Costs of Enrollment and Estimated Savings Related to Simplification

1. Costs of Enrollment and Estimated Savings Related to Simplification New York Academy of Medicine Gerry Fairbrother, Ph.D Kerry-Ann Newell, M.S. Children’s Defense Fund Melinda Dutton, J.D Rachel Cooper, M.A. Manatt, Phelps & Phillips, LLP Deborah Bachrach, J.D. Patricia Boozang, M.P.H. Academy Health 2004 Annual Research Meeting June 8, 2004 Funded by the Foundation for Child Development

2. Background • Fiscal constraints are driving states to cut Medicaid budgets • Administrative hurdles are also being re-introduced or made more onerous in order to “reduce the rolls” • Administrative complexity drives up costs in states’ Medicaid programs

3. Study Overview • The study assessed administrative costs to enroll NYC children in Medicaid and SCHIP by: • Estimating costs related to the “typical” enrollment process • Estimating cost savings realized through a dramatically streamlined process modeled on the post-9/11 Disaster Relief Medicaid (DRM) program

4. Methods • Develop a detailed description of the typical enrollment process • Assess overall time and costs related to the typical process • Determine whether reductions in time and cost were occurring in the DRM process • Estimate cost savings by comparing the typical costs to the DRM costs

5. Data • Three of 16 MCOs enrolling in Medicaid and SCHIP in Greater New York City: • Provided 2001 enrollment and cost data • Participated in interviews regarding the enrollment process • Complete detailed questionnaires regarding time allocated to the typical process and time saved on enrollment in the DRM process

6. Outreach/Health Insurance Education Recruit Families Answer Questions Explain importance of health insurance Educate families about how to use health care Application Completion/ Documentation Help families choose a provider Help families fill out application Calculate likely eligibility Identify and gather documents Quality Assurance Check applications for completeness and accuracy Application submission/ troubleshooting Track application submissions Troubleshoot problems Follow-up with agencies and families Typical Enrollment Process

7. How Enrollers Spend Their Time The Typical Enrollment Process Source: Authors’ analysis

8. Outreach/Education Recruit Families Answer Questions Explain about how DRM works Educate families about how to use health care Application Completion/ Documentation Help families fill out application Calculate likely eligibility DRM Enrollment Process

9. 10% 10% 11% Time Enrollers Saved The DRM Enrollment Process Time Saved Outreach/ Health Other Enrollment Insurance Activities 19% Education 18% Eligibility Screening 16% Application Process 27% Gathering Documents 20% Source: Authors’ analysis

10. Functional Enrollment Categories $282 Application Submission and Troubleshooting $25 $26 Quality Assurance $166 $59 Outreach/ Health Insurance Education $11 $8 $56 Application Completion and Documentation $172 $50 $91 $0 Typical Enrollment Costs Costs with Simplification Costs Allocated $350 $300 $250 $200 $150 $100 Source: Authors’ analysis

11. Limitations • Findings are from three managed care organizations in one state • Costs do not include: • Medicaid costs to enroll • State-level administration costs • Advertising • MCO overhead (e.g. CEO salary)

12. Conclusions • Enrollment in NYS Medicaid and SCHIP programs costs roughly $282 per enrollment • This cost could be reduced by 40% to $166 if a dramatically simplified process modeled on DRM were implemented • Administrative costs related to enrollment are a misallocation of scarce resources