On November 19, 2021, the U.S. House of Representatives passed H.R. 5376, the Build Back Better Act (BBBA), which is now being considered by the U.S. Senate. State Medicaid officials are particularly interested in the BBBA’s provisions related to the Medicaid continuous coverage requirement and the associated federal medical assistance percentage (FMAP) increase[1]. Currently, both the enhanced FMAP and the requirement to keep individuals enrolled in Medicaid are tied to the federal COVID-19 public health emergency (PHE), which has an undefined end date and must be renewed in 90-day increments. If enacted, the BBBA would eliminate the uncertainty of when the Medicaid continuous coverage requirement and FMAP increase would end by decoupling these provisions from the federal PHE. Specifically, the BBBA would phase out the enhanced FMAP and provide states with the option to begin Medicaid eligibility redeterminations and disenrollments as early as April 1, 2022. However, the BBBA’s option for beginning Medicaid redeterminations in spring 2022 would require careful planning to ensure that enrollees are effectively reached and do not lose coverage if they remain eligible for Medicaid or other sources of insurance.

State implications of BBBA changes to Medicaid continuous coverage requirement and FMAP increase

The BBBA’s disassociation of both the increased FMAP and the continuous coverage requirement from the federal COVID-19 PHE declaration would impact states’ return to regular eligibility determination and enrollment operations. The BBBA outlines certain conditions related to unwinding the Medicaid continuous coverage provision that states must comply with in order to continue receiving the FMAP increase that would be available through September 2022:

BBBA Changes to Medicaid Continuous Coverage Requirement:

• Sets a defined date of 4/1/22 for when states can begin terminating Medicaid coverage for individuals who are determined to be ineligible for the program, with certain conditions

BBBA Changes to FMAP Increase:

• Gradually reduces the 6.2 percentage point FMAP increase beginning 4/1/22 to 3 percentage points, and then to 1.5 percentage points on 7/1/22
• FMAP increase would end 9/30/22, regardless of whether the COVID-19 PHE is still in place
• States could only terminate coverage for individuals who have been enrolled in Medicaid for 12 consecutive months, and similar to the current unwinding guidance from the Centers for Medicare and Medicaid Services (CMS), states would need to conduct a full eligibility redetermination prior to any adverse coverage actions.

• States must conduct “good faith” efforts to ensure that the state has up-to-date contact information for individuals by coordinating with Medicaid MCOs and other state agencies prior to terminating coverage.
• An individual could not be disenrolled based on returned mail unless there have been at least two unsuccessful attempts to contact an individual through at least two modalities, and that after the second attempt the individual was provided with 30 days notice through at least two modalities.
• Beginning April 1, 2022 through September 30, 2022, states would not be allowed to conduct eligibility redeterminations and renewals for more than 1/12 of all individuals enrolled in the state’s Medicaid program.
• From April 1, 2022 through September 30, 2022, states would need to submit monthly reports to the Secretary of Health and Human Services with information about renewals, the number of individuals disenrolled from Medicaid coverage and the termination reason, as well as information about volume, wait times and abandonment rates at enrollment call centers.

The BBBA’s delinking of the FMAP increase and the Medicaid continuous coverage requirement from the federal PHE provides predictability and could assist states in their efforts to plan for resuming normal eligibility determination operations and make budgetary decisions. Despite the benefit of more certainty, some state officials have expressed concerns about the BBBA’s requirements for eligibility determination procedures. As compared to CMS’ current unwinding guidance which offers states flexibility in their approaches to reinstating normal eligibility determination operations, the BBBA’s provisions are more prescriptive, and some of the issues identified by state officials include:

• Specificity of requirements:
  • State officials anticipate that it could be challenging to ensure precise compliance with the BBBA’s requirement that states would need to limit eligibility determinations and renewals to no more than one-twelfth of their Medicaid caseload between April and September 2022.
  • The BBBA’s specific procedures for states’ enrollee communication efforts contain a level of operational detail that is generally issued from CMS, an agency that has a working relationship with state Medicaid offices, rather than included in legislation.
• Timing of redeterminations and funding:
  • Given their significantly large Medicaid caseloads, many state officials have indicated that they will likely need up to 12 months to conduct redeterminations, renewals and verifications, as well as handle a likely increased volume of consumer appeals.
  • With the phasing down of the FMAP increase in April 2022 at the same time that states may begin processing Medicaid redeterminations and then the end of the increase in September 2022, states would face the challenge of a reduction in federal matching funds while managing an intensified workload.

The ability to redetermine Medicaid enrollees is critical as states approach the end of the continuous coverage requirement, but states continue to operate with a reduced workforce. With the anticipation of increased eligibility determination work beginning in April 2022 alongside the uncertainty of whether the BBBA will pass, it is difficult for states to determine when to begin the hiring process to increase staff capacity. Additionally, because the Medicaid continuous coverage provision has been in effect since March 2020, many Medicaid eligibility workers have little to no experience with the overall eligibility redetermination process, and as a result, it will take time to provide training and guidance to these staff.

Despite these challenges, state officials remain committed to ensuring that that eligible individuals remain enrolled in Medicaid or other sources of coverage. As states navigate these issues within a changing federal policy environment, NASHP will continue to convene state officials to assist them in their efforts to transition back to regular Medicaid eligibility determination operations.

[1] As authorized by the Families First Coronavirus Response Act (FFCRA), states are currently receiving a 6.2 percentage point federal medical assistance percentage (FMAP) increase during the COVID-19 PHE if they comply with certain maintenance of effort (MOE) requirements. These MOE requirements include a prohibition on terminating individuals from Medicaid coverage if they were enrolled as of or after March 18, 2020, which is generally referred to as the “continuous coverage” requirement.