CMS Seeks Immediate Action To Correct Medicaid, CHIP Disenrollments

The Medicaid unwinding saga continues. Just a couple of months after Department of Health and Human Services (HHS) Secretary Xavier Becerra sent a letter to state governors regarding Medicaid redeterminations as states reassess who is eligible for Medicaid following the COVID-19 pandemic, HHS’ Center’s for Medicare and Medicaid Services (CMS) has issued another letter to states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands requiring 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. In such cases, the letter is requiring states to immediately act to correct the problem and reinstate coverage.

“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 Aug. 30 CMS letter. “These actions violate federal renewal requirements and must be addressed immediately.”

As flexibilities allowed for Medicaid enrollment during the COVID-19 pandemic now lapse, states are reviewing their rolls of participants eligible for Medicaid and CHIP to begin the full renewal process. States are required by federal regulation to use information already available to them through existing reliable data sources (e.g., state wage data) to determine whether people are still eligible for Medicaid or CHIP. Using the auto-renewal process makes it easier for people to renew participants’ coverage and to avoid inappropriate disenrollment.

CMS explains in the letter that eligibility systems in a number of states may be programmed incorrectly and are conducting automatic renewals at the family-level, 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 conflicts with existing federal Medicaid requirements and may have a disproportionate impact on children.

If a state’s eligibility system has the issue CMS has identified, the letter specifies that states must immediately take the following steps to avoid CMS taking action to bring states into compliance: (1) pause procedural disenrollments for those individuals impacted; (2) reinstate coverage for all affected individuals; (3) implement one or more CMS-approved mitigation strategies to prevent continued inappropriate disenrollments; and (4) fix state systems and processes to ensure renewals are conducted appropriately and in accordance with federal Medicaid requirements.

CMS notes that if a state identifies any areas of noncompliance related to the appropriate determination of eligibility for individuals in multimember households, it should contact CMS no later than Sept. 13 with additional information on the population of individuals affected and the state’s plan and timeline for reinstatement and implementation of mitigation strategies. The agency added that it will provide technical assistance to states as they evaluate and address these issues.

Hopefully these issues will be corrected, and we won’t need to see many more of these letters going forward.

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