HB 1270 adds bureaucratic hurdles for Oklahoma families and won’t generate promised savings

Earlier this spring, we warned that HB 1270 would grow administrative waste and punish poor families by requiring substantially more rigorous and more frequent verification procedures for families applying for SNAP (food stamps) and Medicaid (SoonerCare). Following public outcry, HB 1270 has been pared back to only apply to SoonerCare, with a provision excepting some individuals with significant disabilities. However, HB 1270 is still an expensive, unnecessary bill that would put access to basic health care for Oklahoma families at risk. Here’s how.

HB 1270 tries to fix a problem that doesn’t exist

HB 1270 is cookie-cutter legislation from “The Foundation for Government Accountability” (FGA), an advocacy group based in Florida. FGA claims HB 1270 will save millions by ending fraud and abuse in Oklahoma’s Medicaid program. But they haven’t done their homework about our state. According to federal audits, SoonerCare’s error rate, which includes fraud as well as honest mistakes, is 0.3 percent – far below the national average as well as other comparable states.

Even this low rate of error mostly comes from issues that HB 1270 won’t affect; 91 percent of improper Medicaid spending was caused by provider error — not state error. In short, the problem that HB 1270’s proponents claim it will solve doesn’t simply exist.

HB 1270 would create long delays and wasteful spending

HB 1270 would require largely technical changes to how we operate SoonerCare – but it could still have big impacts. Oklahoma’s online SoonerCare enrollment system is one of the best in the country, as we explained back in 2010. Seventy percent of the state’s applicants apply online, and the system processes more than 30,000 applications per month. Basic applicant information is verified in real time and then checked further through data exchanges with the Oklahoma Employment Service Commission, Department of Human Services, Public Assistance Recipient Information Systems, and many more. Applicant data is further verified and updated through regular data matching.

Because HB 1270 would require that OHCA verify information not available in real time before approving an application, OHCA’s current  enrollment system would be useless. But HB 1270 could mean other cash-strapped agencies would need to develop computer systems to run data matches, too. For instance, OHCA receives death records from the Health Department only infrequently since it can get that information through other data matches, but HB 1270 would require death records be checked for every application. HB 1270 would also require OHCA to check incarceration records for every application, which would mean developing information exchange systems with the Department of Corrections, federal prisons, and private prison facilities. All of this means long delays for Oklahomans in need of medical coverage and wasteful duplication of eligibility systems when the one we have already works very well.

HB 1270 would make it harder for families to access health care

There’s zero evidence that HB 1270 will uncover SoonerCare errors at anywhere near the levels to pay for the costs it would create. That means deserving families will lose access to SoonerCare.

HB 1270 would also require new SoonerCare applicants to pass a quiz of “personal and financial questions,” similar to the knowledge-based authentication that credit card companies require for new applicants. Credit card companies typically contract with credit reporting agencies like Experian to do this, paying the agencies per completed quiz – which the Health Care Authority would have to pay as well. For low-income families who have moved a lot, immigrant parents applying on behalf of citizen children, and unbanked families without credit histories, this quiz may be impossible. HB 1270 specifies that the quiz shall “attempt to accommodate unbanked or underbanked applicants who do not have an established credit history,” but “attempt to accommodate” is not the same as “will accommodate.” Oklahoma families deserve better than an “attempt.”

HB 1270 also directs the Health Care Authority to contract with additional independent vendors to verify applicant information. There’s no guarantee that these vendors’ information won’t be out-of-date or inaccurate, and just one error could be enough to strip deserving families of their health care. This outcome is even more likely because of the procedure HB 1270 gives families only 10 days to respond to alerts of discrepancies. Vulnerable families who don’t understand the alert or who simply aren’t able to respond in time could lose their health care needlessly.

The bottom line

Speaking in favor of HB 1270, supporters frequently referred to the importance of making sure that the state’s Medicaid funds go to the “truly deserving.” As we’ve noted, there’s no evidence that Medicaid dollars aren’t going to the “truly deserving.” The bill’s supporters have pointed out that given the state’s budget hole, we need to make every effort to ensure the state’s dollars are being spent correctly. This bill wouldn’t do that. Instead HB 1270 would waste state dollars, destroy well-functioning and efficient systems, and threaten the health care that Oklahoma families need.