Medicaid disenrollments paused in a dozen states after failure to comply with federal rules

By Tami Luhby, CNN

(CNN) — A dozen states have had to pause terminating certain residents from Medicaid and to restore coverage – at least temporarily – for tens of thousands of people, according to the Centers for Medicare and Medicaid Services.

A Covid-19 pandemic-era ban on states ending residents’ Medicaid coverage expired on April 1. Since then, more than 3 million enrollees have been disenrolled, according to state and federal data compiled by KFF.

What’s greatly concerning CMS is that the majority of those terminations have been for so-called procedural reasons, meaning that enrollees did not complete the renewal process – possibly because they didn’t receive the forms or didn’t understand the instructions, among other reasons.

Nearly three-quarters of disenrollments fell into this category, according to KFF, though the rate varied widely by state. Many of these folks may actually be eligible for Medicaid.

“Despite all the preparations and what we know has been a tremendous amount of work at the state level and in the community, we are very concerned about the level of terminations, meaning disenrollment, that we are seeing across the country,” Daniel Tsai, director of the Center for Medicaid and CHIP Services, told reporters on Wednesday.

In particular, CMS is very worried that when states terminate people for procedural reasons, they have not definitively ascertained that those enrollees are no longer eligible for Medicaid, he said.

The agency is closely monitoring states’ progress and compliance with federal requirements, as laid out in Congress’ fiscal 2023 federal spending package, which set the expiration date of the pandemic ban.

The 12 states are working with CMS to pause terminations to address issues related to full compliance with renewal requirements for some or all of their enrollees, the agency said.

In addition, CMS is also in preliminary discussions with multiple other states to make sure they are not in violation of the federal rules.

The agency is not naming any of the states since they are working collaboratively with CMS to address the issues. But if they ever fail to comply in the future, the agency “won’t hesitate to make that information public,” said CMS administrator Chiquita Brooks-LaSure.

One of the most common reasons that states have had to pause disenrollments is that they did not use electronic data sources to check certain enrollees’ income, which can lead to them being automatically renewed. Tsai termed the problem “systems glitches.”

The length of the pauses varies by state and depends on the speed at which it can remedy its problem, said Tsai, noting that some states are taking an extra 90 days to correct their systems.

The most effective stick that CMS has to get states to comply is the risk of losing their federal Medicaid matching funds if they don’t follow all the federal requirements, Tsai said.

“What those states understand is if they do not do that, their entire enhanced federal match for the quarter that’s been outlined by statute is at risk, and that’s a significant amount of funding,” he said.

States had been receiving a 6.2 percentage point increase in their federal match during the disenrollment ban. That enhancement is phasing out over the course of 2023.
Separately, another 10 states are taking advantage of a new CMS option to delay procedural terminations for at least a month to conduct additional outreach.

Enrollment in Medicaid and the Children’s Health Insurance Program, known as CHIP, has soared to nearly 94 million people during the roughly three years that states could not winnow their rolls.

Estimates of how many people will lose their coverage during the redetermination process vary. KFF pegs it at 17 million, while a Department of Health and Human Services analysis from last summer projected a reduction of 15 million enrollees.

States have until the end of May 2024 to complete their eligibility reviews, though a number plan to finish the process much faster.

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