In late 2007 the Texas Health and Human Services Commission (HHSC) announced that the state will begin a statewide smart card system to verify Medicaid coverage. Based on the positive performance and the success of the state's pilot projects, HHSC is planning on expanding operations statewide by procuring similar services for the implementation of a permanent card. The card is to be encoded with eligibility and identify information. The state released a Request for Information (RFI) for Medicaid Access Card (MAC) Services in late January 2008. Texas plans to be fully implemented late 2009 and fully operational by early 2010. In doing so, Texas will become the first state to use smart card-based identity in its Medicaid program.

Background: Pilot Projects

The use of smart cards for social welfare is already in place as Electronic Benefit Transfer (EBT) projects across the states as either magnetic stripe cards or chip-based smart cards. The use of biometric applications in state's human service programs is not new either. In fact, in 1995, the Texas Legislature mandated the use of biometrics to reduce fraud and abuse in their public assistance programs and in turn deployed the Lone Stare Image System (LSIS)*. The LSIS, a fingerprint imaging systems, was implemented in the 1990s to prevent fraud in programs such as Food Stamps and Temporary Assistance for Needy Families (TANF). Building on the success of the LSIS, the 2003 Texas Legislature directed the HHSC to obtain the technology necessary to meet the responsibility of combating fraud, abuse, and waste in health and human services. The bill established a front-end Medicaid fraud pilot program including the use of biometric readers, smart cards, and finger imaging systems. The state conducted two phases of a pilot project, the Medicaid Integrity Pilot (MIP) and the MAC project.

The state conducted the MIP between 2004-2005 in order to evaluate the state's use of the smart cards and to compare vendor's technologies and approaches. HHSC procured the services of MTG Management Consulting, L.L.C. (MTG) and International Biometric Group (IBG) to serve as the respective project manager and evaluators of the pilot project. Four vendors piloted the projects in six counties, including Atos Origin in Tarrant, Maximus in Harris and Dallas, eMedical Files in Travis, and Electronic Data Systems (EDS) in both Hidalgo and Cameron. During the pilot smart card and biometric readers were put in the offices of participating Medicaid providers, physicians, ERs and clinics. The patient presented their card and put their finger over the biometric scanner and the two were compared to validate their identity. The benefits of the technologies included automatic check-in for patients, faster benefit processing, cost reductions, better security measures, limited Medicaid fraud, and less practices of "phantom" services.

The second phase, the MAC project, became operational in 2006. The MAC project differed from its MIP predecessor in a number of ways. A single system from EDS was implemented in the MAC project and it was only implemented in three counties including Hidalgo, Cameron and Travis. The MAC project was also considered the mandatory participation phase. Also, in the MIP project there was a larger focus on fraud prevention, however the MAC pilot focused more on accessibility and facilitation.

The Big Picture: Integrated Benefits Card

In 2006, the state issued a feasibility report to the Legislature of the cost-effectiveness of integrating client identification for the issuance of several health and human service programs on a common-card platform. It was concluded that an Integrated Benefits Card (IBC) was a positive investment and will pay for itself after 5 years of operation and could save $400k each year thereafter. Since the Medicaid card project has been approved for statewide implementation, it is likely that it will also be approved for IBC participation. Then the four main human service programs, Food Stamps, Temporary Assistance for Needy Families (TANF), Medicaid and Women Infant and Children (WIC) could be implemented on one card. The IBC could replace the other methods of fraud prevention and identification including the EBT or the Medicaid smart card. The feasibility report suggests that once the IBC service delivery model is in place the Food Stamp and TANF program will be implemented. A year later, the Medicaid and WIC programs will follow.

In preparation of an integrated solution, it's important to note that the state used hybrid smart card specifications in the last procurement of their cards for the WIC program. This will supply the infrastructure to support the interoperability of WIC EBT smart cards between Texas and other states as well as enable the program to participate in the IBC. The RFI for the MAC also specifies the mission to use a technology infrastructure to allow expansion of the program to include the IBC. HHSC intends to issue a Request for Proposals to select a contractor for the continuation of their IBC project.

INPUT's Take:

The smart card is a practical application for the assistance programs and the Medicaid card is a natural progression for Texas' biometric-carrying smart card technology. Overall, a universal services card concept will allow citizens ease of use by having one card for a number of or all of their state assistance benefits. As this trend grows, more and more data can be added to the cards; besides public health and human assistance programs we can start to think about immunization records and prescription information data being utilized as well. And then as we look further into the future there's the potential of a health and human service access card's compatibility with a national identity card, which is a whole other topic for discussion.