Children's Health Insurance
Recent HHS-OIG Reviews Inform the Congress on Improper Enrollment and Reductions in Low-Income, Uninsured Children Gao ID: GAO-06-457R March 9, 2006The Congress passed legislation creating the State Children's Health Insurance Program (SCHIP) in 1997 to reduce the number of uninsured children in families with incomes that are too high to qualify for Medicaid. For SCHIP, the Congress appropriated $40 billion over 10 years, with funds allotted annually to the 50 states, the District of Columbia, and the U.S. commonwealths and territories. States' participation in SCHIP is voluntary. States that do participate have three options in designing their SCHIP programs: expand the Medicaid program to include SCHIP-eligible children, develop a separate child health insurance program, or maintain a program that combines both of these options. Financed jointly by the states and the federal government, SCHIP offers a strong incentive for states to participate by offering a higher federal matching rate--that is, the federal government pays a larger proportion of program expenditures--than the Medicaid program. While this incentive encourages efforts to reduce the number of uninsured children through state participation in SCHIP, there have been concerns that states might inappropriately enroll Medicaid-eligible children in SCHIP and thus obtain higher federal matching funds than allowed under Medicaid. In addition, there has been interest in assessing the progress states made to reduce the number of uninsured children, including the extent to which states met the objectives and goals established in their SCHIP programs. In particular, states must report their progress in reducing the number of low-income, uninsured children and may rely on certain national data sets, such as the Current Population Survey (CPS), or conduct their own surveys, to do so. In the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 (BBRA), the Congress directed the Department of Health and Human Services (HHS) Office of Inspector General (OIG) to conduct a series of studies on two issues--determining the number of children who were enrolled in separate SCHIP programs but were eligible for Medicaid and assessing states' progress in reducing the number of low-income, uninsured children--every 3 years, beginning in fiscal year 2000. This provision required the OIG to only include in its studies states with separate SCHIP programs. BBRA directed that we review and report on the OIG's work. The OIG issued its initial reports in February 2001, and our assessment of the OIG's work was published in March 2002. The OIG's most recent set of reports on these issues was published in 2004 and 2005. This report reflects our evaluation of the OIG's recent reports. Specifically, we assessed the OIG's efforts to inform the Congress on (1) the number of Medicaid-eligible children enrolled in separate SCHIP programs and (2) states' progress in reducing the number of uninsured children, including the progress they have made in meeting the objectives and goals initially established in their SCHIP programs.
The OIG's most recent set of reports on improper SCHIP enrollment and states' progress in reducing the number of low-income, uninsured children informed the Congress about these issues and included improvements from its initial studies. For example, in evaluating the number of children who were enrolled in separate SCHIP programs but were eligible for Medicaid, the OIG broadened the scope of its initial study to include a random sample of children's case files from the 34 separate SCHIP programs with available data. In its initial study responding to the BBRA mandate, the OIG only examined case files from 5 separate SCHIP programs. In its most recent report, the OIG estimated that only 1 percent of children were improperly enrolled in separate SCHIP programs. The confidence interval the OIG calculated for its enrollment error rate, which provides an estimated range of values that is likely to include the true error rate, was 0.3 to 2.6 percent. We believe that this confidence interval is relatively wide for such an analysis and is likely the result of the small sample of case files reviewed by the OIG. However, we recognize that even at its upper bound, the enrollment error rate for the population would be 2.6 percent. In addition, 7 percent of separate SCHIP case files did not include enough information to support enrollment decisions, but the OIG did not find any evidence in these case files to indicate that the enrollment decisions were inappropriate. In part to respond to our earlier recommendation that the OIG expand its scope beyond the separate SCHIP programs, the OIG further informed the Congress about improper SCHIP enrollment by conducting an additional study in 29 states with Medicaid expansion programs. This study, which also evaluated the enrollment decisions in a random sample of case files, identified 7 percent of sampled children as not meeting the state eligibility criteria for Medicaid expansion and 10 percent of case files as having missing documentation. Similarly, for its most recent review of states' progress in reducing the number of low-income, uninsured children, the OIG expanded its scope to include the 46 states that submitted SCHIP annual reports for fiscal year 2002. In its initial study responding to the BBRA mandate, the OIG only examined the annual reports of 5 states with separate SCHIP programs. The OIG also supplemented its most recent review by examining several national data sources on the uninsured. The OIG noted that states continue to face challenges in their efforts to measure the change in the number of low-income, uninsured children, and only 22 of the 46 states that submitted reports directly measured their progress in this area. One of the biggest challenges in measuring progress is the limitation in data sources--including the often-used CPS, which for various reasons, such as small sample sizes, has not produced reliable state-level estimates in the past. In light of these obstacles, the OIG recommended that CMS continue to work with states to address concerns about data sources used to measure such progress. We concur with this recommendation. In addition, absent state submission of data directly measuring changes in low-income, uninsurance rates through their SCHIP annual reports, the OIG suggested, and we concur, that CMS could itself measure such reductions by completing its own analysis of available CPS data, which now include the results of broader state samples.
