oversight

Medicare Savings Programs: Implementation of Requirements Aimed at Increasing Enrollment

Published by the Government Accountability Office on 2012-09-14.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                             United States Government Accountability Office

GAO                          Report to Congressional Committees




September 2012
                             MEDICARE SAVINGS
                             PROGRAMS
                             Implementation of
                             Requirements Aimed
                             at Increasing
                             Enrollment




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GAO-12-871
                                                September 2012

                                                MEDICARE SAVINGS PROGRAMS
                                                Implementation of Requirements Aimed at
                                                Increasing Enrollment
Highlights of GAO-12-871, a report to
congressional committees




Why GAO Did This Study                          What GAO Found
Congress established four MSPs and              The Social Security Administration (SSA) took a number of steps to implement
the LIS program to help low-income              the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)
beneficiaries pay for some or all of            requirements aimed at eliminating barriers to Medicare Savings Program (MSP)
Medicare’s cost-sharing requirements.           enrollment and spent about $12 million in fiscal years 2009 through 2011 to do
Historically low enrollment in MSPs             so. SSA reported transferring over 1.9 million Low-Income Subsidy (LIS) program
has been attributed to lack of                  applications to state Medicaid agencies between January 4, 2010 and May 31,
awareness about the programs and                2012. SSA also took steps to make information available to potentially eligible
cumbersome enrollment processes                 individuals, conduct outreach, and train SSA staff on MSPs. In fiscal years 2009
through state Medicaid programs.
                                                and 2010, SSA spent $9.2 million of the $24.1 million appropriated by MIPPA for
MIPPA included requirements for SSA
                                                initial implementation costs, and in fiscal year 2011, SSA spent about $2.5 million
and state Medicaid agencies aimed at
eliminating barriers to MSP enrollment.
                                                of the $3 million appropriated by MIPPA for ongoing administrative costs. SSA
Most notably, MIPPA created a new               officials told GAO that implementing the MIPPA requirements has not
pathway to MSP enrollment by                    significantly affected its overall workload and that SSA expects funding provided
requiring SSA, beginning January 1,             under the law to be sufficient to carry out the requirements.
2010, to transfer the information from a        Using data from the Centers for Medicare & Medicaid Services (CMS), GAO
LIS application to the relevant state           estimates that MSP enrollment increased each year from 2007 through 2011.
Medicaid agency, and the state must             The largest increases occurred in 2010 and 2011 (5.2 percent and 5.1 percent
initiate an application for MSP
                                                respectively), the first 2 years that the MIPPA requirements were in effect.
enrollment. MIPPA also required GAO
                                                Several factors may have contributed to the higher levels of growth in MSP
to study the effect of these
requirements. This report describes             enrollment during these 2 years, including SSA application transfers and
(1) SSA’s implementation of the                 outreach, other MIPPA provisions related to MSPs, and the economic downturn.
requirements; (2) how MSP enrollment            For example, while there are no nationwide data demonstrating the effects of the
levels have changed from 2007                   SSA application transfers, officials from 28 states reported that MSP enrollment
through 2011 and the factors that may           had increased as a result of the transfers.
have contributed to those changes;              Officials from most of the six states GAO contacted to supplement its survey
and (3) the effects of the MIPPA
                                                reported that the SSA application transfers led to changes in eligibility systems
requirements on states’ administration
                                                and had increased the state’s workload, that is, the time spent processing MSP
of MSPs.
                                                applications. The extent to which the application transfers resulted in system or
GAO reviewed documents and data on              workload changes may have depended on whether states accepted SSA’s
SSA’s efforts to transfer applications          verification of the information transferred, as allowed under CMS policy. In
and implement other MIPPA                       response to GAO’s survey, officials from 35 states reported that the state
requirements, analyzed MSP                      required the applicant to reverify at least some of the information. GAO found
enrollment data from CMS, surveyed              from interviews with officials from selected states that requiring reverification from
Medicaid officials from the 50 states           applicants included multiple steps by the state and applicant. In contrast, officials
and the District of Columbia, and               from two states that accepted SSA’s verification of the information told GAO that
contacted officials from 6 states               the state was able to enroll some of the applicants transferred by SSA with little
selected, in part, because they
                                                to no work required by caseworkers. Differences in how SSA and states count
accounted for over 20 percent of MSP
                                                income and assets when determining eligibility for LIS versus MSPs may have
enrollment.
                                                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.
View GAO-12-871. For more information,          SSA, in an e-mail, agreed with GAO’s description of its implementation of MIPPA
contact Kathleen M. King at (202) 512-7114 or   requirements.
kingk@gao.gov.

