CMS to states: Fix your broken Medicaid eligibility systems

CMS is urging states to correct an issue that could result in eligible people being removed from Medicaid. 

On Aug. 30, the agency sent a letter to Medicaid directors in all 50 states, informing them automatic renewal systems in several states are calculating eligibility at the family income level, rather than the individual level. According to a news release from CMS, this can result in improper disenrollments, especially for children, because family members may have different eligibility requirements. 

"Children often have higher eligibility thresholds than their parents, making them more likely to be eligible for Medicaid or CHIP coverage even if their parents no longer qualify. This conflicts with existing federal Medicaid requirements and may have a disproportionate impact on children," the agency wrote in the release. 

CMS did not not name which states it believed were incorrectly conducting these renewals. In the letter, the agency urged state directors to determine if their automatic renewal system has issues, and take steps to correct it and reinstate enrollment for those affected. 

If states fail to identify issues with their automatic renewal system, they may be required to submit a corrective action plan to CMS. If the state does not implement corrective action, they could face financial penalties, according to the letter to state Medicaid directors. 

According to KFF, as of Aug. 29, over 5.5 million people have been disenrolled during the unwinding of continuous coverage requirements. Of those disenrolled, 4 in 10 are children. 

Earlier in August, the agency warned 27 states they had "concerning" rates of procedural terminations. Of those disenrolled from Medicaid, 3 in 4 have been disenrolled because of procedural reasons, rather than being determined ineligible by CMS, according to KFF. 

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