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Capitol Correspondence - 07.25.23

Medicaid Redeterminations: CMS Seeks to Ensure Coverage Amid Disenrollments

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As the COVID-19 pandemic-era ban on ending residents’ Medicaid coverage came to an end on April 1, concerns have been raised about the large number of disenrollments that followed. According to state and federal data compiled by the Kaiser Family Foundation (KFF), more than 3 million enrollees have been disenrolled since then. Of particular concern to the Centers for Medicare and Medicaid Services (CMS) is the fact that the majority of these terminations have been attributed to procedural reasons. This means that enrollees did not complete the renewal process, possibly due to not receiving forms or not understanding instructions, among other reasons. Approximately three-quarters of disenrollments fell into this category, although the rate varied significantly from state to state. This situation raises concerns that many of these individuals may still be eligible for Medicaid coverage. CMS has halted eligibility checks in 12 states to address concerns from advocates regarding procedural disenrollments.

Daniel Tsai, CMS Deputy Administrator and Director of the Center for Medicaid and CHIP Services, expressed CMS’ concern about the level of terminations happening across the country. In response to this issue, a dozen states have worked collaboratively with CMS to temporarily pause terminations and address compliance issues with renewal requirements for some or all of their enrollees.

CMS is closely monitoring states’ progress and adherence to federal requirements, as outlined in Congress’ fiscal 2023 federal spending package, the Consolidated Appropriations Act of 2023, that set the expiration date for the pandemic ban. While CMS is not publicly naming the states at this time, they have made it clear that if any state fails to comply in the future, that information will be made public. CMS administrator Chiquita Brooks-LaSure emphasized the importance of collaboration with states and the potential consequences if they do not adhere to federal requirements—including the risk of losing their federal Medicaid matching funds.

Enrollment in Medicaid and the Children’s Health Insurance Program (CHIP) has increased significantly over the past three years, reaching nearly 94 million people during the time when states could not remove beneficiaries from their rolls due to the pandemic. As states now begin the redetermination process, estimates of how many people will lose their coverage vary, with KFF projecting 17 million and a Department of Health and Human Services analysis from last summer projecting 15 million enrollees.

To ensure that Americans do not lose health coverage inappropriately during the redetermination process, the Biden administration is closely monitoring states’ Medicaid renewal procedures. Tsai stated that CMS has intervened with about a half-dozen states to require them to pause procedural terminations and reinstate individuals. Nearly 2.9 million Medicaid beneficiaries nationwide have been disenrolled as of July 18.

To address issues early with renewals, CMS will be closely tracking state data and fielding complaints. The agency will issue corrective actions, including pausing terminations, reinstating coverage, and addressing systems glitches to ensure compliance. Congress has given CMS the discretion to impose financial penalties and withhold extra federal funding from states that do not comply with renewal rules. The agency is also providing extensive technical assistance to states and encouraging them to spread renewals over 12 months and increase auto-renewals based on available data to minimize unnecessary paperwork.