                                                                                          United States Government Accountability Office
Contents


Letter                                                                                      1
              Background                                                                    6
              SSA Transferred Applications, Conducted Outreach and Training,
                and Reported That These Efforts Did Not Significantly Affect
                Workload                                                                  12
              Estimated MSP Enrollment Increased from 2007 through 2011 with
                the Largest Increases Occurring after the Requirements Took
                Effect                                                                    16
              States Reported That the Requirements Led to Various System
                Changes and Increased Workload                                            19
              Concluding Observations                                                     24
              Agency Comments                                                             25

Appendix I    GAO Methodology for Estimating Change in Medicare
              Savings Program Enrollment                                                  27



Appendix II   GAO Contact and Staff Acknowledgments                                       29



Tables
              Table 1: Medicare Coverage and Beneficiary Cost Sharing for 2012
                       under the Medicare Fee-for-Service Program                           7
              Table 2: Federal Income Limits and Benefits for Medicare Savings
                       Programs and the Low-Income Subsidy Program                        10
              Table 3: Social Security Administration (SSA) Letters Sent to
                       Individuals Potentially Eligible for Medicare Savings
                       Programs (MSP), 2010 through May 2012                              14
              Table 4: Change in Estimated Medicare Savings Program (MSP)
                       Enrollment, 2007 through 2011                                      17
              Table 5: Social Security Administration (SSA) Data Elements States
                       Require Medicare Savings Program Applicants to Reverify            23




              Page i                        GAO-12-871 Enrollment in Medicare Savings Programs
Abbreviations

CMS               Centers for Medicare & Medicaid Services
FPL               federal poverty level
FTE               full time equivalent
LIS               Low-Income Subsidy
MIPPA             Medicare Improvements for Patients and Providers Act
                    of 2008
MSP               Medicare Savings Program
NCOA              National Council on Aging
QDWI              Qualified Disabled and Working Individual
QI                Qualifying Individual
QMB               Qualified Medicare Beneficiary
SLMB              Specified Low-Income Medicare Beneficiary
SSA               Social Security Administration
SSI               Supplemental Security Income


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Page ii                              GAO-12-871 Enrollment in Medicare Savings Programs
United States Government Accountability Office
Washington, DC 20548




                                   September 14, 2012

                                   Congressional Committees

                                   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. 1 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. 2 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), 3 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
                                   Qualified Disabled and Working Individual (QDWI) programs. 4 MSPs help
                                   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,




                                   1
                                    Medicare is the federally financed health insurance program for persons age 65 or over,
                                   certain individuals with disabilities, and individuals with end-stage renal disease. Medicare
                                   Parts A and B are known as Medicare fee-for-service. Medicare Part A covers hospital
                                   and other inpatient stays. Medicare Part B is optional, and covers hospital outpatient,
                                   physician, and other services. Medicare beneficiaries have the option of obtaining
                                   coverage for Medicare services from private health plans that participate in Medicare
                                   Advantage—Medicare’s managed care program—also known as Part C. All Medicare
                                   beneficiaries may purchase coverage for outpatient prescription drugs under Part D, either
                                   as a stand-alone benefit or as part of a Medicare Advantage plan.
                                   2
                                    Throughout this report, we use the term “beneficiary” to refer to a Medicare beneficiary.
                                   3
                                    See “Distribution of Medicare Beneficiaries by Federal Poverty Level, states (2009-2010),
                                   U.S. (2010)” (The Kaiser Family Foundation), accessed Apr. 25, 2012,
                                   http://www.statehealthfacts.org.
                                   4
                                    The QMB program was established in 1989, followed by the QDWI program in 1990, the
                                   SLMB program in 1993 and the QI program in 1998.




                                   Page 1                                GAO-12-871 Enrollment in Medicare Savings Programs
deductibles, copayments and coinsurance. 5 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. 6

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. 7

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



5
 Medicaid is a joint federal-state program that finances health care for certain low-income
populations. Under state Medicaid programs, QMB, SLMB, and QDWI are financed jointly
by states and the federal government. QI is financed entirely by the federal government as
long as costs fall within a state’s annual allotment for the program. The Kaiser
Commission on Medicaid and the Uninsured reported that Medicaid paid $32.1 billion in
federal fiscal year 2008 for Medicare premiums and cost-sharing for Medicare services.
See Kaiser Commission on Medicaid and the Uninsured, Medicaid’s Role for Dual Eligible
Beneficiaries (Washington, D.C.: April 2012).
6
 GAO issued a report and two testimonies in 2007 and 2008 on SSA implementation of
LIS. See GAO, Medicare Part D Low-Income Subsidy: Additional Efforts Would Help
Social Security Improve Outreach and Measure Program Effects, GAO-07-555
(Washington, D.C.: May 31, 2007); Medicare Part D Low-Income Subsidy: Progress
Made in Approving Applications, but Ability to Identify Remaining Individuals Is Limited,
GAO-07-858T (Washington, D.C.: May 8, 2007); and Medicare Part D Low-Income
Subsidy: SSA Continues to Approve Applicants, but Millions of Individuals Have Not Yet
Applied, GAO-08-812T (Washington, D.C.: May 22, 2008).
7
 The exception to this is that those enrolled in the QI program, which is financed entirely
with federal funds, do not increase the costs of state Medicaid programs.