GAO-06-457R, Children's Health Insurance: Recent HHS-OIG Reviews Inform the Congress on Improper Enrollment and Reductions in Low-Income, Uninsured Children
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March 9, 2006:
Congressional Committees:
Subject: Children's Health Insurance: Recent HHS-OIG Reviews Inform the
Congress on Improper Enrollment and Reductions in Low-Income, Uninsured
Children:
The Congress passed legislation creating the State Children's Health
Insurance Program (SCHIP) in 1997 to reduce the number of uninsured
children in families with incomes that are too high to qualify for
Medicaid.[Footnote 1] For SCHIP, the Congress appropriated $40 billion
over 10 years, with funds allotted annually to the 50 states, the
District of Columbia,[Footnote 2] and the U.S. commonwealths and
territories. States' participation in SCHIP is voluntary. States that
do participate have three options in designing their SCHIP programs:
expand the Medicaid program to include SCHIP-eligible children, develop
a separate child health insurance program, or maintain a program that
combines both of these options. Financed jointly by the states and the
federal government, SCHIP offers a strong incentive for states to
participate by offering a higher federal matching rate--that is, the
federal government pays a larger proportion of program expenditures--
than the Medicaid program.[Footnote 3] While this incentive encourages
efforts to reduce the number of uninsured children through state
participation in SCHIP, there have been concerns that states might
inappropriately enroll Medicaid-eligible children in SCHIP and thus
obtain higher federal matching funds than allowed under Medicaid. In
addition, there has been interest in assessing the progress states made
to reduce the number of uninsured children, including the extent to
which states met the objectives and goals established in their SCHIP
programs.[Footnote 4] In particular, states must report their progress
in reducing the number of low-income, uninsured children and may rely
on certain national data sets, such as the Current Population Survey
(CPS), or conduct their own surveys, to do so.
In the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of
1999 (BBRA), the Congress directed the Department of Health and Human
Services (HHS) Office of Inspector General (OIG) to conduct a series of
studies on two issues--determining the number of children who were
enrolled in separate SCHIP programs but were eligible for Medicaid and
assessing states' progress in reducing the number of low-income,
uninsured children--every 3 years, beginning in fiscal year
2000.[Footnote 5] This provision required the OIG to only include in
its studies states with separate SCHIP programs. BBRA directed that we
review and report on the OIG's work. The OIG issued its initial reports
in February 2001, and our assessment of the OIG's work was published in
March 2002.[Footnote 6]
The OIG's most recent set of reports on these issues was published in
2004 and 2005.[Footnote 7] This report reflects our evaluation of the
OIG's recent reports. Specifically, we assessed the OIG's efforts to
inform the Congress on (1) the number of Medicaid-eligible children
enrolled in separate SCHIP programs and (2) states' progress in
reducing the number of uninsured children, including the progress they
have made in meeting the objectives and goals initially established in
their SCHIP programs.
