In addition to jointly procuring or developing business functions that can serve both health and human services programs, a second approach can potentially qualify for the cost-allocation exception. A state can develop an interface between health and human services programs that serves two important functions for Medicaid:17
- Verification. The interface can provide Medicaid with automated access to information about applicants for and current or former recipients of human services benefits. This can be used to verify Medicaid eligibility efficiently, without the manual intervention of caseworkers from either health or human services agencies. Such automated eligibility determination reduces administrative costs for Medicaid agencies while strengthening program integrity by providing an additional check on the accuracy of Medicaid’s eligibility decisions.
In addition, automating verification can increase health coverage for Medicaid-eligible consumers. If less work is required for consumers to document initial or continuing eligibility for Medicaid, fewer eligible consumers will be denied or lose health coverage because they fail to gather, organize, and furnish the necessary documentation. Developing an effective interface between health and human services programs is thus integral to realizing the ACA’s vision of maximizing health coverage for those who qualify by streamlining eligibility determination.
- Fast-tracking Medicaid enrollment. An interface between health and human services programs could identify recipients of human services benefits who do not yet participate in Medicaid but who are likely to qualify for Medicaid as newly eligible adults and can therefore become the subject of “fast track” enrollment into health coverage. In May 2013, CMS released a letter to state health officials describing the opportunity to automatically enroll some or all of a state’s current SNAP recipients into Medicaid, based on their receipt of SNAP. The process included a waiver under Social Security Act §1902(e)(14)(A) that allowed states to avoid making individual income calculations, instead relying on SNAP eligibility findings to qualify consumers for Medicaid.18 This process was especially convenient for the SNAP and Medicaid programs, in part because of the common eligibility systems that Medicaid and SNAP programs shared before the ACA in most states, as explained earlier. With the kind of interface discussed here, other human services programs could also partner with Medicaid using the same strategy to automatically enroll groups of Medicaid-eligible consumers based on their receipt of human services benefits.
Particularly important to human services programs is that investments needed for the interface to gather necessary information from human services program records can qualify for the cost-allocation exception, so long as they would not have been made but for the Medicaid program’s need for the interface. In some cases, the capabilities that result from such investments could prove helpful to human services programs in other contexts.
For example, the interface with Medicaid may require the human services program to improve its ability to respond to queries from Medicaid. In turn, this may involve strengthening the capacity to search its records efficiently (which may require some initial indexing capacity) and then reporting requested information about specific individuals within households receiving benefits—capacities that could ultimately prove useful in other contexts as well.
The cost-allocation exception would cover the cost of developing the searching and reporting functions needed for the interface with Medicaid to function properly. If the human services program sought to use those functions for other purposes—to develop data analytic functions, for example, that analyze human services program performance or that facilitate linkages to other third-party data sources with information potentially relevant to eligibility for human services benefits—those subsequent efforts would be funded entirely by the human services program, without any role played by Medicaid or the cost-allocation exception. Nonetheless, the Medicaid-focused investment covered by the cost-allocation exception could significantly lower the later, incremental cost of developing capacities specifically focused on meeting the human services program’s needs.