The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule affecting eligibility determination and enrollment policies in Medicaid and the Children’s Health Insurance Program (CHIP) and which is related to their earlier request for input on how to improve access to coverage and care in these programs. Comments are due by November 7, 2022. As noted by CMS, the proposed changes are intended to simplify application, verification, enrollment, and renewal processes in Medicaid and CHIP, minimize disruptions in coverage, as well as reduce administrative burdens for states and beneficiaries.
The proposed rule emphasizes that given the significant amount of eligibility determination work states will face during the COVID-19 public health emergency (PHE) unwinding period, CMS is seeking input about realistic timeframes for implementing the rule’s provisions. CMS also recognizes that some of the proposed changes may necessitate modifications in states’ statutes and regulations and/or eligibility system changes, which will take time. Given these factors, CMS is considering various potential compliance dates after the rule is finalized, which could differ by provision and range from 90 days, six months, and/or 12 months.
Considering the complexity and comprehensiveness of the proposed rule, states are in the process of determining how to respond to the numerous provisions. Below are some of the key aspects of the proposed rule, as well as a few issues raised by some states during a recent discussion NASHP convened with state officials.
Aligns Non-MAGI and MAGI Eligibility Determination and Renewal Policies and Simplifies Enrollment Verification Processes in Medicaid and CHIP
In the proposed rule, CMS seeks to apply many of the eligibility determination and enrollment simplifications that are currently used for individuals with MAGI-based eligibility to non-MAGI groups to help streamline enrollment and renewals for individuals who qualify for Medicaid based on age, blindness, or disability. CMS notes that individuals who are eligible for Medicaid based on non-MAGI criteria are more likely to have fixed incomes and therefore tend to have more stable eligibility than MAGI-based Medicaid and CHIP enrollees. However, CMS is concerned that a larger share of non-MAGI individuals who lose coverage do so because of procedural issues. To help reduce these errors, the rule proposes that states use many of the same application and renewal processes for both MAGI and non-MAGI beneficiaries. This includes requirements that renewals only be conducted once a year for nearly all Medicaid enrollees, that pre-populated renewal forms are also provided to the non-MAGI population with at least a 30-day time frame for returning these forms through all acceptable modalities, and the creation of a 90-day reconsideration period after a procedural disenrollment if individuals return needed renewal information. Additionally, states would no longer be able to require an in-person interview for non-MAGI beneficiaries when they apply for or seek to renew their coverage. The proposed rule also aims to further streamline and reduce barriers related to certain enrollment verification processes, such as those associated with verifying citizenship, as well as includes changes to facilitate enrollment in the optional Medically Needy eligibility group.
Defines New Timeliness Requirements for Processing Applications, Renewals, and Changes in Circumstances
CMS indicates that some states may not have the necessary procedures in place to process possible changes in beneficiaries’ circumstances within a reasonable time frame, or in a way that promotes coverage continuity and/or enrollee access to lower cost sharing. To address this concern, the proposed rule offers clearer definitions of states’ responsibilities related to processing and acting on enrollees’ reported circumstance changes. Additionally, CMS is considering aligning minimum timeframes for all applicants to respond to information requests related to eligibility redeterminations and application and renewal verifications to help reduce inappropriate coverage terminations that can occur when beneficiaries lack sufficient time to respond. The proposed rule also suggests providing states with additional time to process eligibility redeterminations depending on when information is submitted by beneficiaries to help ensure that there is an adequate period to complete these assessments. Overall, CMS is seeking to identify an appropriate balance between ensuring that eligibility determinations are processed efficiently by state agencies while also allowing individuals adequate time to provide necessary documentation. However, some states are concerned that it could be potentially challenging to manage all of the various timelines associated with the proposed changes to processing renewals and changes in circumstances.
