Bill Summary – FastDemocracy

Fiscal Note
                                       Fiscal Services Division
HF 2438 – Public Assistance Program Integrity (LSB6217HV)
Staff Contact: Jess Benson (515.281.4611) jess.benson@legis.iowa.gov
Fiscal Note Version – New
Description
House File 2438 makes various changes related to public assistance programs under the
Department of Human Services (DHS). Changes by section include:
Section 1 creates various definitions, including defining “public assistance” as the Food
Assistance Program, the Medicaid Program, the Family Investment Program (FIP), and the
Children’s Health Insurance Program (CHIP).
Section 2 requires that prior to the DHS awarding public assistance benefits to an applicant, the
applicant shall complete a computerized identity authentication process to confirm the identity of
the applicant through the use of a knowledge-based questionnaire consisting of financial and
personal questions. The questionnaire is to contain questions tailored to assist persons without
a bank account or those who have poor access to financial and banking services or who do not
have an established credit history.
Section 3 requires the DHS to submit an annual report to the Governor and the General
Assembly beginning January 15, 2024, through January 15, 2029, to assess the impact of the
Bill.
Sections 4 through 6 require the DHS to receive and review State and federal information from
various entities concerning individuals or individuals in households enrolled in the Food
Assistance Program or the Medicaid Program that indicates a change in circumstances that
may affect eligibility. Additionally, the Bill requires the DHS to, on at least a monthly basis,
cross-check information relating to individuals in households enrolled in the Food Assistance
Program or the Medicaid Program, as applicable, with specified federal databases. The Bill
requires that prior to determining eligibility for the Medicaid Program, the DHS access
information for every member listed in an applicant’s household from the data sources outlined
in the Bill and conduct a review of nationwide public records data sources of physical asset
ownership. The Bill also requires an applicant for Food Assistance Program benefits to
cooperate with the Child Support Recovery Unit (CSRU) as a condition of eligibility as specified
under federal law.
Section 7 requires the DHS to seek approval of an amendment to the Section 1115
demonstration waiver for the Iowa Health and Wellness Plan (IHAWP) from the Centers for
Medicare and Medicaid Services (CMS). The Bill requires IHAWP members who are subject to
monthly contributions, and who have been disenrolled for failure to pay those contributions, to
repay the contributions before reenrolling after their second disenrollment, with contributions not
to exceed specified limits. The Bill does not require members to repay monthly contributions in
order to reenroll in the Program after being disenrolled the first time for failure to pay.
Section 8 requires the DHS to request federal approval including for any state plan
amendments or waivers necessary to administer the Bill. If the DHS determines that any
provision of the Bill would result in the denial of funds or services from the federal government
that would otherwise be available or would be inconsistent with the requirements of federal law
or regulation, such provision is to be suspended, but only to the extent necessary to eliminate
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the inconsistency with federal requirements. The DHS is to implement the provisions of the Bill
in an incremental fashion, beginning July 1, 2022, with a goal of full implementation no later
than June 30, 2024, to minimize duplication of efforts and to maximize coordination with the
implementation time frames of other departmental resource enhancements.
Assumptions
DHS Staff
There will be four months of full-time equivalent (FTE) costs in FY 2023 as the Department
begins to ramp up, with all staff costs being annualized in FY 2024.
All the additional staffing requirements in sections 4 through 6 estimate new computer and
software costs in FY 2023 of $3,000 per FTE position and $540 for ongoing software costs per
FTE position in FY 2024 and beyond.
The provision in section 4 requiring the DHS to check the National Directory of New Hires
database is estimated to trigger at least one alert per household for the 127,995 households on
both Medicaid and Food Assistance Program annually. Assuming it takes 10 minutes to review
the alert, the provision will require:
• 13.0 Income Maintenance Worker 2 FTE positions at $60,000 per position.
• 2.0 Support Staff FTE positions at $44,000 per position.
• 1.0 Income Maintenance Supervisor FTE position at $72,000.
The DHS is to verify United States Department of Housing and Urban Development (HUD) data
twice a year, as specified in section 4, for the estimated 43,000 households receiving assistance
via HUD. Assuming it will require an average of 12.5 minutes to request and verify information
for the alerts, the provision will require:
• 11.0 Income Maintenance Worker 2 FTE positions at $60,000 per position.
• 1.0 Support Staff FTE position at $44,000.
• 1.0 Income Maintenance Supervisor FTE position at $72,000.
The eligibility and asset verification requirements in sections 4 and 6 will require 1.0 Executive
Officer 2 FTE position at $85,000 to implement and monitor the requirements.
The provision in section 5 requiring applicants for Food Assistance Program benefits to
cooperate with the CSRU will generate an estimated 4,723 additional referrals from DHS filed
staff. The CSRU will be required to establish child support orders, begin enforcement
procedures, monitor cases for Food Assistance Program noncooperation, and communicate
cooperation. At current staffing ratios, this will require:
• 10.0 Support Recovery Officer FTE positions at $60,000 per position.
• 2.0 Clerk Specialist FTE positions at $49,000 per position.
• 1.0 Support Recovery Supervisor FTE position at $74,000.
