Hurricane Katrina
Allocation and Use of $2 Billion for Medicaid and Other Health Care Needs Gao ID: GAO-07-67 February 28, 2007In February 2006, the Deficit Reduction Act of 2005 (DRA) appropriated $2 billion for certain health care costs related to Hurricane Katrina through Medicaid and the State Children's Health Insurance Program (SCHIP). The Centers for Medicare & Medicaid Services (CMS) was charged with allocating the $2 billion in funding to states directly affected by the hurricane or that hosted evacuees. GAO performed this work under the Comptroller General's statutory authority to conduct evaluations on his own initiative. In this report, GAO examined: (1) how CMS allocated the DRA funds to states, (2) the extent to which states have used DRA funds, and (3) whether selected states--Alabama, Louisiana, Mississippi, and Texas--anticipate the need for additional funds after DRA funds are expended. To conduct this review, GAO reviewed CMS's allocations of DRA funds to all eligible states, focusing in particular on the four selected states that had the highest initial allocation (released by CMS on March 29, 2006). GAO obtained data from Medicaid offices in the four selected states regarding their experiences enrolling individuals, providing services, and submitting claims; collected state Medicaid enrollment data; and analyzed DRA expenditure data that states submitted to CMS.
As of September 30, 2006, CMS allocated $1.9 billion of the $2 billion in DRA funding to states. CMS allocated funds to: Category I--the nonfederal share of expenditures for time-limited Medicaid and SCHIP services for eligible individuals affected by the hurricane (32 states); Category II--expenditures for time-limited uncompensated care services for individuals without a method of payment or insurance (8 of the 32 states); and Category III--the nonfederal share of expenditures for existing Medicaid and SCHIP beneficiaries (Alabama, Louisiana, and Mississippi). CMS did not allocate funds to Category IV--for restoration of access to health care. After CMS reconciles states' expenditures with allocations, it will determine how to allocate the unallocated $136 million and unexpended funds from the $1.9 billion allocated to states. Of the $1.9 billion in allocated DRA funds, almost two-thirds of the 32 states that received these funds submitted claims totaling about $1 billion as of October 2, 2006. Claims from Alabama, Louisiana, and Mississippi for Category III accounted for about 85 percent of all claims filed. These initial results are likely to change as states continue to file claims for services. Of the four selected states, Louisiana and Texas raised concerns about their ability to meet future health care needs once the DRA funds are expended. Louisiana's concerns involved managing its Medicaid program across state borders as those who left the state remain eligible for the program. Texas was significantly affected by the number of evacuees seeking services, thus raising concerns among state officials about the state's future funding needs. CMS, Alabama, Louisiana, and Texas commented on a draft of this report. CMS suggested the report clarify the DRA funding categories, reallocation process, and communication strategy with states, especially Louisiana. Louisiana and Texas commented on their ongoing challenges, and Alabama provided technical comments. The report was revised as appropriate.
GAO-07-67, Hurricane Katrina: Allocation and Use of $2 Billion for Medicaid and Other Health Care Needs
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Report to Congressional Committees:
United States Government Accountability Office:
GAO:
February 2007:
Hurricane Katrina:
Allocation and Use of $2 Billion for Medicaid and Other Health Care
Needs:
GAO-07-67:
GAO Highlights:
Highlights of GAO-07-67, a report to congressional committees
Why GAO Did This Study:
In February 2006, the Deficit Reduction Act of 2005 (DRA) appropriated
$2 billion for certain health care costs related to Hurricane Katrina
through Medicaid and the State Children‘s Health Insurance Program
(SCHIP). The Centers for Medicare & Medicaid Services (CMS) was charged
with allocating the $2 billion in funding to states directly affected
by the hurricane or that hosted evacuees.
GAO performed this work under the Comptroller General's statutory
authority to conduct evaluations on his own initiative. In this report,
GAO examined: (1) how CMS allocated the DRA funds to states, (2) the
extent to which states have used DRA funds, and (3) whether selected
states”Alabama, Louisiana, Mississippi, and Texas”anticipate the need
for additional funds after DRA funds are expended. To conduct this
review, GAO reviewed CMS‘s allocations of DRA funds to all eligible
states, focusing in particular on the four selected states that had the
highest initial allocation (released by CMS on March 29, 2006). GAO
obtained data from Medicaid offices in the four selected states
regarding their experiences enrolling individuals, providing services,
and submitting claims; collected state Medicaid enrollment data; and
analyzed DRA expenditure data that states submitted to CMS.
What GAO Found:
As of September 30, 2006, CMS allocated $1.9 billion of the $2 billion
in DRA funding to states. CMS allocated funds to: Category I”the
nonfederal share of expenditures for time-limited Medicaid and SCHIP
services for eligible individuals affected by the hurricane (32
states); Category II”expenditures for time-limited uncompensated care
services for individuals without a method of payment or insurance (8 of
the 32 states); and Category III”the nonfederal share of expenditures
for existing Medicaid and SCHIP beneficiaries (Alabama, Louisiana, and
Mississippi). CMS did not allocate funds to Category IV”for restoration
of access to health care. After CMS reconciles states‘ expenditures
with allocations, it will determine how to allocate the unallocated
$136 million and unexpended funds from the $1.9 billion allocated to
states.
Table: Allocation of DRA Funds to States, as of September 30, 2006:
State: Alabama;
DRA allocations (in thousands)[A]: Category I: $2,377,000;
DRA allocations (in thousands)[A]: Category II: $4,660,000;
DRA allocations: Category III: $241,144,000;
DRA allocations (in thousands)[A]: Total: $248,181,000;
Percentage: 13.3.
State: Louisiana;
DRA allocations (in thousands)[A]: Category I: 23,811;
DRA allocations (in thousands)[A]: Category II: 132,091,048;
DRA allocations (in thousands)[A]: Category III: 699,528,807;
DRA allocations (in thousands)[A]: Total: 831,643,666; Percentage:
44.6.
State: Mississippi;
DRA allocations (in thousands)[A]: Category I: 1,815,572;
DRA allocations (in thousands)[A]: Category II: 75,264,730;
DRA allocations (in thousands)[A]: Category III: 518,482,628;
DRA allocations (in thousands)[A]: Total: 595,562,930; Percentage:
32.0.
State: Texas;
DRA allocations (in thousands)[A]: Category I: 76,872,000;
DRA allocations (in thousands)[A]: Category II: 65,336,000;
DRA allocations (in thousands)[A]: Category III: [B];
DRA allocations (in thousands)[A]: Total: 142,208,000;
Percentage: 7.6.
State: Subtotal;
DRA allocations (in thousands)[A]: Category I: 81,088,383;
DRA allocations (in thousands)[A]: Category II: 277,351,778;
DRA allocations (in thousands)[A]: Category III: 1,459,155,435;
DRA allocations (in thousands)[A]: Total: 1,817,595,596;
Percentage: 97.5.
State: Remaining states;
DRA allocations (in thousands)[A]: Category I: 21,315,202;
DRA allocations (in thousands)[A]: Category II: 25,002,000;
DRA allocations (in thousands)[A]: Category III: [B];
DRA allocations (in thousands)[A]: Total: 46,317,202;
Percentage: 2.5.
Total;
DRA allocations (in thousands)[A]: Category I: $102,403,585;
DRA allocations (in thousands)[A]: Category II: $302,353,778;
DRA allocations (in thousands)[A]: Category III: $1,459,155,435;
DRA allocations (in thousands)[A]: Total: $1,863,912,798;
Percentage: 100.0.
Source: GAO analysis of CMS data.
Note: This table accounts for the DRA funds allocated to states as of
September 30, 2006.
[A] CMS did not allocate funds to Category IV, restoring access to
health care.
[B] Texas and the remaining states were not eligible for funding from
this category.
[End of Table]
Of the $1.9 billion in allocated DRA funds, almost two-thirds of the 32
states that received these funds submitted claims totaling about $1
billion as of October 2, 2006. Claims from Alabama, Louisiana, and
Mississippi for Category III accounted for about 85 percent of all
claims filed. These initial results are likely to change as states
continue to file claims for services.
Of the four selected states, Louisiana and Texas raised concerns about
their ability to meet future health care needs once the DRA funds are
expended. Louisiana‘s concerns involved managing its Medicaid program
across state borders as those who left the state remain eligible for
the program. Texas was significantly affected by the number of evacuees
seeking services, thus raising concerns among state officials about the
state‘s future funding needs.
CMS, Alabama, Louisiana, and Texas commented on a draft of this report.
CMS suggested the report clarify the DRA funding categories,
reallocation process, and communication strategy with states,
especially Louisiana. Louisiana and Texas commented on their ongoing
challenges, and Alabama provided technical comments. The report was
revised as appropriate.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-67].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Kathryn G. Allen (202)
512-7118 or allenk@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
CMS Allocated DRA Funds to Three Funding Categories:
States Have Submitted Claims for About Half of Total DRA Allocations:
Louisiana and Texas Raised Concerns Regarding Future Funding Needs:
Agency and State Comments and Our Evaluation:
Appendix I: Deficit Reduction Act of 2005 Allocations to 32 States:
Appendix II: Comments from the Centers for Medicare & Medicaid
Services:
Appendix III: Comments from the State of Louisiana Department of Health
and Hospitals:
Appendix IV: Comments from the State of Texas Health and Human Services
Commission:
Appendix V: GAO Contact and Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: CMS's Simplified Eligibility Groups for Demonstration Projects
for Time-Limited Medicaid and SCHIP Services:
Table 2: DRA Funding Characteristics and Categories:
Table 3: CMS's Allocation of DRA Funds to States Based on States'
Estimated Expenditures, as of September 30, 2006:
Table 4: Selected States' Initial and Updated Estimated Expenditures
and CMS's Initial and Updated Allocations, as of September 30, 2006:
Table 5: CMS Allocation of DRA funds and States' Claims Submitted for
Reimbursement, by State, as of October 2, 2006:
Table 6: CMS Allocation of DRA Funds and States' Claims Submitted, by
Time-limited Funding Categories, as of October 2, 2006:
Table 7: Claims Submitted for the Nonfederal Share of Expenditures for
Existing Medicaid and SCHIP Beneficiaries (Category III), as of October
2, 2006:
Table 8: Percentages of Submitted Claims for Top Four Medicaid Services
in Each Selected State, as of October 2, 2006:
Table 9: Selected States' Monthly Enrollment in Category I, Time-
limited Medicaid Services:
Table 10: CMS's Allocation of DRA Funds to States, Based on States'
Estimated Expenditures, as of September 30, 2006:
Figures:
Figure 1: Affected Counties or Parishes in Louisiana, Mississippi, and
Alabama:
Figure 2: Percentage of $1.9 Billion DRA Allocation by Funding
Category, as of September 30, 2006:
Figure 3: Texas Monthly Enrollment for Its Traditional Medicaid Program
and DRA Categories I and II, July 2005-June 2006:
Abbreviations:
CMS: Centers for Medicare & Medicaid Services:
DRA: Deficit Reduction Act of 2005:
FPL: Federal Poverty Level:
HHS: Health and Human Services:
MBES: Medicaid Budget and Expenditure System:
SCHIP: State Children's Health Insurance Program:
SSA: Social Security Act:
SSI: Supplemental Security Income:
United States Government Accountability Office:
Washington, DC 20548:
February 28, 2007:
Congressional Committees:
Hurricane Katrina, which made landfall along the Gulf coast of
Louisiana and Mississippi on August 29, 2005, was one of the largest
natural disasters in our nation's history, disrupting the lives of
hundreds of thousands of individuals who suddenly lacked housing and
access to basic health care services. The states most directly affected
by the hurricane--Alabama, Louisiana, and Mississippi[Footnote 1]--
were among the poorest areas in the United States, even before
Hurricane Katrina hit. Compared to the rest of the United States,
higher proportions of the nonelderly populations in these directly
affected states were enrolled in Medicaid, a program jointly financed
by the federal government and states to provide health care coverage to
certain categories of low-income individuals. The devastation caused by
Hurricane Katrina compounded the health care needs of these
communities, increasing the numbers of eligible beneficiaries for
Medicaid and adding large numbers of uninsured individuals.
Additionally, individuals displaced from their homes and jobs evacuated
their home states and moved to other states, such as Texas, which
strained these states' health care resources.
During the first 3 weeks after the hurricane, the Centers for Medicare
& Medicaid Services (CMS), which oversees the Medicaid program,
announced that states could apply for demonstration projects--to be
approved by CMS--through which the federal government would fund its
share of expenditures for health care services for certain individuals
affected by the hurricane.[Footnote 2] CMS identified two categories of
services covered under these demonstration projects, both of which were
subject to time limitations. The first category allowed individuals
affected by the hurricane and eligible under an approved demonstration
project to receive benefits under Medicaid or the State Children's
Health Insurance Program (SCHIP) for up to 5 months.[Footnote 3] The
second category, known as uncompensated care, allowed states to
reimburse providers rendering services from August 24, 2005, through
January 31, 2006, to individuals affected by the hurricane who had no
other method of payment or insurance.[Footnote 4] In February 2006, the
Deficit Reduction Act of 2005 (DRA) appropriated $2 billion to fund,
among other purposes, these two categories of services under approved
demonstration projects.[Footnote 5] DRA further specified that the $2
billion could be used for two additional categories of expenditures
that were not time-limited. With respect to the third category, funds
were available for the nonfederal (state) share of expenditures for
services provided to existing Medicaid and SCHIP beneficiaries from
certain areas of the directly affected states.[Footnote 6] Funds were
also available for the fourth category of restoring access to health
care in impacted communities.[Footnote 7] DRA did not specify how the
$2 billion in Hurricane Katrina relief funding would be allocated among
the states; rather, CMS was responsible for determining these
allocations.[Footnote 8]
Because of broad congressional interest, we performed this work under
the Comptroller General's statutory authority to conduct evaluations on
his own initiative. This report presents results of our work examining:
(1) how CMS allocated the DRA funds to states, (2) the extent to which
states have used DRA funds, and (3) whether Alabama, Louisiana,
Mississippi, and Texas anticipate the need for additional funds after
DRA funds are expended.
To conduct this work, we obtained documentation from CMS on its
allocation of DRA funds to states. We reviewed allocations for four
categories, as outlined below.
* Category I--time-limited Medicaid and SCHIP services:[Footnote 9]
This category was for the nonfederal (state) share of expenditures
associated with Medicaid and SCHIP services (including administrative
costs) provided to individuals affected by Hurricane Katrina and
eligible under an approved demonstration project.[Footnote 10] Each
state defined the populations eligible for its demonstration project
for individuals affected by the hurricane. Funding is available through
this category for services delivered through June 30, 2006.
