While the federal COVID-19 public health emergency – which allows for a range of state and federal policy flexibilities in programs such as Medicaid – was recently extended, considering the significant number of pandemic-related policies that states have implemented, officials need to begin preparing now for the eventual end of the emergency. Currently, there is little federal guidance about how states would unwind the many policy changes they have implemented in response to the pandemic.
MACPAC recommended that federal officials should provide states with a minimum 90-day advance notice of the PHE’s termination, and that federal guidance about returning to regular processes should be provided to states as early as possible.
One of states’ key concerns is disenrolling individuals from Medicaid who may have become ineligible during the PHE. This is because the Families First Coronavirus Response Act (FFCRA) provided enhanced federal Medicaid matching funds tied to maintenance of effort (MOE) requirements that include a prohibition on terminating Medicaid coverage of individuals who were enrolled as of or after March 18, 2020. To comply with that requirement, often referred to as the “continuous coverage” provision, states are not fully processing their traditional Medicaid renewals. The purpose of this MOE requirement is to help prevent coverage disruptions, particularly at a time when consumers may be especially in need of coverage, yet also experiencing extreme fluctuations in income.
Although the increase in federal Medicaid funds provided by the FFCRA and the other MOE requirements do not expire until the end of the quarter in which the PHE ends, the continuous coverage provision ends on the last day of the month of the PHE. However, due to a number of reasons, states will not be able to immediately return to the regular processing of eligibility renewals. As noted by MACPAC, restarting these processes will require states to collect new information about enrollees’ income and other criteria to re-verify eligibility. To do so, states will need to make a number of eligibility system, policy and process changes.
States have emphasized the need for flexibility when reinstating eligibility redeterminations. For one, changes will need to be implemented within the context of strained state administrative capacity due to budget cuts, staff furloughs and reassignments to other departments to respond to COVID-19, early retirements, hiring freezes, and the need to focus on addressing increased demand for state-supported services. States also have different IT systems for determining Medicaid eligibility, each with distinctive programming challenges. This is further complicated by the fact that systems must be coordinated, and in several cases fully integrated, with health insurance marketplaces, a major vehicle through which consumers may seek Medicaid and marketplace coverage. Given these complications, states have expressed the need for a “menu of options” from the Centers for Medicare & Medicaid Services (CMS) detailing how to phase out the changes put in place during the PHE. Requirements for notifying enrollees about program and eligibility changes also vary by state, and states need time to develop notices and send out information to both individuals and providers about coverage changes.
Another important issue is that because the renewal process is currently backlogged, it could overwhelm states if federal officials require them to go back and process redeterminations for individuals with renewal dates that have already passed. In anticipation of the eventual end of the PHE, some states have been continuing to send out renewal notices to enrollees to gather and assess their information. In these states, coverage for eligible individuals is extended and while no action is taken to disenroll those who appear to be ineligible, they can be identified for follow-up at the end of the PHE. But many state officials have indicated that it would be helpful if federal guidance instead allows them to focus on moving forward with a rolling renewal date process when the PHE expires.
Colorado’s Department of Health Care Policy & Financing recently sent a letter to CMS administrators requesting certain federal actions to help it plan for the end of the PHE. Specifically, the state asked that CMS provide at least 60-days notice before the end of the PHE, and allow at least 90 days after the end of the PHE to conduct redeterminations and inform enrollees and providers about the associated changes — and it indicated that even more time may be needed if the PHE is extended beyond October because Medicaid enrollment will likely continue to increase over time. Similar to MACPAC, Colorado also stressed the importance of CMS providing specific guidance about redetermination requirements, and they requested additional guidance about aligning redetermination time frames between CHIP and Medicaid. Because Colorado’s pause on processing renewals in CHIP was implemented through a state plan amendment (SPA), its CHIP policies expire on the day that the PHE ends, as opposed to the Medicaid continuous coverage provisions, which expire on the last day of the month in which the PHE ends.
Colorado’s letter also emphasized that the state has at least 40 Medicaid projects and 65 home- and community-based services items that will need to be modified when the PHE expires. Some of these efforts will involve significant changes in claims processing and eligibility systems that will take time to implement and increase the workload of eligibility technicians. Some of the other issues that the state is seeking guidance on from CMS include:
- Whether states will have flexibility to stagger redeterminations and renewals after the end of the PHE to reduce the workload burden; and
- Whether federal Medicaid funding will be available for enrollees for whom the state is conducting redeterminations on for beyond 90 days if the state needs more time, as well as through any disenrollment appeals processes.
The letter also raised an issue that has been expressed by state-based marketplace (SBM) officials in other states — that states will need time to develop messaging and provide assistance to individuals who are no longer eligible for Medicaid in order to help them enroll in marketplace coverage. Many SBM officials are concerned that once the PHE ends, they may face an unmanageable influx of individuals transitioning from Medicaid to marketplace coverage. As federal officials develop guidance, they should take this issue into consideration and also factor in the timing of SBMs’ open enrollment periods.
In addition to eligibility redeterminations, states will also need sufficient time and federal guidance to unwind other policies implemented during the PHE, such as Section 1135 waivers that eased many provider-related requirements and validations, and Medicaid and CHIP disaster relief SPAs to facilitate enrollment or waive cost-sharing requirements. Another factor is that some states may be interested in retaining certain policy flexibilities implemented under the PHE, and as identified by MACPAC this will require states to take a number of steps to make these changes permanent.
States will also need guidance about resuming many federal reporting requirements that were put on hold during the PHE. Given the pandemic’s wide-ranging effects on coverage and care access, state Medicaid and CHIP officials have expressed concerns about how to determine baseline data for quality measures and provide information for other regular program integrity assessments. They indicated that they hoped CMS would allow flexibility in 2020 and 2021 federal reporting and auditing as states make good-faith efforts to come into compliance. SBM officials have expressed similar concerns about the potential of being penalized for certain policy choices and the need for federal recognition of the unique programmatic and operational challenges created by the pandemic.
As highlighted by MACPAC, “Delayed guidance, unrealistic expectations, or short implementation time frames for eligibility redeterminations and provider revalidations could disrupt state operations, result in beneficiaries churning on and off of Medicaid coverage, and jeopardize access to care.”
Although the PHE was extended again, states still face significant challenges without sufficient information from the federal government about how to transition back to regular operations. States urgently need formal federal guidance so they can begin effective and efficient planning efforts now, both to reduce administrative burdens and minimize disruptions in coverage and care.