REPORT DIGEST

MEDICAID ELIGIBILITY
DETERMINATIONS FOR
LONG-TERM CARE

PERFORMANCE AUDIT
Release Date:  March 2019

Audit performed in accordance with Public
Act 100-380

State of Illinois, Office of the Auditor
General
FRANK J. MAUTINO, AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General, Iles Park
Plaza, 740 E. Ash Street, Springfield, IL
62703
(217) 782-6046 or TTY (888) 261-2887

This Report Digest and Full Report are also
available on the worldwide web at
www.auditor.illinois.gov

Medicaid Eligibility Determinations for
Long-Term Care

The Illinois Public Aid Code at 305 ILCS
5/11-5.4 (enacted by Public Act 100-380 and
amended by Public Act 100-665) required the
Office of the Auditor General to conduct a
performance audit of Medicaid eligibility
determinations for long-term care (LTC).
The audit was to review and evaluate:
• Compliance with federal regulations on
timeliness of eligibility determinations;
• The accuracy and completeness of the
monthly report required by the Illinois
Public Aid Code;
• The efficacy and efficiency of the
application processing approach used for
making eligibility determinations,
including the role of the Integrated
Eligibility System, compared to the prior
application processing approach; and
• Any issues affecting eligibility
determinations related to the Department of
Human Services (DHS) completing Medicaid
eligibility determinations instead of the
designated single State Medicaid agency in
Illinois, the Department of Healthcare and
Family Services (HFS).

Key findings of the audit include the
following:
• Auditors reviewed data consisting of
39,146 long-term care applications received
in calendar years 2015 through 2017.
However, due to issues with the data,
calculating timeliness for the population
of applications was not possible. Therefore
auditors selected a sample of applications
for testing.
• For the 61 applications tested, the
applications were, on average, 69 days
overdue. Twelve of 61 applications (20%)
had an eligibility determination within the
required timeline, 14 applications (23%)
were between 2 and 26 days overdue, and the
remaining 35 applications (57%) were
overdue by more than 30 days.
• HFS and DHS do not track extensions in a
manner that makes it easy to identify the
dates of the extensions or the number of
extensions that have been granted for each
case. As a result, the timeliness of
pending applications will appear worse than
it actually is. Testing showed that
processing times for 28 of 61 applications
(46%) could have been shortened by up to 60
days by subtracting extension days from
eligibility determination processing time.
• LTC reports were not being posted on both
the DHS and HFS websites on a monthly basis
as required, did not always contain all
elements required by statute, and were not
accurate due to issues with the source data
and a potential overstatement of the number
of days applications are pending.
• While it is difficult to ascertain the
efficiency and efficacy of the task-based
process compared to the caseworker-based
process, the decision to switch to the
task-based approach appeared to be based
upon business process research and
reasonable assumptions. The switch was
complicated by the concurrent
implementation of the Integrated
Eligibility System.

The audit contains a total of 8
recommendations to HFS, HFS Office of the
Inspector General, and DHS.

AUDIT SUMMARY AND RESULTS

On August 25, 2017, the Governor signed
into law Public Act 100-380, which amended
the Illinois Public Aid Code and required
the Auditor General to report on the
performance and compliance of the
Department of Healthcare and Family
Services (HFS), the Department of Human
Services (DHS), and the Department on Aging
concerning eligibility determinations for
Medicaid long-term care services and
supports. Specifically, the audit was to
review and evaluate:
• compliance with federal regulations on
furnishing long-term care services promptly
to beneficiaries under 42 CFR 435.930;
• compliance with federal regulations on
the timely determination of eligibility as
provided under 42 CFR 435.912;
• the accuracy and completeness of the
monthly monitoring report of long-term care
eligibility processing required by Section
11-5.4(e)(9) of the Illinois Public Aid
Code (Section 11-5.4(f) after amendment by
Public Act 100-665 effective August 2,
2018);
• the efficacy and efficiency of the task-
based process used for making eligibility
determinations in the centralized offices
of the Department of Human Services for
long-term care services, including the role
of the State's Integrated Eligibility
System, as opposed to the traditional
caseworker-specific process from which the
central offices converted; and
• any issues affecting eligibility
determinations related to the Department of
Human Services' staff completing Medicaid
eligibility determinations instead of the
designated single State Medicaid agency in
Illinois, the Department of Healthcare and
Family Services (prior to Public Act
100-665, 305 ILCS 5/11-5.4(f); following,
305 ILCS 5/11-5.4(g)).