* Category II--time-limited uncompensated care services:[Footnote 11]
This category contained funding for the total expenditures associated
with services (including administrative costs) provided to individuals
affected by Hurricane Katrina who did not have a method of payment or
insurance.[Footnote 12] Funding is available through this category for
services delivered through January 31, 2006.
* Category III--existing Medicaid and SCHIP beneficiaries:[Footnote 13]
This category was designated to compensate states for the nonfederal
(state) share of expenditures associated with services provided to
existing Medicaid and SCHIP beneficiaries from certain areas of
directly affected states. The DRA did not specify any time limits on
funding for services delivered under this category. Funding is limited
to the three directly affected states--Alabama, Louisiana, and
Mississippi.
* Category IV--restore access to health care in impacted
communities:[Footnote 14] This category allowed for coverage of
expenditures provided for other purposes, if approved by the Secretary
of HHS, to restore access to health care in impacted communities. The
DRA did not specify any time limits on funding under this category.
We focused our review on four selected states that, as of March 29,
2006, had received the highest allocations of DRA funding from CMS--
Alabama, Louisiana, Mississippi, and Texas.[Footnote 15] We selected
March 29, 2006, because this was the date on which CMS made its initial
allocation of DRA funds to states. We obtained data and information
from Medicaid offices in these states regarding their experiences
enrolling individuals, providing services, and submitting claims for
services and administrative costs. We also collected Medicaid
enrollment data from the four selected states through June 2006. In
addition, we analyzed CMS data included in the Medicaid Budget and
Expenditure System (MBES) on DRA funding for the states that received
initial allocations as of March 29, 2006. Within the MBES, we examined
data that states submitted for expenditures that qualified for DRA
funding as of October 2, 2006. States submit all Medicaid data to MBES
electronically and must attest to its completeness and accuracy. These
data are preliminary in nature, in that they are subject to further
review and are likely to be updated as states continue to submit claims
for DRA funding. Nevertheless, we considered MBES data sufficiently
reliable for purposes of conducting a preliminary assessment of claims
submitted to date. We also contacted Medicaid officials in Arizona and
Georgia to ascertain why they had not submitted claims for DRA funding.
We chose Arizona and Georgia because they had not submitted claims data
as of June 2006, but were the only two states that had logged into MBES
and inserted placeholders for their claims data. We conducted our work
from April 2006 to October 2006 in accordance with generally accepted
government auditing standards.
Results in Brief:
As of September 30, 2006, CMS had allocated $1.9 billion of the $2
billion made available by DRA to states that were directly affected by
Hurricane Katrina or that hosted evacuees in the aftermath of the
storm. Based on states' estimates of their DRA expenditures, CMS
allocated funds as follows:
* Category I--CMS allocated about $102 million to 32 states for the
nonfederal share of expenditures for time-limited Medicaid and SCHIP
services for individuals affected by the hurricane and eligible under
an approved demonstration project.
* Category II--CMS allocated about $302 million to 8 states for
expenditures for time-limited uncompensated care services provided to
individuals affected by the hurricane who did not have a method of
payment or insurance.
* Category III--CMS allocated approximately $1.5 billion to the 3
directly affected states (Alabama, Louisiana, and Mississippi) for the
nonfederal share of expenditures for existing Medicaid and SCHIP
beneficiaries.
* Category IV--CMS chose not to allocate any DRA funding to this
category--restoring access to health care in impacted communities--
because, according to CMS, the agency viewed this category as
discretionary in nature and not associated with direct services
expenditures.
In allocating the $1.9 billion, CMS met 100 percent of the states'
estimated expenditures in categories I, II, and III. After CMS
reconciles states' expenditures with their allocations, CMS will
determine how to allocate the remaining $136 million of available DRA
funds and any unexpended funds from the approximately $1.9 billion in
DRA funds previously allocated to states.
Of the $1.9 billion in DRA funding that CMS allocated, states had
submitted claims for approximately $1 billion (54 percent) as of
October 2, 2006. Approximately two-thirds of the 32 states that
received DRA funding (including the 4 selected states--Alabama,
Louisiana, Mississippi, and Texas), submitted claims. The amount of
claims submitted for Category I, the nonfederal share of expenditures
for time-limited Medicaid and SCHIP services, accounted for 20 percent
of allocations; for Category II, expenditures for time-limited
uncompensated care services, 42 percent; and for Category III, the
nonfederal share of expenditures for existing Medicaid and SCHIP
beneficiaries, 58 percent. Claims from Alabama, Louisiana, and
Mississippi for the nonfederal share of expenditures for existing
Medicaid and SCHIP beneficiaries (Category III) accounted for about 85
percent of claims filed for all categories of funding. States are
permitted up to 2 years after paying claims to seek reimbursement from
CMS. According to state officials, they have not submitted claims to
CMS in some instances because of problems processing providers' claims.
For example, in Mississippi, uncompensated care claims had to be
processed manually because the state did not have a computerized system
to accommodate such claims. Although expenditures varied by state,
typically claims were concentrated in nursing facility services,
inpatient hospital care, and prescription drugs.
Of the four selected states, two states--Louisiana and Texas--raised
concerns about their ability to meet future health care needs of those
affected by the hurricane once the DRA funds are expended.
* Louisiana, a directly affected state that is therefore eligible for
DRA funding for services provided beyond June 30, 2006, raised concerns
that it would need additional funds to provide coverage for individuals
affected by the hurricane who evacuated the state but intend to return.
State officials noted that Louisiana is currently managing what they
characterized as a national Medicaid program, given that many
individuals enrolled in Louisiana Medicaid are temporarily residing in
other states. Additionally, the state has asked CMS for direction on
issues such as managing out-of-state providers, redetermining
eligibility, and ensuring program integrity given the state's concern
that some providers may be receiving payment from more than one state
for the same service.
* Texas, which is eligible only for the time-limited DRA funds from
Categories I and II, expressed concern about its future funding needs
in light of the many evacuees remaining in the state. To learn more
about this population, the state commissioned a survey that indicated
that evacuees responding to the survey continue to have a high need for
services, including health care coverage under Medicaid and SCHIP.
Because the state is not eligible for DRA funding for Medicaid services
provided beyond June 30, 2006, officials expressed concern that these
services are being provided through evacuees' use of emergency rooms in
the state or through local county facilities, thus straining resources
that provide care for all Texas residents.
The remaining two selected states--Alabama and Mississippi--while also
eligible for ongoing DRA funding, stated that they did not anticipate a
need for funding beyond that allocated by CMS.
We received comments on a draft of this report from CMS and state
officials from Alabama, Louisiana, and Texas. In commenting, CMS
provided additional information on an initiative aimed at assisting
Louisiana to rebuild its health care system in the aftermath of
Hurricane Katrina. In response to CMS's comment that we
mischaracterized the categories of DRA funding, we provided additional
legal citations to better link the statutory language of DRA with the
categories of funding presented in the report. Additionally, CMS noted
that our description of its process for allocating unexpended funds was
misleading. While the draft report did include a thorough description
of this process, we clarified this process in the Highlights and
Results in Brief. CMS also discussed criticism it faced in
communicating with the states, particularly Louisiana, regarding
program implementation, coverage for out-of-state evacuees, and other
issues. In its comments, CMS identified the steps it took to work with
states with approved demonstration projects. While CMS may have
provided such assistance, from Louisiana's perspective, it was not
sufficient to address the many issues the state is facing. Louisiana
and Texas primarily provided comments about their efforts to assist
those affected by the hurricane and ongoing challenges as a result of
Hurricane Katrina. Alabama provided technical comments which we
incorporated as appropriate, while Mississippi did not provide
comments.
Background:
Medicaid and SCHIP are joint federal-state programs that finance health
care coverage for certain categories of low-income individuals. To
qualify for Medicaid or SCHIP, individuals must meet specific
eligibility requirements related to their income, assets, and other
personal characteristics such as age. Each state operates its program
under a CMS-approved state plan.
Almost immediately after Hurricane Katrina, CMS announced in a State
Medicaid Director's letter on September 16, 2005, that states could
apply for Medicaid demonstration projects authorized under section 1115
of the SSA, through which the federal government would fund its share
of expenditures for health care services for certain individuals
affected by the hurricane.[Footnote 16] These demonstration projects
provided for (1) time-limited Medicaid and SCHIP services to allow
states to quickly enroll eligible individuals who were affected by the
hurricane, and (2) time-limited uncompensated care services--allowing
states to pay providers rendering services for individuals affected by
the hurricane who do not have an alternative method of payment or
insurance. Interested states could apply to CMS to offer demonstration
projects for either or both categories, and those receiving CMS
approval were permitted to seek reimbursement for the federal share of
allowable expenditures for covered beneficiaries under the
demonstrations. To assist states in applying for these demonstration
projects, CMS convened a conference call with all state Medicaid
agencies to brief them on the agency's September 16, 2005, letter,
discuss the application process, and provide information on other
implementation issues, such as benefits for evacuees and relevant
federal regulations regarding Medicaid eligibility.
For time-limited Medicaid and SCHIP services under the demonstrations,
states received approval to provide Medicaid and SCHIP coverage to
certain evacuees and affected individuals.[Footnote 17] In establishing
eligibility for this type of demonstration, states primarily used
simplified eligibility criteria that CMS developed to determine if
affected individuals and evacuees could enroll to receive time-limited
Medicaid and SCHIP services (see table 1).
Table 1: CMS's Simplified Eligibility Groups for Demonstration Projects
for Time-Limited Medicaid and SCHIP Services:
Simplified eligibility groups: Children under age 19;
Income levels: Up to and including 200 percent of the Federal Poverty
Level (FPL)[A].
Simplified eligibility groups: Pregnant women from Louisiana and
Mississippi;
Income levels: Up to and including 185 percent FPL.
Simplified eligibility groups: Pregnant women from Alabama;
Income levels: Up to and including 133 percent FPL.
Simplified eligibility groups: Individuals with disabilities;
Income levels: Up to and including 300 percent Supplemental Security
Income (SSI)[B].
Simplified eligibility groups: Low-income Medicare recipients;
Income levels: Up to and including 100 percent FPL.
Simplified eligibility groups: Low-income individuals in need of long-
term care;
Income levels: Up to and including 300 percent SSI.
Simplified eligibility groups: Low-income parents of children under age
19;
Income levels: Up to and including 100 percent FPL.
Source: CMS.
Note: CMS approved these demonstration projects under section 1115 of
the SSA.
[A] In fiscal year 2005, the Federal Poverty Level for a family of four
was $19,350 in the 48 contiguous United States and the District of
Columbia. Federal poverty levels are not defined for Puerto Rico and
other insular areas.
[B] SSI is a means-tested income assistance program for disabled,
blind, or aged individuals.
[End of table]
States with approved demonstrations for time-limited uncompensated care
services could pay providers who delivered services to affected
individuals and evacuees who either did not have any other coverage for
health care services (such as private or public health insurance), or
who had Medicaid or SCHIP coverage but required services beyond those
covered under either program.
On February 8, 2006, the DRA appropriated $2 billion to be available
until expended for four funding categories--two categories associated
with the demonstration projects, and two additional categories of
funding.[Footnote 18] DRA applied time limits on the first two
categories that were linked to the demonstration projects--that is,
services must have been provided by certain dates. The DRA did not
specify time limits for the two remaining funding categories. (See
table 2.)
Table 2: DRA Funding Characteristics and Categories:
Funding characteristics: Share of funding available;
Category I[A,B]: Time-limited Medicaid and SCHIP services: Nonfederal
share of expenditures[F];
Category II[A,C]: Time-limited uncompensated care services: Total
expenditures;
Category III[D]: Existing Medicaid and SCHIP beneficiaries: Nonfederal
share of expenditures[F];
Category IV[E]: Restore access to health care: Total expenditures.
Funding characteristics: Designated purpose of funding;
Category I[A,B]: Time-limited Medicaid and SCHIP services: To reimburse
eligible states for Medicaid and SCHIP services provided to individuals
affected by the hurricane who meet certain criteria and were eligible
under a demonstration project;
Category II[A,C]: Time-limited uncompensated care services: To
reimburse eligible states for services associated with caring for
individuals affected by the hurricane with no other source of payment
or insurance;
Category III[D]: Existing Medicaid and SCHIP beneficiaries: To
reimburse states for Medicaid and SCHIP expenditures for affected
individuals in certain areas of directly affected states;
Category IV[E]: Restore access to health care: To restore access to
health care in impacted communities, when approved by the Secretary of
Health and Human Services.
Funding characteristics: Length of availability[G];
Category I[A,B]: Time-limited Medicaid and SCHIP services: For services
provided through June 30, 2006;
Category II[A,C]: Time-limited uncompensated care services: For
services provided through January 31, 2006;
Category III[D]: Existing Medicaid and SCHIP beneficiaries: No time
period specified;
Category IV[E]: Restore access to health care: No time period
specified.
Funding characteristics: Limit on individual eligibility;
Category I[A,B]: Time-limited Medicaid and SCHIP services: Up to 5
months[H];
Category II[A,C]: Time-limited uncompensated care services: None
specified;
Category III[D]: Existing Medicaid and SCHIP beneficiaries: None
specified;
Category IV[E]: Restore access to health care: None specified.
Funding characteristics: States eligible for funding;
Category I[A,B]: Time-limited Medicaid and SCHIP services: The three
directly affected states and states that accepted evacuees;[I] states
must have demonstrations approved by CMS;
Category II[A,C]: Time-limited uncompensated care services: The three
directly affected states and states that accepted evacuees;[I] states
must have demonstrations approved by CMS;
Category III[D]: Existing Medicaid and SCHIP beneficiaries: The three
directly affected states[I];
Category IV[E]: Restore access to health care: None specified.
Source: GAO analysis of DRA and CMS demonstration project provisions.
[A] Category I and Category II required CMS approval of a demonstration
project under section 1115 of the SSA. In addition to service
expenditures, associated administrative costs are also covered under
these categories.
[B] DRA, Pub. L. No. 109-171, § 6201(a)(1)(A),(C), (a)(2), 120 Stat.
132-133.
[C] DRA, Pub. L. No. 109-171, § 6201(a)(1)(B),(D), (a)(2), 120 Stat.
132-133.
[D] DRA, Pub. L. No. 109-171, § 6201(a)(3), 120 Stat. 132-133.
[E] DRA, Pub. L. No. 109-171, § 6201(a)(4), 120 Stat. 132-133.
[F] DRA funding is available for the states' share of expenditures
incurred under this category. The remaining share of funding would be
obtained from the federal Medicaid program; thus, the states'
expenditures in these categories would be $0 until DRA funds have been
expended.
[G] Although the DRA was not enacted until February 8, 2006, CMS
allowed funding to be retroactive to August 24, 2005.
[H] CMS required states to limit Medicaid and SCHIP eligibility to 5
months under their demonstration projects.
