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Dear USET/USET SPF Family,
On August 30, 2023, the Centers for Medicare and Medicaid Services (CMS) issued a letter to state Medicaid agencies requiring them to review their systems for determining Medicaid eligibility and ensure they are compliant with federal regulations. The letter reports that CMS has found major errors in state systems and as as result, substantial numbers of individuals (including over 1 million children) have been improperly disenrolled from the Medicaid program. According to the letter, state Medicaid agencies have 2 weeks to review their systems and come into compliance with federal regulations, or risk penalties.
"Medicaid Unwinding" is the process of states restarting Medicaid eligibility requirements after the continuous enrollment period due to COVID-19 ended. Under Medicaid Unwinding, states can restart eligibility redeterminations and terminate beneficiaries who are no longer eligible for the program. However, since Unwinding began, there has been concern that state Medicaid agencies have moved too quickly, resulting in the improper disenrollment of individuals who are still eligible for Medicaid. To date, of the 5.5 million people who have been disenrolled nationwide, nearly three quarters lost their coverage due to procedural reasons, such as failure to return proper paperwork. This tracker from the Kaiser Family Foundation shows Medicaid disenrollments by state, including the means by which the individuals were renewed or disenrolled. Indian Country is likely to be especially impacted in the disenrollment process, particularly by procedural disenrollements.
CMS is primarily concerned in this letter with the high disenrollment of children. In general, eligibility requirements for children are more generous. However, children account for 43% of all disenrollments. CMS states that the high disenrollment of children may be due to errors in the ex parte renewal procedures, which allow individuals to have their coverage automatically renewed using state databases to determine income requirements. However, CMS states in the letter that even after completing ex parte renewals, some states are still sending renewal forms for all household members, and have disenrolled everyone in that household if the forms are not returned, even those deemed eligible through ex parte processes. This is not compliant with federal regulations, which require states to check the eligibility of enrollees on an individual, not household, basis. Federal regulations also prohibit states from requiring additional information to renew coverage for those already renewed ex parte.
Therefore, CMS is requiring all state Medicaid agencies to review their renewal procedures to ensure compliance with federal regulations in the next two weeks or risk consequences, including financial penalties. States that are not compliant must pause procedural terminations, reinstate coverage for affected individuals (including retroactively), fix the state systems and procedures, and implement one or more of the mitigation strategies CMS outlined in the letter. More information can also be found in this memorandum from Hobbs, Straus, Dean and Walker LLP. As Medicaid Unwinding continues and states review their renewal processes, we ask our member Tribal Nations to report any issues you might be having with your state Medicaid office to USET SPF.
For more information, please contact Ashton Martin, USET SPF Health Policy Analyst, at amartin@usetinc.org.
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