Current Data Matching Requirements
The House Energy & Commerce Committee reconciliation bill proposes a tired, ineffective idea that would increase the frequency of residency data matches from quarterly to monthly for Medicaid enrollees. Although the stated goal is identifying improper payments paid for people receiving benefits in two states, the likely effect will be increased coverage terminations for eligible individuals. Data matching to identify enrollees who have moved to another state has been around for about 30 years and the Republican proposal does not make significant improvements to existing processes, but requires them to occur more frequently. Instead of identifying significant waste in Medicaid, the proposal will generate administrative costs for states and harm to the individuals who will lose coverage from those administrative burdens.
Data Matching to Identify Enrollees’ Changing Circumstances Already Occurs
States already perform significant data matching, including periodic data matching during an eligibility period that triggers an eligibility renewal process. Over two-thirds (35) of states use verified information from SNAP or TANF to identify changes that may affect Medicaid eligibility, 15 states periodically check external data sources like quarterly wage and unemployment data, and 11 states do both. Medicaid enrollees are also required to report any change that may affect their eligibility, including moving out of state.
One of the data sources states use specifically focuses on identifying people receiving public benefits in more than one state. The Public Assistance Reporting Information System (PARIS) has existed since the mid-1990s and Medicaid agencies have been required since 2009 to use it. States’ eligibility systems must include PARIS data matching to receive federal matching funds for automated data systems, which include necessary eligibility systems and claims/billing systems.
PARIS collects more data than the reconciliation bill proposes, including Social Security number, name, date of birth, address, case number, public benefits being received, and dates those benefits were received. States send data to the administering agency, ACF (Administration for Children & Families), for each quarterly data match, which occurs in February, May, August, and November each year. States are required to submit data for the August match. They receive a data match file after each quarterly match.
PARIS is not highly utilized by states, and not for the reasons that would be addressed by the reconciliation bill. According to reports, states do not submit all or accurate information to PARIS for all quarters because of state technology issues and limited staff capacity. Even the valid matches produced are not very effective. The matches result in a valid discontinuation of benefits less than half the time, with states often opting to not pursue recovery of those improper payments because they did not have the resources or the recovery would take too long. Recovering the payments also frequently has limited value compared to the effort and time it takes to identify and recoup these payments. For example, in one study, 18% of the verified matches only totaled $6,200. But these minimally effective matches come at significant cost to states and to people terminated from the administrative processes generated.
Increased Matching Will Be Burdensome and Expensive for States
Increased matching frequency comes at a systems and administrative cost. States’ Medicaid eligibility and enrollment systems are often expensive and time-consuming to change. For example, when the Affordable Care Act (ACA) introduced the Federal Data Services Hub to facilitate eligibility-related data matching for all insurance affordability programs, nearly half the states sought temporary or indefinite waivers to avoid using the Hub for some or all Medicaid eligibility data matching. Moreover, like PARIS, the data matching system proposed in the reconciliation bill relies on state submissions. Thus, like PARIS, its data is only as good as state contributions.
The more frequent data checks will result in increased eligibility reviews and coverage terminations, generating additional work for states, at significant cost. The coverage terminations that will result from the proposed changes will cause increased “churn,” a process by which individuals lose Medicaid or CHIP coverage and re-enroll within a short period of time, often due to administrative barriers. Churn places a significant administrative and financial burden on states. For instance, when enrollees lose eligibility for procedural reasons, eligibility workers end up processing multiple applications for individuals who were eligible but still lost their eligibility and cycled off coverage.
Given the minimal returns states experience from PARIS and the substantial financial and administrative costs associated with updating states’ eligibility and enrollment systems and increasing the frequency of eligibility checks, implementing a system that does many of the same functions as PARIS is not likely to be worth the investment.
Increased Data Checks Will Increase Coverage Loss & Harm
More frequent data matching, in addition to being administratively burdensome, increases the risk of coverage terminations. Eligible individuals can lose coverage through procedural terminations, i.e., administrative issues, the likelihood of which increases with additional renewal processes. Such terminations occur not because the person is ineligible, but simply because the person either did not return or the state did not process requested information. Recent data shows that more than 70 percent of Medicaid disenrollments during the continuous coverage unwinding were for solely procedural reasons, with enrollees complaining of incomprehensible notices and dysfunctional state systems that limited their ability to understand and submit information. And as recently as December 2024, the majority of enrollees disenrolled at renewal were disenrolled for procedural reasons as opposed to being found ineligible.
Enrollees who remain eligible but lose Medicaid must undertake the administrative burden of re-enrolling in coverage. Many of them will not, either believing they must not be eligible or understanding that they remain eligible but being unable to navigate the re-enrollment process. For most Medicaid-eligible adults, Medicaid is their only source of health insurance: 70 percent of adults who were disenrolled from Medicaid during the unwinding became uninsured. Uninsurance has enormous consequences for the health and finances of impacted people. People who successfully re-enroll in coverage are affected, too: even brief periods without coverage are associated with increased emergency room usage and inpatient hospital admissions. Uninsurance also places a significant burden on hospitals in the form of uncompensated care and increased usage of costlier emergency department services. These effects are especially acute in rural areas, where high rates of uninsurance contribute to financial challenges and hospital closures that disproportionately affect older adults and individuals with chronic conditions.
Conclusion
Creating a new system to perform the same function of PARIS, with simply more frequency and burden on states ignores the efficacy the system and other mechanisms states use to identify individuals who are no longer eligible. More frequent data checks and renewals will generate coverage loss, and not just from people who are ineligible. This coverage loss will increase health care costs to individuals who have lost coverage, and to the taxpayers from delayed care.