Page 2                                GAO-12-871 Enrollment in Medicare Savings Programs
enrolled for SLMB benefits. 8 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. 9 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. 10 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. 11 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. 12




8
 The estimates completed by the Congressional Budget Office in 2004 are the most
recent estimates available.
9
 Pub. L. No. 106-554, App. F, § 911(a), 114 Stat. 2763, 2763A-583 (adding section 1144
to the Social Security Act (SSA); codified at 42 U.S.C. § 1320b-14(b) (2010)). GAO issued
a report in 2004 describing SSA’s efforts to meet those requirements. See GAO, Medicare
Savings Programs: Results of Social Security Administration’s 2002 Outreach to Low-
Income Beneficiaries, GAO-04-363 (Washington, D.C.: Mar. 26, 2004).
10
  Pub. L. No. 110-275, § 113, 122 Stat. 2494, 2503 (amending sections 1144 and 1935(a)
of the SSA; codified at 42 U.S.C. §§ 1320b-14, 1396u-5(a) (2010)) (hereafter, “MIPPA”).
11
  Throughout this report, we describe these exchanges of information between SSA and
states as application transfers, as SSA is transferring all of the information from the LIS
application.
12
  MIPPA required that SSA and CMS execute an agreement by which CMS would provide
SSA the full administrative cost of SSA’s MSP-related activities, starting in fiscal year
2011, and appropriated not more than $3 million for each fiscal year for that purpose.




Page 3                                GAO-12-871 Enrollment in Medicare Savings Programs
MIPPA also directed GAO to report on the effects of the MIPPA
requirements on participation in MSPs and on SSA and states. 13 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
premium. 14 In our estimates we used data from December of each year.
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



13
  MIPPA, § 113(a), 124 Stat. at 2505 (amending section 1144(c)(6) of the SSA; codified at
42 U.S.C. § 1320b-14(c)(6) (2010)).
14
  The data were derived from CMS’s monthly Third-Party Buy-In file, which contains data
from the CMS Enrollment Database. Data in the Enrollment Database are used by CMS to
track enrollment and bill state Medicaid programs for the Part B premiums for individuals
whose premiums the state has agreed to finance. States submit data regularly to CMS for
updates to the Enrollment Database.




Page 4                               GAO-12-871 Enrollment in Medicare Savings Programs
from our estimates. 15 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. 16 To supplement our survey, we
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 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.


15
  States have the option to provide Medicaid benefits and payment for Medicare Part B
premiums to beneficiaries that do not meet the eligibility requirements for MSPs but who
otherwise qualify for Medicaid. For example, some states finance premiums for
beneficiaries categorized as “medical assistance only” who are not eligible for MSPs. We
excluded these beneficiaries from our estimates. Some states also finance premiums for
beneficiaries categorized as “medically needy.” These beneficiaries may or may not meet
the eligibility requirements for a MSP. We were not able to exclude these beneficiaries
from our estimates, because CMS did not have data for this population for each year
included in our analysis. For the same reason, we were not able to exclude beneficiaries
for whom the state did not specify the eligibility category. While CMS did not have data for
each year of our analysis for these populations, as of May 8, 2012, about 8 percent of
beneficiaries were medically needy or did not have an eligibility category specified.
16
 In this report, we use the term “states” to refer to the 50 states and the District of
Columbia.




Page 5                                 GAO-12-871 Enrollment in Medicare Savings Programs
             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.


             Medicare covers almost 49 million beneficiaries. Individuals who are
Background   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
             was $99.90 per month in 2012. 17 Beneficiaries are also responsible for
             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



             17
               Beneficiaries with higher incomes may pay a higher Part B premium, up to a maximum
             of $319.70 for single beneficiaries with yearly incomes in 2010 above $214,000 and for
             married beneficiary couples with yearly incomes in 2010 above $428,000. The premium
             amounts are adjusted each year so that expected Medicare premium revenues equal
             25 percent of expected Medicare Part B spending. 42 U.S.C.§1395r(a)(2000).




             Page 6                              GAO-12-871 Enrollment in Medicare Savings Programs
                                        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.