During the course of the audit, Section
11-5.4 of the Public Aid Code was amended
by Public Act 100-665, effective August 2,
2018. In instances in which the Public Aid
Code citations changed as a result of
Public Act 100- 665, auditors provided both
the Public Aid Code citation prior to the
change and the citation following the
change.

Timeliness of Eligibility Determinations

Auditors reviewed data consisting of 39,146
long-term care (LTC) applications received
in calendar years 2015 through 2017. Upon
review of the data, which was pulled from
the LTC application tracking database
utilized by HFS and DHS, auditors
determined calculating timeliness for the
population of applications using the data
provided was not possible.  The data did
not capture all dates necessary to
accurately determine the timeliness of each
application’s eligibility determination.
In addition, the data contained duplicate
entries and a co-mingling of information
among records for applicants who had
submitted multiple applications.  For these
reasons, an accurate calculation of
timeliness required testing individual
applications as opposed to being able to
test and report on the timeliness of all
applications in the population.  Auditors
focused on the timeliness of the
eligibility determinations; auditors did
not assess if eligibility was determined
correctly.

According to HFS data, 12,787 LTC
applications were submitted for Medicaid
eligibility determinations in calendar year
2017. Auditors selected a sample of 55
individuals, which consisted of 61 total
applications.

According to HFS data, 12,787 LTC
applications were submitted for Medicaid
eligibility determinations in calendar year
2017. Auditors selected a sample of 55
individuals, which consisted of 61 total
applications.

Auditors found that 12 applications (20%)
had an eligibility determination within the
required timeline (45 days, 60 days for
applications on the basis of a disability,
or 135 days if referred for asset
investigation).  An additional 14
applications (23%) were completed between 2
and 26 days beyond the required timeline.
The remaining 35 applications (57%) were
overdue by more than 30 days, ranging from
36 to 381 days.

Digest Exhibit 1 provides a breakdown of
the days overdue for the 61 applications
tested. When calculating days overdue,
auditors subtracted extensions requested by
the applicants.  On average, the 61
applications were 69 days overdue. Auditors
made a recommendation in this area.

Ten of the 61 applications tested were
referred to the HFS OIG for asset discovery
investigations.  Prior to August 2, 2018
(the effective date of Public Act 100-665),
the Public Aid Code (305 ILCS 5/11-5.4(a))
allowed an extension of up to 90 days
(i.e., 135 day total processing time
limit).

Applications involving asset discovery
investigations were overdue (beyond the 135
day time limit) by 114 days on average.
However, auditors found that the delay is a
combination of time the application is
being worked at the HFS OIG and at DHS. On
average, the 10 applications in our sample
were at the HFS OIG for 127 days after
extension days were subtracted. For four of
the applications (40%), completion of the
asset investigation took less than the 90
days allowed by the Public Aid Code. The
asset investigation for the remaining six
(one of which was ongoing at the time of
our testing in August 2018) took between
118 and 253 days.

Auditors found that in 5 of 10 asset
investigation cases (50%), once an asset
investigation was concluded and the HFS OIG
notified DHS of the recommendation on the
application, DHS implemented the
recommendation from the HFS OIG promptly
within 5 days. In 4 cases (40%), DHS did
not take action on the case (implement the
recommendation from the HFS OIG) for
between 19 and 88 days. The remaining asset
investigation was ongoing at the time of
our testing, and therefore, the HFS OIG had
not yet made a recommendation to DHS.
Auditors made a recommendation in this
area.

HFS and DHS do not adequately track
extensions. HFS and DHS do not track
extensions in a manner that makes it easy
to identify the dates of the extensions or
the number of extensions that have been
granted for each case. The Public Aid Code
requires the time limits for processing an
application to be tolled, or paused, during
the period of an applicant-requested
extension, essentially subtracting time
granted through these extensions from the
application processing times (prior to
Public Act 100-665, 305 ILCS 5/11- 5.4(e)
(8); following, 305 ILCS 5/11-5.4(e)).
However, if extensions or extension dates
are not easy to identify or not captured at
all, then the extension processing times
cannot be subtracted from the eligibility
determination processing time as required.
As a result, the timeliness of pending
applications will appear worse than it
actually is.  Additionally, when extensions
are not tracked adequately, it is difficult
to ensure that DHS and HFS are limiting
applications to two extensions.

