88,000 Pennsylvania Children Lose Medicaid Benefits

By Don Sapatkin, The Philadelphia Inquirer

17 January 12

ore children lost Medicaid coverage in Pennsylvania in December than in the previous three months combined, according to new Department of Public Welfare numbers that show a total of 88,000 cut since August.

Advocates for the poor and disabled say orders to quickly process a backlog of eligibility reviews, which has mushroomed to more than 700,000 cases, have pushed an already overwhelmed workforce over the edge. Many cuts that legal-services and social workers challenged turned out to involve paperwork that they say DPW lost - sometimes repeatedly, even when clients had receipts - or that had never been sent in the first place.

The official numbers don't count an additional 23,000 children whose benefits were cut and eventually restored retroactively, often with legal help. But poorer people may be less likely to call a lawyer, and child advocates believe thousands have no idea they are now uninsured.

"Our fear is that there are many out there," said Renee Turchi, a pediatrician in St. Christopher's Hospital for Children's special needs clinic, where about 50 children have lost coverage at some point.

On Friday, an infant who was born three months prematurely was brought in for a monthly immunoglobulin injection and was denied, to the surprise of hospital workers and family, when the staff ran the insurance card. Without the preventive shot, Turchi said, complications of a virus could be life-threatening.

The Inquirer reported last week that DPW plans to tighten food-stamp eligibility. That proposal, if implemented on May 1, would be an official change in policy. DPW described the Medicaid cuts, in contrast, as simply the result of catching up on a backlog by enforcing current law, which requires cases to be reviewed for eligibility every six months. (Federal law prohibits the state from changing Medicaid policy.)

Both moves have been touted as part of DPW Secretary Gary Alexander's efforts to reduce waste, fraud, and abuse. Alexander has also made clear that he intends to revamp entitlement programs in Pennsylvania to focus more on short-term emergency needs, with an eye toward reducing clients' dependency and saving the state money - a goal too complex to attempt in his first year on the job.

This year's budget ax chopped deep into education, largely sparing public welfare. But DPW's $10.6 billion allocation accounts for nearly 40 percent of all state spending. And with Harrisburg facing a shortfall next year officially projected at $800 million but likely to be much more, Alexander's money-saving ideas may be hard to ignore.

Still, squeezing savings out of entitlements is difficult. They are highly regulated, giving states little leeway to make changes. Federal matches mean the state often loses roughly $2 for every $1 it saves.

And in the current situation, if people are losing benefits by mistake, as advocates believe, many will eventually be reinstated. If not, they may put off seeing doctors and show up as uninsured emergency room patients.

"We're petrified about that," said A. Scott McNeal, a medical director for the North Philadelphia Health System's hospitals and Delaware Valley Community Health's four community health centers. Medicaid accounts for more than half of all revenue for each.

Losing much of those reimbursements, combined with the cost of providing care to what would then be the uninsured, "could destroy certain organizations," McNeal said.

Ripple effects could be felt throughout Philadelphia and other big cities, said Donald F. Schwarz, deputy mayor for health and opportunity. Schwarz said little financial impact had been seen so far, perhaps because many people who recently lost coverage don't often seek care or have not yet needed a doctor.

Medicaid, he said, "is a safety net."

The new enrollment numbers for Philadelphia show 25,516 fewer children on state Medical Assistance through Thursday compared with August, a 9.3 percent drop. The 88,071 children cut statewide represented a 7.6 percent decline.

DPW reported data for adults as well, but it used a new method that makes comparisons with previous monthly numbers unclear.

Most of the reductions resulted from backlogged eligibility reviews that DPW ordered on July 7 and that are now about 80 percent complete.

Ray Packer, program executive in the Office of Income Maintenance, said the backlog was identified in Harrisburg in June or July and most cases were less than a year overdue.

It "would be speculation on our part to say what actually caused it," Packer said.

Advocacy groups and the caseworkers' union say years of staff cuts in DPW's County Assistance Offices, combined with a recession-driven increase in cases, caused work to pile up. Attacking what was first thought to be a smaller backlog on what was originally a five-week deadline added another layer of dysfunction; handling disaster aid after summer floods was yet another.

Data that Packer compiled show that reviews for 579,230 children and adults were processed by Jan. 6 and benefits ended for one-third of them; a quarter of those were later restored.

Three percent of the reviewed cases closed so far involved deceased people, although it was not clear how much money was paid, mainly to managed-care companies, to cover the dead. An additional 7 percent were cut due to income levels.

About 62 percent were closed for "failure to provide information" or "failure to respond."

"It tells me there is something wrong with the process they are using," said Richard Weishaupt, senior attorney at Community Legal Services of Philadelphia. That nearly two-thirds of people who depended on Medicaid "have suddenly become so disorganized they can't send in their paperwork on time . . . just defies imagination. Why did they apply in the first place?" Weishaupt said.

But Packer and Kim Holt, acting of chief of staff for his office, said that nonresponse rate was typical in Medicaid reviews.

Advocacy groups asked the department last month to temporarily suspend case closures for children and vulnerable patients but have not gotten a response.

Anne Bale, a DPW spokeswoman, said that as far as she knew, no attempt had been made to prioritize reviews based on medical need or any other factor. Other officials said suspension was unnecessary because there was no reason to believe eligible people had lost benefits.

There has been no change in policy, they said, adding that DPW procedures guarantee the scenarios described by beneficiaries, legal advocates, and the union representing caseworkers could not have happened.

"They have chosen to send a signal, and I believe it is very callous, because they have captured people in that signal who are likely to be eligible," said Donna Cooper, senior fellow at the Center for American Progress, a Washington think tank, and secretary of policy and planning for former Gov. Ed Rendell.

Sen. Vincent J. Hughes (D., Phila.) said he believed the reviews were part of a pattern - along with the planned tightening of food-stamp eligibility and last February's demise of the state's health insurance program for low-income working adults, which was quickly followed with business tax breaks - of the Corbett administration's "putting their foot on the neck of poor people."