Table 1: Medicare Coverage and Beneficiary Cost Sharing for 2012 under the Medicare Fee-for-Service Program
                                                                a
Part A—Hospital insurance                   Beneficiary pays
    Part A premium                          No premium if beneficiary or spouse worked at least 40 quarters in lifetime
                                            Up to $451 monthly premium if beneficiary or spouse worked fewer than 40 quarters in
                                            lifetime
                                                                                 b
    Inpatient hospital                      $1,156 deductible per benefit period
                                            $289 copayment per day for days 61-90
                                                                                   c
                                            $578 copayment per day for days 91-150
                                            All costs beyond 150 days
                           d
    Skilled nursing facility                Nothing for first 20 days per benefit period
                                            $144.50 copayment per day for days 21-100 per benefit period
                                            All costs beyond 100 days per benefit period
                  e
    Home health                             No cost sharing
                                            20 percent coinsurance of Medicare-approved amount for durable medical equipment
              f
    Hospice                                 No cost sharing
                                            Up to $5 copayment per prescription for outpatient drugs for pain and symptom
                                            management
                                            5 percent coinsurance of Medicare-approved amount for inpatient respite care
    Blood                                   Cost of first 3 pints
                               g
Part B—Medical insurance
                                                                h
    Part B premium                          $99.90 per month
    Physician and medical                   $140 deductible each year
                                            20 percent coinsurance for most services
    Clinical laboratory                     No cost sharing
                  e
    Home health                             No cost sharing
                                            20 percent coinsurance of Medicare-approved amount for durable medical equipment
    Outpatient hospital                     Coinsurance may vary by service
    Blood                                   Cost of first 3 pints
                                            20 percent coinsurance for additional pints
                                        Source: GAO analysis of CMS documents.
                                        a
                                         The information in this column reflects what beneficiaries enrolled in the Medicare fee-for-service
                                        program would pay. Beneficiaries enrolled in a Medicare Advantage Plan may pay either more or less
                                        depending on the costs of the plan.
                                        b
                                         A benefit period begins the day a beneficiary is admitted as an inpatient in a hospital and ends when
                                        the beneficiary has not received any inpatient hospital care for 60 days in a row. No deductible is
                                        charged for second and subsequent hospital admissions if they occur within 60 days of the
                                        beneficiary’s most recent covered inpatient day.




                                        Page 7                                    GAO-12-871 Enrollment in Medicare Savings Programs
c
  After the first 90 days of inpatient care per benefit period, Medicare will help pay for an additional
60 days of inpatient care (days 91-150). Each beneficiary is entitled to a lifetime reserve of 60 days of
inpatient coverage. Each reserve day may be used only once in a beneficiary’s lifetime.
d
 To qualify, a Medicare beneficiary must require daily skilled nursing or rehabilitative therapy services,
generally within 30 days of a hospital stay of at least 3 days in length, and must be admitted to the
nursing home for a condition related to the hospitalization.
e
 To qualify for services, Medicare beneficiaries must be confined to their homes; have a plan of care
signed by a physician; and need intermittent skilled nursing care (other than solely venipuncture for
the purpose of obtaining a blood sample), physical therapy, speech-language services, or have a
continuing need for occupational therapy services.
f
 To quality for services, a Medicare beneficiary must be terminally ill and have 6 months or less to
live.
g
 No cost sharing is required for certain preventive services, including specific screening tests for
breast, colon, cervical, and prostate cancer, annual wellness visit, and flu and pneumonia vaccines.
h
 Most beneficiaries pay the standard Part B premium amount of $99.90 per month. Beneficiaries with
higher incomes may pay a higher Part B premium, up to a maximum of $319.70 for single
beneficiaries with yearly incomes in 2010 above $214,000 and for married beneficiary couples with
yearly incomes in 2010 above $428,000.


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. 18 To qualify for full
Medicaid benefits, beneficiaries must meet their state’s eligibility criteria,
which include income and asset requirements that vary by state. 19 In most
states, beneficiaries that qualify for Supplemental Security Income (SSI)
automatically qualify for full Medicaid benefits. 20 Other beneficiaries may


18
  Within broad federal guidelines, states have considerable flexibility in how they
administer their Medicaid programs. States administer covered services under a state
Medicaid plan that CMS approves. State Medicaid programs must cover certain
mandatory services, such as physician services and nursing facility care. (While Medicare
covers some or all of up to 100 days of skilled nursing facility care following a
hospitalization, Medicaid covers extended nursing facility care.) State Medicaid programs
may also cover certain CMS-approved optional Medicaid services. The federal
government shares the cost of state Medicaid expenditures according to a statutory
formula, whereby the federal share ranged in 2012 from 50 to 74.2 percent of state
Medicaid expenditures. States with lower per capita incomes receive higher Federal
Medical Assistance Percentages. 42 U.S.C. §1396b(a) (2010).
19
  In this report, we use the term “assets” to mean an applicant’s resources, such as funds
in bank accounts and property other than one’s home.
20
  SSI provides cash assistance to aged, blind, and disabled individuals who have limited
income and assets. In 2012, the income limit was $698 per month, and the asset limit was
$2,000 for individuals and $3,000 for couples. SSI asset limits typically exclude the
beneficiary’s automobile and house.




Page 8                                     GAO-12-871 Enrollment in Medicare Savings Programs
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. 21 (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. 22 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. 23 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. 24
Therefore, eligibility requirements for MSPs vary across states, while
requirements for LIS, which is administered by SSA, are uniform
nationwide.




21
  All MSP enrollees are considered to be dually eligible for Medicare and Medicaid.
However, for some, eligibility for Medicaid is limited to MSP benefits. Other enrollees,
considered “full duals,” are eligible for full Medicaid benefits.
22
  MIPPA, § 112, 122 Stat. at 2503 (amending section 1905(p)(1)(C) of the SSA; codified
at 42 U.S.C. § 1396d(p)(1)(C) (2010)). The asset limit for QDWI was not changed by
MIPPA.
23
  In 2012, the asset limit for QMB, SLMB, QI and LIS was $6,940 for an individual and
$10,410 for a couple.
24
  Federal law provides states flexibility to use less restrictive or liberalized methodologies
than are typically used for Medicaid in counting applicants’ income and assets to expand
eligibility for MSPs. 42 U.S.C. § 1396a(r)(2)(2010); 42 C.F.R. § 435.601(b)(iii)(2011).
Many states continue to use the methodology used for the Medicaid program, which
generally follows the methodology SSA uses to count income and assets when assessing
eligibility for SSI.




