Considerations for State Medicaid and CHIP Agencies As they Prepare to Unwind Eligibility and Enrollment Flexibilities Obtained During the COVID-19 Public Health Emergency

Kinda Serafi and Patricia Boozang, Manatt Health

Background

As a condition of receiving enhanced federal funding under the Families First Coronavirus Response Act (FFCRA), states are prohibited from terminating individuals enrolled in Medicaid as of March 18, 2020, or determined eligible on or after that date.[1] These continuous coverage requirements run through the end of the month of the public health emergency (PHE), which was recently extended to October 22, 2020,[2] and apply to individuals who may have become ineligible at redetermination or due to a change in circumstances mid-coverage year such as those who have aged out of their eligibility category or experienced an increase in income. To comply with the enhanced FMAP requirements, states have been required to make numerous changes to their eligibility and enrollment systems, operations and policies.

Many states also took additional action to mitigate Medicaid and Children’s Health Insurance Program (CHIP) coverage losses during the pandemic, including Medicaid and CHIP Disaster Relief State Plan Amendments (SPAs),[3] Medicaid concurrence letters,[4] and Disaster Verification Plans[5] seeking Centers for Medicare & Medicaid Services (CMS) authority to streamline and relax eligibility and enrollment processes. For example, states sought to apply the same Medicaid continuous coverage requirements (e.g., delay acting on renewals and changes in circumstances) to their CHIP populations. States also implemented more expansive presumptive eligibility policies through Medicaid Disaster Relief SPAs and modified verification policies through submitting Disaster Verification Plan Addenda to expedite eligibility determinations.[6]

Absent a further extension of the PHE, states have three months to implement a plan for unwinding the FCCRA continuous coverage requirements which are otherwise set to terminate on October 31, 2020.[7] States will also need to identify which newly obtained eligibility and enrollment flexibilities they would like to make permanent beyond the termination of the PHE–especially in the context of emerging information that suggests that the duration of COVID-19 pandemic may extend well into 2021.

COVID-19 Impact on State Medicaid Redetermination Backlogs and Enrollment

States are facing a significant backlog of cases that await redeterminations based on the continuous coverage requirements and other flexibilities of which states have availed themselves. States will not be able to flip a switch to redetermine eligibility for the thousands of cases that still require a review based on a change in circumstances or that are up for renewal. The redeterminations processes will require systems changes and the issuances of renewal forms or consumer notices requesting additional information if eligibility is unable to be determined based on data verification. States will then need to ensure it has enough administrative capacity to timely act on all of the enrollee responses via paper, telephone, online and in-person. All of this must occur against the backdrop of a compromised and in some cases diminished state agency workforce as a result of COVID-19. If states do not allot enough time to process all of these redeterminations, not only will their agency operations become overwhelmed but enrollees may very likely be at risk of coverage loss.

Importantly, state Medicaid agencies may not terminate coverage for those currently enrolled under continuous coverage requirements–even if they appeared to be ineligible earlier in the PHE–without conducting a full redetermination of their eligibility.[8] States will also need to identify which current flexibilities they wish to maintain and new strategies that may want to leverage in order to help with the unwinding process. [9] For example, states may continue some of the verification simplification policies they implemented through their Disaster Verification Plan Addenda such as accepting attestation and conducting post enrollment in order to move through applications more quickly while processing the redetermination backlogs.

The crush of redeterminations that states face is further compounded by the increase of new Medicaid and CHIP applications. Based on a review of 16 states reporting Medicaid managed care enrollment data between March and May 2020, states reported an aggregate enrollment increase of 3.6 percent with a median growth rate of 4.7 percent.[10] Some states have shown even higher enrollment growth trends during the COVID-19 pandemic: Minnesota had an 11.5 percent enrollment increase from February to July 2020[11]; Missouri had a 10.8 percent increase from February to June 2020[12]; and, Kentucky experienced a 10.3 percent increase from February to June 2020.[13]

Potential Strategies to Mitigate the COVID-19 Backlog

To manage the backlog of redeterminations amidst an increase in Medicaid and CHIP applications, states may consider commencing a staged versus a “big bang” approach well before the end of the PHE and the FCCRA continuous coverage requirements. States may consider restarting and expediting renewals for current beneficiaries, processing ex-parte redeterminations of eligibility where possible, consistent with federal regulations that if a state Medicaid agency has “enough information available to it to renew eligibility with respect to all eligibility criteria, the agency may begin a new 12-month renewal period.”[14] A component of the staged approach could be to prioritize populations that are able to be redetermined most expeditiously, such as child-only cases, or eligibility categories that would be at higher risk if they lost coverage, such as pregnant women and the disabled. States may also wish to look to other eligibility and enrollment strategies to expedite processing of their redetermination backlog. For example, states could seek to leverage SNAP data for redeterminations using express lane enrollment for children and a SNAP SPA for adults.[15] CMS should endeavor to “meet states where they are” by deploying facilitated enrollment mitigation strategies similar to those afforded states in 2013 as they transitioned to modified adjusted gross income (MAGI) eligibility determinations.[16] At the time, states were undergoing considerable systems and backlog issues and CMS relied on statutory authority to waive Medicaid and CHIP program requirements in order to “to ensure that States establish income and eligibility determination systems that protect beneficiaries.”[17] These facilitated enrollment strategies included extending renewal timeframes and enrolling adults in Medicaid based on SNAP eligibility determinations, without asking for additional information (as is currently required under a SNAP SPA).[18]

