Feb, 10, 2023

CMS’ 2020 Rule on Medicaid ‘Continuous Coverage’ Is Blocked as to Additional Dual-Eligible Enrollees

Manatt Health


In November 2022, a federal court in Connecticut ruled in Carr v. Becerra that the Centers for Medicare & Medicaid Services (CMS) had acted impermissibly by issuing an interim final rule (IFR) in November 2020 that narrowed CMS’ interpretation of the Medicaid continuous coverage requirement in the Families First Coronavirus Response Act (FFCRA). The court’s November 2022 order prohibited CMS from enforcing the IFR with respect to the five individual plaintiffs named in the lawsuit, all of whom lost access to “full” Medicaid benefits pursuant to the IFR after becoming eligible for a Medicare Savings Program (MSP), under which Medicaid pays the cost of Medicare premiums and (for some enrollees) Medicare cost sharing, but no longer covers Medicaid services that are not available under Medicare, such as many forms of home and community-based services (HCBS).

The Court’s Latest Order

On January 31, 2023, the court broadened its order to include all Medicaid enrollees nationwide who had experienced a reduction in Medicaid benefits due to the IFR, as well as all enrollees who would otherwise experience such a reduction between the date of the order and March 31, 2023. As in the November 2022 order, the court concluded that the IFR was procedurally defective because CMS did not adequately justify its decision to issue an interim rule without a full notice and comment period; the court did not reach the plaintiffs’ argument that the IFR is an impermissible interpretation of the FFCRA.


The court’s order applies only to CMS, and so does not contain any express directives for states. CMS has not released any public guidance clarifying the order. The implications for states and enrollees may include the following:

  • Moving forward, any Medicaid enrollee who newly qualifies for an MSP is entitled to retain their full Medicaid coverage until the continuous coverage requirement expires on March 31, 2023, at which point the state may transition the individual to MSP-only coverage subject to compliance with CMS’s guidance on redeterminations during unwinding.
  • Looking backward, an individual who was previously transitioned from full Medicaid coverage to MSP-only as a result of the IFR may be entitled to have their prior Medicaid coverage reinstated, potentially retroactive to the date of the transfer. At this time, it is not clear whether CMS expects states to affirmatively identify or notify all individuals eligible to have their coverage reinstated in the short window between now and the end of the continuous coverage requirement on March 31, 2023.