CMS prods states to examine auto-renewal as possible cause of Medicaid disenrollments

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The Centers for Medicare and Medicaid Services has sent a letter to Medicaid directors in all 50 states directing them to determine whether they have an eligibility systems issue that could cause people, especially children, to be disenrolled from Medicaid or the Children's Health Insurance Program (CHIP) even if they are still eligible for coverage.

The letter also requires states to act immediately so the problem can be corrected and coverage reinstated.

"CMS has learned of additional systems and operational issues affecting multiple states, which may be resulting in eligible individuals being improperly disenrolled," according to the letter. "These actions violate federal renewal requirements and must be addressed immediately."

WHAT'S THE IMPACT?

Following the end of pandemic-era conditions for Medicaid coverage, states across the country have resumed regular processes for renewing individuals' Medicaid and CHIP enrollment.

One of the tools states have to keep eligible people enrolled in Medicaid or CHIP coverage during this process is conducting auto-renewals (also known as "ex parte" renewals). States are required by federal regulation to use information already available to them through existing reliable data sources – such as state wage data – to determine whether people are still eligible for Medicaid or CHIP.

CMS believes that eligibility systems in a number of states are programmed incorrectly, and the states are conducting automatic renewals at the family level and not the individual level, even though individuals in a family may have different eligibility requirements to qualify for Medicaid and CHIP. For example, children often have higher eligibility thresholds than their parents, making them more likely to be eligible for Medicaid or CHIP coverage even if their parents no longer qualify.

This, the agency said, conflicts with existing federal Medicaid requirements and may have a disproportionate impact on children.

In the letter, CMS urged states to determine whether they have this problem and to protect and reinstate coverage for impacted individuals, including children.

If a state's eligibility system has the issue CMS identified, the letter specifies that states must immediately take action, including pausing procedural disenrollments for those who are impacted, reinstating coverage for those affected, implementing one or more CMS-approved mitigation strategies to prevent continued inappropriate disenrollments, and fixing state systems and processes to ensure renewals are conducted appropriately and in accordance with federal Medicaid requirements.

States are being required to take these steps to protect coverage for eligible individuals, including children, in order to avoid additional federal oversight and action, such as CMS withholding a state's enhanced federal funding or issuing a corrective action plan.

CMS said it will be able to work with states to provide technical assistance if necessary.

THE LARGER TREND

States began the redetermination process on April 1, ahead of the end of the public health emergency on May 11.

During the COVID-19 public health emergency, Medicaid numbers grew due to the continuous enrollment requirement that kept people covered. 

State funding for the Medicaid program was enhanced by federal funds during the PHE. But the Consolidated Appropriations Act, 2023 phased down the enhanced federal Medicaid matching funds through December of this year, according to KFF.

A KFF survey from May showed that about two-thirds (65%) of all Medicaid enrollees say they are "not sure" if states are now allowed to remove people from Medicaid if they no longer meet the eligibility requirements or don't complete the renewal process, with an additional 7% incorrectly saying states will not be allowed to do this.

Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com