To assess the OIG's work, we reviewed the OIG's methodologies and
findings. We also interviewed the OIG officials who conducted these
studies to clarify questions and to discuss their response to our prior
recommendations.[Footnote 8] Finally, we examined the OIG's
recommendations to the Centers for Medicare & Medicaid Services (CMS),
which administers SCHIP. Our work was conducted from December 2005
through March 2006 in accordance with generally accepted government
auditing standards.
Results in Brief:
The OIG's most recent set of reports on improper SCHIP enrollment and
states' progress in reducing the number of low-income, uninsured
children informed the Congress about these issues and included
improvements from its initial studies. For example, in evaluating the
number of children who were enrolled in separate SCHIP programs but
were eligible for Medicaid, the OIG broadened the scope of its initial
study to include a random sample of children's case files from the 34
separate SCHIP programs with available data. In its initial study
responding to the BBRA mandate, the OIG only examined case files from 5
separate SCHIP programs. In its most recent report, the OIG estimated
that only 1 percent of children were improperly enrolled in separate
SCHIP programs. The confidence interval the OIG calculated for its
enrollment error rate, which provides an estimated range of values that
is likely to include the true error rate, was 0.3 to 2.6 percent. We
believe that this confidence interval is relatively wide for such an
analysis and is likely the result of the small sample of case files
reviewed by the OIG. However, we recognize that even at its upper
bound, the enrollment error rate for the population would be 2.6
percent. In addition, 7 percent of separate SCHIP case files did not
include enough information to support enrollment decisions, but the OIG
did not find any evidence in these case files to indicate that the
enrollment decisions were inappropriate. In part to respond to our
earlier recommendation that the OIG expand its scope beyond the
separate SCHIP programs, the OIG further informed the Congress about
improper SCHIP enrollment by conducting an additional study in 29
states with Medicaid expansion programs. This study, which also
evaluated the enrollment decisions in a random sample of case files,
identified 7 percent of sampled children as not meeting the state
eligibility criteria for Medicaid expansion and 10 percent of case
files as having missing documentation.
Similarly, for its most recent review of states' progress in reducing
the number of low-income, uninsured children, the OIG expanded its
scope to include the 46 states that submitted SCHIP annual reports for
fiscal year 2002. In its initial study responding to the BBRA mandate,
the OIG only examined the annual reports of 5 states with separate
SCHIP programs. The OIG also supplemented its most recent review by
examining several national data sources on the uninsured. The OIG noted
that states continue to face challenges in their efforts to measure the
change in the number of low-income, uninsured children, and only 22 of
the 46 states that submitted reports directly measured their progress
in this area. One of the biggest challenges in measuring progress is
the limitation in data sources--including the often-used CPS, which for
various reasons, such as small sample sizes, has not produced reliable
state-level estimates in the past. In light of these obstacles, the OIG
recommended that CMS continue to work with states to address concerns
about data sources used to measure such progress. We concur with this
recommendation. In addition, absent state submission of data directly
measuring changes in low-income, uninsurance rates through their SCHIP
annual reports, the OIG suggested, and we concur, that CMS could itself
measure such reductions by completing its own analysis of available CPS
data, which now include the results of broader state samples.
In commenting on a draft of this report, the OIG did not comment on our
findings. The OIG provided technical comments, which we incorporated as
appropriate.
Background:
Medicaid and SCHIP, joint federal-state programs to finance health care
coverage for certain categories of low-income individuals, represent
the primary source of health insurance coverage for low-income,
uninsured children. Although Medicaid has provided coverage to children
since 1965, SCHIP is a relatively new program, established in 1997. As
of January 2006, 11 states had expanded their Medicaid programs to
include children eligible for SCHIP, 19 states had separate SCHIP
programs, and 20 states had combination programs.[Footnote 9],[Footnote
10] (See fig. 1.)
Figure 1: States' Design Choices under SCHIP, January 2006:
[See PDF for image]
[End of figure]
Medicaid program expenditures are shared between states and the federal
government, and the share is determined using a formula that is based
on a state's per capita income in relation to the national average.
