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Missouri House committee examines new Medicaid system

August 26, 2015 at 4:45 a.m. | Updated August 26, 2015 at 4:45 a.m.

An increase in the Missouri's Medicaid caseload had legislators questioning representatives from the department of social services in a Tuesday hearing.

The number of Medicaid cases, including youth in the Children's Health Insurance Program (CHIP), hit a high point in May with more than 918,000 cases. Since January, the cases have increased by more than 55,000 due to various factors, including the implementation of a new enrollment system and policies in the Affordable Care Act, said Brian Kinkade, director of the department of social services.

Cases hit a low in May of last year with approximately 819,000 enrolled, which Kinkade credited to the Affordable Care Act taking effect in January. They have since steadily increased, but with a more noticeable jump this year.

The department's new enrollment system, the Missouri Eligibility Determination Enrollment System (MEDES), started Jan. 1, 2015, processing Medicaid applications under new standards, Kinkade said. MEDES was not fully developed when made public, though. EngagePoint, a Florida firm, was awarded a $148 million bid in 2013 to modify Curam, an IBM software, to meet the department's Medicaid application needs. As MEDES rolled out this year, EngagePoint was still developing the system, which created inefficiencies, Kinkade said.

Because the software was still in the developmental stages, he said department employees created "work arounds" when the system was inefficient for application processing.

This slowed down the application process, creating a backlog. In April, he said the amount of pending applications was approximately 55,000 - more than double the average rate for the time of year at 23,000 pending applications. Pregnant women needing their applications processed signaled a backlog issue as their cases are time sensitive.

"The combination of a new system, new policy, new procedures, new operation standards for our staff made us very inefficient, very slow in our application process those first few months and as a result, we saw our caseload drop off as pending applications dramatically," Kinkade said.

Doug Nelson, commissioner of the office of administration, also placed blame on EngagePoint. The state terminated its contract with the firm in May. Nelson said EngagePoint was not meeting deadlines, but he wouldn't divulge into specifics, citing his belief the state and firm will be in litigation after the department received a demand letter.

"I'm not going to get into a situation where I feel like I'm answering questions that are making admissions or putting the state's ability to either pursue its claims or defend claims against it in a public hearing with representatives of the vendor and counsel in the room," he said.

The department has since hired IBM, the second lowest bidder - next to EngagePoint - at $158 million on the original contract, Nelson said. He added the "lowest and best" regulation when awarding bids does not always mean what it implies and recommended review of the state's purchasing statutes. Eventually, Nelson said it's likely the project will cost more than intended, but he couldn't speculate how much.

Approximately 300 positions in the social services department have been eliminated since 2013, Kinkade said, as a result of increased implementation of new technologies for MEDES. He said he believes the system will eventually increase workers' productivity, justifying the trade-off for staff. However, Kinkade added, the department has no plans to cut staff for the time being.

"Now, the problem is that we began to cut staff as we built the system, which was fine, but over the last few months, the system development has slowed down," he said. "Over the past year, we did propose a further reduction in our staff because the system production had slowed down."

Rep. Genise Monticello, D-St. Louis, was vocal in her concerns with the department's recent inefficiencies and computer system. She said her constituents have run into difficulties accessing a live person to speak with over the phone, adding that's particularly problematic for seniors who are not computer savvy. Monticello questioned the department's ability to handle an influx of cases.

The problem isn't with customer service, she said, but the system.

"This isn't philosophical about how we're going to spend our money - this has real life impacts. ... I've got families who are worried about feeding their children," Monticello said. "This is a very real issue that affects a lot of children, and this department testified before us time and time again and we were promised this new system was going to be efficient, it was going to take care of the needs and everyone was going to be taken care of. It did not do that, so I'm very hesitant to believe that everything will be OK."

In his testimony to the committee, Kinkade said delayed re-investigations (cases going through an annual review for acceptance or denial) contributed to caseload growth. The department is also adjusting to ACA processing and review, which requires data matching for Social Security numbers, benefit income, disability status, citizenship and more. ACA policies have also lowered churn, which defines how many Medicaid enrollees are flowing in and out of the system - "not because they do not meet eligibility criteria, but because of missteps in the process of applying or reapplying," according to materials distributed by the department. Less churn means more cases, the material states.

The Select Committee on Budget will reconvene at noon Sept. 15 to continue its conversation on this topic.

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