A bill that would have the state health department implement more methods of verifying the eligibility of those receiving benefits from public assistance programs cleared a Senate committee on a 6-3 party-line vote Wednesday.
Republicans backed Senate Bill 100, which the sponsor said is meant to eliminate fraud in state-administered programs including Medicaid, Medicaid expansion, the Supplemental Nutrition Assistance Program, the Children’s Health Insurance Program and the Temporary Assistance for Needy Families Program.
“This (bill) only works at getting people that are not qualified to be on one of these assistance programs,” said Sen. Cary Smith, R-Billings, who is carrying the legislation. “It's not like ‘Fine, I gotcha, I caught ya’ type of analysis we're having. We're looking for whether you qualify or you don't qualify. We're not getting rid of any programs, we're not changing the qualification for a program. We're just checking to see who's eligible.”
But Democrats on the Senate Public Health, Welfare and Safety Committee raised concerns the bill will result in people losing coverage and won't save the state as much money as a fiscal note estimates.
Sen. Mary McNally, a Billings Democrat, questioned the projected savings in the bill, saying that those removed from the program may be re-qualified later because of a mistake or changes in their financial situation.
“The idea that you have this churn and you’re losing people, they do come back,” McNally said.
A fiscal note for the bill, before it was amended, estimates once the verification program is established, it would save the state about $4.7 million a year through a projected 2.6% enrollment reduction for the assistance programs.
The note estimated if the bill becomes law, about 2,500 fewer children would be covered by CHIP, 503 fewer adults would be on standard Medicaid and 2,615 fewer on Medicaid expansion. The note did not provide estimates for SNAP and TANF enrollment. It did say an estimated 50 cases of suspected welfare fraud would be referred to the Department of Justice each year, which is how those occurrences are handled now.
The bill contains information for the department to reference when ensuring people meet the qualifications for coverage through the assistance programs. Beyond tax and wage data, the department would also review arrest and incarceration information, immigration status, housing assistance payments, emergency utility payments, child care services information, information from external vendors such as LexisNexis and Equifax, and more.
To verify a person’s identity, the health department would employ digital and physical identity authorization factors “using data sources permitted by federal and state law.”
Under the amendment passed Wednesday, the verification process would be run every six months. That would bring an end to the continuous eligibly of CHIP, Medicaid expansion and parts of traditional Medicaid.
The fiscal note estimates that change would result in significant "churn," or a person exiting and re-entering a program within four months. The estimate under the bill, for the quarterly checks, was approximately a 20% churn rate for Medicaid and combination Medicaid/SNAP cases. A new fiscal note will be generated to reflect the twice-yearly verification and other changes.
The amendment also clarified the legislation would not include programs like vocational rehabilitation or home weatherization assistance. The amendment also removed a 10-day turnout on eligibility verification.
Smith said he worked with the governor’s budget director and state health department to make the amendments he hoped would lower the estimated costs of the bill, which originally called for adding about 42 full-time equivalent positions to implement the new verification protocols.
While Democrats questioned the purpose behind the bill, Smith said that nothing about the qualifications for the programs were changing, just how people meeting those qualifications are verified.
Sen. Diane Sands, D-Missoula, asked Smith why he wasn’t looking at health care providers who defraud the program by doing things like billing for unnecessary services and charging for services at a higher level than the care provided.
Smith said he believed there were “millions and millions” of dollars in fraud from both recipients and providers, but this his bill only was looking at people who are covered by the programs.
Sands also pressed Smith on why the amendments removed several programs from oversight.
“If you’re looking for people scamming the system, why aren’t you looking at these as well?” Sands asked.
Smith again said the change was made to reduce the estimated costs of the bill.
“We think we can still have the savings ... but by not going to some of these smaller programs that we have out there where there’s a lot less money involved, it makes it a much easier program to run, a lot less complicated and where we can get the majority of the instances where we may have a situation where somebody does not qualify for a benefit," Smith said.
McNally said she had concerns about a part of the bill she said incentivized a third-party vendor to identify fraud.
“That they get rewarded the more they’re able to do that; I find that pretty amazing,” McNally said.
Sen. Jen Gross, a Billings Democrat, said that implementing SB 100 during a public health emergency could jeopardize the state’s enhanced federal matching rate for Medicaid programs put into place because of the pandemic. That’s because states can’t change their programs to include more restrictive procedures than were in place at the start of 2020 and must provide continuous eligibility. It's not clear, however, when the bill would be enacted, if passed.
Emails between the bill sponsor, drafter and other parties show involvement from the Foundation for Government Accountability, a think tank that has worked on similar proposals in other states, as well as Charlie Brereton, the health care policy adviser for Gov. Greg Gianforte; and the director of the state health department.
During his campaign for governor, Gianforte, a Republican, said while he supported continuing the state's Medicaid expansion program, he wanted to see tighter checks to make sure those on the program were actually qualified.
In a press conference Wednesday, when asked if he supported SB 100 or if he or his staff had been involved in the legislation, Gianforte said he was not familiar with the bill.
"There's a lot of bills moving through the Legislature. We'll take a look at them if they get to my desk and we'll make the best decision in the interest of Montana," Gianforte said.
In an email later Wednesday, a spokesperson for the governor's office said his staff had been working on the bill.
"Gov. Gianforte has been clear: he is committed to ensuring that critical services, resources, and support are available to the most vulnerable among us. To that end, the governor's staff has been working with legislators to ensure programs are there for those who truly need them most," said Brooke Stroyke in an email.