CMS to crack down on Medicaid redetermination compliance

CMS has laid out how it will sanction states that do not comply with Medicaid redetermination requirements. 

In an interim final rule issued Dec. 3, the agency said it will take several actions against states that do not comply with federal Medicaid eligibility rules or reporting requirements. The interim rule takes effect Dec. 6. 

CMS was granted additional oversight authority over the redetermination process by Congress in the Consolidated Appropriations Act of 2023. 

According to the interim rule, CMS will require states that are not complying with federal laws or reporting requirements to submit a corrective action plan. If the state does not submit or implement the plan, the agency can fine the state up to $100,000 for each day it is not in compliance. CMS can also pause procedural disenrollments in the state. 

CMS can also reduce the amount of federal funding to state Medicaid programs up to 1 percentage point for states not complying with reporting requirements. 

In April, some states began determining if Medicaid beneficiaries are still eligible for the program for the first time since the COVID-19 pandemic began. 

As of Dec. 1, more than 11.7 million Medicaid beneficiaries have been disenrolled from their coverage through the redeterminations process, according to KFF. Of those beneficiaries, 71% were disenrolled for procedural reasons, such as failing to return required paperwork, rather than being determined ineligible for the program. 

More than 22 million beneficiaries have had their coverage renewed through the process, according to KFF. 

CMS has previously urged states to reduce the number of procedural terminations. In July, the agency said it had paused procedural terminations in a "half-dozen" states, though the agency did not specify which states. 

In August, the agency told states to correct an issue in automatic renewal systems that could result in eligible people being removed from Medicaid. The agency paused terminations in 30 states while the issue was resolved, and coverage was restored for more than 500,000 Medicaid beneficiaries. 

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