Information Technology (IT) Costs
The IT changes in sections 2, 4, 5, 6, and 7 will require various one-time IT systems costs to
update interfaces, make changes to the master client index, link with required data sources and
systems, and build a dashboard and reporting requirements. These one-time costs are
estimated to cost $33.6 million and will be completed over two years beginning in FY 2023.
Beginning in FY 2025, it is estimated there will be an ongoing vendor interface cost to six
different vendors to access the data sources required by the Bill. The estimated cost per vendor
contract is $1.0 million. In addition, there will be ongoing IT maintenance and operations costs
of $360,000 annually.
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Miscellaneous Costs
Identity and authentication requirements in section 2 will require the DHS to send an additional
7,328 requests for information, reported at $0.60 per mailing, due to Food Assistance Program
changes.
Requirements in section 4 to access Internal Revenue Service data will require all Income
Maintenance Worker 2 FTE positions to receive Federal Bureau of Investigation (FBI)
background checks. The cost of a background check is $61 per employee. It is estimated that
the DHS hires 100.0 new Income Maintenance Worker 2 FTE positions annually. Every five
years, the DHS will need to complete a new background check for each employee.
The provision in section 5 requiring cooperation with the CSRU will require court action to
establish child support orders for approximately 73.0% (3,448) of the new cases. The CSRU
must serve each nonrequesting parent in an establishment action with a notice, which will cost
an average of $11.61 per notice for certified mail. Approximately 45.0% of parents will not
accept or pick up the certified mail, requiring the use of a process server or sheriff at an average
cost of $76.11 per case. The average cost to serve the requesting parent by regular mail is
$0.71.
Program Impacts
Beginning in FY 2025, approximately 1.0% of individuals receiving benefits will have their
benefits canceled due to discrepancies. This includes 7,368 Medicaid recipients, 777 CHIP
recipients, and 1,421 Food Assistance Program recipients.
Federal Match Rate
The federal match rate varies by program and activity. Total cost and State share are depicted
in the table below.
Fiscal Impact
House File 2438 is estimated to increase State costs by $6.7 million in FY 2023 and $7.5 million
in FY 2024. Beginning in FY 2025 and subsequent fiscal years, the Bill is estimated to
decrease State costs by $13.1 million annually. Details of the estimated DHS staff costs,
increases in IT and miscellaneous costs, and savings are listed in the table below for FY 2023
though FY 2025.
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                                        Fiscal Impact Estimate for HF 2438
                                                  FY 2023                            FY 2024                         FY 2025
                                                                              Total                           Total
DHS Staff Costs                           Total Cost     State Share      Cost/Savings State Share        Cost/Savings State Share
   DHS Staff Increase                   $     857,000    $    434,000     $ 2,570,000 $ 1,303,000         $ 2,570,000 $ 1,303,000
   New Computers/Software Costs               125,000          76,000            44,000      27,000              44,000      27,000
Total DHS Staff Costs                   $     982,000    $    510,000     $ 2,614,000 $ 1,330,000         $ 2,614,000 $ 1,330,000
DHS Information Technology               Total Cost      State Share       Total Cost    State Share          Total Cost    State Share
  IT Systems Costs                      $ 16,819,000     $ 6,135,000      $ 16,819,000   $ 6,135,000      $     6,360,000   $ 3,696,000
DHS Miscellaneous Costs
   Food Assistance Postage              $          0 $              0     $      4,000 $          2,000   $        4,000 $         2,000
   Background Checks                          40,000           29,000            6,000            4,000            6,000           4,000
   Child Support Mailings                          0                0          158,000           54,000          158,000          54,000
Total DHS Miscellaneous Costs           $     40,000 $         29,000     $    168,000 $         60,000   $      168,000 $        60,000
DHS Program Savings
  Medicaid                              $          0 $                0   $         0 $              0    $ -58,139,000     $ -17,736,000
  Children's Health Insurance Program              0                  0             0                0       -1,604,000          -414,000
  Food Assistance                                  0                  0             0                0       -8,288,000                 0
DHS Total Program Savings               $          0 $                0   $         0 $              0    $ -68,031,000     $ -18,150,000
HF 2438 Total Increased Cost/Savings    $ 17,841,000     $   6,674,000    $ 19,601,000   $    7,525,000   $ -58,889,000     $ -13,064,000
The DHS currently refers cases of suspected fraud, along with any supporting information, to
the Department of Inspections and Appeals (DIA) for investigation. In FY 2021 the Economic
Fraud Control Bureau responded to 4,966 referrals and investigations from those
referrals resulted in $5.0 million in savings to the State. Sections 2, 4, and 6 of the Bill may
increase the number of referrals from the DHS to the DIA, but the number of new referrals
cannot be estimated and it is assumed that any additional referrals can be absorbed by current
staff. If there is a substantial increase in referrals, the DIA may need to hire additional
investigators.
Sources
Department of Human Services
Department of Inspections and Appeals
                                                                                             /s/ Holly M. Lyons
                                                                                             February 23, 2022
Doc ID 1287572
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
                                                        www.legis.iowa.gov
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