[I] The three directly affected states are Alabama, Louisiana, and
Mississippi.
[End of table]
States could receive allocations from CMS based on certain criteria
identified in the DRA, including whether they were directly affected by
the hurricane or hosted evacuees. States directly affected by the
hurricane--Alabama, Louisiana, and Mississippi--and states that hosted
evacuees could receive DRA funding through Categories I and II, the
nonfederal share of expenditures for time-limited Medicaid and SCHIP
services and expenditures for time-limited uncompensated care services.
In contrast, as specified by DRA, funds for Category III, the
nonfederal share of expenditures for existing Medicaid and SCHIP
beneficiaries, were available only to certain areas in the directly
affected states. These areas were counties or parishes designated under
the Robert T. Stafford Disaster Relief and Emergency Assistance Act as
areas eligible to receive federal disaster assistance.[Footnote 19]
According to a CMS official, shortly after Hurricane Katrina, 10
counties in Alabama, 31 parishes in Louisiana, and 47 counties in
Mississippi were identified as eligible to receive such assistance and
were declared individual assistance areas.[Footnote 20] (See fig. 1.)
Figure 1: Affected Counties or Parishes in Louisiana, Mississippi, and
Alabama:
[See PDF for image]
Source: GAO map using Federal Emergency Agency data provided by CMS.
Note: These three states were all considered directly affected by
Hurricane Katrina.
[End of figure]
States receive reimbursement for their expenditures in each of the
funding categories through the submission of claims to CMS. To obtain
reimbursement of claims for services, providers first submit claims to
states for health care services provided to affected individuals and
evacuees. States then submit claims to CMS for DRA-covered expenditures
made for health care services provided to affected individuals and
evacuees under each of the DRA funding categories. In addition,
although the DRA was not enacted until February 8, 2006, CMS allowed
funding to be retroactive to August 24, 2005.
CMS Allocated DRA Funds to Three Funding Categories:
As of September 30, 2006, CMS had allocated approximately $1.9 billion
of the total $2 billion in DRA funds to states that were directly
affected by Hurricane Katrina or that hosted evacuees in the aftermath
of the storm. CMS allocated funds to the first three categories:
Category I--the nonfederal share of expenditures for time-limited
Medicaid and SCHIP services; Category II--expenditures for time-limited
uncompensated care services; and Category III--the nonfederal share of
expenditures for existing Medicaid and SCHIP beneficiaries from
designated areas of the directly affected states. CMS chose not to
allocate any DRA funding to Category IV, for restoring access to health
care in impacted communities. CMS allocated the majority of DRA funding
(78.3 percent of the $1.9 billion allocated) to Category III, the
nonfederal share of expenditures for existing Medicaid and SCHIP
beneficiaries, which, by law, was limited to the three directly
affected states (Alabama, Louisiana, and Mississippi).[Footnote 21] CMS
allocated funds to states on two occasions--an initial allocation of
$1.5 billion on March 29, 2006, and a subsequent allocation on
September 30, 2006. Both of these allocations were based on states'
estimates of their DRA expenditures. In the second allocation on
September 30, 2006, no state received less funding than it received in
the March 29, 2006, allocation, but allocations shifted among the DRA
categories.
CMS Allocated $1.9 Billion of DRA Funds to Three DRA Categories:
As of September 30, 2006, CMS had allocated approximately $1.9 billion
of DRA funds to three DRA funding categories to 32 states. The majority
of the $1.9 billion allocation--about $1.5 billion (78.3 percent)--is
for Category III, existing Medicaid and SCHIP beneficiaries, which is
limited to the three directly affected states (Alabama, Louisiana, and
Mississippi). For Category I, time-limited Medicaid and SCHIP services,
and Category II, time-limited uncompensated care services, states
received about $102 million (5.5 percent of the total allocation) and
about $302 million (16.2 percent of the total allocation),
respectively. (See fig. 2.) With regard to Category I, 32 states
received approval to extend time-limited Medicaid and SCHIP coverage to
individuals affected by Hurricane Katrina; however, no states actually
enrolled individuals in SCHIP. Therefore, only Medicaid services were
covered through this DRA funding category.[Footnote 22] Of these 32
states, 8 states also received approval for Category II to pay
providers for rendering extend time-limited uncompensated care services
to individuals affected by the hurricane. CMS officials stated that the
agency approved the majority of states' applications for demonstration
projects within 45 days of the hurricane.[Footnote 23]
Figure 2: Percentage of $1.9 Billion DRA Allocation by Funding
Category, as of September 30, 2006:
[See PDF for image]
Source: GAO analysis of CMS data.
[A] Category I and Category II required CMS approval of a demonstration
project under section 1115 of the SSA.
[End of figure]
Of the 32 states that received allocations totaling $1.9 billion,
Louisiana received the largest amount--44.6 percent (about $832
million) of the total allocation. Combined, the 3 directly affected
states--Louisiana, Alabama, and Mississippi--received approximately 90
percent ($1.7 billion) of the $1.9 billion allocated to states. While
not a directly affected state, Texas hosted a large number of evacuees
and received about 7.6 percent ($142 million) of the allocation. These
4 selected states together received approximately 97.5 percent ($1.8
billion) of the $1.9 billion allocation. (See table 3.)
Table 3: CMS's Allocation of DRA Funds to States Based on States'
Estimated Expenditures, as of September 30, 2006:
State: Alabama;
DRA allocations: Category I Time-limited Medicaid services[A,B]:
$2,377,000;
DRA allocations: Category II Time-limited uncompensated care
services[B]: $4,660,000;
DRA allocations: Category III Existing Medicaid and SCHIP
beneficiaries: $241,144,000;
DRA allocations: Category IV Restore access to health care: [C];
DRA allocations: Total allocation: $248,181,000;
Percentage of DRA allocation: 13.3.
State: Louisiana;
DRA allocations: Category I Time-limited Medicaid services[A,B]:
23,811;
DRA allocations: Category II Time-limited uncompensated care
services[B]: 132,091,048;
DRA allocations: Category III Existing Medicaid and SCHIP
beneficiaries: 699,528,807;
DRA allocations: Category IV Restore access to health care: [C];
DRA allocations: Total allocation: 831,643,666;
Percentage of DRA allocation: 44.6.
State: Mississippi;
DRA allocations: Category I Time-limited Medicaid services[A,B]:
1,815,572;
DRA allocations: Category II Time-limited uncompensated care
services[B]: 75,264,730;
DRA allocations: Category III Existing Medicaid and SCHIP
beneficiaries: 518,482,628;
DRA allocations: Category IV Restore access to health care: [C];
DRA allocations: Total allocation: 595,562,930;
Percentage of DRA allocation: 32.0.
State: Texas;
DRA allocations: Category I Time-limited Medicaid services[A,B]:
76,872,000;
DRA allocations: Category II Time-limited uncompensated care
services[B]: 65,336,000;
DRA allocations: Category III Existing Medicaid and SCHIP
beneficiaries: [D];
DRA allocations: Category IV Restore access to health care: [C];
DRA allocations: Total allocation: 142,208,000;
Percentage of DRA allocation: 7.6.
State: Subtotal;
DRA allocations: Category I Time-limited Medicaid services[A,B]:
81,088,383;
DRA allocations: Category II Time-limited uncompensated care
services[B]: 277,351,778;
DRA allocations: Category III Existing Medicaid and SCHIP
beneficiaries: 1,459,155,435;
DRA allocations: Category IV Restore access to health care: 0;
DRA allocations: Total allocation: 1,817,595,596;
Percentage of DRA allocation: 97.5.
State: Remaining states;
DRA allocations: Category I Time-limited Medicaid services[A,B]:
21,315,202;
DRA allocations: Category II Time- limited uncompensated care
services[B]: 25,002,000;
DRA allocations: Category III Existing Medicaid and SCHIP
beneficiaries: [D];
DRA allocations: Category IV Restore access to health care: [C];
DRA allocations: Total allocation: 46,317,202;
Percentage of DRA allocation: 2.5.
State: Total;
DRA allocations: Category I Time-limited Medicaid services[A,B]:
$102,403,585;
DRA allocations: Category II Time-limited uncompensated care
services[B]: $302,353,778;
DRA allocations: Category III Existing Medicaid and SCHIP
beneficiaries: $1,459,155,435;
DRA allocations: Category IV Restore access to health care: [C];
DRA allocations: Total allocation: $1,863,912,798;
Percentage of DRA allocation: 100.0.
Source: GAO analysis of CMS data.
Note: This table accounts for the approximately $1.9 billion of DRA
funds allocated to states as of September 30, 2006.
[A] While states applied for and received approval to extend time-
limited SCHIP coverage to individuals affected by Hurricane Katrina, no
states actually enrolled individuals in SCHIP.
[B] Category I and Category II required CMS approval of a demonstration
project under section 1115 of the SSA. In addition to service
expenditures, associated administrative costs are also included.
[C] CMS did not allocate funds to this category.
[D] State was not eligible for funding to this category.
[End of table]
CMS Provided Allocations to States on Two Occasions:
CMS provided DRA allocations on two occasions, and both allocations
were based on states' estimated DRA expenditures.[Footnote 24] CMS
first allocated $1.5 billion to 32 states on March 29, 2006. After the
DRA was enacted in February 2006, CMS requested states' estimated
fiscal year 2006 expenditures for three of the four DRA funding
categories: Category I--the nonfederal share of expenditures for time-
limited Medicaid services; Category II--expenditures for time-limited
uncompensated care services; and Category III--for directly affected
states, the nonfederal share of expenditures for existing Medicaid and
SCHIP beneficiaries. CMS did not request that the three directly
affected states estimate expenditures for Category IV--restoring access
to health care in impacted communities. CMS officials told us that they
viewed restoring access to care as discretionary in nature and not
associated with direct service expenditures. In the March 29, 2006,
allocation, CMS fully funded 32 states' estimated expenditures for DRA
funding for Categories I and II, and also provided the three directly
affected states with allocations to approximately half of their
estimated expenditures for Category III. Because allocations were based
on states' estimates, CMS withheld $500 million of the $2 billion
available for the initial allocation, anticipating that allocations
would need to be realigned.
In July 2006, CMS requested updated estimates of DRA expenditures for
fiscal year 2006 for the same three categories: the two time-limited
categories for Medicaid and uncompensated care services (Categories I
and II) and the existing Medicaid and SCHIP beneficiaries (Category
III). On September 30, 2006, CMS allocated an additional amount of
about $364 million to states, which, combined with the initial March
29, 2006, allocation of $1.5 billion, provided a total allocation of
approximately $1.9 billion. This allocation was based on states'
updated estimated expenditures for each of the three DRA categories for
which CMS provided funding. For the second allocation, each of the
three directly affected states received allocations of 100 percent of
their updated estimated expenditures for all three funding categories.
While CMS did not decrease any state's allocation as a result of the
July 2006 request for updated estimates, it did shift allocation
amounts among DRA funding categories when necessary for the September
30, 2006, allocation. Therefore, each state received its allocation
amount from March 29, 2006, plus any additional funding included in the
updated estimated expenditures. As a result, some states that lowered
their subsequent estimates received more than they requested. For
example, Texas lowered its initial estimated expenditures from $142
million (its March 29, 2006, estimate) to approximately $36 million.
CMS did not change Texas' allocation from the amount the state received
on March 29, 2006; thus, Texas retained an allocation of $142
million.[Footnote 25] Other states received more than they were
initially allocated. For example, Alabama requested about $181 million
initially, but gave CMS an updated estimate of $248 million. CMS
initially allocated Alabama approximately $97 million, but increased
its allocation to $248 million on September 30, 2006. (See table 4.)
Table 4: Selected States' Initial and Updated Estimated Expenditures
and CMS's Initial and Updated Allocations, as of September 30, 2006:
State: Alabama;
Initial: States' estimated expenditures: 181,472,000;
Initial: March 29, 2006, allocation[A]: 96,946,000;
Updated: States' estimated expenditures[B]: 248,181,000;
Updated: September 30, 2006, allocation: 248,181,000.
State: Louisiana;
Initial: States' estimated expenditures: 1,092,652,000;
Initial: March 29, 2006, allocation[A]: 768,982,000;
Updated: States' estimated expenditures[B]: 831,643,666;
Updated: September 30, 2006, allocation: 831,643,666.
State: Mississippi;
Initial: States' estimated expenditures: 793,294,000;
Initial: March 29, 2006, allocation[A]: 446,521,000;
Updated: States' estimated expenditures[B]: 595,562,930;
Updated: September 30, 2006, allocation: 595,562,930.
State: Texas;
Initial: States' estimated expenditures: 142,208,000;
Initial: March 29, 2006, allocation[A]: 142,208,000;
Updated: States' estimated expenditures[B]: 35,713,063;
Updated: September 30, 2006, allocation: 142,208,000.
State: Total;
Initial: States' estimated expenditures: 2,209,626,000;
Initial: March 29, 2006, allocation[A]: 1,454,657,000;
Updated: States' estimated expenditures[B]: 1,711,100,659;
Updated: September 30, 2006, allocation: 1,817,595,596.
Source: GAO analysis of CMS data.
[A] CMS's initial allocation on March 29, 2006, provided states with
allocations of 100 percent of their estimated expenditures for
Categories I and II. For Category III, which was available only to the
directly affected states, Alabama, Louisiana, and Mississippi each
received allocations of approximately half of their estimated
expenditures. CMS did not allocate any funds to Category IV.
[B] Represents states' updated estimated DRA expenditures for fiscal
year 2006 requested by CMS in July 2006.
[End of table]
As of September 30, 2006, $136 million in DRA funding remained
available for allocation. CMS officials stated that, during the first
quarter of fiscal year 2007, they plan to reconcile states'
expenditures submitted to CMS with the allocation amounts provided to
states on September 30, 2006. After this reconciliation is completed,
CMS will determine how to allocate the remaining $136 million of
available DRA funds and any unexpended funds of the approximately $1.9
billion previously allocated to states.
States Have Submitted Claims for About Half of Total DRA Allocations:
As of October 2, 2006, states had submitted to CMS claims for services-
-including associated administrative costs--totaling about $1 billion
(or 54 percent) of the $1.9 billion in DRA funds allocated to them. The
amount of claims submitted and the number of states that submitted
claims varied by DRA category. Of the 32 states that received
allocations from CMS, 22 states have submitted claims, including the 3
directly affected states. Some state officials said they faced
obstacles processing DRA-related claims. While DRA-related expenditures
varied by state, claims were concentrated in nursing facilities,
inpatient hospital care, and prescription drugs.
