applicant  completes the state’s request for additional information. Officials from  the final state, Pennsylvania, told us that the state did not make changes  to its information system as a result of the application transfers but did  establish business processes for sorting the applications and forwarding  them to county assistance offices for processing.
Officials from the final state said that they could not determine the effect of the  application transfers on the state’s workload, including the effect on the volume of  applications received. increased workload, said that it is difficult to determine the effect of the  application transfers but that for some applications the transfers had  reduced the time needed for processing.
States identified several reasons why processing the applications  transferred from SSA had increased their workload, including that the  transfers include applications for those who are clearly ineligible for  MSPs, applications have inaccurate information, and applicants do not  understand that their application for LIS is triggering an application for  MSPs.
The increased workload may have resulted from SSA transferring  applications for individuals who are ineligible for MSPs because their  income or assets exceed the federal MSP eligibility limits or they are  not yet eligible for Medicare. In response to our survey, officials from  one state reported that over 70 percent of the applications received  from SSA are ineligible for the state’s MSPs but that the state is still  required to process the application. The officials noted that processing  these applications is not a productive use of limited state resources.  Officials from Pennsylvania, one of the six states we contacted to  supplement our survey, reported that, of the approximately 37,500  applications transferred by SSA in 2011, about 14,600 had been  denied LIS enrollment. Those rejected applicants represented a  significant majority of the 21,600 rejected by the state for MSP  enrollment. Officials told us that they have adjusted their process to  automatically deny enrollment in MSPs for those individuals that were  rejected by SSA for LIS because, for example, the person did not  have Medicare or had income that exceeded the eligibility limits.
In response to our survey and during interviews, officials from several  states reported inaccuracies in the SSA data that may have made the  applications more difficult for states to process. For example,  Louisiana officials told us that the city of an applicant is sometimes  misspelled in the SSA data. This triggers an error in the state’s  system, which must be reviewed and corrected by the state.
In response to our survey, officials from several states also indicated  that the state spends time requesting information from applicants who  do not provide it because they do not understand that they have  applied for MSPs. For example, officials from Virginia commented that  individuals do not realize that their application for LIS is triggering an  application for MSP and do not end up providing the additional  information needed for the state to make a determination of MSP  eligibility. Arizona officials stated similar concerns and provided data  indicating that 63 percent of all of the applications transferred by SSA  and processed by the state in 2011 were denied because the  applicant did not respond to the state’s request for additional  information.
The extent to which the SSA application transfers required system  changes or affected workload may have depended on whether the state  treated the transferred information as verified. Though CMS policy allows  states to treat the information in the transferred applications as verified, in  response to our survey, officials from 35 states reported requiring  applicants to reverify some or all of the information before the state would  determine eligibility for MSPs. States most frequently reported requiring  applicants to reverify income, both earned and unearned, and assets.(See table 5.) Nine states reported requiring applicants to reverify all of  the data elements transferred by SSA, including household size and  identity.
In the six states we contacted, we found some evidence to suggest that  the application transfers had less of an effect on workload in states that  treated the transferred information as verified. Specifically, of the three  states that we contacted that accepted SSA’s verification of the  application information, two states reported being able to enroll some of  the transferred applicants with little to no work required of caseworkers.  Louisiana officials said that the transfers have allowed the state to  autoenroll some applicants (where the eligibility system enrolls the  applicant using the data transferred by SSA with no need for a  caseworker to enter data or contact the applicant). For example, from  March 2010 through January 2012, Louisiana autoenrolled about   14 percent of applicants transferred by SSA (5,937 of 43,414). Officials  said that the transfers have reduced the workload for these applications.  Similarly, officials from Pennsylvania said that the number of applications  received from SSA where caseworkers need to contact applicants for  more information was small, because, in addition to treating the  information as verified, the state has access to 12 different data sources  that can be used to address any discrepancies in the SSA data and  provide asset information that is not included in the SSA data. In  contrast, in the three states we contacted that required applicants to  reverify some of the information (Arizona, Colorado, and Florida), the  verification process included applicants reporting and documenting  income and reporting and attesting to the accuracy of other information,  such as assets and citizenship. This verification process included multiple  steps by states and applicants.
