Virginia has contended with historic levels of change and growth in its Medicaid program in the last five years – driven from Medicaid expansion in 2019, the COVID-19 public health emergency (PHE) and resulting continuous eligibility requirements, and overall population and demographics changes. While growing access to Medicaid has come with many benefits for eligible Virginians, it also increased pressure on an already strained Medicaid eligibility determination system, impacting applicant experience and increasing the workload for eligibility teams across the Commonwealth.

Medicaid eligibility determination in the Commonwealth, similar to many states, struggles with fragmented responsibilities, outdated and inflexible technology, and underlying program complexity. Virginia is one of only 7 states with Medicaid eligibility being largely conducted and administered across 120 local department of social services agencies (LDSS) versus being centralized at the state level. Virginia is also one of 14 states where Medicaid eligibility is integrated with other social services, which gives Virginians the opportunity to apply for multiple benefits concurrently. While both features offer many benefits to Virginians, they also introduce coordination and complexity to the eligibility process. Despite the best efforts of those who administer, support, and apply for Medicaid, the experience of Medicaid eligibility in VA today is a maze of access points, variable processes, imperfect system interfaces, and confusing communication.

At the direction of the General Assembly, this assessment analyzed Medicaid eligibility determination across people and organizational structure, process, and technology and data systems. It leveraged 75+ interviews, 2 surveys (including one with over 1,300 staff), focus groups, data analysis, system testing, and external benchmarking research to assess the current program and identify potential improvements. Four themes emerged as critical to improve Medicaid eligibility:

1) Poor applicant experience with less digital, more manual processes

While Virginia exceeds the national average for Medicaid renewals with automatic verification ("ex parte"), it falls behind in other areas: 21% of new Modified Adjusted Gross Income (MAGI) applications take over 45 days to process (compared to 14% nationally), and only 19% are reviewed within 24 hours (compared to 43%).(*1) This is partly due to a low rate of online applications: 40% in VA vs. 57% in NC, 63% in TN, and 79% in IN (states that have similarities with VA either because they have the same IT vendor, local administration of eligibility, and/or integration of benefits). CommonHelp, the main application digital portal in Virginia, offers a poor user experience, driving applicants toward slower, manual methods like paper and phone. Even in those channels, applicants experience complex and difficult to understand paperapplication forms and notices, and the existence of multiple call centers and phone numberscreate confusion for which path applicants can take. Only 14% of surveyed LDSS benefitprograms specialists believe Virginians can navigate the eligibility process without significantchallenges.

2) Outdated and inflexible technology systems

The Virginia Case Management System (VaCMS) – the main benefits eligibility IT system that processes applications and renewals – is based on 1990s era technologies that are heavily intertwined, making even small changes difficult and costly to make. LDSS agencies report many “outages" and technical errors with the system. Findings from system testing conducted for this assessment suggest system limitations such as timeouts and delays occur when the equivalent of 10-12% of LDSS eligibility staff (400 or more users) are processing cases concurrently. Further independent evaluation is warranted to understand drivers for these results. The system also has limited end to end real-time data reporting capabilities (beyond technical system performance) to provide state leaders with actionable information about eligibility determination. Poor user experience with VaCMS leads to the use of workarounds, further increasing variability in the process. Exacerbating these challenges with VaCMS is the Commonwealth's reliance on an external technology vendor to manage and operate the system without effective vendor management practices (e.g., absence of strong service level agreements limits Commonwealth’s ability to make changes).

3) Insufficient governance structure across DMAS, VDSS, and LDSS agencies

Virginia's Medicaid eligibility governance structure creates complexities between state agencies and the 120 LDSS agencies. The Department of Medical Assistance Services (DMAS) oversees Medicaid overall, and its sister agency, the Virginia Department of Social Services (VDSS), oversees eligibility conducted by LDSS agencies and manages the eligibility IT system. This separation between DMAS and VDSS can create operational complexity, communication delays, and reduced visibility on performance. Challenges extend to the relationship between VDSS and LDSS agencies. VDSS has limited oversight over the Medicaid eligibility activities performed by LDSS agencies, with few mechanisms through which the Commonwealth can enforce eligibility process standards and performance expectations. Currently, the only performance target provided to LDSS agencies is completing 97% of Medicaid applications within federally required timelines. However, only 13 of 120 agencies (11%) meet this goal, and minimal supports are put in place to help the LDSS agencies achieve the target.