About Two-Thirds of Eligible States Have Submitted Claims for
Reimbursement, Accounting for 54 Percent of Total Allocations:
Of the 32 states that received DRA allocations, about two-thirds (22)
had submitted claims for expenditures to CMS as of October 2, 2006. The
submitted claims accounted for about 54 percent of CMS's $1.9 billion
allocated to states. States that submitted claims for reimbursement did
so for amounts that ranged from about 7 percent to approximately 96
percent of their allocations. (See table 5.) Each of the 4 selected
states we reviewed--Alabama, Louisiana, Mississippi, and Texas--had
submitted claims by this time.
Table 5: CMS Allocation of DRA funds and States' Claims Submitted for
Reimbursement, by State, as of October 2, 2006:
States: Alabama;
Total CMS allocation of DRA funds: $248,181,000;
States' DRA claims submitted: $127,161,817;
DRA claims submitted as percentage of state's allocation: 51.2.
States: Arizona;
Total CMS allocation of DRA funds: 713,000;
States' DRA claims submitted: 445,219;
DRA claims submitted as percentage of state's allocation: 62.4.
States: Arkansas;
Total CMS allocation of DRA funds: 5,370,000;
States' DRA claims submitted: 661,954;
DRA claims submitted as percentage of state's allocation: 12.3.
States: Delaware;
Total CMS allocation of DRA funds: 429,000;
States' DRA claims submitted: 49,902;
DRA claims submitted as percentage of state's allocation: 11.6.
States: District of Columbia;
Total CMS allocation of DRA funds: 80,541;
States' DRA claims submitted: 72,305;
DRA claims submitted as percentage of state's allocation: 89.8.
States: Florida;
Total CMS allocation of DRA funds: 2,871,000;
States' DRA claims submitted: 1,788,666;
DRA claims submitted as percentage of state's allocation: 62.3.
States: Idaho;
Total CMS allocation of DRA funds: 44,000;
States' DRA claims submitted: 34,652;
DRA claims submitted as percentage of state's allocation: 78.8.
States: Indiana;
Total CMS allocation of DRA funds: 368,332;
States' DRA claims submitted: 208,314;
DRA claims submitted as percentage of state's allocation: 56.6.
States: Iowa;
Total CMS allocation of DRA funds: 240,000;
States' DRA claims submitted: 203,514;
DRA claims submitted as percentage of state's allocation: 84.8.
States: Louisiana;
Total CMS allocation of DRA funds: 831,643,666;
States' DRA claims submitted: 434,790,616;
DRA claims submitted as percentage of state's allocation: 52.3.
States: Maryland;
Total CMS allocation of DRA funds: 701,000;
States' DRA claims submitted: 326,317;
DRA claims submitted as percentage of state's allocation: 46.6.
States: Minnesota;
Total CMS allocation of DRA funds: 383,581;
States' DRA claims submitted: 291,759;
DRA claims submitted as percentage of state's allocation: 76.1.
States: Mississippi;
Total CMS allocation of DRA funds: 595,562,930;
States' DRA claims submitted: 400,531,996;
DRA claims submitted as percentage of state's allocation: 67.3.
States: Montana;
Total CMS allocation of DRA funds: 25,000;
States' DRA claims submitted: 22,002;
DRA claims submitted as percentage of state's allocation: 88.0.
States: Nevada;
Total CMS allocation of DRA funds: 250,000;
States' DRA claims submitted: 213,160;
DRA claims submitted as percentage of state's allocation: 85.3.
States: Ohio;
Total CMS allocation of DRA funds: 404,000;
States' DRA claims submitted: 301,275;
DRA claims submitted as percentage of state's allocation: 74.6.
States: South Carolina;
Total CMS allocation of DRA funds: 1,212,000;
States' DRA claims submitted: 408,696;
DRA claims submitted as percentage of state's allocation: 33.7.
States: Tennessee;
Total CMS allocation of DRA funds: 7,528,467;
States' DRA claims submitted: 487,675;
DRA claims submitted as percentage of state's allocation: 6.5.
States: Texas;
Total CMS allocation of DRA funds: 142,208,000;
States' DRA claims submitted: 30,817,487;
DRA claims submitted as percentage of state's allocation: 21.7.
States: Utah;
Total CMS allocation of DRA funds: 275,000;
States' DRA claims submitted: 233,935;
DRA claims submitted as percentage of state's allocation: 85.1.
States: Wisconsin;
Total CMS allocation of DRA funds: 1,170,234;
States' DRA claims submitted: 154,385;
DRA claims submitted as percentage of state's allocation: 13.2.
States: Wyoming;
Total CMS allocation of DRA funds: 14,000;
States' DRA claims submitted: 13,368;
DRA claims submitted as percentage of state's allocation: 95.5.
States: 10 remaining states[A];
Total CMS allocation of DRA funds: 24,238,047;
States' DRA claims submitted: 0;
DRA claims submitted as percentage of state's allocation: 0.0.
States: Totals;
Total CMS allocation of DRA funds: $1,863,912,798;
States' DRA claims submitted: $999,219,014;
DRA claims submitted as percentage of state's allocation: 53.6.
Source: GAO analysis of CMS and MBES data.
Note: This table includes the three DRA funding categories for which
states received allocations: (I) time-limited Medicaid and SCHIP
services, (II) time-limited uncompensated care services, and (III)
existing Medicaid and SCHIP beneficiaries. The selected states--
Alabama, Louisiana, Mississippi, and Texas--which received the highest
allocations of DRA funding are presented in bold type.
[A] The remaining 10 states received allocations but had not submitted
claims as of October 2, 2006. The remaining states are: California,
Georgia, Massachusetts, North Carolina, North Dakota, Oregon,
Pennsylvania, Puerto Rico, Rhode Island, and Virginia.
[End of table]
Of the claims submitted for the two time-limited funding categories, 22
of 32 states submitted claims for Medicaid services (Category I) and 6
of 8 states submitted claims for uncompensated care services (Category
II). The claims submitted constituted approximately 20 percent of total
allocations to Medicaid and about 42 percent of total allocations to
uncompensated care services. Of the 4 selected states, 3 states--
Alabama, Mississippi, and Texas--submitted claims for Medicaid
services, while all 4 selected states submitted claims for
uncompensated care services. (See table 6.)
Table 6: CMS Allocation of DRA Funds and States' Claims Submitted, by
Time-limited Funding Categories, as of October 2, 2006:
States: Alabama;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: $2,377,000;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: $1,887,744;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 79.4;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: $4,660,000;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: $116,214;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: 2.5.
States: Arizona;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 713,000;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 445,219;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 62.4;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Arkansas;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 670,000;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 525,145;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 78.4;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: 4,700,000;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: 136,809;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: 2.9.
States: Delaware;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 429,000;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 49,902;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 11.6;
Time- limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: District of Columbia;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 80,541;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 72,305;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 89.8;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Florida;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 2,871,000;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 1,788,666;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 62.3;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Idaho;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 44,000;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 34,652;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 78.8;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Indiana;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 368,332;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 208,314;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 56.6;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Iowa;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 240,000;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 203,514;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 84.8;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Louisiana;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 23,811;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 0;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 0.0;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: 132,091,048;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: 101,305,491;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: 76.7.
States: Maryland;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 701,000;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 326,317;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 46.6;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Minnesota;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 383,581;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 291,759;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 76.1;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Mississippi;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 1,815,572;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 1,270,965;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 70.0;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: 75,264,730;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: 6,940,321;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: 9.2.
States: Montana;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 25,000;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 22,002;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 88.0;
Time- limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Nevada;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 250,000;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 213,160;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 85.3;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Ohio;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 404,000;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 301,275;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 74.6;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: South Carolina;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 1,088,000;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 406,918;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 37.4;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: 124,000;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: 1,778;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: 1.4.
States: Tennessee;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 1,850,467;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 487,675;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 26.4;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: 5,678,000;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [D];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [D].
States: Texas;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 76,872,000;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 11,690,643;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 15.2;
Time- limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: 65,336,000;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: 19,126,844;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: 29.3.
States: Utah;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 275,000;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 233,935;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 85.1;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Wisconsin;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 1,170,234;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 154,385;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 13.2;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Wyoming;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 14,000;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: 13,368;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 95.5;
Time- limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [C];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [C].
States: Remaining states[D];
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: 9,738,047;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: [D];
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: [D];
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: 14,500,000;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: [D];
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: [D].
States: Totals;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
CMS allocation of DRA funds: $102,403,585;
Time- limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted: $20,627,863;
Time-limited funding categories[A]: Category I: Medicaid services[B]:
DRA claims submitted as a percentage of CMS allocation: 20.1;
Time-limited funding categories[A]: Category II: Uncompensated care
services: CMS allocation of DRA funds: $302,353,778;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted: $127,627,457;
Time-limited funding categories[A]: Category II: Uncompensated care
services: DRA claims submitted as a percentage of CMS allocation: 42.2.
Source: GAO analysis of CMS and MBES data.
Note: The four selected states--Alabama, Louisiana, Mississippi, and
Texas--which received the highest allocations of DRA funding are
presented in bold type.
[A] Category I and Category II required CMS approval of a demonstration
project under section 1115 of the SSA. In addition to service
expenditures, associated administrative costs are also included.
[B] While states applied for and received approval to extend time-
limited SCHIP coverage to individuals affected by Hurricane Katrina, no
states actually enrolled individuals in SCHIP.
[C] State did not receive an allocation to Category II--time-limited
uncompensated care funding.
[D] As of October 2, 2006, state(s) had not submitted claims.
[E] The remaining states that received allocations but had not
submitted claims as of October 2, 2006, are: California, Georgia,
Massachusetts, North Carolina, North Dakota, Oregon, Pennsylvania,
Puerto Rico, Rhode Island, and Virginia.
[End of table]
Only the three directly affected states--Alabama, Louisiana, and
Mississippi--were eligible to receive DRA funding for existing Medicaid
and SCHIP beneficiaries (Category III). The claims submitted by the
directly affected states constituted approximately 58 percent of total
allocations to Category III. (See table 7.) In addition, claims from
the three directly affected states for existing Medicaid and SCHIP
beneficiaries accounted for about 85 percent of all DRA claims filed.
While funds for existing Medicaid and SCHIP beneficiaries were
available for both programs, about 98 percent of claims submitted were
for Medicaid expenditures.
Table 7: Claims Submitted for the Nonfederal Share of Expenditures for
Existing Medicaid and SCHIP Beneficiaries (Category III), as of October
2, 2006:
States: Alabama;
Total CMS allocations of DRA funds: $241,144,000;
DRA claims submitted: $125,157,859;
DRA claims submitted as percentage of CMS allocation: 51.9.
States: Louisiana;
Total CMS allocations of DRA funds: 699,528,807;
DRA claims submitted: 333,485,125;
DRA claims submitted as percentage of CMS allocation: 47.7.
States: Mississippi;
Total CMS allocations of DRA funds: 518,482,628;
DRA claims submitted: 392,320,710;
DRA claims submitted as percentage of CMS allocation: 75.7.
States: Total;
Total CMS allocations of DRA funds: $1,459,155,435;
DRA claims submitted: $850,963,694;
DRA claims submitted as percentage of CMS allocation: 58.3.
Source: GAO analysis of CMS and MBES data.
[End of table]
It has taken longer than usual for states--both those directly affected
by the hurricane as well as states that hosted evacuees--to submit
claims. Typically, Medicaid expenditure reports are due the month after
the quarter ends. CMS officials estimated that about 75 percent of
states submit their Medicaid expenditures within 1 to 2 months after
the close of a quarter. However, data are not finalized until CMS and
states ensure the accuracy of claims. The process of states submitting
claims for DRA-related expenditures has been more prolonged. As with
other Medicaid claims, states are permitted up to 2 years after paying
claims to seek reimbursement from CMS. Therefore, these initial results
are likely to change as states continue to file claims for services. As
of October 2, 2006, 10 of 32 states that received allocations of DRA
funding had not submitted any claims even though fiscal year 2006 ended
on September 30, 2006.
Some state officials told us that they were having difficulties
submitting claims because of various obstacles related to processing
claims or receiving claims from providers, including needing to
manually process claims or adapt computer systems to accommodate the
new types of claims being submitted. For example, Mississippi officials
explained that they were manually processing claims for time-limited
uncompensated care services because they did not have an electronic
system for processing such claims. Georgia officials reported that the
state's claims processing system had to be adjusted in order to
properly accept claims for time-limited uncompensated care services.
After such adjustments were made, Georgia officials anticipated
accepting these claims from mid-July through the end of August 2006.
Alabama officials noted that they had to specifically request that
providers submit claims for the costs of providing uncompensated care
services they may have assumed would not be reimbursable.
States' Claims Were Concentrated in Three Service Areas:
Claims that the four selected states submitted for Medicaid
expenditures in the three categories of DRA funding we reviewed varied,
but were typically concentrated in three service areas: nursing
facilities, inpatient hospital care, and prescription drugs. For
example, all four selected states had nursing facility services as one
of their top four services for which they submitted claims, while only
Alabama had home and community-based services as one of its services
with the highest expenditures. Of the claims submitted by states, the
proportions attributed to specific services varied across the states.
(See table 8.)
Table 8: Percentages of Submitted Claims for Top Four Medicaid Services
in Each Selected State, as of October 2, 2006:
Selected states: Alabama;
Nursing facilities: 24.8;
Inpatient hospitals: [A];
Prescribed drugs: 18.6;
Outpatient hospitals: [A];
Physician services: 7.7;
Home and community services: 11.5;
Other practitioners: [A].
Selected states: Louisiana;
Nursing facilities: 14.0;
Inpatient hospitals: 19.8;
Prescribed drugs: 24.8;
Outpatient hospitals: [A];
Physician services: 8.5;
Home and community services: [A];
Other practitioners: [A].
Selected states: Mississippi;
Nursing facilities: 18.8;
Inpatient hospitals: 22.9;
Prescribed drugs: 14.2;
Outpatient hospitals: 9.1;
Physician services: [A];
Home and community services: [A];
Other practitioners: [A].
Selected states: Texas;
Nursing facilities: 10.7;
Inpatient hospitals: 38.8;
Prescribed drugs: [A];
Outpatient hospitals: 12.4;
Physician services: [A];
Home and community services: [A];
Other practitioners: 8.9.
Source: GAO analysis of MBES data.
[A] Claims submitted for this service were not among the top four
services of this state.
[End of table]
Alabama, Louisiana, and Mississippi submitted claims for the nonfederal
share of expenditures for SCHIP services to existing SCHIP
beneficiaries. Overall, the dollar amount of claims for SCHIP
represented approximately 2 percent of the total value of claims
submitted. As of October 2, 2006, the top four SCHIP expenditures in
Alabama were for physician services (22.8 percent), prescription drugs
(20.7 percent), inpatient hospital services (13.4 percent), and dental
services (12.1 percent). The top four SCHIP expenditures in Louisiana
were for prescription drugs (45.4 percent), physician services (22.4
percent), outpatient hospital services (12.5 percent), and inpatient
hospital services (9.8 percent). For Mississippi, all of the claims for
DRA funds were for expenditures associated with paying SCHIP premiums
for certain enrollees.
