CMS urges states to address system errors causing potential Medicaid and CHIP disenrollments. Automated renewals inaccurately assess eligibility based on family status, leading to wrongful disenrollment of eligible individuals. CMS warns that non-compliance may result in loss of FMAP eligibility. States must halt terminations, reinstate coverage, rectify system errors, and implement preventive measures. CMS grants until September 13, 2023, to report non-compliant systems. Compliant states provide documentation.
The Centers for Medicare & Medicaid Services (CMS) has identified a pressing concern regarding the potential disenrollment of eligible Medicaid and Children’s Health Insurance Program (CHIP) enrollees due to system errors. States failing to rectify these issues and adhere to CMS guidelines may face severe penalties, including the loss of Federal Medical Assistance Percentage (FMAP) eligibility.
CMS has detected errors within certain state systems that might lead to the unnecessary disenrollment of individuals eligible for Medicaid and CHIP during the redetermination process. As a response, CMS is urgently calling upon state Medicaid programs to promptly review and resolve these problems.
In its effort to ensure compliance, CMS is directing all Medicaid and CHIP agencies to undertake a comprehensive evaluation of their renewal processes. This evaluation includes a thorough examination of standard operating procedures, renewal forms, notices, and the validation of renewal logic in the eligibility system. The purpose of these actions is to confirm that the system accurately determines eligibility for each individual within a household.
While automated renewals, also known as ex parte renewals, can enhance the efficiency of the redetermination process, CMS has identified an issue where some systems evaluate redeterminations based on family status rather than individual status.
Ex-parte renewals utilize existing data to automatically renew an individual’s Medicaid coverage. However, certain scenarios arise where states request additional information from beneficiaries through renewal forms to verify their eligibility. Complications can arise when households contain a mix of Medicaid or CHIP eligibility statuses. In such cases, the auto-renewal system may erroneously disenroll individuals eligible for coverage due to the ineligibility of other family members or the lack of response to renewal forms.
The primary groups at risk of being wrongly disenrolled due to this system error include:
1. Children residing in households with at least one Medicaid-eligible adult, could face incorrect disenrollment if a renewal form confirming the Medicaid eligibility of a household member is not returned.
2. Cases where states request additional information to confirm Medicaid eligibility of a household member and no response is received. This situation puts other Medicaid beneficiaries at risk of disenrollment.
CMS expresses concern that other vulnerable populations might also be susceptible to unnecessary disenrollment due to similar system errors.
This error raises concerns related to CMS regulations in two aspects. Firstly, it fails to assess eligibility individually, instead of considering household circumstances. Secondly, it may necessitate individuals already approved for Medicaid or CHIP coverage through ex parte methods to provide additional information to confirm their eligibility.
CMS has issued a stern warning that unless these violations are addressed, states will fall out of compliance and lose eligibility for the FMAP increase. Furthermore, states might be compelled to submit corrective action plans, with non-compliance resulting in fines and potential disqualification from receiving FMAP increases.
To rectify these issues, state Medicaid agencies are advised to take the following steps:
1. Temporarily halt procedural terminations and maintain the pause until the error is resolved.
2. Reinstate coverage for individuals wrongly terminated, and ensure retroactive eligibility for those affected.
3. Rectify the system error before reintroducing the auto-renewal process, ensuring eligibility assessment is conducted individually and additional information is not requested for confirmation.
4. Implement prevention strategies to prevent similar issues from arising while fixing the system.
Examples of prevention strategies include manually renewing coverage for eligible household members in cases where a renewal form is not returned, suspending renewals for multi-member households, or waiving redeterminations for affected individuals.
States are granted until September 13, 2023, to report any non-compliant systems, specifying the impacted populations and outlining strategies for resolution and mitigation. States without issues in their systems must provide documentation confirming their compliance.
