Three Ways the Consolidated Appropriations Act of 2023 Impacts Medicare and Medicaid

President Biden last month signed the Consolidated Appropriations Act of 2023 into law. The $1.7 trillion spending bill funds the government for the 2023 fiscal year. Though it touches many areas of federal spending, it will also impact Medicare and Medicaid in several ways. Below are three Consolidated Appropriations Act of 2023 provisions that impact Medicare and Medicaid.

Medicaid Redeterminations

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. Because the government paid Medicaid agencies more to maintain beneficiary rolls, Medicaid participation swelled during the pandemic. Since February 2020, enrollment in Medicaid and CHIP grew by nearly 20 million, an increase nearing 30%

The Consolidated Appropriations Act phases out the federal Medicaid match rate beginning in April of 2023.  The increased match rate will decline every quarter until December 31, 2023. 

It also ends the continuous coverage requirement necessary to receive those funds effective April 1, 2023. States can take up to a full year to initiate those Medicaid redeterminations. 

To receive federal funds during the transition period, April to December 2023, Medicaid agencies must comply with federal requirements. Those requirements include maintaining up-to-date contact information of Medicaid enrollees and not disenrolling individuals based on returned mail unless the state makes an effort to contact those beneficiaries by another method.

Finally, the act adds reporting requirements to states performing redeterminations. States must account for their actions, reporting renewals initiated, those renewed, and those terminated. States must also report the number of individuals removed for procedural reasons and call center volumes, wait times, and abandonment rates. And states with state-based insurance exchanges must indicate how many individuals were determined eligible for a health insurance plan and the number that enrolled in a marketplace plan. States failing to meet the reporting requirements will receive a reduction in federal funds.

12 Months of Continuous Coverage for Children in Medicaid and CHIP

Today, states can provide 12 months of continuous coverage for children in Medicaid or the Children’s Health Insurance Program (CHIP). About half the states currently mandate 12 months of coverage.

Because children with continuous coverage typically receive appropriate preventive and primary care and cycling on and off coverage during the year can cost states time and money, continuous coverage has long been a goal for many health advocates. The Consolidated Appropriations Act of 2023 makes continuous coverage a reality. Effective January 1, 2024, all states must implement 12 months of continuous coverage for all children younger than 19 in Medicaid and CHIP.

The act specifically states that children will maintain continuous coverage that ends no earlier than 12 months beginning on the date of the benefits determination, the date on which the child turns 19, or the date on which the child ceases to be a state resident.

Extending Medicare Telehealth Provisions

Access to telehealth during the pandemic helped Medicare seniors access healthcare without potentially exposing themselves to COVID during an office visit. As a result, the Centers for Medicare & Medicaid Services (CMS) expanded coverage and payment for telehealth services. However, those expanded telehealth benefits were tied to the COVID-19 public health emergency (PHE) and scheduled to be effective only an additional 151 days after the PHE ends. Most expect the PHE to end sometime in 2023.

To help, the Consolidated Appropriations Act of 2023 untied the Medicare telehealth flexibilities from the PHE. However, Congress did not leave the Medicare flexibilities open-ended. The act stipulates that COVID-era telehealth flexibilities will continue through 2024. 

Among the flexibilities:

  • Removing geographic requirements and expanding originating sites for telehealth services
  • Expanding provider eligibility to deliver telehealth services
  • Extending telehealth services for federally qualified health centers and rural health clinics. Before the PHE, these providers could not receive reimbursement as distant site telehealth providers for non-mental health services.
  • Enabling mental health providers to deliver services by telehealth. Before the PHE, Medicare reimbursement required an in-person visit within 6 months of the initial assessment and every 12 months thereafter.
  • The ability to deliver audio-only telehealth
  • Enabling telehealth to be used to conduct face-to-face encounters before hospice care recertification.

To learn more, see the text of the Consolidated Omnibus Appropriations Act of 2023.

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