Page 9                                 GAO-12-871 Enrollment in Medicare Savings Programs
Table 2: Federal Income Limits and Benefits for Medicare Savings Programs and the Low-Income Subsidy Program

                                                  Income limit as a percent of the
Program                                           federal poverty level                      Medicare costs covered by the program
Medicare Savings Program (MSP)
    Qualified Medicare Beneficiary (QMB)          At or below 100%                           Part A premium, deductible, copayments, and
                                                                                             coinsurance, including for skilled nursing
                                                                                             facility stays
                                                                                             Part B premium, deductible, copayments, and
                                                                                             coinsurance
    Specified Low-Income Medicare                 Above 100% but less than 120%              Part B premium
    Beneficiary (SLMB)
    Qualifying Individual (QI)                    At 120% but less than 135%                 Part B premium
    Qualified Disabled and Working Individual     Disabled and working Medicare              Part A premium
    (QDWI)                                        beneficiaries whose incomes do not
                                                  exceed 200%
Low-Income Subsidy (LIS) program
    Full subsidy                                  Below 135%                                 Drug plan premium, deductible, and
                                                                                             coinsurance, and a portion of copayments
    Partial subsidy                               At 135% but less than 150%                 Portion of drug plan premium, deductible,
                                                                                             copayments, and coinsurance
                                           Source: GAO analysis of CMS documents.

                                           Note: Federal law provides states flexibility to use less restrictive or liberalized methodologies than
                                           are typically used for Medicaid in counting applicants’ income and assets to expand eligibility for the
                                           MSPs.


                                           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. 25 In addition to the above requirements, MIPPA
                                           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



                                           25
                                             MIPPA, § 113, 122 Stat. at 2503 (amending section 1144(c) of the SSA; codified at
                                           42 U.S.C. § 1320b-14(c)(2010)).




                                           Page 10                                    GAO-12-871 Enrollment in Medicare Savings Programs
than English. 26 In addition, MIPPA included funding for states and other
organizations to perform outreach for LIS and MSPs. 27 Beginning January
2010, MIPPA also exempted certain types of income and assets from
being counted when SSA makes a determination of LIS eligibility. 28 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.




26
  MIPPA, § 118, 122 Stat. at 2507 (amending section 1905(p)(5)(a) of the SSA; codified at
42 U.S.C. § 1396d(p)(5)(A) (2010)). CMS translated the model application into: (1) Arabic.
(2) Chinese, (3) Creole, (4) Farsi, (5) French, (6) Korean, (7) Russian, (8) Spanish,
(9) Tagalog, and (10) Vietnamese. States are not required to use the model application.
27
  MIPPA, § 119, 122 Stat. at 2508. State Health Insurance Assistance Programs, Area
Agencies on Aging, and Aging and Disability Resource Centers received MIPPA outreach
grants beginning in fiscal year 2009.
28
  MIPPA, § 116, 122 Stat. at 2507 (amending section 1860D-14(a)(3) of the SSA; codified
at 42 U.S.C. § 1395w-114(a)(3)(2010)).




Page 11                              GAO-12-871 Enrollment in Medicare Savings Programs
                              In implementing the MIPPA requirements, SSA reported transferring over
SSA Transferred               1.9 million applications to states, made information available on MSPs to
Applications,                 potentially eligible individuals, conducted outreach, and provided training
                              to staff on MSPs. SSA spent about $12 million in the first 3 years in
Conducted Outreach            implementing the MIPPA requirements, and officials reported that these
and Training, and             efforts did not significantly affect its workload.
Reported That These
Efforts Did Not
Significantly Affect
Workload
SSA Transferred over          As required by MIPPA, SSA began transferring applications in January
1.9 Million Applications to   2010, and SSA reported transferring over 1.9 million applications to states
States, Made Information      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
on MSPs Available to          2010 and that applications are transferred to states each business day. 29
Potentially Eligible          Through the application transfer, SSA provides states with the following
Individuals, and Trained      information: (1) all of the information reported by the applicant or modified
Staff                         by SSA, including information on household composition, income, and
                              assets; 30 (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. 31 As a result, a
                              number of elements of the application information transferred to states




                              29
                               SSA does not transfer LIS data to states on federal holidays.
                              30
                                LIS application income and assets data include the total amount of income not earned
                              from working (referred to as unearned income), such as Social Security benefits and
                              Veterans Administration benefits; the total amount of income earned from working; the net
                              earnings and losses from self-employment; funds in bank accounts; funds in stocks,
                              bonds, and other investments; and the value of real estate (exclusive of the primary
                              home). SSA officials told us that in reviewing the application, the agency will sometimes
                              modify the reported information after discussions with the applicant. Those modifications
                              are reflected in the data transferred to states.
                              31
                                SSA reported that in fiscal year 2011 about 64 percent of LIS determinations were made
                              in 30 days or fewer and about 90 percent in 45 days or fewer.