Auditors tested 61 applications and found
evidence of a request for an extension by
the applicant in 28 of these 61
applications (46%). In total, 38 extensions
were granted for the 28 applications.
Auditors found that the processing time for
these 28 applications could have been
shortened by up to 60 days (12 to 60 days).
Also, one application received three
extensions in violation of the Public Aid
Code and Administrative Code. Auditors made
a recommendation in this area. (pages
21-27)

Although discrepancies exist due to
different data sources, the reports on HFS’
website and the reports to the federal
Centers for Medicare and Medicaid Services
both showed that not all applicants are
receiving their determination of
eligibility within the timelines
established by federal regulations and the
Illinois Administrative Code (42 CFR
435.912 and 89 Ill. Adm. Code 110.20 and
10.420). (pages 19-21)

LTC Monthly Reporting

Auditors found various issues with the LTC
monthly reports required by the Public Aid
Code including:
• Reports were not being posted on both the
DHS and HFS websites on a monthly basis as
required;
• Reports did not always contain all
elements required by statute (some elements
were not included for a period and others
were not included in any of the monthly
reports tested); and
• Reports were not accurate due to
duplicate entries and other issues with the
source data and a potential overstatement
of the number of days applications are
pending.

Auditors also found discrepancies in LTC
pending application numbers reported by
HFS. Auditors compared numbers posted to
the HFS website to reports submitted to the
federal Centers for Medicare and Medicaid
Services and found various discrepancies.
According to HFS officials, these
differences occurred because the reports
had two different data sources, an
application tracking database and the
Integrated Eligibility System; however,
beginning in September 2018, both reports
will be produced using data from the
Integrated Eligibility System. Digest
Exhibit 2 shows the pending applications
reported in the LTC monthly reports and to
the federal Centers for Medicare and
Medicaid Services for January 2017 through
May 2018. Auditors made recommendations in
this area. (pages 30-38)

Application Processing Approaches

By November 2014, DHS moved from a
caseworker-based approach to application
processing to a Statewide task-based
approach. This change to task-based
processing was implemented at both Family
Community Resource Centers (local offices)
and Long-Term Care hubs.

Auditors were asked to evaluate the
efficacy and the efficiency of the task-
based process used for making eligibility
determinations, including the role of the
State’s Integrated Eligibility System, as
opposed to the caseworker- based process.
Assessing the efficiency and efficacy of
the task-based process was complicated by
the fact that the switch to the task-based
approach happened concurrently with the
implementation of the Integrated
Eligibility System. While it is difficult
to ascertain the efficiency and efficacy of
the task-based process compared to the
caseworker-based process, the decision to
switch to the task-based approach appeared
to be based upon business process research
and reasonable assumptions. (pages 39-43)

Delegation of Medicaid Eligibility
Determination

Auditors found it is not unusual for the
designated single State Medicaid agency to
delegate authority to determine
eligibility. Illinois’ State Plan for
Medicaid delegated authority to DHS
effective July 1, 1997. This delegation of
authority was approved by the federal
Centers for Medicare and Medicaid Services
on August 30, 1999. Additionally, to
determine if other states were delegating
the Medicaid eligibility function, auditors
reviewed State Plan documents for 26 other
states. Auditors found that 14 of the 26
states reviewed delegate Medicaid
eligibility determinations in varying
degrees, similar to Illinois.

Although HFS develops the policies DHS
utilizes, HFS is not directly involved in
the determination of eligibility for
Medicaid. DHS caseworkers review the
application, request additional information
from the applicant, if necessary, and
determine eligibility. Auditors found no
apparent issues affecting eligibility
determinations related to DHS staff
completing these determinations instead of
HFS, the single State Medicaid agency.
(pages 15- 16)

RECOMMENDATIONS

The audit report contains eight
recommendations: two recommendations
directed to HFS, three directed to HFS and
DHS, and three directed to HFS, DHS, and
the HFS OIG. The agencies agreed with the
recommendations. Appendix E to the audit
report contains the agency responses.

This performance audit was conducted by
staff of the Office of the Auditor General.

JOE BUTCHER
Division Assistant Director

This report is transmitted in accordance
with Section 3-14 of the Illinois State
Auditing Act.

FJM:TEW