Federal matching rates for SCHIP are "enhanced"--they are established
under a formula that takes 70 percent of a state's Medicaid matching
rate and adds 30 percentage points, with an overall federal share that
may not exceed 85 percent.[Footnote 11] In fiscal year 2006, the
enhanced federal match rates for SCHIP ranged from 65 to about 83
percent while the federal match rates for Medicaid programs ranged from
50 to about 76 percent.
Under SCHIP, each state is required to submit a SCHIP plan and an
annual report, which must include a description of the state's progress
in reducing the number of low-income, uninsured children. States may
rely on the CPS, which is a monthly survey of a sample of American
households conducted by the Census Bureau and collects information on
characteristics of the labor force, to report progress in reducing the
number of low-income, uninsured children.[Footnote 12] In particular
months, the Census Bureau supplements its survey by incorporating
additional questions. For example, the March Supplement historically
asks respondents about their health insurance status and provides the
only nationwide source of information on uninsured children by state.
The OIG's Assessment of Improper Enrollment Identified Few Errors:
By broadening the scope of its initial study, the OIG's most recent set
of reports on the number of children who were enrolled in separate
SCHIP programs but were eligible for Medicaid more fully informed the
Congress on this issue. In contrast to its initial study in which the
OIG reviewed case files for five separate SCHIP programs, the OIG's
most recent work included a review of a sample of case files from all
separate SCHIP programs for which data were available. Similar to its
initial study, the OIG identified only 1 percent of children as being
improperly enrolled in separate SCHIP programs. The confidence interval
the OIG calculated for its enrollment error rate is relatively wide;
however, even at its upper bound, the error rate would be 2.6 percent
for the population. The OIG augmented this work by also evaluating
enrollment decisions in a random sample of case files from 29 Medicaid
expansion states.
The OIG's Assessment of Improper Enrollment Broadened to Include Nearly
All SCHIP Programs:
The OIG broadened the scope of its initial study from a review of 5
separate SCHIP programs to a review of the 34 separate SCHIP programs
for which data were available.[Footnote 13] From these programs, the
OIG selected a random sample of 400 case files to assess enrollment
decisions. After eliminating cases that did not fit study criteria, the
OIG ultimately reviewed 386 case files. The OIG reviewed documentation
within the case files, including the SCHIP application or the most
recent eligibility redetermination; supporting income documentation;
and calculation sheets states used to determine family income. The OIG
did not verify the accuracy and completeness of the state case files;
rather, it focused on whether the information in each file supported
the eligibility determination reached by the state. If case files were
missing documentation, the OIG determined if the files included any
information that indicated enrollment decisions were inappropriate.
Using the same methodology, the OIG also reviewed a random sample of
case files in 29 Medicaid expansion programs with available
data.[Footnote 14] Of the 400 case files randomly selected for this
study, 357 met study criteria and were reviewed. This additional work
was undertaken in part to respond to our earlier recommendation that
the OIG expand its review to include Medicaid expansion programs. The
OIG's review of enrollment decisions in both separate SCHIP and
Medicaid expansion programs went beyond the BBRA mandate and more fully
informed the Congress on this issue.
The OIG's sample of case files was drawn from over 80 percent of all
separate SCHIP and Medicaid expansion programs with available data.
Nevertheless, our assessment is that this sample was small compared to
the total SCHIP population, as it represented 0.01 percent of total
separate SCHIP enrollees and 0.04 percent of Medicaid expansion
enrollees. The small sample size resulted in a less precise estimate of
the number of cases of inappropriate SCHIP enrollment. In discussing
our assessment of the sample size, the OIG emphasized the increased
work associated with broadening its scope from 5 to 34 separate SCHIP
programs and reviewing the additional 29 Medicaid expansion programs.
The OIG also explained that the size of its sample was influenced, in
part, by available resources and competing priorities.
