COLORADO OFFICE OF THE STATE AUDITOR

COLORADO OFFICE OF THE STATE AUDITOR

A REQUEST FOR PROPOSALS FOR A PERFORMANCE AUDIT OF MEDICAID CLIENT CORRESPONDENCE

December 17, 2019

TABLE OF CONTENTS

SECTION I:

Administrative Information

SECTION II:

Information That Must Be Included in Proposal

SECTION III:

Proposal Evaluation Process

SECTION IV:

Supplemental Information

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SECTION I ADMINISTRATIVE INFORMATION

A. ISSUING OFFICE

This request for proposal (RFP) is issued by the Colorado Office of the State Auditor (OSA). The terms State Auditor, OSA, State, and State of Colorado are used interchangeably throughout this RFP.

As an agency within Colorado's Legislative Branch, the OSA and this solicitation are exempt from the State Procurement Code and State Procurement Rules [see Section 24-101-105(1)(a), C.R.S.].

All communications regarding this RFP must take place directly with the OSA's assigned contract monitor listed in Section I(E) ? Inquiries and Section I(F) ? Submission of Proposals.

B. BACKGROUND INFORMATION

Links to key documents and information referenced in this background section are provided in Section IV ? Supplemental Information.

Colorado Medicaid

Medicaid is a federal-state program that provides health care coverage and services to eligible low-income families. Medicaid is administered at the federal level by the Centers for Medicare and Medicaid Services (CMS) under Title XIX of the Federal Social Security Act, and administered at the state level by Colorado's Department of Health Care Policy and Financing (Department) under Section 25.5-4-105, C.R.S. Colorado's Medicaid program is branded and marketed under the name "Health First Colorado."

The Department is responsible for ensuring that the State complies with all federal and state Medicaid requirements. Federal regulations [42 C.F.R., 440] require states' Medicaid programs to provide all eligible recipients certain basic services, including but not limited to inpatient and outpatient hospitalization, physician and rural health clinic services, and nursing facility services for recipients aged 21 and older.

Colorado Senate Bill 13-200 expanded eligibility for low-income adults without dependent children and for low-income parents and caretaker relatives with dependent children, effective January 2014. In accordance with federal regulations [42 C.F.R., 435], Colorado currently provides Medicaid benefits and services to the following low-income populations:

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? Adults with an income at or below 133 percent of the federal poverty level.

? Children in families with a household income at or below 142 percent of the federal poverty level.

? Pregnant women with an income at or below 195 percent of the federal poverty level.

? Individuals receiving Supplemental Security Income (SSI) for the Aged, Blind, and Disabled.

? Individuals qualified for adoption assistance or foster care maintenance payments under Title IV-E of the Social Security Act.

? Some dual-eligible Medicare beneficiaries who are over age 65. For this population, Medicaid is the payer of last resort.

? Individuals who are not U.S. citizens, but who meet specific requirements under federal law [8 USC 1612] related to income, work, child support enforcement, and U.S. residency.

According to Department data, Colorado's total Medicaid client caseload was about 1.2 million members as of October 31, 2019, which is about 21 percent of Colorado's population. For Fiscal Year 2020, the General Assembly appropriated about $7.9 billion for medical services premiums under Medicaid. Medicaid is funded jointly with state and federal funds. The federal matching rate varies depending on the services being provided and the populations being served.

Colorado's Shared Eligibility System

In Colorado, the responsibility for determining recipient eligibility for Medicaid benefits is shared between local county departments of human/social services, medical assistance eligibility sites (MA sites) certified by the Department to accept and process Medicaid applications, and the State.

Low-income individuals with a significant disability who are receiving Supplemental Security Income (SSI) are automatically eligible for Medicaid. All other individuals must complete the Department's standard Medicaid application using one of the following methods:

? Online. Individuals can complete the Medicaid application process online through the Department's Program Eligibility and Application Kit (PEAK) website. PEAK is only available to low-income applicants who do not have a disability or need long-term care. When applicants who have a disability or need long-term care attempt to apply for Medicaid through PEAK, their application is forwarded to their local county department of human/social services or MA site for processing. 4

? In Person. Individuals can apply for Medicaid in person at their local county department of human/social services or MA site.

? By Telephone. Individuals can apply for Medicaid over the telephone by calling the Colorado Medical Assistance Program.

? By Mail. Individuals can apply for Medicaid by mail by sending their completed application to their local county department of human/social services, the Colorado Medical Assistance Program, or Connect for Health Colorado, which is the State's health insurance exchange under the federal Affordable Care Act. (Connect for Health Colorado staff use the PEAK website to submit online any Medicaid applications they receive by mail.)

The Colorado Benefits Management System (CBMS) is the statewide data system through which all applications are processed and eligibility determinations are made for public benefits such as food, cash, and medical assistance, including Medicaid. The State has contracted with a private contractor, Deloitte Consulting, LLC, to operate and maintain CBMS. Medicaid applications completed online through PEAK are automatically transferred to CBMS. For all other Medicaid applications, caseworkers collect applicants' information and enter it directly into CBMS.