Louisiana and Texas Raised Concerns Regarding Future Funding Needs:
Two of our four selected states raised concerns about their ability to
meet the future health care needs of those affected by the hurricane
once DRA funds have been expended: Louisiana, which is eligible for DRA
funding for Category III services that may be provided beyond June 30,
2006; and Texas, which is not eligible for such ongoing assistance. Of
the three directly affected states--Alabama, Louisiana, and
Mississippi--only Louisiana raised concerns that it would need
additional funds to provide coverage for individuals affected by the
hurricane who evacuated the state yet remain enrolled in Louisiana
Medicaid. Alabama and Mississippi officials did not anticipate the need
for additional funding beyond what was already allocated by CMS. In
contrast, because Texas is eligible only for the time-limited DRA funds
from Category I and Category II, state officials expressed concern
about future funding needs in light of the many evacuees remaining in
the state. To learn more about this population, the state commissioned
a survey that indicated that evacuees responding to the survey continue
to have a high need for services, including health care coverage under
Medicaid and SCHIP.
Louisiana's Concerns Centered on Its Ability to Administer and Fund
Medicaid Coverage for Out-of-State Evacuees:
Only the three directly affected states--Alabama, Louisiana, and
Mississippi--are eligible for DRA funds for Category III services,
which were designated to compensate states for the state share of
expenditures associated with services provided to existing Medicaid and
SCHIP beneficiaries from certain areas of directly affected states
beyond June 30, 2006. This additional DRA funding could potentially be
available from any unused funds of the $1.9 billion allocated on
September 30, 2006, and the $136 million remaining from the $2 billion
appropriated. It is unclear how much of the $1.9 billion allocation
will be unused and thus available for redistribution. Additionally, it
is not yet known how the remaining $136 million will be distributed,
but CMS will make that determination after reconciling states' claims
submitted during the first quarter of fiscal year 2007 with the
allocations. Of the three states eligible for ongoing DRA funding, only
Louisiana raised concerns that additional funds will be necessary;
Alabama and Mississippi did not anticipate additional funding needs
beyond those CMS already allocated.
Louisiana's funding concerns were associated with managing its program
across state borders as evacuees who left the state continue to remain
eligible for Louisiana Medicaid. State officials acknowledged that
their immediate funding needs have been addressed by the September 30,
2006, allocation; however, they remain concerned that they do not have
the financial or administrative capacity to serve their Medicaid
beneficiaries across multiple states.[Footnote 26] Louisiana officials
also cited the difficulty of maintaining what they characterized as a
national Medicaid program for enrolled individuals and providers living
in many different states.
Louisiana has submitted claims for DRA funding for Category III for
existing Medicaid and SCHIP beneficiaries (individuals enrolled in
Louisiana Medicaid) who resided in 1 of the 31 affected parishes in
Louisiana prior to Hurricane Katrina, but evacuated to another state
after the hurricane, and who continue to reside in that state.[Footnote
27] Because many of these evacuated individuals have expressed intent
to return to Louisiana, they have not declared residency in the state
where they have been living since Hurricane Katrina. Under these
circumstances, these individuals have continued to remain eligible for
Louisiana Medicaid. However, Louisiana officials were uncertain how
long the state would be expected to continue this coverage on a long-
distance basis. While DRA funds cover the nonfederal (Louisiana state)
share of service expenditures for these Medicaid and SCHIP
beneficiaries (Category III), they are not designated to include
reimbursement for the administrative costs associated with serving
Louisiana Medicaid beneficiaries living in other states.[Footnote 28]
In particular, Louisiana officials noted the following difficulties,
which were also outlined in a May 15, 2006, letter to HHS and a May 26,
2006, letter to CMS. These letters requested specific direction from
CMS on the issues presented as well as permission to waive certain
federal Medicaid requirements that Louisiana believes it has been
unable to comply with. In commenting on a draft of our report,
Louisiana officials stated that as of November 30, 2006, they had not
received the written guidance that they requested from CMS on the
following issues:
* Managing and monitoring a nationwide network of providers. Covering
individuals who have evacuated from the state but remain eligible for
Louisiana Medicaid requires the state to identify, enroll, and
reimburse providers from other states.[Footnote 29] According to
Louisiana officials, the state has enrolled more than 16,000 out-of-
state providers in Louisiana Medicaid since August 28, 2005. The state
does not believe that it can manage and monitor a nationwide network of
providers indefinitely. Therefore, Louisiana is seeking guidance from
CMS to ensure that the state is continuing to comply with federal
Medicaid requirements for payments for services furnished to out-of-
state Medicaid beneficiaries.[Footnote 30]
* Redetermining eligibility. Federal Medicaid regulations require that
states redetermine eligibility at least annually as well as when they
receive information about changes in individuals'
circumstances.[Footnote 31] Louisiana officials indicated that they had
received approval through its demonstration project to defer
redetermination processes through January 31, 2006. Officials noted
that they have more than 100,000 individuals from affected areas whose
eligibility had not yet been redetermined as of May 26, 2006. Officials
say they do not want to take beneficiaries who need coverage off the
state's Medicaid rolls for procedural reasons, and thus would prefer to
conduct mail-in renewals and have a process for expedited reenrollment
upon return to the state. According to Louisiana officials, the state's
redetermination processes are currently on hold while CMS examines the
possibility of granting a waiver for redetermining eligibility for
individuals from the most severely affected parishes around New
Orleans.
* Maintaining program integrity. Louisiana officials explained that
running a Medicaid program in multiple states raises issues of program
integrity. While some providers have contacted Louisiana Medicaid to
report that they have received payment from more than one state,
Louisiana officials believe that other providers are not reporting
overpayments. State officials indicated that they will conduct
postpayment claims reviews to ensure that double billing and other
fraudulent activities have not occurred. These officials estimated that
this effort to review claims could be time consuming, taking
approximately 3 to 8 years to complete. Because Louisiana believes that
it is unable to ensure the integrity of the program as long as it
continues enrolling out-of-state providers, the state requested
specific direction from CMS on whether to continue such enrollment
efforts.
* Ensuring access to services. Louisiana officials expressed a concern
about the state's ability to ensure access to home and community-based
services in other states. Officials noted that some states have long
waiting lists for this type of long-term care, making it difficult for
them to provide services that assist in keeping individuals in the
community rather than in an institution. Additionally, as a requirement
of providing home and community-based services, measures are needed to
protect the health and welfare of beneficiaries. However, officials
stated that Louisiana is not in the position to assure the health and
safety of individuals requiring these services out of the state. Thus,
the state asked CMS for direction on how to continue operating its
Medicaid program without violating the federal requirement to assure
the health and welfare of beneficiaries receiving home and community-
based services.
Texas Is Hosting Large Number of Evacuees Whose Future Plans Are
Uncertain:
While Texas is not a directly affected state and therefore not eligible
for DRA funding for any Medicaid or SCHIP services provided beyond June
30, 2006, it has been significantly affected by the number of evacuees
seeking services, thus prompting concern among state officials
regarding the state's future funding needs. To address the health needs
of evacuees entering the state, Texas enrolled these individuals into
Medicaid under Category I--providing time-limited Medicaid services for
evacuees who were eligible under an approved demonstration
project.[Footnote 32] In comparison to Alabama and Mississippi, which
also enrolled evacuees into time-limited Medicaid services, Texas
enrolled the largest number of evacuees--peaking at nearly 39,000
individuals in January 2006. (See table 9).
Table 9: Selected States' Monthly Enrollment in Category I, Time-
limited Medicaid Services:
Year: 2005;
Month: September;
Category I enrollment[A]: Alabama: 541;
Category I enrollment[A]: Mississippi: 0;
Category I enrollment[A]: Texas: 0.
Year: 2005;
Month: October;
Category I enrollment[A]: Alabama: 2,755;
Category I enrollment[A]: Mississippi: 979;
Category I enrollment[A]: Texas: 9,049.
Year: 2005;
Month: November;
Category I enrollment[A]: Alabama: 3,722;
Category I enrollment[A]: Mississippi: 2,106;
Category I enrollment[A]: Texas: 22,694.
Year: 2005;
Month: 2006: December;
Category I enrollment[A]: Alabama: 2006: 4,345;
Category I enrollment[A]: Mississippi: 2006: 3,201;
Category I enrollment[A]: Texas: 2006: 32,687.
Year: 2006;
Month: January;
Category I enrollment[A]: Alabama: 2,751;
Category I enrollment[A]: Mississippi: 3,675;
Category I enrollment[A]: Texas: 38,783.
Year: 2006;
Month: February;
Category I enrollment[A]: Alabama: 2,110;
Category I enrollment[A]: Mississippi: 3,396;
Category I enrollment[A]: Texas: 28,766.
Year: 2006;
Month: March;
Category I enrollment[A]: Alabama: 1,439;
Category I enrollment[A]: Mississippi: 2,222;
Category I enrollment[A]: Texas: 14,931.
Year: 2006;
Month: April;
Category I enrollment[A]: Alabama: 1,088;
Category I enrollment[A]: Mississippi: 1,232;
Category I enrollment[A]: Texas: 6,995.
Year: 2006;
Month: May;
Category I enrollment[A]: Alabama: 879;
Category I enrollment[A]: Mississippi: 691;
Category I enrollment[A]: Texas: 482.
Year: 2006;
Month: June;
Category I enrollment[A]: Alabama: Alabama: 798;
Category I enrollment[A]: Mississippi: Mississippi: 132;
Category I enrollment[A]: Texas: Texas: [B].
Source: States' Medicaid enrollment data.
Note: Louisiana was excluded from this table because it did not enroll
any evacuees in the time-limited Medicaid category of its
demonstration. Louisiana officials informed us that 52 evacuees who
relocated to Louisiana met the state's criteria for its traditional
Medicaid program and were enrolled in that program.
[A] Category I and Category II required CMS approval of a demonstration
project under section 1115 of the SSA. While states applied for and
received approval to extend time-limited SCHIP coverage to individuals
affected by Hurricane Katrina, no states actually enrolled individuals
in SCHIP.
[B] Data were not available.
[End of table]
Texas also submitted claims for Category II DRA funds for time-limited
uncompensated care services to evacuees, shortly after the hurricane.
Enrollment into this category grew steadily from 2,224 individuals in
October 2005 to 9,080 individuals in January 2006. Figure 3 shows the
enrollment patterns for the Texas Medicaid program, as well as Category
I and Category II services provided for the period following Hurricane
Katrina.
Figure 3: Texas Monthly Enrollment for Its Traditional Medicaid Program
and DRA Categories I and II, July 2005-June 2006:
[See PDF for image]
Source: GAO analysis of state's Medicaid enrollment data.
[End of figure]
To better understand the characteristics, needs, and future plans of
the evacuee population, the Texas Health and Human Services Commission
contracted with the Gallup Organization to survey Hurricane Katrina
evacuees in Texas.[Footnote 33] Data from survey respondents indicated
that, as of June 2006, evacuees remaining in the state were
predominantly adult women who lived in low-income households with
children and had increasing rates of uninsurance since the
hurricane.[Footnote 34] Despite the loss of insurance coverage, the
survey indicated that fewer evacuees received Medicaid than previously
expected and the loss of insurance primarily affected children's health
coverage. Evacuees appear to be turning to hospital emergency
departments to meet their health care needs, as survey respondents
reported an increase in emergency room visits in the past 6 months.
Texas officials confirmed that evacuees who were previously eligible
for the two DRA categories for time-limited coverage (Medicaid and
uncompensated care services) are beginning to present themselves to
local county facilities for their health care needs, thus straining
local resources to provide care for all Texas residents. Based on this
survey, Texas officials said they are concerned that they will continue
to host an evacuee population with high needs who do not have immediate
plans to leave the state. In particular, over half of the survey
respondents believe they will continue to reside in Texas in the next 6
months and half believe they will still be there in 1 year. Texas was
not a directly affected state and is therefore not eligible for ongoing
assistance through the DRA; funding for Category I only covers services
provided as of June 30, 2006, and funding for Category II only covers
services provided as of January 31, 2006.
Agency and State Comments and Our Evaluation:
We provided copies of a draft of this report to CMS and the four states
we reviewed: Alabama, Louisiana, Mississippi, and Texas. We received
written general and additional comments from CMS (see app. II) and from
Louisiana and Texas (see apps. III and IV, respectively). Alabama
provided technical comments, while Mississippi did not comment on the
draft report.
In commenting on the draft report, CMS provided information on an
initiative it took to respond to Hurricane Katrina. The agency
indicated that HHS, which oversees CMS, worked closely with Louisiana's
Department of Health and Hospitals to assist the state in convening the
Louisiana Health Care Redesign Collaborative, which will work to
rebuild Louisiana's health care system. We did not revise the text of
the report to include information on this effort because it was beyond
the scope of this report. However, we have earlier reported on HHS
efforts to help rebuild Louisiana's health care system.[Footnote 35]
CMS also commented on three issues: our characterization of the
categories of funding provided through DRA, our description of CMS's
reconciliation process, and criticism it faced in communicating with
the states, particularly Louisiana and Texas, regarding program
implementation, coverage for out-of-state evacuees, and other issues.
These comments are addressed below.
CMS commented that we mischaracterized the categories of DRA funding by
specifying them in the report as Categories I, II, III, and IV. We
developed these four descriptive categories, which were derived from
provisions of the DRA, in order to simplify report presentation.
However, to respond to CMS's comment, we included additional legal
citations in the report to better link the statutory language of the
DRA with the categories of funding presented in this report. We did
not, however, adopt all of CMS's descriptions of DRA provisions as CMS
presented some of the descriptions inaccurately. In particular, CMS
presented DRA sections 6201(a)(3) and 6201(a)(4) as providing federal
funding under an approved section 1115 demonstration project, but as
stated in the report, such approval is irrelevant to this funding.
CMS also commented that the report was misleading because it did not
fully describe the reconciliation process that will be used to allocate
remaining and unused DRA funds. Specifically, the agency indicated that
we did not explain that additional DRA allocations would be made to
states not only from the remaining $136 million in unallocated funds
but also from any unspent funds already allocated to states. The draft
report did contain a full explanation of the reconciliation process.
However, to address CMS's comment, we clarified this process in the
report's Highlights and Results in Brief.