The OIG's Reviews Identified Few Examples of Inappropriate Enrollment:
The OIG's findings regarding the number of children improperly enrolled
in separate SCHIP programs paralleled its earlier study on this topic,
with only 1 percent of children (4 of 386 cases) identified as being
inappropriately enrolled. In each of these 4 cases, the children were
eligible for the respective state's Medicaid program. In its Medicaid
expansion study, the OIG identified 7 percent of sampled children (24
of 357 cases) as not meeting the state eligibility criteria for
Medicaid expansion. Of these cases, 21 had family incomes that were too
low to qualify for Medicaid expansion, and the remaining 3 had family
incomes that were too high to qualify. For both separate and expansion
programs, enrollment errors were due to a variety of reasons, including
caseworkers misinterpreting income information, multiplying daily wages
by the wrong number of days, or basing a family's income on weekly as
opposed to biweekly pay.
For the separate SCHIP study, the OIG projected its error rate estimate
to the population, and a 95 percent confidence interval was estimated
as 0.3 to 2.6 percent.[Footnote 15] The confidence interval, which we
consider to be relatively wide in light of the enrollment error rate of
1 percent, is likely a result of the small sample size.[Footnote 16]
However, even at its upper bound, the error rate would be 2.6 percent
for the population. The OIG did not project to the population for
Medicaid expansion programs because of problems identified with
population data provided by certain states, such as data that
mistakenly included children who were enrolled in states' traditional
Medicaid programs.
In addition to the definitive cases of inappropriate enrollment
identified above, the OIG noted that some case files--approximately 7
percent of the 386 separate SCHIP and 10 percent of the 357 Medicaid
expansion case files--did not include complete documentation to support
enrollment determinations. However, the OIG reviewed the documentation
included in these case files and did not identify any information that
indicated enrollment decisions were inappropriate. Further, the OIG
explained that for the case files with missing documentation, income
levels were toward the middle of the SCHIP eligibility range, as
opposed to near the lower bound of the range closer to Medicaid
eligibility levels. Therefore, errors in documentation or calculations
of resources would have needed to be extensive for the children to be
eligible for traditional Medicaid as opposed to SCHIP. We concurred
with the OIG's reasoning.
The OIG Identified Challenges States Face in Determining the Number of
Uninsured and Opportunities for CMS Assistance:
To assess states' progress in reducing the number of low-income,
uninsured children, the OIG also broadened the scope of its mandated
review to include all states that submitted SCHIP annual reports for
fiscal year 2002 by June 1, 2003. The OIG's review of these annual
reports indicated that states continue to experience challenges when
determining their progress in reducing the number of low-income,
uninsured children, primarily with data sources. We agree with the
OIG's recommendation that CMS continue to work with states to address
concerns about data sources used to measure their progress in reducing
the number of low-income, uninsured children.
The OIG's Review Indicated States' Efforts to Report Progress in
Reducing Uninsured Children Are Hindered by Data Limitations:
Similar to its most recent work on inappropriate enrollment in SCHIP
programs, the OIG expanded its review of state efforts to measure
changes in the number of low-income, uninsured children. The OIG
reviewed the fiscal year 2002 SCHIP annual reports of the 46 states
that submitted them by June 1, 2003. In its initial report, the OIG
reviewed reports from 5 states' separate SCHIP programs.[Footnote 17]
The OIG reviewed the annual reports to determine states' progress in
meeting the strategic objective of reducing the number of uninsured
children. While 22 states used CPS or state survey data to demonstrate
changes in the uninsured population of children, the remaining 24
states did not respond directly to the objective.[Footnote 18] Instead,
19 of these 24 states used SCHIP enrollment data as a proxy for
demonstrating their progress in reducing the number of uninsured
children. Of the remaining states, 3 provided responses that did not
measure insurance coverage or enrollment, and 2 did not respond.
Further, the OIG augmented its assessment of state efforts by also
reviewing national data on the uninsured--including data from the CPS,
the National Health Interview Survey, and the Urban Institute. These
sources were consistent with the majority of states' annual reports
that indicated a reduction in the number of uninsured children. By
expanding its scope, the OIG went beyond BBRA's requirements to inform
the Congress on states' progress in reducing the population of
uninsured children.