Eligibility refers to the process of determining whether an individual applicant qualifies for Medicaid benefits and services based on established criteria. Federal regulations require states to determine whether an applicant is eligible for Medicaid based on the applicant's income, state residency, age, citizenship, immigration status, household composition, and pregnancy status [42 C.F.R., 435 et. seq.]. When individuals apply through PEAK, CBMS is automated to conduct real-time verifications of each applicant's identity, Social Security number, citizenship, and immigration status through electronic interfaces with other data sources. Medicaid may accept an applicant's self-attestation of other information needed to determine eligibility [42 C.F.R., 435.945]. For example, federal regulations [42 C.F.R., 435.956(e)] require the State to accept applicant's self-attestations for pregnancy, unless the State has information that is not compatible with the applicant's attestation. If application information is missing, questionable, or does not match the data from the appropriate interface, the applicant is given a pending status in CBMS, and PEAK forwards the application to county caseworkers for manual processing.

The following exhibit summarizes the methods that Medicaid uses to verify application information and determine eligibility for applicants who apply online through PEAK. Most of the electronic verifications occur within 24 hours of application completion, and CBMS tracks the verifications conducted. For example, Colorado's Medicaid program accepts self-attestation of earned and unearned income to determine applicant eligibility. Applicants are not required to provide documentation of income unless the self-attestation of income cannot be verified electronically or the information verified electronically is not reasonably compatible.

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Most employers in Colorado are required to report employees' wages to the Colorado Department of Labor and Employment (CDLE). The Department uses the Income and Eligibility Verification System (IEVS) to retrieve and verify applicants' self-reported income information against wage data from CDLE.

COLORADO MEDICAID METHODS FOR VERIFYING APPLICANTS'

ELIGIBILITY INFORMATION

ELIGIBILITY INITIAL SELF-

ELECTRONIC

WHEN DOCUMENTATION IS OBTAINED

FACTOR

ATTESTATION

SYSTEM

TO VERIFY ELIGIBILITY

VERIFICATIONS

Residency Yes

None

Obtained if applicant provides

Age

questionable information.

Pregnancy

Income

Yes

Income and

Obtained if there is a discrepancy of

Eligibility

10% or more between the application

Verification

and IEVS data, and applicant does not

System (IEVS)

provide a reasonable explanation.

Citizenship None

State Verification Obtained if CBMS does not find the

Exchange System applicant in the SVES System.

(SVES)

Identity

None

Social Security

Obtained if CBMS does not find the

Administration

applicant through the Social Security

Interface or

Administration Interface or

Department of

Department of Motor Vehicles

Motor Vehicles Interface.

Interface

Social

Yes

Social Security

Obtained if applicant provides

Security

Administration

questionable information.

Number

Interface

Immigration None

Verify Lawful

Obtained if an electronic verification

Status

Presence Interface is not received.

SOURCE: Office of the State Auditor's Colorado Medicaid: The PEAK Application and Eligibility

Verification Performance Audit (July 2016).

CBMS also interfaces with the federal Public Assistance Reporting Information System (PARIS) to search for any benefits a recipient may be receiving in another state or another federal program, such as veteran's benefits. CBMS also checks information the applicant provided to other public assistance programs, such as Colorado's Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF), to determine in real-time whether the recipient provided those programs with any information that conflicts with the information provided on their Medicaid application.

2016 Interim Study Committee

As a result of feedback from constituents and stakeholder groups expressing concerns about confusing and inaccurate information on correspondence with Medicaid clients about eligibility determinations and other related matters, the General Assembly convened an Interim Study Committee on Communication

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between the Department of Health Care Policy and Financing and Medicaid Clients (Study Committee) during the 2016 Legislative Interim. The Study Committee met a number of times from June through September 2016, and was charged with studying the following policy issues:

? The current form and content of letters that are send to Medicaid clients by the Department

? The frequency with which letters are sent to Medicaid clients by the Department

? Whether such letters can be simplified and the content made more clear so as to improve the information that is communicated to Medicaid clients

Overall, there are a number of different points of communication between the Department and Medicaid applicants/clients throughout the eligibility determination and enrollment process, as outlined in the following exhibits:

Source: Department of Health Care Policy and Financing. Presented and discussed at the June 24, 2016 hearing of the 2016 Interim Study Committee on Communication between the Department of Health Care Policy and Financing and Medicaid Clients.

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Source: Department of Health Care Policy and Financing. Presented and discussed at the June 24, 2016 hearing of the 2016 Interim Study Committee on Communication between the Department of Health Care Policy and Financing and Medicaid Clients.

? Verification Checklist. After an individual applies for Medicaid, the applicant will receive a letter requesting additional information or documentation if the Department cannot verify information provided by the applicant through various interfaces or other resources.

? Notice of Action. All individuals applying for Medicaid will receive a letter informing them of their eligibility approval or denial. Those individuals who apply for Medicaid on the basis of disability, or who require long-term care, will also receive a separate letter informing them whether or not they meet the applicable disability or level-of-care requirements. If something changes where an individual no longer qualifies for Medicaid, the individual will receive a letter informing them of their change in eligibility status.

? Income Letter. If the Department receives information about the applicant's income from the IEVS interface that is reasonably different from what was reported during the application process, the client will receive a letter requesting the client explain the income discrepancy and provide associated supporting documentation.

? Annual Renewal Letter. On an annual basis, all Medicaid clients receive a letter 60 days prior to their renewal date requesting that the client review, confirm, and provide updated information and documentation for the purpose of re-determining the client's eligibility status. 8

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