New Guidance for Unwinding Federal COVID-19 Public Health Emergency Provides State Flexibility and Medicaid Enrollee Protections

The Biden administration signaled earlier that the federal COVID-19 public health emergency (PHE) will be in place at least through calendar year 2021, but with COVID-19 cases increasing recently due to the Delta variant, there is uncertainty about exactly how long the PHE may extend into 2022. Regardless of these factors, state health officials are currently developing plans for implementing the many necessary policy and process changes once the PHE eventually expires. In support of these efforts, on August 13, the Centers for Medicare & Medicaid Services (CMS) issued a state health official letter that provides important updates to the December 2020 guidance that  CMS initially released about how states should transition back to normal operations in Medicaid and the Children’s Health Insurance Program (CHIP) after the end of the PHE. The new letter addresses some of the primary concerns that states had about the original guidance, such as allowing for an adequate amount of time to complete all pending eligibility determination actions and implementing measures to help ensure that eligible individuals remain enrolled and staff workloads are manageable when disenrollments are reinstated for individuals who may have become ineligible for Medicaid during the PHE.[1]

In planning for resuming normal eligibility determination and enrollment processes after the end of the COVID-19 PHE, many state Medicaid officials have expressed concerns that they would not be able to complete the anticipated large volume of pending eligibility and enrollment actions within six months, which was the timeline outlined in the December 2020 guidance. As the PHE has extended into 2021 and Medicaid enrollment has increased substantially, states’ concerns have intensified about the significant amount of eligibility determination activities that will be necessary to conduct after the PHE concludes.

In response to these issues, the new guidance provides states with up to 12 months after the month in which the PHE ends to resolve any pending eligibility determinations. This includes actions such as post-enrollment verifications, renewals, and redeterminations based on changes in circumstances. CMS indicated that the rationale for the additional time is because of the significant increases in Medicaid enrollment that have occurred during the pandemic, as well as to help states develop plans to stagger and appropriately space out renewals of eligibility so that Medicaid programs have a manageable renewal schedule going forward. The extra months to complete pending eligibility determination work may also help prevent individuals from being inappropriately disenrolled, because states will have more time to gather eligibility verification information from individuals. However, CMS notes that as specified in the December 2020 guidance, states will still be expected to resume timely application processing procedures within four months after the end of the PHE, and the increased federal Medicaid funds that states are currently receiving will still expire at the end of the quarter in which the PHE ends.

The other significant change included in the new guidance is that states will be required to conduct an additional redetermination for all individuals who were found to be ineligible for Medicaid during the PHE prior to disenrolling them. Although states are not disenrolling individuals from Medicaid currently, as encouraged by CMS most states are still conducting regular eligibility reviews and renewing coverage for those individuals found to still be eligible. However, the December 2020 guidance provided states with an option to avoid completing another redetermination for some individuals found to be ineligible prior to terminating their coverage after the PHE ends if certain conditions were met. This new guidance rescinds that option and indicates that to ensure that individuals are not improperly disenrolled, states will need to conduct another full eligibility redetermination for these individuals after the PHE ends before taking any adverse actions. During this redetermination process, the guidance suggests that states allow individuals 30 days to provide any necessary eligibility verification information and that at least 10 days of advance notice and fair hearing rights be provided prior to any adverse actions. Additionally, the guidance reminds states that individuals found to be ineligible for Medicaid when the PHE concludes should be transitioned to other coverage options they may be eligible for, such as through the marketplace.

CMS indicates that in the coming months they will provide further details about the updated policies outlined in the revised guidance, including additional information to help states reinstate a reasonable and sustainable Medicaid renewal workload. NASHP plans to continue to engage states—both Medicaid as well as state-based marketplace officials—as they plan for transitioning back to pre-PHE operations and work to ensure that individuals maintain health coverage during this process.

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[1] The Families First Coronavirus Response Act (FFCRA), which provides states with enhanced federal Medicaid matching funds during the COVID-19 PHE if they comply with certain maintenance of effort (MOE) requirements, prohibits states from terminating individuals from Medicaid coverage if they were enrolled as of or after March 18, 2020, even if states learn that certain individuals may no longer be eligible. (For states to be compliant with the requirements, individuals can only be terminated from Medicaid coverage if they move out of state or voluntarily request to be disenrolled.) This “continuous coverage” requirement of FFCRA ends on the last day of the month of the PHE, although the increase in federal Medicaid funds and the other MOE requirements do not expire until the end of the quarter in which the PHE ends.