The OIG emphasized, and we acknowledge, that efforts to measure
progress in reducing the number of low-income, uninsured children in
states continue to be hindered by multiple factors, such as limitations
in data sources and the often prohibitive cost of conducting state
surveys. For example, CPS data used by many states have well-
established shortcomings--particularly with regard to state-level
estimates--which can be unreliable and exhibit volatility from year to
year because of small sample sizes. This is particularly true in states
with smaller populations. Also, children who are enrolled in Medicaid
are often undercounted in CPS data and may be mistakenly counted as
uninsured. Finally, as noted in the OIG's recent report, the manner in
which the Census Bureau asks respondents about their health insurance
coverage during the past year may lead to respondents incorrectly
answering the question. As a result, CPS data may overestimate the
number of uninsured children.[Footnote 19]
In addition to data source problems, the OIG noted that some states use
changes in SCHIP enrollment to demonstrate progress in meeting this
objective. However, we agree with the OIG that increases in SCHIP
enrollment are not a valid measure of reductions in the number of low-
income, uninsured children. For example, an increase in SCHIP
enrollment can be the result of children moving from private health
insurance coverage to public insurance under SCHIP. In addition,
declines in the economy and increased unemployment can lead to some
children losing their private health insurance coverage and enrolling
in SCHIP, and others becoming uninsured because they are ineligible for
SCHIP.
The OIG Suggested CMS Assist States in Future Efforts to Estimate
Uninsured Children:
In its most recent report, the OIG recommended, and we agree, that CMS
should continue to work with states to determine whether ongoing CPS
sample size improvements have alleviated concerns about limitations in
the CPS data. In 1999, the Congress appropriated $10 million annually
for the Census Bureau for fiscal year 2000 and subsequent fiscal years
to improve the reliability of CPS data for estimating the uninsured
population of low-income children. Specifically, in response to
concerns about the reliability of state-level estimates, the Census
Bureau increased the survey sample size for each state, which may
improve the accuracy of CPS estimates of low-income, uninsured
children.[Footnote 20] Although these improved data were available in
March 2002, not all states used these data in their fiscal year 2002
SCHIP annual reports. Of the 12 states that used CPS data to determine
their progress in reducing the number of low-income, uninsured
children, only 4 used the March 2002 data in their reports. The
remaining 8 states relied on data from prior years. The OIG did not
explore the reasons why these 8 states did not incorporate the March
2002 data in their reports.
Further, CPS data are easily accessible and are available at no cost.
Therefore, absent state submission of data measuring changes in low-
income, uninsurance rates through their SCHIP annual reports, the OIG
officials suggested, and we concur, that CMS could itself measure such
reductions by completing its own analysis of CPS data.
Agency Comments:
We received comments on a draft of this report from the HHS-OIG (see
the enclosure). In commenting on a draft of this report, the OIG did
not comment on our findings, but the OIG did provide technical
comments, which we incorporated as appropriate.
We are sending a copy of this report to the Inspector General of HHS
and other interested parties. In addition, the report is also available
at no charge on GAO's Web site at http://www.gao.gov.
If you or your staffs have questions about this report, please contact
me at (312) 220-7600 or aronovitzl@gao.gov. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on
the last page of this report. Susan Anthony, Assistant Director; Kevin
Milne; Dae Park; and Sari B. Shuman made key contributions to this
report.
