A number of banks in the state have received letters from the Mississippi Division of Medicaid (DOM) enclosing a form of contract with the DOM for the bank to participate in an asset verification/data match program for Medicaid applicants. The letter implied that the Mississippi Bankers Association (MBA) had worked with DOM on the program and contract and asked that banks sign and return the contract and agree to participate in the program. When it learned of the DOM letter, the MBA notified its members that while it had worked with the DOM on the legislation, it had not reviewed the form of the contract, and the MBA suggested that its member banks may want to hold off signing the contract or participating in the program until the contract could be reviewed and the MBA could make sure the form of the contract addressed several issues it believed to be important to participating banks.
The impetus for the DOM letter was House Bill 1391 which was approved by the Mississippi legislature during the 2012 session. That bill directed the DOM to implement a program for verifying assets of those persons applying for Medicaid benefits, their spouses and certain other persons whose resources are required to be considered in determining eligibility for Medicaid benefits. The bill also authorized DOM to enter into agreements with financial institutions in the state to develop and operate a data match system under which DOM would send to participating financial institutions on a quarterly basis a an electronic file containing names, Social Security numbers and other identifying information of Medicaid applicants, spouses and other persons whose resources must be considered for eligibility, and the financial institution would compare the list against its records and respond with account numbers and balances for any names that matched. The DOM, then, can follow up with a request for additional information about those persons’ accounts if necessary. The process would work much like the existing child support collection data match program.
Butler Snow was engaged by the Mississippi Bankers Association to assist the association on the bill, and we were successful in getting a number of amendments made which clarified that participation in the program is voluntary, provided for reimbursement of expenses to participating financial institutions in accordance with the cost reimbursement provisions of the federal Right to Financial Privacy Act, and granted participating financial institutions immunity from liability for participating and responding to the DOM information requests without any responsibility for notifying customers that their information had been provided, among other changes.
It was also necessary to amend Miss. Code Section 81-5-55 which generally prohibits a bank from revealing the name of a depositor or amount of his or her deposit, except in certain specified circumstances. An exception was added to permit disclosures in connection with verifications of qualification for public assistance where the Department of Human Services or the Division of Medicaid certifies to the bank that it has on file an effective written authorization from the depositor authorizing the disclosure.
As things stand today, the MBA has obtained comments on the form contract from its Bank Attorneys Committee. Those comments will be delivered to the DOM and MBA will seek to get the DOM to agree to the changes. Once that is complete, we expect MBA will advise its members so that each bank can then review the contract (with its counsel), consider what its responsibilities might be under the agreement and decide for itself whether or not to participate in the program.
Mississippi and all other state Medicaid programs are under a federal mandate to implement an automated asset verification program. The U.S. Department of Health and Human Services initially set a timetable for implementation which contemplated that Mississippi would implement a program before f.y.e. 2010, with Tennessee by f.y.e. 2012 and Alabama, Arkansas and Louisiana by f.y.e. 2013. While it appears that Mississippi is the only one of those five states to take legislative action thus far and only a few states nationwide have actually implemented a program, banks in all states should be alert to the issue.
As the Mississippi law stands today, participation in the asset verification program is entirely voluntary on the part of Mississippi banks. There is some possibility, however, that if the DOM doesn’t get sufficient participation, it may seek to amend the law to make bank participation mandatory. Of course, there is a good reason for banks to participate where possible. The data match program may save the state and its taxpayers a great deal of money in the long run by helping to ensure that recipients of Medicaid benefits are truly qualified.
We will be watching for developments and will pass on any information we receive in future newsletters.