Identity-Proofing Will Help States Navigate the Post-Pandemic Medicaid System

Healthcare coverage changes impacting millions of Americans are on the horizon. As the end of the Medicaid continuous enrollment provision approaches in May, Medicaid eligibility determinations will fall back to the states. As they do, public sector agencies must prepare now to reexamine cases for potential fraud, secure programs, and continue accessibility for those who genuinely need the service. More than outdated identity-proofing methods will be required. As Senior VP of TransUnion's Public Sector, I stand at the intersection of private-sector technology and public-sector needs. In my role, I've seen the growth of technology developed to meet current and future needs.

A Foreseeable Problem

The pandemic exposed multiple areas of vulnerability when the U.S. government was forced to rapidly scale benefit enrollments and distributions to those in need. Critics asserted the initial response could have been more cohesive. Estimates demonstrate that pandemic-related fraud cost U.S. taxpayers billions, illustrating clear challenges to resolve.

It's up to agencies overseeing assistance programs — such as Medicaid, nutrition benefits and unemployment insurance — to implement effective fraud mitigation tools that secure programs with robust identity-proofing and digital authentication methods while quickly moving valid applications through enrollment.

The good news is existing technological standards allow us to address response processes moving forward. We can avoid repeating past mistakes as we look to the end of the Medicaid re-enrollment provision with the gift of foresight. As states resume the responsibility of eligibility determination at scale, a lot of work will likely be required. But there are tools to help prepare.

Hurdles of a Public Health Emergency

Many people relocated during the pandemic. Although the majority didn't move far, the sheer quantity of moves strained public agencies which rely on self-reporting to keep constituent contact information up to date. Understandably, the last thing on anyone's mind during a crisis is logging into their benefits platform to update profile information. Unfortunately, states that saw an influx (or loss) of inhabitants might be unprepared to reach beneficiaries for re-enrollment. In the worst cases, states may be unaware new, enrolled residents exist.

The problem of income verification is another concern facing states. Some employment verification data sources only apply to certain segments of the employment market, such as medium- and large-business employers. Small business employees and gig economy participants often are not reported in these databases. Startups, in particular, saw dramatic hiring increases during the past two years. Without more robust data sources to estimate income, employees who took positions at smaller organizations could be erroneously and adversely impacted when agencies screen out potential Medicaid recipients for not meeting eligibility requirements.

Income and employment verification challenges also grow as more people start their own businesses. Typically, states rely on data from payroll providers to assist in the verification process. However, many small companies may not use third-party payroll or HR services for various reasons, resulting in significant gaps in the data available to states. The question then becomes how states can verify income and employment for these constituents when relying solely on these data sources. For these new problems, the old way of reporting misses the mark.

Navigating Those Hurdles

What are the solutions if screening for income verification and locating beneficiaries are the problems facing the public sector? One increasingly popular solution is consumer-contributed data. Encouraging Medicaid recipients to provide verifiable paycheck information can be a simple process.

Maintaining enrollment in the program is a priority for many individuals, so allowing them to provide data and documents that can be verified against other records may be beneficial. Another option is allowing recipients to authorize access or data sharing from their employer or payroll provider.

Many constituents in underserved communities are also more likely to participate in the gig economy, which is linked to employment or income verification difficulties. Recognizing the disproportionate effects of changes to programs like Medicaid on traditionally disadvantaged populations is paramount. For example, people with limited English proficiency (LEP) or the disabled may be more challenging to locate and, therefore, more likely to be missed.

Although steps to secure identity-proofing require forethought, they're necessary. With increased scrutiny comes more innovative fraud. Fraudsters are likely to take advantage of this process disruption to supply fake income verification or location data to appear more convincing than ever.

Our best tools against fraud are data points which allow services to build a comprehensive picture of an individual and their eligibility. Layering the ability to verify these data points, documents and the identities of people who need and qualify for aid is essential.

In an increasingly digital world, verifying the information tied to the devices people use to enroll is imperative in the fight against fraud. Agencies must be able to confirm a person exists — even when on the other side of a screen — and that they are who they profess to be. Not only will this save states millions of dollars, but it will also improve the constituent experience.

New Challenges, New Solutions

Though changes are coming, we have forewarning and the rare opportunity to brace for these challenges. Leaning on constituents to supply their own screening data will pay off.

More data, identity-proofing and digital authentication tools are also needed for states looking to cut down on fraud and get benefits equitably to those who need them most. Luckily, many of those tools are already available. All that is left to do is begin.