Finally, CMS disagreed with statements in the draft report that
Louisiana had not received the requested direction detailed in letters
written to HHS on May 15, 2006, and CMS on May 26, 2006. Louisiana's
letters included concerns and questions that arose after the state
implemented its section 1115 demonstration project. CMS indicated that
it provided and continues to provide technical assistance to all states
with section 1115 demonstration projects for Hurricane Katrina
assistance beyond the states reviewed in this report. In particular,
immediately following the hurricane CMS provided guidance to states
through a conference call and a September 16, 2005, letter sent to all
state Medicaid directors that explained the process of applying for the
section 1115 demonstration project, the benefits and eligibility
criteria for evacuees, the uncompensated care pool, and other pertinent
information. We revised the report to reflect the guidance that CMS
provided to the states immediately following the hurricane. CMS also
commented that it worked with Louisiana and the other hurricane-
affected states on redetermining eligibility through a conference call,
and provided information to Louisiana several times regarding
regulations that the state should follow for redetermining eligibility
on an annual basis. Further, CMS indicated that it provided technical
assistance to Louisiana in its efforts to ensure program integrity and
access to health care services. While CMS may have provided such
assistance, from Louisiana's perspective, it was not sufficient to
address the many issues the state is facing. In Louisiana's written
comments, state officials maintained that as of November 30, 2006, they
had not received written guidance from CMS regarding the issues
outlined in their May 15, 2006, letter.
Comments from Louisiana and Texas centered on each state's efforts to
assist those affected by the hurricane and the ongoing challenges that
exist as a result of Hurricane Katrina. In particular, Louisiana
emphasized the lack of response from HHS regarding its concerns about
running its Medicaid program in many states and related difficulties to
ensuring the program's integrity. Texas commented on its continued need
to provide health care services to Hurricane Katrina evacuees given the
results of a survey conducted by the Gallup Organization, which
indicated that most of the evacuees still residing in Texas were
uninsured as of June 2006.
Additional technical and editorial comments from CMS and the states
were incorporated into the report as appropriate.
We are sending a copy of this report to the Secretary of Health and
Human Services and the Administrator of CMS. We will make copies
available to others upon request. In addition, the report will be
available at no charge on the GAO Web site at [Hyperlink,
http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-7118 or allenk@gao.gov. Contact points for our
Offices 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 V.
Signed by:
Kathryn G. Allen:
Director, Health Care:
List of Congressional Committees:
The Honorable Max Baucus:
Chairman:
The Honorable Charles E. Grassley:
Ranking Member:
Committee on Finance:
United States Senate:
The Honorable John D. Dingell:
Chairman:
The Honorable Joe Barton:
Ranking Member:
Committee on Energy and Commerce:
House of Representatives:
The Honorable Henry A. Waxman:
Chairman:
The Honorable Tom Davis:
Ranking Member:
Committee on Oversight and Government Reform:
House of Representatives:
[End of section]
Appendix I: Deficit Reduction Act of 2005 Allocations to 32 States:
Under the authority of the Deficit Reduction Act of 2005, the Centers
for Medicare & Medicaid Services (CMS) allocated funding totaling
approximately $1.9 billion to 32 states, as of September 30, 2006. The
agency allocated funds to all 32 states for the time-limited Medicaid
category of demonstration projects, to 8 of those 32 states for the
time-limited uncompensated care category of demonstration projects, and
to the 3 directly affected states--Alabama, Louisiana, and Mississippi-
-for the nonfederal share of expenditures for existing Medicaid and
SCHIP beneficiaries. The 4 states selected for this study--Alabama,
Louisiana, Mississippi, and Texas--received approximately 97.5 percent
of the $1.9 billion allocation. All allocations were based on estimates
states submitted for each of the funding categories in response to
CMS's July 2006 request for updated estimates. (See table 10.)
Table 10: CMS's Allocation of DRA Funds to States, Based on States'
Estimated Expenditures, as of September 30, 2006:
State: Alabama;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: $2,377,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
$4,660,000;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
$241,144,000;
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: $248,181,000;
Percentage of DRA allocation: 13.3.
State: Arizona;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 713,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 713,000;
Percentage of DRA allocation: 0.0[I].
State: Arkansas;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 670,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
4,700,000;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 5,370,000;
Percentage of DRA allocation: 0.3.
State: California;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 1,514,000;
Allocations: Category II Time- limited uncompensated care
services[B,D]: 0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 1,514,000;
Percentage of DRA allocation: 0.1.
State: Delaware;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 429,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 429,000;
Percentage of DRA allocation: 0.0[I].
State: District of Columbia;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 80,541;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 80,541;
Percentage of DRA allocation: 0.0[I].
State: Florida;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 2,871,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 2,871,000;
Percentage of DRA allocation: 0.2.
State: Georgia;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 3,868,462;
Allocations: Category II Time-limited uncompensated care services[B,D]:
14,500,000;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 18,368,462;
Percentage of DRA allocation: 1.0.
State: Idaho;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 44,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 44,000;
Percentage of DRA allocation: 0.0[I].
State: Indiana;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 368,332;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 368,332;
Percentage of DRA allocation: 0.0[I].
State: Iowa;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 240,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 240,000;
Percentage of DRA allocation: 0.0[I].
State: Louisiana;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 23,811;
Allocations: Category II Time-limited uncompensated care services[B,D]:
132,091,048;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
699,528,807;
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 831,643,666;
Percentage of DRA allocation: 44.6.
State: Maryland;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 701,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 701,000;
Percentage of DRA allocation: 0.0[I].
State: Massachusetts;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 629,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 629,000;
Percentage of DRA allocation: 0.0[I].
State: Minnesota;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 383,581;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 383,581;
Percentage of DRA allocation: 0.0[I].
State: Mississippi;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 1,815,572;
Allocations: Category II Time- limited uncompensated care
services[B,D]: 75,264,730;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
518,482,628;
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 595,562,930;
Percentage of DRA allocation: 32.0.
State: Montana;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 25,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 25,000;
Percentage of DRA allocation: 0.0[I].
State: Nevada;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 250,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 250,000;
Percentage of DRA allocation: 0.0[I].
State: North Carolina;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 493,415;
Allocations: Category II Time- limited uncompensated care
services[B,D]: 0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 493,415;
Percentage of DRA allocation: 0.0[I].
State: North Dakota;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 4,170;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 4,170;
Percentage of DRA allocation: 0.0[I].
State: Ohio;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 404,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 404,000;
Percentage of DRA allocation: 0.0[I].
State: Oregon;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 67,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 67,000;
Percentage of DRA allocation: 0.0[I].
State: Pennsylvania;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 1,698,000;
Allocations: Category II Time- limited uncompensated care
services[B,D]: 0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 1,698,000;
Percentage of DRA allocation: 0.1.
State: Puerto Rico;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 125,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 125,000;
Percentage of DRA allocation: 0.0[I].
State: Rhode Island;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 90,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 90,000;
Percentage of DRA allocation: 0.0[I].
State: South Carolina;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 1,088,000;
Allocations: Category II Time- limited uncompensated care
services[B,D]: 124,000;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 1,212,000;
Percentage of DRA allocation: 0.1.
State: Tennessee;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 1,850,467;
Allocations: Category II Time- limited uncompensated care
services[B,D]: 5,678,000;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 7,528,467;
Percentage of DRA allocation: 0.4.
State: Texas;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 76,872,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
65,336,000;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 142,208,000;
Percentage of DRA allocation: 7.6.
State: Utah;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 275,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 275,000;
Percentage of DRA allocation: 0.0[I].
State: Virginia;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 1,249,000;
Allocations: Category II Time- limited uncompensated care
services[B,D]: 0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 1,249,000;
Percentage of DRA allocation: 0.1.
State: Wisconsin;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 1,170,234;
Allocations: Category II Time- limited uncompensated care
services[B,D]: 0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 1,170,234;
Percentage of DRA allocation: 0.1.
State: Wyoming;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: 14,000;
Allocations: Category II Time-limited uncompensated care services[B,D]:
0;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
[H];
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: 14,000;
Percentage of DRA allocation: 0.0[I].
State: Total;
Allocations: Category I Time-limited Medicaid and SCHIP
services[A,B,C]: $102,403,585;
Allocations: Category II Time-limited uncompensated care services[B,D]:
$302,353,778;
Allocations: Category III Existing Medicaid and SCHIP beneficiaries[E]:
$1,459,155,435;
Allocations: Category IV Restore access to health care[F]: [G];
Allocations: Total allocation: $1,863,912,798;
Percentage of DRA allocation: 100.00[J].
Source: GAO analysis of CMS data.
Note: This table accounts for the approximately $1.9 billion of DRA
funds allocated to states.
[A] While states applied for and received approval to extend time-
limited SCHIP coverage to individuals affected by Hurricane Katrina, no
states actually enrolled individuals in SCHIP.
[B] Category I and Category II required CMS approval of a demonstration
project under section 1115 of the SSA. In addition to service
expenditures, associated administrative costs are also included.
[C] DRA, Pub. L. No. 109-171, § 6201(a)(1)(A),(C), (a)(2), 120 Stat.
132-133.
[D] DRA, Pub. L. No. 109-171, § 6201(a)(1)(B),(D), (a)(2), 120 Stat.
132-133.
[E] DRA, Pub. L. No. 109-171, § 6201(a)(3), 120 Stat. 132-133.
[F] DRA, Pub. L. No. 109-171, § 6201(a)(4), 120 Stat. 132-133.
[G] CMS did not allocate funds to this category.
[H] State was not eligible for funding from this category.
[I] State's percentage of DRA allocation is less than 0.10 percent.
[J] Numbers may not add to 100 percent due to rounding.
[End of table]
[End of section]
Appendix II: Comments from the Centers for Medicare & Medicaid
Services:
Department Of Health & Human Services:
Centers for Medicare & Medicaid Services:
Administrator:
Washington, DC 20201:
Date: Dec 15 2006:
TO: Kathryn G. Allen:
Health Care:
Director:
Government Accountability Office:
FROM: Leslie V. Norwalk, Esq.
Acting Administrator:
[See PDF for image]
[End of figure]
Subject: Government Accountability Office's (GAO) Draft Report:
"Hurricane Katrina: Allocation and Use of $2 Billion for Medicaid and
Other Health Care Needs" (GAO-07-67):
The Centers for Medicare & Medicaid Services (CMS) has reviewed the GAO
draft report entitled, "Hurricane Katrina: Allocation and Use of $2
Billion for Medicaid and Other Health Care Needs (GAO-07-67)." We
appreciate the opportunity to provide comments on the draft report.
Although not mentioned in your report, CMS would like to highlight that
the Secretary of the Department of Health and Human Services (HHS) has
worked very closely with the Louisiana Secretary of the Department of
Health and Hospitals (DHH) to provide staffing and other support for
the State"s convening of the Louisiana Health Care Redesign
Collaborative. The Collaborative which was formed to seriously promote
rebuilding of Louisiana's health care system, initially starting in the
New Orleans area, has submitted to CMS and HITS its preliminary long-
term recovery proposal that would involve a Medicare demonstration,
Medicaid 1115 waiver, and potential other rebuilding/recovery projects
associated with "jump-starting" more efficient and effective health
care recovery for all citizens in the greater New Orleans area. The
proposal is currently under review by CMS and other relevant HHS
Operating Divisions.
We believe the purpose of this report is to discuss the allocation of
the $2 billion for Medicaid expenditures and the provision of services
to evacuees in the aftermath of Hurricane Katrina. However, information
regarding the allocation of the $2 billion for Medicaid expenditures
has also been mischaracterized. The Deficit Reduction Act of 2005 (DRA)
provides very specific categories for funding of evacuees. The report
specifies these funding categories as Category 1, Category II, etc. In
using these identifiers, the report has no direct linkage to the DRA
and is unclear for the reader.
Information regarding the reconciliation process that CMS will
undertake in allocating any unexpended DRA funds is also misleading.
CMS will reconcile States' expenditures with their allocations and
subsequently will determine how to allocate the remaining $136 million
previously unallocated and any unexpended amounts from the $1.86
billion in previously allocated DRA funds determined after the
reconciliation.
The report does not include any recommendations and provides no
specific suggestions on how CMS can improve the process for allocating
funds. We have, however, provided specific comments on these areas and
believe it is important to revise the report to clearly articulate the
reconciliation process and the categories for funding under the DRA.
The report discusses criticism CMS has faced in communicating with
States, particularly Louisiana and Texas, regarding eligibility,
program implementation, coverage for out-of-State evacuees, etc. Our
specific comments identify the steps CMS has taken to work with all
States that have approved Section 1115 demonstrations providing health
care coverage to evacuees including convening a conference call with
all State Medicaid Agencies shortly after the hurricane to brief States
on the State Medicaid Director's letter of September 16, 2005, and to
discuss the CMS waiver template through which States could apply for a
Section 1 115 Multi-State Hurricane Katrina demonstration. CMS has
provided information to States in a variety of venues and forms. It is
through these communications CMS and the Director, Center for Medicaid
and State Operations (CMSO), has provided specific guidance on all
implementation issues including eligibility and coverage of out-of-
State providers.
The report provides no recommendations or feedback on CMS's
communication efforts. We believe the report should identify the
specific steps taken by CMS and the Department in order to provide a
more accurate description of our guidance provided to all States and
the rapid response to provide health care coverage to evacuees in a
time of a natural disaster.
Thank you again for the opportunity to comment.
Additional Comments:
The Deficit Reduction Act of 2005 (DRA), P.L. 109-171, section 6201,
provided authority for the provision of additional Federal payments to
States under hurricane-related Multi-State Section 1115 Demonstration
Projects:
Section 6201 (a)(1)(A) and (C). Provides funding for the non-Federal
share of expenditures for health care provided to affected individuals
(those who reside in a major disaster area declared as a result of
Katrina and continue to reside in the same State) and evacuees
(affected individuals who have been displaced to another State) under
approved multi-state section 1] 15 demonstration projects (includes
Medicaid, State Children's Health Insurance Program (SCRIP), and
premium assistance);
Section 6201(a)(1)(B) and (D). Provides funding for the total
expenditures for uncompensated care pool costs for evacuees and
affected individuals;
Section 6201(a)(2). Provides funding for the reasonable administrative
costs related to such projects;
Section 6201(a)(3). Provides funding for the non-Federal share of
expenditures for medical care provided to individuals under existing
Medicaid and SCRIP State plans; and:
Section 6201(a)(4). Provides funding for other purposes if approved by
the Secretary, to restore access to health care in impacted
communities.
