Key Takeaways:

• Poor systems design means billions of dollars wasted — the Wall Street Journal reported that poor system design has led to duplicate Medicaid enrollments across states.
• Medicaid can learn from innovations in the elections sector — The Electronic Registration Information Center (ERIC) is a multi-state program that allows states to maintain accurate and secure voter rolls without adding any additional burdens to voters. Medicaid could have a similar secure data sharing system. In fact, federal Medicaid databases already track cross-state enrollments.
• Medicaid investments can save major dollars — Secure cross-state data sharing to improve Medicaid is possible.  But, cutting Medicaid funding hinders these kinds of improvements. Smart, upfront investment can curb waste and boost efficiency long-term

As Congress proposes potential federal funding cuts to Medicaid, “waste, fraud, and abuse” are often cited as reasons to reduce program funding. While states actively engage in Medicaid fraud investigations, program rules designed to protect healthcare access for Medicaid recipients can make it difficult to maintain accurate enrollment records. Adherence to these rules, and limited opportunities for data sharing between states and from the federal government, can lead to stories like the recent Wall Street Journal article, “Taxpayers Spent Billions Covering the Same Medicaid Patients Twice,” which highlights the costs of people erroneously enrolled in Medicaid in more than one state because of poor system design.

As the nation’s largest health insurance program, Medicaid is a federal program that reaches Americans through state-operated programs. Each state must follow a baseline set of rules to ensure that eligible individuals can quickly and easily enroll in coverage and stay covered as long as they remain eligible. Enrollees also have appeal rights and some enrollees have time-based enrollment periods. Crucially, enrollment in Medicaid happens state by state. If a person moves from one state to another, they need to manually enroll in their new state of residence and disenroll from their old state. There is not a mechanism for one state to determine if an enrollee has moved or has enrolled in Medicaid in a different state. This gap is burdensome for people enrolled in Medicaid and parents of enrolled children – and imposes large costs for states.  

This isn’t a case of intentional fraud, waste, or abuse by people who receive Medicaid. Much to the contrary, this is a matter of government systems not yet keeping up to track and account for something as routine and inevitable as people moving to new states.

About 75% of Medicaid enrollees are in Managed Care plans, where the state pays an insurance company to provide coverage for enrollees and the insurance company is paid a monthly rate per person to cover the cost of care. This system creates the dynamic for the claims that duplicate enrollment in Medicaid creates waste. If a person is enrolled in two states, and both states use managed care plans, then both states are paying insurance companies, even though the care is only received in one state. Without a solution to quickly and effectively identify duplicate enrollments, two states, along with the federal government, will be paying for the same person twice.

The problem of duplicate enrollments is not limited to Medicaid. The problem of voter registration in multiple states vexed election officials for many years. A solution came in the form of ERIC, the Electronic Registration Information Center. At least every 60 days, member-states of ERIC must submit voter registration and licensing and identification data from their DMV. ERIC then uses data matching software to identify potential voters who have moved within a state or across state lines, duplicate registrations within a state voter database, and deceased voters, allowing states to update voter rolls in accordance with state and federal laws. This system allows states to maintain accurate and secure voter rolls without adding any additional burdens to voters. Such a service does not exist for Medicaid, despite federal databases that track enrollments across states. For a costly program like Medicaid, this kind of streamlined list maintenance could mean millions of dollars saved for taxpayers.  

Leveraging technology solutions, paired with dynamic consumer protections of Medicaid in the event of an error, could reduce the waste generated by duplicate enrollment without letting down people who need access to care. There are effective pathways to reduce duplicate enrollments that would involve administrative action by CMS and the creation of new data sharing protocols. Those pathways must also include enrollee protections to ensure that any new process does not wrongly terminate coverage, as well as appropriate privacy protections. Data sharing in the Medicaid context can get complicated, but given the data sharing between CMS and states, a solution can be constructed.  

However, crafting such a solution takes upfront investment and policy commitments. Proposals to cut Medicaid funding will limit states’ abilities to effectively root out waste in the system because the needed infrastructure investments will be impossible. Saving money and improving efficiency over the long-term will require short-term investments coupled with innovative ideas.