Looking Ahead

Regardless of their approach, states will need more time to plan for and implement the unwinding of the eligibility and enrollment processes and system changes they put into place to comply with FCCRA, and more than likely will not have come into full compliance with “regular business” eligibility and enrollment regulations by the end of October 2020. This timeline is complicated by the fact that the PHE may be further extended without little advance notice to states. CMS has stated that the agency will release guidance on states’ obligations with redetermining eligibility for those to whom the FFCRA continuous coverage requirements apply. In addition to deploying mitigation strategies, states will need flexibility from and partnership with CMS to assess the potential audit implications of COVID-19 eligibility and enrollment practices during this unprecedented and unpredictable time.

[1] Families First Coronavirus Response Act, HR 6201, § 6008(b)(3).

[2] U.S. Department of Health and Human Services, “Renewal of a Determination that a Public Health Emergency Exists,” July 23, 2020, available at https://www.phe.gov/emergency/news/healthactions/phe/Pages/covid19-23June2020.aspx.

[3] See State Plan Flexibilities at https://www.medicaid.gov/resources-for-states/disaster-response-toolkit/state-plan-flexibilities/index.html.

[4] The Medicaid and CHIP Coverage Learning Collaborative, “Inventory of Medicaid and CHIP Flexibilities and Authorities in the Event of a Disaster, August 20, 2018, available at https://www.medicaid.gov/state-resource-center/downloads/mac-learning-collaboratives/medicaid-chip-inventory.pdf.

[5] Medicaid and CHIP Disaster Relief MAGI-Based Verification Plan Addendum available at https://www.medicaid.gov/medicaid/eligibility/downloads/magi-based-verification-plan-addendum-template.docx.

[6] State and Health Value Strategies, “State Strategies to Support Medicaid/CHIP Eligibility & Enrollment in Response to COVID-19,” April 29, 2020, available at https://www.shvs.org/state-strategies-to-support-medicaid-chip-eligibility-enrollment-in-response-to-covid-19/.

[7] Families First Coronavirus Relief Act § 6008(b)(3). See also, State Health and Value Strategies, “Federal Declarations and Flexibilities Supporting Medicaid and CHIP COVID-19 Response Efforts Effective and Expiration Dates,” July 23, 2020, available at https://www.shvs.org/wp-content/uploads/2020/06/COVID-19-Emergency-Flexibility-Timelines-Product-07.23.2020.pdf.

[8] 42 CFR § 435.916(f)(1).

[9] See K.Serafi and K.O’Connor, “Coronavirus (COVID-19) Unwinding Federal Medicaid Flexibilities: Issues and Considerations for States,” State Health and Value Strategies, June 19, 2020, available at https://www.shvs.org/coronavirus-covid-19-unwinding-federal-medicaid-flexibilities-issues-and-considerations-for-states/.

[10] E.Hounton and R.Rudowitz, “Data Note: Growth in Medicaid MCO Enrollment During the COVID-19 Pandemic,” Kaiser Family Foundation, July 16, 2020, available at https://www.kff.org/coronavirus-covid-19/issue-brief/data-note-growth-in-medicaid-mco-enrollment-during-the-covid-19-pandemic/

[11] Minnesota Department of Human Services, “Managed Care Enrollment Figures,” available at https://www.dhs.state.mn.us/main/idcplg?IdcService=GET_DYNAMIC_CONVERSION&RevisionSelectionMethod=LatestReleased&dDocName=dhs16_141529.

[12] Missouri Department of Social Services, “DSS Caseload Counter,” available at https://dss.mo.gov/mis/clcounter/history.htm

[13] Kentucky Cabinet for Health and Family Services, “Division of Fiscal Management: Medicaid Statistics,” available at https://chfs.ky.gov/agencies/dms/dafm/Pages/statistics.aspx?View=KCHIP+Enrollment+Data&Title=Table+Viewer+Webpart

[14] 42 CFR § 435.916(d)(1)(ii).

[15] K.Serafi, “Using Supplemental Nutrition Assistance Program (SNAP) Information to Facilitate Medicaid Enrollment and Renewal,” State Health Reform Assistance Network, September 12, 2016, available at https://www.shvs.org/wp-content/uploads/2016/09/State-Network-Manatt-Using-SNAP-Information-to-Facilitate-Medicaid-Enrollment-and-Renewal-September-2016.pdf

[16] Centers for Medicare and Medicaid Services SHO #13-003, Facilitating Medicaid and CHIP Enrollment and Renewal in 2014,” May 17, 2013, available at https://www.hhs.gov/guidance/sites/default/files/hhs-guidance-documents/SHO-13-003_0.pdf.

[17] Social Security Act 1902(e)(14)(A).

[18] Supra note 16.