Leslie G. Aronovitz:
Director, Health Care:
Enclosure:
List of Committees:
The Honorable Arlen Specter:
Chairman:
The Honorable Tom Harkin:
Ranking Minority Member:
Subcommittee on Labor, Health and Human Services, Education, and
Related Agencies:
Committee on Appropriations:
United States Senate:
The Honorable Charles E. Grassley:
Chairman:
The Honorable Max Baucus:
Ranking Minority Member:
Committee on Finance:
United States Senate:
The Honorable Ralph Regula:
Chairman:
The Honorable David R. Obey:
Ranking Minority Member:
Subcommittee on Labor, Health and Human Services, Education, and
Related Agencies:
Committee on Appropriations:
House of Representatives:
The Honorable Joe Barton:
Chairman:
The Honorable John D. Dingell:
Ranking Minority Member:
Committee on Energy and Commerce:
House of Representatives:
Comments from the Department of Health and Human Services:
DEPARTMENT OF HEALTH & HUMAN SERVICES:
Office of Inspector General:
Washington, D.C. 20201:
MAR 3 2006:
Ms. Leslie G. Aronovitz:
Director, Health Care:
U.S. Government Accountability Office:
Washington, DC 20548:
Dear Ms. Aronovitz:
Enclosed are the Department's comments on the U.S. Government
Accountability Office's (GAO) draft report entitled, "CHILDREN'S HEALTH
INSURANCE: Recent HHS-OIG Reviews Inform the Congress on Inappropriate
Enrollment and Reductions in Low-Income, Uninsured Children" (GAO-06-
457R). These comments represent the tentative position of the
Department and are subject to reevaluation when the final version of
this report is received.
The Department provided several technical comments directly to your
staff.
The Department appreciates the opportunity to comment on this draft
report before its publication.
Sincerely,
Signed by:
Daniel R. Levinson:
Inspector General:
Enclosure:
The Office of Inspector General (OIG) is transmitting the Department's
response to this draft report in our capacity as the Department's
designated focal point and coordinator for U.S. Government
Accountability Office reports. OIG has not conducted an independent
assessment of these comments and therefore expresses no opinion on
them.
COMMENTS OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES ON THE U.S.
GOVERNMENT ACCOUNTABILITY OFFICE'S DRAFT REPORT ENTITLED, "CHILDREN'S
HEALTH INSURANCE: RECENT HHS-OIG REVIEWS INFORM THE CONGRESS ON
INAPPROPRIATE ENROLLMENT AND REDUCTIONS IN LOW-INCOME, UNINSURED
CHILDREN" (GAO-06-457RI:
The Department of Health and Human Services (HHS) appreciates the
opportunity to comment on the draft report. The Medicare, Medicaid, and
SCHIP Balanced Budget Refinement Act of 1999 (BBRA) mandates that every
3 years the Office of Inspector General (OIG) determine the number of
separate SCHIP enrollees, if any, who are eligible for Medicaid and the
reduction in the number of low-income, uninsured children. Your report
carries out the additional BBRA mandate that GAO review these two OIG
studies. Our comments follow.
In the first paragraph on page 2, GAO indicates that Congress asked OIG
to study two issues-inappropriate enrollment and the reduction in the
number of low-income, uninsured children. In regard to the first issue,
BBRA asks OIG to determine the number of children, if any, who are
enrolled in separate SCHIP but are eligible for Medicaid (rather than
inappropriate enrollment.) Congress's concern, as expressed through the
mandate, is that children eligible for Medicaid would instead be
enrolled in SCHIP, thus allowing a State to claim a higher match rate.
This clarification should be noted throughout when it describes the
purpose of this study.
In the second paragraph on page 8, when discussing Medicaid expansion,
GAO's presentation implies that OIG projected its findings to the
universe of children enrolled in Medicaid expansion programs. OIG did
not. We suggest deletion of the sentence that discusses OIG not
calculating a confidence interval because a discussion of confidence
intervals is not warranted when no projection has occurred. If GAO
chooses not to delete this sentence, we suggest that GAO replace the
current language, "The OIG did not calculate a confidence interval for
the error rate estimate for the Medicaid expansion programs.." with the
following language, "The OIG did not project to the universe for
Medicaid expansion programs.."
[End of section]
(290512):
FOOTNOTES
[1] Medicaid is a federal-state program that provides health care
coverage to certain categories of low-income adults and children. SCHIP
was established as title XXI of the Social Security Act by the Balanced
Budget Act of 1997, Pub. L. No. 105-33, § 4901, 111 Stat. 251, 552, and
is codified at 42 U.S.C. § 1397aa, et seq.
[2] The District of Columbia is included among our discussion of states
for purposes of this report.
