CMS: 'Substantial' portion of Medicaid terminations due to red tape

With Medicaid redeterminations underway nationwide, CMS is urging states to ensure they do not terminate coverage for eligible individuals.

"A substantial portion of the terminations that we've seen in April were due to folks not responding, or red tape," Daniel Tsai, CMS deputy administrator and director of the Center for Medicaid and CHIP, said during a May 30 call with reporters. "Discussions with on-the-ground stakeholders indicate that most Medicaid enrollees are not aware that Medicaid eligibility checks have restarted."

States could begin terminating coverage for ineligible Medicaid recipients in April following a three-year period of continuous Medicaid/CHIP enrollment under the COVID-19 public health emergency. All states have begun initiating renewals, but the majority will begin terminating coverage in June or July. A May 24 survey from KFF found that 65 percent of Medicaid recipients were unaware states could begin terminating coverage.

In Florida, Arkansas and Indiana, which began terminations in April, more than 80 percent of those disenrolled so far saw their coverage terminated because their information was not updated with the state — not because they were ineligible for the program based on income. 

In addition, more than 50 health advocacy groups and other organizations have called on Florida Gov. Ron DeSantis to pause redeterminations over the early results.

"When governors see such large numbers of terminations of coverage for procedural reasons, they should pause the process and see what is going wrong," Joan Alker, executive director and co-founder of the Georgetown University Center for Children and Families, wrote in a blog post May 16. She noted that it is difficult to compare states' redetermination processes because each Medicaid program is prioritizing different groups and reporting data independently. 

Mr. Tsai said CMS is monitoring state Medicaid programs to ensure compliance with federal rules and said the agency would have more complete national data around the process "in early summer." He urged states to do additional outreach to unresponsive individuals before terminating coverage and to take advantage of new tools and flexibilities available during the unwinding period.

"Where and if we do find there are instances of folks not following what's required under federal rules, we will use all the levers at our disposal to ensure that everyone eligible for Medicaid is able to maintain the coverage they are entitled to," he said. "This really is an all-hands-on-deck moment. Even when states are following all the federal rules required for Medicaid renewals, we are looking for everybody to do more."

HHS has estimated that 15 million people total will lose Medicaid coverage during redeterminations. The Congressional Budget Office estimated May 24 that 9.3 million people will transition to other forms of health insurance through 2024, and 6.2 million will remain uninsured.

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