Medi-Cal Paperwork Errors, Re-Enrollment Cost State More Than $120 Million Over Three Years, Study Finds

Re-enrolling children whose Medi-Cal benefits have been eliminated because of untimely or incomplete paperwork cost the state more than $120 million over three years, according to a study by the California Endowment, the Sacramento Bee reports.

According to the study, -- titled "How Much Does Churning in Medi-Cal Cost?" -- nearly half of the 3.4 million children enrolled in the program in 2003 were beneficiaries for at least three years. However, about 600,000 eligible children were removed from Medi-Cal at some point, the report stated. Most of those children were re-enrolled within four months.

The study found that it cost the state $180 per person to enroll beneficiaries in Medi-Cal and a managed care plan, including $28 per application to consulting firm Maximus and a $26 fee charged by health plans.

"This means that California is spending over $120 million to reprocess eligible children who have been disenrolled in a three-year period," the study states.

Gerry Fairbrother, lead author of the report and a researcher at Cincinnati Children's Hospital Medical Center, said the practice -- called churning -- "has significant implications for cost, in that administrative dollars to process applications diminish funds available for actual coverage."

Stan Rosenstein, deputy director of the Office of Medical Care Services, said that the study provides "valuable" information but that "the cost figures aren't entirely accurate." He said, "If the child comes back in (the program) within the first month -- and the report shows about 28% do -- there's no intake cost. If they come back in the first two months -- which is 61% -- (the application) doesn't go through Maximus. ... We automatically reassign that child to the health plan."

Rosenstein said that the report also does not recognize improvements the state has made in retaining beneficiaries. "We're looking at a number of things to address the churning issue, including redesigning the (renewal) form to make it easier for families to use," he said (Rojas, Sacramento Bee, 4/21).