Back in 2002, Vietnam veteran Bill Allman was working for the Washington State Department of Social and Health Services determining the eligibility of long-term care applicants for Medicaid. As he sorted through a growing number of veterans’ cases, it dawned on him: “Wait a second, what if they’re eligible for veterans’ benefits? Wouldn’t that pay for a lot of the services we pay for?”

It was a stroke of genius. Allman already was looking for ways to stretch the state dollars used for Medicaid -- Washington’s second largest expenditure. So he launched the Veterans Benefit Enhancement Project, which works with the state Department of Veterans Affairs (VA) to move eligible veterans from state-funded Medicaid programs to VA health care. The project, which provides equal and often greater benefits at federal expense, went live statewide as a pilot in 2003. Since then, it’s facilitated benefits for more than 7,000 veterans and saved the state more than $20 million.

The project was made possible by a 17-year-old reporting system: Allman needed a way to identify Medicaid patients in Washington who might be eligible for veterans’ benefits, and the Public Assistance Reporting Information System (PARIS) was the answer. Originally designed in part to prevent welfare recipients from drawing benefits from more than one state, PARIS compiles the Social Security numbers of individuals receiving Medicaid, welfare, food stamps, veterans’ benefits, pensions, disability payments and a host of other social services. This made the system ideal for finding veterans.

Allman started by looking at long-term care Medicaid recipients, an important group to focus on because it’s the fastest growing group of Medicaid recipients in the state. “You have a higher number of dollars going toward long-term care through Medicaid, and anything you can do for veterans reduces the money their families will have to repay,” Allman says. After the patient’s death, any long-term care benefits received under Medicaid are required to be repaid to the state through a recovery process. VA benefits do not require repayment. Not only does this help the family, it also helps the state. “You’re saving the money the state expends, at an average of $455 per month per client,” Allman says.

Under VA rules, anyone who served honorably for two years in a branch of the military is eligible for some benefits, even if they never left American soil or saw combat. Allman reached out to the state VA to join forces, and together they began identifying eligible veterans around the state -- and their spouses.

As the state continued looking through PARIS records, it found instances of veterans receiving only part or none of their benefits. When Allman launched the project in 2003, only 3 percent of long-term care patients were identified as veterans, even though data showed that this number should have been higher than 40 percent.

After digging around, officials concluded that the low percentage of those deemed veterans in long-term care was caused mainly by the state relying on self-identification or identification by the veteran’s family -- confusion reigned over what constituted a veteran. The more officials dug through PARIS and VA records, the more instances they found of veterans not receiving full benefits. In one scenario, Allman and his team isolated any veteran who was listed in the PARIS database as receiving no VA benefits. What he learned was that in many instances, the benefits were canceled because the veteran did not turn in an eligibility review form. Each quarter now, Allman’s division sends the state VA a list of veterans not receiving benefits, and the VA reaches out to help them file the forms. In another scenario, Allman began isolating all cases of veterans’ receiving $90 per month from the VA. As he explains it, if you have a VA pension, receive $1,700 per month and go into a nursing home, the VA reduces your benefits to $90 per month. Allman compared all cases receiving $90 to those who had left nursing-home care. “A lot of times, they go home or get in-home care, and they should go back up to a regular monthly amount,” he says. “This is huge because they’re able to contribute to the cost of their care, which reduces the amount we pay.” Allman also notes that he found some veterans paying upward of $3,000 per month for private nursing-home care -- when they could move to a VA facility up the street for free.

The three-year pilot transitioned into a model program for other states. Several states, including California, Montana and Colorado, have joined Washington in using PARIS to identify Medicaid recipients eligible for VA benefits. In addition, a host of other states have been in contact with Allman to learn the best methods for getting legislative buy-in and implementing the program.

As enticing as this money-saving program may be to cash-strapped states, Allman warns that an upfront investment is inevitable. However, he points to California, where the state’s research shows it could save as much as $25 million a year if just 10 percent of its veterans moved from Medicaid to VA benefits. “When your return on investment is 7-to-1,” Allman says, “I don’t think you’ll get too many legislators who don’t like it … I’m comfortable saying you will receive huge savings.”

California legislators agreed and authorized the funding for start-up costs last year. Colorado, which began using the system in November, already has identified about 1,600 individuals or families who might qualify, for a potential savings of about $8 million per year. Montana implemented the program in 2007 and has since saved $900,000. But for Allman, “It’s not all about the savings -- though that seems to be the big buzz word. I think about it in terms of what you’re doing for the veterans and their families.”