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memorandum in opposition

UPDATED: Don't Require Unproven & Burdensome Biometric ID Program for Medicaid

A.6555-B (Rivera) / S.4384-B (Ranzenhofer)

This bill, if enacted, would require the Department of Health to implement a program requiring the use of biometric technology by clinics, pharmacies and hospitals participating in New York’s Medicaid program to identify Medicaid recipients at the point of being seen by clinical staff and again upon completion of care or services.  The Department would be required to issue requests for proposals for the program (RFP) by January 15, 2013.  The successful bidder would propose a program capable of storing the biometric markers and logs of all billed services; the program must be revenue neutral from inception.

While on its face the intent of this legislation is laudable, we believe that this bill will cause undue harm to individuals attempting to access health services.  In addition, the bill places federal funding for New York’s entire Medicaid program at risk. 

The Affordable Care Act (ACA) prohibits states from placing any new restrictions on eligibility for Medicaid prior to 2014.  Specifically, the maintenance of effort provisions of the ACA prohibit states from putting any procedures in place that would make eligibility for Medicaid any more restrictive than the program that was in place on March 23, 2010. [1]  Biometric identification as a condition of eligibility violates the maintenance of effort provision because it is likely to restrict enrollment, thereby placing all of the state’s federal funding at risk. [2] 

A biometric program would also create legal problems for New York State post-2014.  Beginning in 2014, states are required to allow most Medicaid applicants to apply for Medicaid online (the exception being elderly and disabled applicants).  Face to face interviews can no longer be required. [3]  Yet requirements for biometric markers cannot be satisfied without face to face meetings.  Thus, the only population New York would be able to apply biometric identification requirements to post-2014 would be the elderly and disabled. 

Studies of the use of biometric requirements (finger imaging) in the Food Stamp Program have repeatedly shown that biometric requirements regularly and inappropriately deter eligible households from participating.  This is especially true with respect to elderly and disabled individuals, as well as families living in rural areas of the state, many of whom lack reliable access to transportation; families with working adults who cannot take time off from work and households with children between the ages of 18 and 21, whose cooperation with the finger imaging requirement is sometimes impossible for the parents to obtain.

Finger imaging technologies are not failsafe and they produce errors.  Empire Justice Center’s December 2011 analysis of New York City’s Food Stamp finger imaging program found that 97% of households whose Food Stamp applications were denied due to failure to comply with finger imaging successfully challenged their denials at the fair hearing level due to rampant mistakes in the finger imaging process. [4]  Errors can mean that applicants guilty of fraud are not detected and that legitimate applicants are deemed fraudulent. 

If fingerprinting is subject to error, we can assume that other biological data collection will likewise be subject to error.  Although the bill gives lip service to ensuring that recipients have access to emergency services in the event of a malfunction, it is not clear how the determination will be made that a malfunction has occurred, or that full access to services would be maintained even if agreement was reached concerning a malfunction.

Furthermore, we have strong indications from the experiences of other states that the Center for Medicare and Medicaid Services (CMS) is unlikely to provide federal funding for biometric screening.  North Carolina was recently informed by CMS in no uncertain terms that the agency will not provide federal financial participation for technologies associated with biometric technologies. [5]  Virginia halted plans for a pilot program to utilize biometric technology in its Medicaid program after a review by CMS concluded that the biometric requirement was a condition of Medicaid eligibility that would violate the maintenance of effort requirement of the Affordable Care Act. [6]  

Without CMS support, it is difficult to imagine how the cost of such a program could ever be cost neutral, as the bill requires.  The Department of Health would nonetheless be mandated by the bill’s language to invest time and staff resources into developing a request for proposals for the biometric program, and evaluating resulting submissions.  Given all of the other changes and implementation challenges currently facing the Department of Health, we believe it would be irresponsible to use precious resources in this manner. 
   
Finally, there has been no evidence on a national or statewide level that biometrics are a cost effective and efficient method of preventing fraud.  Indeed, finger imaging systems have proved to be costly to states, to the degree that only one state still uses the technology for fraud detection in the Food Stamp Program.  Furthermore, it is unclear that the amount of fraud deterred warrants the cost to the state itself, even without consideration of the costs to eligible households that do not apply.  It is difficult to imagine how gathering other biological data such as DNA or palm patterns could prove any more effective in the Medicaid program.  

Imposing onerous biometric eligibility requirements on New York’s Medicaid population (including 2 million children, half a million elderly recipients and over 600,000 disabled individuals) and the providers who serve them – on top of already existing fraud detection processes - is a well-intentioned but misguided proposal and should not be enacted into law.  

End Notes:
 [1] Affordable Care Act, Section 20001(b), 42 U.S.C. 1396(gg).  See also CMS, Dear State Medicaid Director (Aug. 5, 2011) (SMDL #11-009, ACA # 19) available at https://www.cms.gov/smdl/downloads/smd11-009.pdf.
 [2] We expect that biometric identification procedures would impact enrollment in much the same way fingerprinting requirements have.  Enrollment would be restricted due to negative perceptions of the process and the program as well as errors and complications inherent in implementation.  We expect that applicants for Medicaid would shy away from providing biometric identification markers and would experience regular delays in accessing the benefits just as food stamp applicants have due to fingerprinting requirements,  See “Time to Leave Fingerprints Behind,” Empire Justice Center, December 2011, available at http://www.empirejustice.org/publications/reports/new/time-to-leave-finger-prints.htm.
 [3] 45 CFR §§ 435.907(a) and (d). 
 [4] Access and Access Barriers to Getting Food Stamps: A Review of the Literature, Food Research and Action Center, February 2008, pp. 68-69, available at http://www.frac.org/pdf/FSPaccess.pdf
 [5] Smart Card Initiative: Quarterly Report to the Joint Legislative Oversight Committee on Information Technology, State Chief Information Officer, North Carolina, April 2011.  Available at https://www.scio.nc.gov/library/pdf/Smart_Cards_report_%28April_2011%29.pdf
 [6] Dep’t of Medical Assistance Serv., Virginia Medicaid Biometric Pilot Implementation Report, H. Doc. 2010-10, Reg. Sess., at 1 (2010), available at http://leg2.state.va.us/dls/h&sdocs.nsf/By+Year/HD102010/$file/HD10.pdf.

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06/01/12

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