[3] Federal funds are allotted to states for SCHIP programs up to a
specified amount each year. See 42 U.S.C. § 1397dd.
[4] The SCHIP statute includes a provision requiring states, in
establishing their programs, to specify strategic objectives and
performance goals for providing child health assistance. See 42 U.S.C.
§ 1397gg.
[5] Pub. L. No. 106-113, App. F., § 703, 113 Stat. 1501A-321, 1501A-
401-402.
[6] GAO, Children's Health Insurance: Inspector General Reviews Should
Be Expanded to Further Inform the Congress, GAO-02-512 (Washington,
D.C.: Mar. 20, 2002).
[7] Department of Health and Human Services Office of Inspector
General, SCHIP: States' Progress in Reducing the Number of Uninsured
Children (Washington, D.C.: August 2004); Determining if Children
Enrolled in Separate SCHIPs Were Eligible for Medicaid (Washington,
D.C.: June 2005); and Determining if Children Classified as SCHIP
Medicaid Expansion Meet Eligibility Criteria (Washington, D.C.: October
2005).
[8] See GAO-02-512. In that report, we noted that the OIG's findings
could not be generalized to all SCHIP programs because sample cases
were limited to five states' separate SCHIP programs. Therefore, we
recommended that the OIG (1) expand its scope when conducting
subsequent mandated studies and (2) review enrollment practices in
states with Medicaid expansion programs, in addition to separate SCHIP
programs, to further inform the Congress about the appropriateness of
enrollment. Because state evaluations of reductions in the uninsured
had limitations, we also suggested that the OIG review other available
literature on changes in the uninsured population for its next study.
[9] Prior to September 30, 2002, Tennessee had a Medicaid expansion
program under SCHIP, which covered children born before October 1,
1983, and who were under age 19 with family incomes up to 100 percent
of the federal poverty level. After September 2002, Tennessee
discontinued its SCHIP program because all enrolled children had aged
out of the program.
[10] At the time of the OIG's review, New York had a combination SCHIP
program. New York's program changed to a separate SCHIP program as of
April 1, 2005, when all of the children enrolled in the state's
Medicaid expansion aged out of the program.
[11] For example, a state with a 50 percent Medicaid match receives a
65 percent match under SCHIP.
[12] The CPS is the primary source of information on the labor force
characteristics of the U.S. population, and estimates obtained from the
CPS include employment, unemployment, earnings, and hours of work.
[13] Two separate SCHIP programs--Michigan and Rhode Island--were
unable to provide necessary data to the OIG.
[14] Michigan's Medicaid expansion program was unable to provide
necessary data to the OIG.
[15] The OIG did not report confidence intervals for its initial review
of inappropriate SCHIP enrollment.
[16] A confidence interval provides an estimated range of values,
within which the true error rate for the population will likely fall.
For this study, the OIG calculated that the true enrollment error rate
could be from 0.3 to 2.6 percent, which is 70 percent below and 160
percent above the estimated error rate.
[17] Four of the five states excluded from the most recent OIG review-
-Connecticut, Hawaii, Minnesota, and Nevada--were excluded because they
did not submit their SCHIP annual reports by June 1, 2003. The
remaining state, Tennessee, was not required to submit an annual report
because there was no one enrolled in its SCHIP program.
[18] Of the 22 states that directly demonstrated changes in the
uninsured population of children, 12 states used CPS data and 10 states
used state survey data.
[19] Although the CPS asks respondents if they had health insurance
coverage within the past year, the question is asked at a specific
point in time and may result in respondents answering incorrectly. For
example, those who had health insurance at some time during the year,
but who are uninsured at the time of the survey, may mistakenly answer
the question with their current uninsured status, which can lead to an
overestimate of the uninsurance rate.
[20] When reporting uninsurance rates, the Census Bureau reports 3-year
averages. Therefore, at least 4 years of data will need to be collected
to measure the full impact of the expanded sample. The 4 years of data
will allow for a comparison of the change in the rate of low-income,
uninsured children from two consecutive 3-year averages.