Throughout the report, individuals referenced under section
6201(a)(1)(A) and (C) are mischaracterized. For example, on page l, the
last sentence in the paragraph at the bottom of the page reads, "The
first category allowed individuals affected by the hurricane who may
not otherwise have qualified for Medicaid or State Children's Health
Insurance Program (SCHIP) to become eligible for these programs for up
to 5 months." The approved section 1115 demonstration programs specify
the groups covered and eligible, and the Medicaid/SCHIP benefits
available, under such programs. Specifically, the intent of the
demonstrations was to provide a vehicle for Host States to quickly re-
enroll evacuees who had previously been determined eligible for
Medicaid or SCHIP in their own State Medicaid or SCHIP program and to
provide a vehicle for States to establish eligibility for those
evacuees who now met the eligibility standards of their home State
because of Hurricane Katrina. Accordingly, we suggest this sentence be
revised (and similar revisions made, as appropriate, to other
statements elsewhere in the report) to read as follows: "The first
category allowed individuals eligible under the approved section 1115
demonstration to receive benefits under the Medicaid and SCI UP
programs for up to 5 months."
The draft report also mischaracterizes the uncompensated care pool by
suggesting that these pools provide "coverage" for individuals rather
than being limited to providing payment to providers. Specifically, on
page 8, the first full paragraph after Table 1 indicates that "States
with approved demonstrations for time-limited uncompensated care
services offered coverage to affected individuals and evacuees who
either did not have any other coverage for health care services (such
as private or public health insurance), or who had Medicaid or SCHIP
but required services beyond those covered under either program.
The award letter to States with approved section 1115 Katrina
demonstrations state -(Name o State will be allowed to reimburse
providers that incur uncompensated care costs for medically necessary
services and supplies for evacuees who do not have other coverage for
such services..."
We suggest that GAO revise the language on page 8 (and any similar
language on other pages) to indicate that, "States with approved
demonstrations for time-limited uncompensated care services were
authorized to nay providers for some or all costs of furnishing
services to affected individuals and evacuees who either did not..."
On page 24, in the first full paragraph at the top of the page, the
report indicates, "As of October 11, 2006, the state had not received
the requested direction from IIHS or CMS on the following issues:" We
disagree with this statement. In particular, as detailed below, with
respect to the concerns raised by Louisiana and Texas regarding future
funding needs and coverage for out-of-State evacuees, CMS provided and
continues to provide technical assistance and support to all States
(including Louisiana and Texas) implementing section 1115 Hurricane
Katrina demonstrations.
CMS Guidance. CMS provided guidance to all States in a variety of
venues and forums. Specifically, the Director, CMSO, convened a
conference call with all Stale Medicaid Agencies shortly alter the
hurricane to brief States about the State Medicaid Director's Letter of
September 16, 2005, and to discuss the CMS waiver template through
which Stales could apply for a Section 11 15 Mufti-State Hurricane
Katrina demonstration. Through these communications, the Director
explained the process for applying for a demonstration, the benefits
and eligibility process for Medicaid/SCHIP evacuees, the possibility of
an uncompensated care pool, and other relevant information specified in
Federal regulations regarding Medicaid eligibility. The Director
entertained any questions and concerns from the parties.
Moreover, CMS Central and Regional Office staff provided support and
technical assistance to Louisiana and Texas on numerous occasions and
on a continuing basis to address concerns raised by these States
regarding displaced evacuees and appropriate payments to individuals.
Redetermining Eligibility. CMS has worked with Texas, Louisiana and all
other affected States in an effort to assist Louisiana in redetermining
eligibility for its evacuees. Specifically, the Director, CMSO,
convened a conference call with Texas and other affected home States in
an effort to enable Louisiana to locate displaced Louisiana Medicaid
recipients. Additionally, CMS has provided guidance to Louisiana on
several occasions regarding the traditional regulations that the State
should follow with respect to the annual redetermination process.
Maintaining program integrity. CMS provided technical assistance to
Louisiana regarding its program integrity program.
Ensuring Access to Services. CMS provided technical assistance to
Louisiana regarding the best possible method for ensuring access to
services for individuals receiving health care services in its State.
Louisiana Health Care Redesign Collaborative. As one of the Department
of Health and Human Services' top initiatives, the Secretary (in
cooperation with Governor Blanco) has convened the Louisiana Health
Care Redesign Collaborative to develop, and oversee the implementation
of, a practical blueprint for an evidence-based, quality-driven health
care system for Louisiana. This blueprint will serve as a guide to
health care policy in Louisiana and for the recovery and rebuilding of
health care in the hurricane-affected areas of the State. The Secretary
has committed resources to the Collaborative in an effort to seriously
promote the rebuilding of Louisiana's health care system.
On the "GAO Highlights" page (immediately preceding page 1), the last
sentence in the first paragraph under "What GAO Found" currently reads:
"After CMS reconciles states' expenditures with their allocations, CMS
will determine how to allocate the remaining $136 million of available
DRA funds." We suggest this sentence be revised to read as follows:
"After CMS reconciles States' expenditures with their allocations, CMS
will determine how to allocate any unexpended DRA funds, including the
$136 million previously unallocated and any unexpended amounts from the
$1.86 billion in previously allocated DRA funds determined after the
reconciliation."
On page 5, just below the bullets at the top of the page, the sentence
that reads: "After CMS reconciles state's expenditures. . ." should be
replaced with the following: "After CMS reconciles States' expenditures
with their allocations, CMS will determine how to allocate any
unexpended DRA funds, including the $136 million previously
unallocated, and any unexpended amounts from the $1.86 billion in
previously allocated DRA funds determined after the reconciliation."
On page 5, paragraph at the bottom of the page, sentence that reads:
"States are permitted up to 2 years after paying claims to seek
reimbursement from CMS." This sentence should be replaced with the
following: "Although, in general, States are permitted up to 2 years
after paying claims to seek reimbursement from CMS, CMS is working with
States to expedite this process."
On page 20, in the first paragraph, the sentence that reads: "As with
other Medicaid claims, states are permitted up to 2 years after paying
claims to seek reimbursement from CMS." This sentence should be
replaced with the following: "Although, in general, States are
permitted up to 2 years after paying claims to seek reimbursement from
CMS. CMS is working with States to expedite this process."
On page 24, last sentence before footnotes seems to be missing a verb:
"Louisiana officials that it had received."
Throughout the report, we suggest you make clear that the approximately
$1 billion in submitted claims for expenditures reported as of October
2, 2006, reflect only claims submitted on the Medicaid and SCHIP Budget
and Expenditure System (MBES) expenditure reports through the third
quarter fiscal year (FY) 2006. For example, the following sentence on
page 4, lines 8-10, reads "Within the MBES, we examined data that
states submitted for expenditures that qualified for DRA funding as of
October 2, 2006, in order to capture all activity for fiscal year
2006." Without the fourth quarter reports, you cannot capture all
reported activity for FY 2006. We suggest this sentence read as
follows: "As of October 2, 2006, we examined the MBES for DRA-qualified
funding data that States submitted on expenditure reports through the
third quarter of FY 2006."
A discussion of Appendix I does not appear in the report. Footnote 5 on
page 2 includes information regarding the Deficit Reduction Act of
2005. Since Appendix I also includes information on the DRA allocations
and the 32 States with approved demonstrations, we believe adding a
discussion of Appendix I to Footnote 5 is an appropriate placement for
such a description.
[End of section]
Appendix III: Comments from the State of Louisiana Department of Health
and Hospitals:
State Of Louisiana Department Of Health And Hospitals:
Louisiana Department Of Health And Hospitals:
Kathleen Babineaux Blanco:
Governor:
Frederick P. Cerise, MD., M.P.H.
Secretary:
November 30, 2006:
Kathryn G. Allen:
Director, Health Care:
United States Government Accountability Office:
Washington, DC 20548:
Dear Ms. Allen:
As requested, this letter is in response to the draft report entitled:
Hurricane Katrina: Allocation and Use of $2 Billion for Medicaid and
Other Health Care Needs (GAO-07-67).
As noted in the report, Louisiana continues to have concerns regarding
managing what we characterize as a, "National Medicaid Program." We
have many Louisiana Medicaid enrollees who are temporarily residing in
other states, a large group of out-of-state providers delivering
services to this displaced population, and grave concerns relating to
ensuring program integrity on a long-distance basis. These concerns
were noted in a letter from Governor Kathleen Blanco to Secretary
Michael Leavitt dated May 15, 2006 (attached). To date, we still have
not received a written response from Centers for Medicare and Medicaid
Services (CMS) regarding these critical issues. Louisiana has chosen to
take a proactive approach on these issues instead of waiting on a CMS
response.
As of this date, we have sent approximately 50,000 families from the
New Orleans metropolitan area renewal packets that must be completed
and returned in order to maintain their Medicaid eligibility.
Individuals who do not return the forms will lose their Medicaid health
coverage. For those Medicaid enrollees who indicate their intent to
return to Louisiana, and are otherwise Medicaid eligible, the
Department of Health & Hospitals will continue Medicaid as long as the
enrollee is not receiving Medicaid assistance in another state. We
anticipate that as of January 1, 2007 all re-determinations that were
deferred due to Katrina will be complete and Louisiana will be back in
compliance with the Requirement for Annual Re-determination of
Eligibility.
Louisiana Medicaid enrolled 19,464 out-of-state providers under
Katrina. Provider Enrollment and is currently working to close those
providers that have not billed for six consecutive months. Currently we
have 4,253 out-of-state providers that are actively billing. The great
number of out-of-state providers and our inability to manage and
monitor a nationwide network of providers indefinitely is a concern. In
addition, we are not able to ensure access to home and community-based
services or assure the health and safety of these individuals requiring
these services in other states.
We do plan to conduct post pay review to ensure that double billing and
fraudulent activities have not occurred but this effort could take 3-8
years to complete. Our program integrity monitoring has expanded out-
of-state which is atypical. We are unable to use peer group profiling.
At best, our Program Integrity Unit works off of complaints on these
providers instead of following the standard SURS procedures. As to
payments made to these providers, Program Integrity, after discussion
with both CMS and the OIG, has deferred the data collection and data
mining tasks to the OIG's Special Taskforce and will rely on
appropriate referrals from that Taskforce.
Additionally, we have our system in place to track Katrina related
claims and have included an update on our expenditures. (Attached):
In summary, we continue to be proactive in our approach to these issues
and continue to wait on written guidance from CMS regarding these
important issues. Please do not hesitate to call if you need additional
information. Thank you for the opportunity to review and respond to the
draft report prior to its final release.
Sincerely,
Signed by;
Jerry Phillips:
Medicaid Director:
JLP/LST:
Enclosures:
State of Louisiana:
Office Of The Governor:
Baton Rouge:
Kathleen Babineaux Blanco:
Governor:
POST OFFICE Box 94004:
70604-9004 (
225) 342-7015:
May 15, 2006:
The Honorable Michael Leavitt, Secretary:
U. S. Department of Health and Human Services:
200 Independence Avenue, S.W.
Washington, D.C. 20201:
Dear Secretary Leavitt:
Thank you for visiting Louisiana the week of April 24TH to both co-host
Louisiana's Pandemic Flu Summit and address the Joint Health and
Welfare committee. We appreciate your commitment to helping Louisiana
rebuild our health care system. The purpose of this letter is to appeal
to you on behalf of the citizens of the State of Louisiana. Due to the
devastating hurricanes that destroyed so much of our state and
disrupted the lives of so many citizens, Louisiana is now in a
precarious position with respect to evacuees, our Medicaid and SCHIP
Programs, and the federal government.
It has been eight months since the disasters and many thousands of
evacuees enrolled in Louisiana Medicaid continue to reside out-of-
state. Many of them state that they intend to return to Louisiana when
housing is available and circumstances allow, and we are working
diligently to make that possible. Our situation is unprecedented and I
am confident that federal Medicaid statutes and regulations never
contemplated extended absences from a state of this length-perhaps
years.
We recognize that complying with federal Medicaid regulations is a
condition of Federal Financial Participation (FFP) that we cannot
afford to jeopardize. In conversations with Centers for Medicare and
Medicaid Services (CMS) staff, we have been cautioned that we should be
very careful to not deviate from the regulations in 42 CFR The Office
of Inspector General has already shown great interest in our compliance
with federal Medicaid regulations post-Katrina and Rita. As we continue
to work toward recovery, it is becoming virtually impossible to comply
with federal Medicaid policy in a number of important areas:
1) Requirement for Annual Redetermination of Eligibility 142 CFR
§435.9161 Louisiana's authority under our approved Section 1115
Disaster Waiver to defer redetermination activity expired January 31,
2006. Our understanding of this policy is that our Medicaid agency
"must promptly redetermine eligibility when it receives information
about changes in a recipient's circumstances that may [emphasis ours]
affect his eligibility." We currently have well over 100,000 cases for
persons in the most severely impacted disaster areas whose annual
redeterminations were deferred and must now be completed.
We have developed a plan for completing redeterminations that is
intended to assure that persons who remain eligible for Louisiana
Medicaid are not closed for procedural reasons and that mitigates the
adverse impact on this very vulnerable population. However, that plan
has been met with major resistance from The Advocacy Center, who
advised me in correspondence dated April 6 of its intent to obtain a
Temporary Restraining Order (TRO) in federal court if we proceed with
redetermination activity. As a result, our plan to resume annual
redeterminations of eligibility is on hold, awaiting additional
guidance from CMS. Louisiana is seeking support from CMS to proceed
with our plan.
2) State Residence Prohibition (42 CFR § 435.403 (j) (3)1 Federal
regulations stipulate that Louisiana "may not deny or terminate a
resident's Medicaid eligibility because of that person's temporary
absence from the State if the person intends to return when the purpose
of the absence has been accomplished, unless another State has
determined that the person is a resident therefor purposes of
Medicaid."
We believe that there are inherent problems related to access, quality,
and program integrity for Louisiana Medicaid enrollees living
indefinitely in other states. Their access to care is dependent on the
willingness of out-of-state providers to enroll in Louisiana Medicaid.
We have enrolled more than 16,000 out-of-state providers in Louisiana
Medicaid since August 28. However, we cannot realistically manage and
monitor a nationwide network of Louisiana Medicaid providers in an
effective manner if we extend benefits indefinitely to those out of
state.
3) Payment for Services Furnished Out-of-State 142 CFR § 431.521:
An additional concern to us is that continued payment for Medicaid
services provided to evacuees out o^ state does not appear to meet any
of the four conditions under which the State may receive FFP for doing
so. We are seeking assurances from you, in writing, that if we continue
to pay for services rendered out of state Louisiana will not be in
jeopardy of losing FFP. If you cannot make this assurance to us, then
please provide us with written notice that our options are 1) to
terminate Louisiana Medicaid eligibility or 2) that the stale must
assume full responsibility for the cost of any services provided
without the ability to claim FFP.
4) Protection of Health and Welfare (42 U.S.C. §1396n(c)(2)(A)):
We are required to undertake measures to protect the health and welfare
of persons receiving services pursuant to a Home and Community-Based
Waiver (HCB). Louisiana continues to have enrollees in our HCB Medicaid
Waivers residing out of state who have not returned. They and their
advocates are adamant that they continue to meet the Louisiana
residency requirement for Medicaid eligibility purposes. Home and
community-based services are essential for them to avoid
institutionalization and other states have long waiting lists for
Medicaid waiver programs. For example, the waiting list in Texas is
more than 10 years.