                              Page 12                              GAO-12-871 Enrollment in Medicare Savings Programs
have been verified by SSA. 32 However, the timing of the transfer can
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.

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


32
  SSA officials noted that SSA verifies some but not all of the information provided by
applicants. For example, SSA verifies that certain types of reported income are accurate
but does not verify the household size reported by the applicant.




Page 13                              GAO-12-871 Enrollment in Medicare Savings Programs
                                              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. 33 (See table 3.)

Table 3: Social Security Administration (SSA) Letters Sent to Individuals Potentially Eligible for Medicare Savings Programs
(MSP), 2010 through May 2012

                                                             Number of letters               Number of letters              Number of letters sent
                                                               sent in 2010                    sent in 2011                 in 2012 (January-May)
Category of potentially eligible individual                   English      Spanish            English        Spanish            English         Spanish
Individuals with incomes that appear to qualify              3,268,289       51,996         2,747,919          42,361         2,344,620          35,725
for the Low-Income Subsidy (LIS) program and
MSPs but not enrolled in either
Individuals with incomes that appear less than                559,469        30,588           792,595          35,828           716,339          34,804
135 percent of federal poverty level, enrolled in
LIS, but not enrolled in an MSP
                                                                                                                                            a              a
Former disability insurance individuals who lost               42,584            514            42,290             511                  0              0
Medicare Part A premium assistance when they
returned to work and who are not enrolled in
Medicaid
Total                                                        3,870,342       83,098         3,582,804          78,700         3,060,959          70,529
                                              Source: SSA.

                                              Note: According to SSA officials, in addition to the letters described in this table, SSA sends letters
                                              with a LIS application to individuals receiving social security benefits and potentially eligible for LIS as
                                              they approach age 65 or the 25th month of disability.
                                              a
                                               SSA generally sends letters to former disability insurance individuals at the end of November of each
                                              year.


                                              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


                                              33
                                                According to SSA officials, SSA also sends letters with a LIS application to individuals
                                              receiving social security benefits and potentially eligible for LIS as they approach age 65
                                                       th
                                              or the 25 month of disability.




                                              Page 14                                     GAO-12-871 Enrollment in Medicare Savings Programs
                             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.


SSA Spent about              In fiscal years 2009 through 2011, SSA spent about $12 million to
$12 Million in the First     implement the MIPPA requirements. Of the $24.1 million appropriated by
3 Years and Reported That    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
Implementing the             $4.7 million respectively). The remaining $14.9 million in unspent funds
Requirements Did Not         remains available to SSA for future costs in meeting the requirements. In
Significantly Affect SSA’s   fiscal year 2011, SSA spent about $2.5 million of the $3 million
Workload                     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. 34 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


                             34
                               SSA defines an FTE as the equivalent of a staff member (or combination of staff
                             members) that worked 2,080 hours. The FTE numbers cited for annual MSP-related
                             activities includes the work of staff at both SSA headquarters and field offices.




                             Page 15                             GAO-12-871 Enrollment in Medicare Savings Programs
                        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. 35


                        Using CMS data, we estimated that MSP enrollment increased each year
Estimated MSP           from 2007 through 2011. The largest increases in MSP enrollment
Enrollment Increased    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.)
from 2007 through       During this period, Medicare enrollment also grew by approximately 2 to
2011 with the Largest   3 percent each year, from about 44.4 million people in 2007 to about
                        48.7 million people in 2011. 36
Increases Occurring
after the
Requirements Took
Effect


                        35
                          See MIPPA § 113(a), 122 Stat. 2503, 2504 (adding SSA § 1144 (c)(5)). SSA uses its
                        annual administrative funding to administer various services, including the Old Age and
                        Survivors Insurance, Disability Insurance, and SSI programs, among other services, and
                        provide certain administrative support for programs primarily administered by other
                        agencies, such as Medicare.
                        36
                          See Boards of Trustees, Federal Hospital Insurance and Federal Supplementary
                        Medical Insurance Trust Funds, The 2012 Annual Report of the Boards of Trustees of the
                        Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds
                        (Washington, D.C.: Apr. 23, 2012).




                        Page 16                             GAO-12-871 Enrollment in Medicare Savings Programs
Table 4: Change in Estimated Medicare Savings Program (MSP) Enrollment, 2007
through 2011

                                 Estimated           Estimated annual                   Annual
 Month/year                 MSP enrollment      increase in enrollment     percentage increase
 December 2007                      6,740,940                 233,190                        3.6%
 December 2008                      7,002,427                 261,487                           3.9
 December 2009                      7,195,390                 192,963                           2.8
 December 2010                      7,572,541                 377,151                           5.2
 December 2011                      7,961,274                 388,733                           5.1
Source: GAO analysis of CMS data.

