State Medicaid agencies have likely struggled to keep up during the COVID-19 pandemic. Remote work requirements for part or all of the past 18 months impacted state agencies. Plus, the economic downturn that followed the pandemic led to a significant increase in the number of Medicaid applications. In April, it was reported that 82.3 million beneficiaries were enrolled in Medicaid/CHIP, an increase of 11.1 million since February of 2020. That’s a significant increase.
But another challenge is looming for Medicaid agencies. During the pandemic, the federal government didn’t allow states to terminate Medicaid beneficiaries. As a result, they face a backlog of Medicaid redeterminations to process. That backlog will further stress Medicaid staff.
Here are 7 questions about Medicaid redeterminations after the COVID-19 public health emergency ends:
What are Medicaid Redeterminations?
Medicaid redeterminations, also called Medicaid renewals and Medicaid recertifications, is the process by which Medicaid agencies ensure that beneficiaries are still eligible for Medicaid benefits. Because most Medicaid recipients earn benefits based on their income, states require beneficiaries to report any changes in income. During renewal, the Medicaid agency will review income information to determine if a beneficiary is still eligible for benefits. The redetermination occurs once every 12 months. Beneficiaries who gain Medicaid benefits due to a disability also have their disability status reviewed every 12 months. Typically, states send multiple communications to beneficiaries about the redetermination.
What is the COVID-19 Public Health Emergency?
A public health emergency for the entire US was declared on Jan. 31, 2020, and subsequently renewed on April 21, July 23, October 2, Jan. 7, 2021, April 15, 2021, and July 20, 2021.
On March 18, 2020, the Trump administration signed the Families First Coronavirus Response Act into law in response to the COVID-19. In exchange for additional funding, states had to maintain enrollment for all beneficiaries through the end of the month in which the public health emergency. Later guidance led to limited circumstances under which states could disenroll beneficiaries.
What impact does the COVID-19 Public Health Emergency Have on Medicaid?
The Families First Coronavirus Response Act included a 6.2 percentage point increase in the federal Medicaid match rate if states didn’t terminate Medicaid beneficiaries. This act helped support states as their revenue declined during the COVID-19 pandemic. As a result, Medicaid enrollment increased, as did associated costs. Those costs generally fell more on the federal government than state governments. A KFF study found a 19.5% increase in federal Medicaid spending in the first year after the coronavirus pandemic hit.
Medicaid cost increases will likely shift from the federal government back to the states as the federal match spending increase ends.
When does the Public Health Emergency End?
The latest renewal of the COVID-19 Public Health Emergency expires on October 20, 2021. However, most observers expect the federal government to extend it again. The latest communication from Health and Human Services (HHS) indicated that the Public Health Emergency will last throughout 2021 and that states will be given at least 60 days’ notice before the conclusion of the Public Health Emergency.
How will states address the redetermination backlog?
CMS has released guidance to help states address the redetermination backlog. Among their recommendations:
- CMS extended the redetermination backlog processing timeline from 6 to 12 months. When they did, they rescinded previous guidance that indicated states could perform redeterminations during the Public Health Emergency and could use those determinations if they occurred within a certain period of the Public Health Emergency ending. Instead, states must redetermine all beneficiaries given the 12-month timeline.
- Beneficiaries whose eligibility is based on income should be given 30 days to respond and provide any necessary information need to verify a change in circumstances.
- CMS wants states to smoothly transition beneficiaries to other insurance affordability programs, including assessing eligibility, including for ACA marketplace plans.
How long do states expect the redetermination backlog to take?
A long time. CMS initially directed states to process their backlog within 6 months of the Public Health Emergency ending. However, recent guidance doubled that time to 12 months. It’s also worth noting that unenrollment activities can’t occur until the end of the month in which the Public Health Emergency expires. Assuming it expires in Jan. of 2022, it could be February before those activities could begin.
That said, timing could incentivize states to quickly process their redeterminations. The increased federal Medicaid match rate (FMAP) will expire at the end of the quarter in which the Public Health Emergency ends. As a result, should the Public Health Emergency end in January 2022, the increased FMAP funds would expire at the end of March. That would incentivize states to move quickly to process their redeterminations by the time the FMAP declines.
How do states handle Medicaid terminations?
Generally, states are first required to redetermine eligibility based on information available to the agency without requiring information from the beneficiary. If the agency is unable to renew based on that information, it should send a renewal form and communicate any additional information that the beneficiary must provide to access Medicaid benefits. States must give beneficiaries at least 30 days to deliver any required documentation.
States may consider a beneficiary ineligible during the redetermination process. If so, state Medicaid agencies should determine potential eligibility for other insurance programs. Then, they should transfer electronic records to that program, if applicable.
Many states perform Medicaid terminations for procedural reasons. For example, a beneficiary fails to return documentation within the allotted 30 days. As a result, if the information is returned within a timely period after 30 days, CMS recommends 90 days, the agency must reconsider the application without requiring another renewal form.
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