Differences in how SSA and states count income and assets for LIS  versus MSPs may have driven states’ choices to require further  verification of information in the transferred applications. For example,  several states noted that the LIS application combines income for a  couple, whereas the state needs to know the income for each spouse  separately to determine eligibility for MSPs. Officials from Arizona, one of  our selected states that requires applicants to reverify income, explained  that the state needs to know the income of each spouse as well as any  dependent children living in the household to determine eligibility for  MSPs. In a February 2010 letter to state Medicaid directors with guidance  on implementation of the MIPPA requirements, CMS noted that SSA has  a more expansive definition of a household in determining eligibility for  LIS than what most states use to determine MSP eligibility. The guidance  reminded states that they have the option to align their definition with  SSA’s, and noted that doing so would expand eligibility for MSPs to more  people and reduce states’ administrative burden in processing the  applications transferred by SSA. Some states also count certain types of  income and assets that SSA does not. For example, SSA does not count  the value of life insurance policies against the asset limit, but states count  it unless the state has amended its Medicaid plan to disregard it. States  must verify whether applicants have life insurance policies either by  contacting the applicant or through another data source.
section_title: Concluding Observations
paragraphs: Historically, MSPs have had low enrollment rates, with the Congressional  Budget Office estimating in 2004 that only a third of eligible individuals  were enrolled in the QMB program and an even smaller percentage in the  SLMB program. Our estimates show that enrollment has grown each year  for the last 5 years, with the largest increases occurring in 2010 and 2011  (5.2 percent and 5.1 percent), the first 2 years the MIPPA requirements  were in effect. The differences between how income and assets are  counted for LIS and MSPs make it difficult for some states to act on the  applications transferred by SSA without requiring additional information  from applicants, a step that requires additional work by the state and can  present a hurdle to applicants. Aligning the methods for determining  income and assets for MSPs with those of LIS is an option currently  available to states, and some states have used that flexibility. More states  may not have opted to do so because aligning these methods would likely  expand the number of individuals who are eligible only for MSP, and not  for other Medicaid, benefits. Because providing MSP benefits to such  individuals is likely to increase costs to the state, states have no  immediate financial incentive to provide MSP benefits to these  individuals. Further, while aligning these methods may allow states to  more easily act upon the applications transferred by SSA, it would create  a method for counting income and assets for MSPs that may differ from  how states assess eligibility for Medicaid, making it more complicated for  states to assess MSP eligibility as part of assessing eligibility for  Medicaid.
section_title: Agency Comments
paragraphs: We provided a draft of this report to HHS and SSA to review. HHS did not  provide comments. SSA stated, in an e-mail, that the report accurately  describes its implementation of the requirements. SSA also provided  technical comments, which we incorporated as appropriate.
We are sending copies of this report to the Administrator of CMS, the  Commissioner of SSA, and other interested parties. In addition, the report  is available at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-7114 or kingk@gao.gov. Contact points for our Office of  Congressional Relations and Public Affairs may be found on the last page  of this report. GAO staff who made major contributions to this report are  listed in appendix II.
section_title: Appendix I: GAO Methodology for Estimating Change in Medicare Savings Program Enrollment
paragraphs: To describe the change in Medicare Savings Program (MSP) enrollment  from 2007 through 2011, we used data from the Centers for Medicare &  Medicaid Services (CMS) to estimate annual enrollment and the change  in annual enrollment over that period. The data, reported by states to  CMS, included state-level information on the number of Medicare  beneficiaries for whom states will pay the Medicare Part B premium. For  our estimates we used data that represented the number of beneficiaries  for whom states financed the Part B premium in December of each year.  The data do not reflect enrollment for Qualified Disabled and Working  Individuals, which CMS officials estimated numbered less than 300  people nationally as of March 2012. In addition, the data include some  Medicare beneficiaries who are not eligible for MSPs but for whom states  finance the Part B premium. We excluded some but not all of these  beneficiaries from our analysis. Specifically, we excluded those  beneficiaries categorized as “medical assistance only” as those  beneficiaries are not eligible for MSPs per CMS’s policy manual. We were  not able to exclude those categorized as “medically needy”—beneficiaries  who may or may not also meet the eligibility requirements for an MSP— because CMS does not have data on this population for each of the years  in our analysis. It is also likely that for a small percentage of beneficiaries,  states did not specify the basis of eligibility, and therefore it is unclear  whether they were eligible for MSPs or not. While CMS does not have  data for each of the years in our analysis on the number of beneficiaries  categorized as medically needy or with an unspecified eligibility category,  4 percent were medically needy and 4 percent did not have an eligibility  category specified as of May 8, 2012. Though our estimates of enrollment  may be overstated, we believe that our estimates of the change in  enrollment over the 5-year period are valid.
To assess the reliability of CMS’s data on MSP enrollment, we  interviewed CMS officials about their efforts to ensure the quality of the  data and reviewed the CMS policy manual outlining the requirements  states must follow in reporting the data. We also asked officials about the  limitations of the data and reviewed any statements about data limitations  in published reports. Finally, we reviewed data for each month of 2007  through 2011 to identify any anomalies in the data. We determined the  data to be sufficiently reliable for the purposes of estimating the changes  in MSP enrollment nationally over time; where relevant we stated the  limitations of the data in the findings.
section_title: Appendix II: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Kristi Peterson, Assistant  Director; Jeremy Cox, Assistant Director; Susan Barnidge; Krister Friday;  Sandra George; Kristin Helfer Koester; Lisa Rogers; and Paul Wright  made key contributions to this report.