Notes: These data provide an estimate of the number of Medicare beneficiaries enrolled in MSPs in
December of the given year and the annual change in enrollment nationally. The data do not include
individuals enrolled in the Qualified Working and Disabled Individuals program. The data may include
some beneficiaries who are not enrolled in MSPs for whom states finance Medicare Part B premiums.


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. 37
      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. 38 As a result of the
      application transfers from SSA in 2011, Arizona reported enrolling
      about 800 of 16,000 applicants; Louisiana reported enrolling about


37
  Officials from the remaining state did not answer the survey question about the effects of
the application transfers on MSP enrollment.
38
  SSA collected data on the number of people who applied for LIS and were enrolled in an
MSP in 2010 and 2011, about 280,000 individuals each year. SSA officials explained that
the data are limited in that SSA cannot determine whether those enrolled in an MSP were
enrolled as a result of their LIS application triggering an MSP application or because of a
duplicate MSP application submitted to the state.




Page 17                                     GAO-12-871 Enrollment in Medicare Savings Programs
     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. 39

•    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. 40 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. 41 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.




39
  GAO-04-363. Using SSA data, we estimated that of the 16.4 million people who
received SSA letters in 2002, an additional 74,000 recipients enrolled in MSPs than would
have likely enrolled without the mailing.
40
  Of the remaining 10 states, 9 did not consider a person’s assets when determining
eligibility for MSPs, and therefore the MIPPA requirement did not expand eligibility in
those states. They are Alabama, Arizona, Connecticut, Delaware, the District of Columbia,
Maine, Mississippi, New York, and Vermont. The final state, Minnesota, had asset limits
that were higher than the LIS limits prior to January 2010.
41
  NCOA defines assistance as providing follow up or resolving problems with an
application that was (1) denied by the state, (2) delayed beyond the 45-day limit for
determining eligibility, or (3) found to be incomplete by the state. The grantees are to
provide enough assistance to individuals so that the state can process the application.




Page 18                               GAO-12-871 Enrollment in Medicare Savings Programs
                       •    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. 42 In addition, awards of SSA disability benefits to
                            those ages 50 to 64 increased. 43 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. 44


                       Officials from four of the six states we contacted to supplement our
States Reported That   survey reported making changes to Medicaid eligibility systems,
the Requirements Led   specifically, changes to both information systems and business
                       processes, to receive and act upon the applications transferred by SSA.
to Various System      For example, officials from Arizona reported modifying the state’s
Changes and            information system to accept the data and automatically create records
Increased Workload     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


                       42
                         We found that among elderly households with incomes below 130 percent of FPL, the
                       proportion classified as food insecure rose from 17.6 percent in 2006 to 24.0 percent in
                       2010. The U.S. Department of Agriculture identifies families with food insecurity based on
                       responses to questions in a supplement to the Current Population Survey concerning the
                       inability, at times, to afford balanced meals, cutting the size of meals because of too little
                       money for food, or being hungry because of too little money for food. Households are
                       classified as having low or very low food security if they experienced the condition at any
                       time during the previous 12 months. GAO, Income Security: Older Adults and the 2007-
                       2009 Recession, GAO-12-76 (Washington, D.C.: Oct. 17, 2011).
                       43
                          The Kaiser Commission on Medicaid reported that Medicaid enrollees that are aged or
                       living with disabilities are less sensitive to changes in economic conditions than other
                       populations, such as children. However, using data reported by 45 states and
                       Washington, D.C., they found that Medicaid enrollment for the aged and disabled grew by
                       4 percent from December 2009 to December 2010 as compared to increases of
                       3.4 percent and 2.7 percent in the two preceding 12-month periods. See Kaiser
                       Commission on Medicaid Facts, Medicaid Enrollment: December 2010 Data Snapshot
                       (Washington, D.C.: December 2011).
                       44
                         Additionally, the percentage of adults 65 and older with incomes below 100 percent
                       of the poverty level declined from 9.7 percent in 2007 to 9.0 percent in 2010. See
                       GAO-12-76.




                       Page 19                                GAO-12-871 Enrollment in Medicare Savings Programs
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. 45 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 five of the six states said that the application transfers had
increased the state’s workload—the time spent processing applications
for MSP enrollment—to some extent and that the additional work was
absorbed by existing staff. 46 While states were able to make MSP
determinations and generate notifications without the need for
caseworker involvement for some of the 1.9 million applications sent by
SSA since the transfers began in January 2010, other cases required
follow-up calls with the applicant or cross-checking the data with other
data sources for verification. Colorado, one of the five states reporting an
increase in workload, provided data showing that the state received
around 15 percent more applications in 2010 and 2011 than in 2009.
However, officials from Pennsylvania, another of the states that reported
an increase in workload, indicated that the effect was minimal.
Pennsylvania officials noted that, while transfers have increased the
volume of applications, processing applications for MSP is a relatively
small portion of caseworkers’ overall workload. Officials noted that
caseworkers process many more applications for other programs such as
Medicaid and the Supplemental Nutrition Assistance Program than for
MSPs. Officials from Louisiana, the one state that did not report an



45
  Under the state’s interim process, which was reviewed by CMS for compliance with the
requirements, the state receives the transfers in a stand-alone database. That database
generates notifications to transferred applicants that to be considered for MSP eligibility
they must contact their county social service office or visit the state website to complete
an application. If the person submits an application and the notification letter documenting
the date of LIS application, the state will determine eligibility and, upon approval, will use
the LIS application date when determining eligibility for MSPs. If the person does not
submit the application, no determination of eligibility is made and there is no record of an
application in the state’s eligibility system. Once the state’s system is updated, all
applicants transferred by SSA will receive an eligibility determination for MSPs.
46
  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.




