Medicaid PHE: New CMS Return to Normal Operation Guidance

In early March, the Center for Medicare and Medicaid Services released SHO#22-001 to help states deal with the conclusion of the Medicaid Public Health Emergency (PHE) and the influx of Medicaid redeterminations. Here’s a look at the guidance CMS recently offered regarding a return to normal operations once the Medicaid PHE ends:


The COVID-19 pandemic caused the US to declare a PHE in late January of 2020. Subsequently, the US has renewed the PHE multiple times. As COVID-19 case counts decline, it’s expected that the US will lift the PHE sometime this year. The PHE had a significant impact on Medicaid enrollment as, among other things, it prevented states from removing most enrollees from state Medicaid programs.

As a result, Medicaid rolls have swelled to nearly 85 million. States now face the significant task of reverifying Medicaid eligibility for their entire population. Throw in that like many employers, state Medicaid departments face labor shortages, and it’s likely an undertaking that states need a good amount of preparation and planning to execute. CMS’ latest guidance hopes to prepare states for the inevitability of the PHE ending.

What additional guidance did the latest state health official (SHO) letter provide?

Among the guidance CMS provided included:

  1. CMS will consider states in compliance with the 12-month unwinding period as long as they have initiated eligibility actions by the last month of the 12 months.

In previous guidance, CMS had indicated that states would have 6 months to process eligibility verifications for their Medicaid population. As a result of the PHE progressing, CMS modified the timeline to 12 months. This guidance added that CMS will consider states to comply if they initiate those actions in the 12-month period and will have an additional two months to complete those activities. That amounts to 14 months total.

  1. CMS provided guidance about pending application timelines after the Medicaid PHE expires.

During the Medicaid PHE, states likely didn’t process most Medicaid verifications. But they also likely received some pending applications and will also receive new applications during the “unwinding” process. As a result, CMS suggested the following timeline to process those pending and new applications:

  • Within 2 months of the PHE ending: States should complete all eligibility determinations based on modified adjusted gross income and other non-disability-related applications.
  • After 3 months of the PHE ending: States should complete all Medicaid determinations for all disability-related applications
  • Within 4 months of the PHE ending: States should resume timely processing of all applications.
  1. States must choose from one of four risk-based approaches to managing their process.

CMS is concerned that the massive workload in verifying Medicaid eligibility may lead to some individuals being inappropriately terminated. As a result, they recommend states take one of four paths:

  • Population-based: In this approach, states prioritize actions based on populations most likely to be eligible for more expansive benefits or different coverage.
  • Time or Age-based: In this model, states prioritize verification based on how long the verification has been delayed.
  • Hybrid: This approach combines population and time/age-based approaches.
  • State-developed: Finally, states can develop their own approach as long as it meets the goal of keeping eligible individuals enrolled, reduces churn, maximizes transition to other coverage, and ensures a sustainable schedule.
  1. States need to facilitate a smooth transition to health insurance marketplaces. These include the federal site or a state’s exchange.

CMS doesn’t want those dropped from Medicaid rolls to become uninsured. As a result, CMS requires states to assess Medicaid-ineligible individuals to determine if they may be eligible for a marketplace plan. If eligible, the state will electronically transfer that individual’s information to the marketplace. CMS also recommends that states:

  • Review and improve their determination notice language so individuals know that states will transmit their data to the appropriate marketplace.
  • Transmit all contact information — including phone numbers and emails — to the marketplace.
  • Consider including information about Navigator or assister programs available to individuals as part of the determination notification process.
  • Work with community-based organizations to ensure individuals have access to information and assistance.
  1. Some CMS monitoring programs and corrective action programs may not apply. CMS will offer technical assistance and planning templates to help states.

CMS will require states to submit data every month demonstrating that they’ve made progress toward completing pending applications and renewals. If states aren’t meeting guidance timelines, they may be required to submit data more frequently. CMS also indicated that it won’t consider eligibility and enrollment actions delayed as a result of the PHE as untimely for PERM and MEQC programs if they follow the timelines indicated in this letter.

Certifi helps states with Section 1115 Medicaid waivers or Medicaid buy-in programs bill and collect payments thanks to a premium billing and collections module that is R3 certified for Medicaid.

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