4) Inconsistency in eligibility processes and poor timeliness of applications

Medicaid eligibility processes and staff experiences vary greatly across the Commonwealth, impacting applicant experience and processing times. In the last year, Medicaid cases per worker ranged from 167 to 961 across LDSS agencies, a ~6x difference. A significant driver of this is the methodology used by VDSS to provide federal and state base funding to LDSS agencies, which does not reflect population growth or demographic changes since the formula was implemented 30 years ago. While additional federal funding can be drawn when agencies deplete their base, this comes at a higher local match (nearly 68%). Unfortunately, local governments have unequal resources to hire and pay staff, impacting turnover rates, and experience levels at LDSS agencies. These processes further differ between LDSS agencies and other channels (e.g., the DMAS CoverVA Call Center and the Virginia Insurance Marketplace) but evaluating differences is hampered by lack of comparable processing time data.

Strategies to improve Medicaid eligibility in Virginia

Virginia can take several steps— ranging from immediate actions to transformative approaches—to improve Medicaid eligibility effectiveness, timeliness, and user experience. Through benchmarking research, 10 strategies were identified to address the challenge areas above. All 10 must be addressed to achieve significant improvement in the administration of the Medicaid eligibility; however, there are different ways these strategies can be achieved, and this report also details specific options to achieve them.

1) Redesign and improve user experience: Best-in-class application portals and processes are built and operated with the end users (e.g., residents, staff) at the center of the design and operation. Given the poor Medicaid applicant experience today, the Commonwealth can pursue strategies to adopt a more digital, streamlined approach.

Strategy A:
Enhance digital experience for applicants by adopting a ‘digital first’ channel strategy and leveraging live chat and AI-driven support tools.

Strategy B:
Streamline processes, applications, notices, and written communications across channels ranging from establishing clear processes for routine updates to redesigning CommonHelp, the main application digital portal in Virginia, with human-centered design principles.

2) Invest in an improved technology ecosystem: Underpinning the ability to improve other process related challenges is an outdated and strained technology system driving delays, workarounds, and frustration for staff. The Commonwealth must invest in its technology infrastructure and processes (e.g., data and vendor management), to streamline processes.

Strategy C:
Modernize VaCMS technology and processes by developing a shared “North Star" vision and conducting a full system diagnostic, initiating a comprehensive modernization journey, and establishing standardized DevOps processes.

Strategy D:
Improve data and reporting capabilities through both staff and system upgrades.

Strategy E:
Enhance management and governance of VaCMS IT vendors, by updating vendor contracts to align with best practices and establishing a vendor governance board.

3) Develop a stronger governance model across DMAS, VDSS, and LDSS: Strengthening ways of working and governance between state and local agencies is a key enabler to realizing improvements across the Medicaid eligibility system. The status quo in the Commonwealth will continue to complicate collaboration and oversight critically needed to maintain program consistency.

Strategy F:
Strengthen collaboration between regional Medicaid consultants, VDSS, and DMAS leadership by institutionalizing collaboration between DMAS and VDSS and realigning central and regional Medicaid consultants to DMAS.

Strategy G:
Increase collaboration between State and LDSS agencies by developing standardized performance metrics, incentives, as well as increasing the capacity of regional Medicaid consultants. More transformative options could consider de-integrating Medicaid eligibility from other benefit programs.

4) Drive consistency of accurate and timely processing: Variability in Medicaid eligibility continues to be a challenge in the current local administration of social services. The Commonwealth can explore ways to help LDSS agencies operate more efficiently, in a standardized way to improve outcomes for those they serve.

Strategy H:
Identify, scale, and standardize best practices and processes by compiling a living best practices playbook and conducting end-to-end process redesign to standardize workflows.

Strategy I:
Strengthen and develop LDSS workforce capacity and capabilities, such as by developing training content across levels, incorporating CoverVA representatives into training, and updating funding approach to LDSS agencies.

Strategy J:
Balance workloads across Virginia and LDSS agencies, such as by facilitating work-sharing across LDSS agencies, providing central surge support, centralizing processing for certain application types, and /or centralizing specific steps of the eligibility determination process. Note, these options need to carefully consider impacts on the LDSS funding formula.

Overall, these strategies can significantly improve applicant and workforce experiences alike. Medicaid eligibility improvements will also benefit other integrated social services, allowing local and state teams to gain capacity for other high-need areas like child welfare all while improving eligibility outcomes for Virginians in need of affordable health care coverage.
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(*1) Centers for Medicare and Medicaid Services (CMS) MAGI Application Processing Time Snapshot, 01/2024-03/2024