Page 20                                GAO-12-871 Enrollment in Medicare Savings Programs
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. 47 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.



47
  SSA officials told us that soon after application transfers began, SSA modified its
process to delay transferring applications for those not yet eligible for Medicare until the
applicant is within 1 month of eligibility. However, officials from several states reported that
their states continue to receive applications for individuals who are more than 1 month
away from being eligible for Medicare.




Page 21                                GAO-12-871 Enrollment in Medicare Savings Programs
•    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. 48
(See table 5.) Nine states reported requiring applicants to reverify all of
the data elements transferred by SSA, including household size and
identity.




48
 Our survey did not ask states whether the state’s methods for determining eligibility for
MSPs were consistent with those used for LIS.




Page 22                               GAO-12-871 Enrollment in Medicare Savings Programs
Table 5: Social Security Administration (SSA) Data Elements States Require
Medicare Savings Program Applicants to Reverify

 Data element transferred by SSA                          Number of states requiring reverification
 Earned income                                                                                         30
 Assets                                                                                                29
 Income not from work                                                                                  28
 Household size                                                                                        19
 Identity                                                                                              11
Source: GAO survey of state Medicaid officials.

Note: Of the 51 states that responded to our survey, officials from 35 states reported requiring
applicants to reverify one or more of the data elements transferred by SSA; officials from 15 states
reported not requiring applicants to reverify any of the information; and officials from 1 state did not
answer the relevant survey question.


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). 49 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. 50 In
contrast, in the three states we contacted that required applicants to


49
  Louisiana’s data indicated that, despite treating the SSA data as verified, about
25 percent of applications received from SSA in 2011 required involvement of a
caseworker.
50
  For example, the state reported accessing data from the Internal Revenue Service on
earned and unearned income.




Page 23                                           GAO-12-871 Enrollment in Medicare Savings Programs
               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.


               Historically, MSPs have had low enrollment rates, with the Congressional
Concluding     Budget Office estimating in 2004 that only a third of eligible individuals
Observations   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


               Page 24                         GAO-12-871 Enrollment in Medicare Savings Programs
                  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.


                  We provided a draft of this report to HHS and SSA to review. HHS did not
Agency Comments   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.




                  Kathleen M. King
                  Director, Health Care




                  Page 25                       GAO-12-871 Enrollment in Medicare Savings Programs
List of Committees

The Honorable Max Baucus
Chairman
The Honorable Orrin G. Hatch
Ranking Member
Committee on Finance
United States Senate

The Honorable Fred Upton
Chairman
The Honorable Henry A. Waxman
Ranking Member
Committee on Energy and Commerce
House of Representatives

The Honorable Dave Camp
Chairman
The Honorable Sander M. Levin
Ranking Member
Committee on Ways and Means
House of Representatives




Page 26                        GAO-12-871 Enrollment in Medicare Savings Programs
Appendix I: GAO Methodology for Estimating
              Appendix I: GAO Methodology for Estimating
              Change in Medicare Savings Program
              Enrollment


Change in Medicare Savings Program
Enrollment
              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. 1 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



              1
               The data were derived from CMS’s monthly Third-Party Buy-In file, which contains data
              from the CMS Enrollment Database. Data in the Enrollment Database are used by CMS to
              track enrollment and bill state Medicaid programs for the Part B premiums for individuals
              whose premiums the state has agreed to finance. States submit data regularly to CMS for
              updates to the Enrollment Database.




              Page 27                              GAO-12-871 Enrollment in Medicare Savings Programs
Appendix I: GAO Methodology for Estimating
Change in Medicare Savings Program
Enrollment




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.




Page 28                             GAO-12-871 Enrollment in Medicare Savings Programs
Appendix II: GAO Contact and Staff
                  Appendix II: GAO Contact and Staff
                  Acknowledgments



Acknowledgments

                  Kathleen M. King, (202) 512-7114, kingk@gao.gov
GAO Contact
                  In addition to the contact named above, Kristi Peterson, Assistant
Staff             Director; Jeremy Cox, Assistant Director; Susan Barnidge; Krister Friday;
Acknowledgments   Sandra George; Kristin Helfer Koester; Lisa Rogers; and Paul Wright
                  made key contributions to this report.




(291010)
                  Page 29                              GAO-12-871 Enrollment in Medicare Savings Programs
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