Facilitates Transitions between Coverage Programs
Although current regulations require that individuals determined ineligible for Medicaid must have their eligibility assessed for other coverage programs and transferred if found to be eligible, there are no explicit requirements to transfer individuals’ accounts when they do not respond to requests for information, even if they are determined likely eligible for another program. To minimize potential unnecessary coverage gaps, the proposed rule would require state Medicaid agencies and separate CHIP programs to enhance coordination so that seamless transitions of eligibility occur between the two programs when there are eligibility status changes. Additionally, MAGI eligibility determinations made by separate CHIP programs would need to be accepted by Medicaid agencies, and similarly CHIP eligibility determinations conducted by Medicaid would need to be accepted by separate CHIP programs. When applicable, states would also have to send out a combined notice that indicates individuals’ ineligibility for one coverage source such as Medicaid but their eligibility for another such as CHIP.
Improves Access to Coverage and Care in CHIP
Intending to reduce enrollment barriers in separate CHIP programs, the proposed rule would eliminate waiting periods as well as end enrollment lockouts that some states impose on families for non-payment of premiums. As of January 2020, 14 states have lockout periods in their separate CHIP programs, and currently 11 states have CHIP waiting periods. Regarding the lockout changes, states will still be able to disenroll individuals from coverage due to non-payment of premiums after a grace period, but CMS will prohibit states from requiring collection of overdue premiums as a condition of reenrollment. While CMS indicates that it is considering allowing states that demonstrate that there are high rates of substitution of CHIP coverage for private coverage to have the option of a 30-day waiting period and is also considering an option of still allowing for a 30-day lockout period for non-payment of premiums, their intent in the proposed rule is eliminating these options to promote care continuity. CMS is also proposing to prohibit any annual or lifetime limits on CHIP benefits.
Establishes Requirements for Handling Returned Mail
CMS indicates that in cases when mailings to enrollees are returned to the state agency, some states may not be making adequate efforts to obtain new contact information for individuals prior to terminating them from coverage. The proposed rule requires states to take certain steps to update addresses for returned mailings to help reduce inappropriate coverage terminations. These include requiring states to check all available data sources for updated enrollee contact information, such as information from managed care plans, enrollment brokers, claims data, or other third-party data sources like state-administered public benefit systems or the National Change of Address (NCOA) database. States must send notices to both the current address on file as well as any forwarding or more recent address and allow individuals 30 days from the date the notice is sent to respond. Some states indicated that the proposed requirement to mail notices again to the original address that resulted in returned mail seems unnecessary and administratively burdensome, especially when ultimately NCOA information is often used when no response is received. Other states also noted that enrollees frequently mention that they are already receiving too many notices about their coverage, as well as that due to postal service delays, complications in delivering the mailings could occur because forwarding addresses may expire.
CMS also proposes that states must attempt to contact individuals through at least one other modality than mail (e.g. phone, electronic notice, email or text message), and that in doing so through these alternative methods must make at least two attempts to reach individuals. If a state has tried all outreach efforts without success, the proposed rule outlines actions depending on the forwarding address information that is available.
Outlines Medicaid and CHIP Record Keeping Requirements
The proposed rule seeks to more clearly define requirements for state Medicaid and CHIP agencies’ record keeping practices. CMS recognizes that existing regulations related to record keeping are outdated as they do not reflect the use of electronic data and that they also lack specificity. Additionally, recent findings from both the U.S. Department of Health and Human Services’ Office of the Inspector General and Payment Error Rate Measurement (PERM) eligibility reviews have demonstrated that some states’ Medicaid case records lack appropriate eligibility verification documentation. To address these issues, the proposed rule defines both the various types of beneficiary documentation that states must keep on file as well as the length of time these records should be retained, which CMS suggests should be a minimum of three years beyond when the case becomes inactive.
Simplifies Medicare Savings Program Enrollment Processes
The proposed rule also includes provisions designed to streamline enrollment in Medicare Savings Programs (MSPs), such as changes to certain verification and documentation requirements and other enrollment simplification policies.
