Why CMS Paused Medicaid Coverage Redeterminations in 6 States

July 27, 2023 - Almost four months after the Medicaid continuous enrollment provision ended, CMS has paused coverage redeterminations in at least six states.

In a press call on July 19, CMS Administrator Chiquita Brooks-LaSure and Deputy Administrator of the Center for Medicaid and CHIP Services Dan Tsai discussed the instances that led to the pauses.

The decisions stemmed from the fact that most coverage losses among Medicaid beneficiaries have been due to procedural reasons, meaning states have not been able to identify that someone is ineligible but the individuals have not completed the renewal process.

According to Tsai, these procedural terminations occurred due to a lack of awareness, wrong addresses, and beneficiaries not receiving a Medicaid renewal form.

Key procedural barriers 

CMS has identified issues in around six states that point to violations of federal requirements. If beneficiaries were unable to follow every step of the regulatory process required for redetermination, then CMS paused procedural terminations for the populations impacted.

The agency also directed states to reinstate individuals who were disenrolled. In some states, tens of thousands of people were reinstated, according to Tsai.

Tsai said CMS is in discussions with another 12 states about possible issues.

A common issue CMS identified was system glitches that prevented states from using electronic data matching for automatic renewals. If income data was on record, data matching should have allowed states to match it with recent data to confirm that a person’s income stayed the same. States then could have sent eligible beneficiaries a notice that their coverage was renewed.

The length of the redetermination pauses varies by state. In some states, terminations are delayed for 90 days to give them adequate time to make corrections in their systems. The pause lengths depend on how fast the state can remedy the issue CMS identified, according to Tsai.

If states do not correct their errors and resume appropriate redeterminations, they risk losing their enhanced federal funding for state Medicaid programs.

CMS is working with stakeholders in the private sector, including health plans and providers, to help raise awareness among Medicaid beneficiaries about the renewal process.

Given the significant levels of Medicaid enrollment, Administrator Brooks-LaSure said that ensuring people retain coverage was as difficult as anticipated. Medicaid enrollment grew by 28 percent during the COVID-19 pandemic, primarily due to Congress introducing the continuous enrollment provision. As a result, the volume of renewals is higher than usual. 

However, the agency is committed to working over the next 12 months to ensure eligible beneficiaries who lost coverage get reinstated.

Solutions to pursue during the pause 

According to Jen Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities (CBPP), when it comes to ensuring that states do not continue wrongfully terminating Medicaid coverage for eligible beneficiaries, the strategies differ.  

Eleven states chose to delay redeterminations by 30 days to conduct additional outreach amid administrative barriers, Wagner told HealthPayerIntelligence. Others, as CMS discussed, were found to be in violation of regulatory requirements. 

For states facing administrative issues, increasing automated renewals, initiating more outreach, and improving customer service can help avoid improper disenrollments.  

Regarding states that violated federal requirements, there needs to be more oversight. Having more people on the ground in these states witnessing the violations can help start a feedback loop to CMS and allow the agency to address it in a timely manner, Wagner said. 

Projections around downstream impacts 

The procedural termination pauses have different impacts on beneficiaries and states.  

The pauses allowed beneficiaries who were improperly disenrolled to be reinstated and to have another chance to complete the renewal process. Additionally, the delays may indicate that these disenrollment issues will be fixed for future cohorts, Wagner shared.  

Meanwhile, the pauses will likely increase the hassle states face. As state Medicaid programs are struggling to maintain regular workflows due to staffing challenges, they now must go back and reprocess cases, furthering their backlogs. 

KFF researchers predicted that between 8 million and 24 million Medicaid beneficiaries could lose coverage from the redetermination process. The procedural termination pauses could potentially reduce these coverage losses by avoiding improper disenrollments.