Meanwhile, Louisiana is not in a position to assure health and safety
of persons who are out of state. We need direction on how we can
continue operating our Medicaid program without violating the federal
requirement to assure health and welfare.
5) Program Integrity [42 CFR 455]
As of April 17, 2006, Louisiana has enrolled 16,129 out-of-state
providers using emergency procedures and waiving some provider
enrollment requirements. These providers were enrolled specifically to
ensure that Louisiana evacuees had access to care while temporarily
residing in other states. We have been contacted by providers that have
received payment from more than one state. While we are appreciative
that these providers are concerned with not being overpaid, we expect,
based on history, that other providers are not reporting these
payments. Unless and until we discontinue enrolling out-of-state
providers, we do not have a mechanism to ensure the integrity of the
Medicaid program.
Again, we are looking to your staff to provide us with direction. Must
Louisiana continue to enroll out-of-state providers or do we have the
option to no longer enroll out-of-state providers and begin the process
of disenrollment?
As you can see, we are faced with a situation that presents Louisiana
with not only moral issues but legal issues as well. Louisiana can ill
afford to lose federal funding for our Medicaid Program. We have had
many conversations with your staff at CMS but have yet to receive
written direction on many of the critical issues.
The Disaster 1115 Demonstration Waiver was effective in resolving
immediate issues. We are now requesting that your staff at CMS work
with us to grant emergency waivers related to the above regulations in
the cases were you have the authority to do so. With the scrutiny that
Louisiana and our Medicaid Program is receiving, it is imperative that
the State and federal governments work jointly to decide the
appropriate course of action and that it be explicit and in writing.
Our experience and "lessons learned" can and should be incorporated
into the development of a national policy and model for Disaster
Medicaid-one that addresses the inherent conflict between existing
Medicaid regulations and the health needs of persons affected by a
major disaster. We look forward to working with members of your staff
to make this happen.
Sincerely,
Signed by:
Kathleen Babineaux Blanco:
Governor:
[End of section]
Appendix IV: Comments from the State of Texas Health and Human Services
Commission:
Texas Health And Human Services Commission:
Albert Hawkins:
Executive Commissioner:
November 30, 2006:
Ms. Kathryn G. Allen:
Director, Health Care:
United States Government Accountability Office:
Washington, DC 20548:
Dear Ms. Allen:
Thank you for the opportunity to comment on the report entitled
Hurricane Katrina: Allocation and use of $2 Billion for Medicaid and
Other Health Care Needs (GAO-07-67). We appreciate the work your staff
did on this report and have no technical disagreements or corrections
to the report. Texas would, however, like to take this opportunity to
emphasize several key points related to Texas use of and need for
Deficit Reduction Act (DRA)-provided funding for Medicaid and other
health care needs as a result of Hurricane Katrina.
First, we want to emphasize that, while the data, for example, both in
Table 9 and in Figure 3, correctly depict the gradual increase and
decrease of Texas' utilization of funds for health care, the decrease
is not illustrative of a decrease in the need for or evacuees' use of
health care, as might otherwise be assumed. Rather, the legislative
restriction of a five months maximum individual eligibility period in
conjunction with an overall ineligibility for funding beyond June 30,
2006, combined to produce the initial uptake and the quick decline in
enrollment for these time-limited services. Note also, for context,
that the relative reduction in our baseline Medicaid population
followed an extended period of caseload growth, and those trends have
started increasing once again.
In our negotiations with Centers for Medicare and Medicaid Services
(CMS) soon after the hurricane struck, Texas asked for a lengthier
eligibility period to more appropriately address the needs of the
hundreds of thousands of evacuees seeking shelter in Texas. However,
the individual and collective time limits required by the DRA
effectively limited Texas' ability to use available Category I funding
(time limited funding for individuals who might not otherwise have
qualified for Medicaid or State Children's Health Insurance Program
[SCHIP]).
As the Government Accountability Office (GAO) report indicates, Texas
continues to have ongoing health care needs. Not only did Texas enroll
the largest number of individuals to participate in Category I time-
limited Medicaid/SCHIP funding, a survey conducted for Texas by the
Gallup Organization indicates that as of June 2006, most of the 251,000
evacuees remaining in the state are uninsured adult women living in low-
income households with children. Individuals who were previously
eligible for the two categories of time limited funding under the DRA
are now seeking care through emergency rooms and other public
providers, straining existing local resources.
Finally, as the GAO noted in its report, the DRA allowed for a fourth
category of funding by CMS: "For other purposes, if approved by the
Secretary under the secretary's authority, to restore access to health
care in impacted communities." CMS to date has chosen not to allocate
funds under that category. Texas respectfully suggests that CMS
consider allocated funding under this category to Texas to address our
ongoing unmet needs for providing access to care for Katrina evacuees
who continue to live in Texas.
Thank you again for the opportunity to comment on the report and we
look forward to working with CMS to address the ongoing health care
needs of these citizens in the future.
Sincerely,
Signed by:
Chris Traylor:
Associate Commissioner for Medicaid and CHIP:
CT: RA:kp:
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Kathryn G. Allen (202) 512-7118 or allenk@gao.gov:
Acknowledgments:
In addition to the contact named above, Carolyn Yocom, Assistant
Director; Jennie Apter; Laura M. Mervilde; JoAnn Martinez-Shriver; Sari
B. Shuman; and Hemi Tewarson made key contributions to this report.
[End of section]
Related GAO Products:
Hurricane Katrina: Status of Hospital Inpatient and Emergency
Departments in the Greater New Orleans Area. GAO-06-1003. Washington,
D.C.: September 29, 2006.
Catastrophic Disasters: Enhanced Leadership, Capabilities, and
Accountability Controls Will Improve the Effectiveness of the Nation's
Preparedness, Response, and Recovery System. GAO-06-618. Washington,
D.C.: September 6, 2006.
Hurricane Katrina: Status of the Health Care System in New Orleans and
Difficult Decisions Related to Efforts to Rebuild It Approximately 6
Months After Hurricane Katrina. GAO-06-576R. Washington, D.C.: March
28, 2006.
Hurricane Katrina: GAO's Preliminary Observations Regarding
Preparedness, Response, and Recovery. GAO-06-442T. Washington, D.C.:
March 8, 2006.
Statement by Comptroller General David M. Walker on GAO's Preliminary
Observations Regarding Preparedness and Response to Hurricanes Katrina
and Rita. GAO-06-365R. Washington, D.C.: February 1, 2006.
FOOTNOTES
[1] Throughout this report, we refer to these three states--Alabama,
Louisiana, and Mississippi--as the "directly affected" states.
[2] Under section 1115 of the Social Security Act (SSA), the Secretary
of Health and Human Services (HHS) may waive certain Medicaid
requirements and authorize certain Medicaid expenditures in order to
demonstrate approaches that are likely to promote Medicaid program
objectives. See SSA § 1115 (codified at 42 U.S.C. § 1315). HHS has
delegated the administration of these demonstration projects to CMS.
[3] SCHIP is a federal-state program that provides health coverage,
generally, for children living in families whose incomes exceed the
eligibility limits for Medicaid. See SSA § 2107(e) (codified at 42
U.S.C. § 1397gg(e)) regarding the applicability of section 1115 of the
SSA to the SCHIP program.
[4] For purposes of this report, the District of Columbia and insular
areas (such as Puerto Rico) that were allocated or expended DRA funds
will be included in our discussion of states.
[5] The Deficit Reduction Act of 2005, Pub. L. No. 109-171, § 6201, 120
Stat. 132-134 (Feb. 8, 2006). For purposes of this report, we refer to
DRA funds available for the nonfederal share of expenditures associated
with individuals affected by the hurricane receiving Medicaid or SCHIP
benefits under an approved demonstration project as "Category I" and
DRA funds available for the total expenditures associated with
uncompensated care services provided to individuals affected by the
hurricane who had no other method of payment or insurance as "Category
II."
[6] For purposes of this report, we refer to DRA funds available for
the nonfederal share of expenditures associated with services provided
to existing Medicaid and SCHIP beneficiaries from certain areas of
directly affected states as "Category III."
[7] For purposes of this report, we refer to DRA funds available for
expenditures associated with restoring access to health care in
impacted communities as "Category IV."
[8] Throughout this report, we refer to Hurricane Katrina relief
funding provided through the DRA as DRA funding or DRA funds.
[9] DRA, Pub. L. No. 109-171, § 6201(a)(1)(A),(C), (a)(2), 120 Stat.
132-133.
[10] This category of DRA funding required CMS approval of a section
1115 demonstration project for Katrina-affected individuals.
[11] DRA, Pub. L. No. 109-171, § 6201(a)(1)(B),(D), (a)(2), 120 Stat.
132-133.
[12] This category of DRA funding required CMS approval of a section
1115 demonstration project for Katrina-affected individuals. In
addition to individuals without a method of payment or insurance, it
also included Medicaid and SCHIP-eligible individuals who did not have
any coverage for certain services.
[13] DRA, Pub. L. No. 109-171, § 6201(a)(3), 120 Stat. 132-133.
[14] DRA, Pub. L. No. 109-171, § 6201(a)(4), 120 Stat. 132-133.
[15] Throughout this report, we refer to Alabama, Louisiana,
Mississippi, and Texas as "selected states."
[16] See SSA § 1115 (codified at 42 U.S.C. § 1315). Throughout this
report, we refer to the section 1115 demonstrations that were approved
after Hurricane Katrina with the intent of providing services to
individuals affected by the hurricane as "demonstration projects," or
"demonstrations."
[17] Affected individuals and evacuees were individuals from certain
counties or parishes of directly affected states that were declared
disaster areas eligible for individual assistance under section 408 of
the Robert T. Stafford Disaster Relief and Emergency Assistance Act
(codified at 42 U.S.C. § 5174). Affected individuals continued to
reside in the same state, while evacuees relocated to another state
after the hurricane.
[18] DRA, Pub. L. No. 109-171, § 6201, 120 Stat. 132-134.
[19] Certain counties and parishes were declared disaster areas that
are eligible for individual assistance under section 408 of the Robert
T. Stafford Disaster Relief and Emergency Assistance Act (codified at
42 U.S.C. § 5174). The declaration allows for a variety of federal
programs to assist in the disaster recovery effort, including housing
for individuals and families. We refer to these areas as "designated
areas of the directly affected states."
[20] In the aftermath of Hurricane Katrina, individuals were evacuated
from individual assistance areas to other locations. Areas absorbing
evacuees were within states directly affected by the hurricane or in
other states entirely.
[21] DRA, Pub. L. No. 109-171, § 6201(a)(3), 120 Stat. 132-133.
[22] Because no states enrolled individuals into SCHIP, we refer to
Category I as "time-limited Medicaid services" for the remainder of
this report.
[23] Thirty-five states applied for the time-limited Medicaid and SCHIP
category of the demonstrations, but 3 states were denied because they
applied after the January 31, 2006, deadline. Although 17 states
applied for the time-limited uncompensated care services category of
the demonstration, 9 states were denied because of their low number of
evacuees and because of their lack of proximity to the directly
affected states.
[24] When submitting estimates to CMS, states provided estimated
expenditures by service, as well as any associated administrative costs
for Categories I and II, time-limited Medicaid and uncompensated care
services. For Category III, existing Medicaid and SCHIP beneficiaries,
CMS did not ask states to provide a breakdown of service and
administrative costs, but did request separate estimates for Medicaid
and SCHIP.
[25] CMS did not decrease the amounts states received in the March 29,
2006, allocation (even if their updated estimated expenditures were
less than the March 29, 2006, allocation), because when CMS fully
funded states' increased estimated expenditures, the total allocation
of $1.9 billion was still less than the $2 billion in DRA funds
available.
[26] While administrative costs associated with providing services for
Louisiana's existing Medicaid beneficiaries would qualify for federal
matching funds under Medicaid, Louisiana officials cited the added
complexity and cost of ensuring that such beneficiaries were originally
from 1 of the 31 affected parishes in order to qualify for funding
under Category III. This would increase the state's share of
administrative costs, which would not be covered under the DRA.
[27] Louisiana did not enroll any evacuees entering the state into its
time-limited Medicaid demonstration. Because the state did not expand
eligibility as permitted under its approved demonstration project,
Louisiana enrolled all evacuees who relocated in the state and who were
eligible into its traditional Medicaid program. There were 52
individuals who met these criteria and were enrolled in Louisiana
Medicaid.
[28] Funds for the nonfederal share of administrative costs are
included in Categories I and II, time-limited Medicaid and SCHIP
services and time-limited uncompensated care services, but not for
Category III, existing Medicaid and SCHIP beneficiaries. Coverage in
Category I was limited to services provided from August 24, 2005,
through June 30, 2006, for the time-limited Medicaid and SCHIP
beneficiaries eligible under a demonstration. Coverage in Category II
was limited to services provided from August 24, 2005, through January
31, 2006, for uncompensated care provided to individuals without a
method of payment or insurance.
[29] To ensure that evacuees from Louisiana had access to care while
temporarily residing in other states, Louisiana Medicaid stated that it
had enrolled out-of-state providers by using emergency procedures and
waiving some provider enrollment requirements.
[30] See SSA § 1902(a)(16); 42 C.F.R. §431.52 for requirements
governing Medicaid payments for services furnished out of state.
[31] See 42 C.F.R §435.916 for regulations governing periodic Medicaid
eligibility redeterminations.
[32] Under demonstration projects, states were permitted to provide
coverage to evacuees for up to 5 months beginning when the individual
became eligible but not running beyond June 30, 2006. For example, if a
person became eligible for Medicaid coverage under the demonstration on
October 1, 2005, his or her eligibility would continue for 5 months,
ending on February 28, 2006.
[33] See Hurricane Katrina Evacuees in Texas, Texas Health and Human
Services Commission, Epidemiology Team, Strategic Decision Support,
Financial Services Division, August 2006. The target population for the
survey included all Hurricane Katrina evacuees from other states who
resided in Texas at the time of the survey, which was administered in
May and June 2006. The statewide survey response rate was 38 percent.
[34] Survey respondents largely reported earning less than $1,000 per
month before the hurricane.
[35] See GAO, Hurricane Katrina: Status of Hospital Inpatient and
Emergency Departments in the Greater New Orleans Area, GAO-06-1003
(Washington, D.C.: Sept. 29, 2006); and Hurricane Katrina: Status of
the Health Care System in New Orleans and Difficult Decisions Related
to Efforts to Rebuild It Approximately 6 Months After Hurricane
Katrina, GAO-06-576R (Washington, D.C.: Mar. 28, 2006).
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