Weaponizing Medicaid Paperwork

It turns out that CMS has a “Patients Over Paperwork” initiative, which the agency describes as “our effort to reduce administrative burden and improve the customer experience while putting patients first.”

Who knew? If you’ve been following Administrator Verma’s crusade to condition Medicaid coverage on meeting requirements to document work, you would be quite surprised. I sure was. Here’s why.

On January 11thCMS issued guidance encouraging state Medicaid Directors to demonstrate applying work requirements to parents and other adults on Medicaid. That was followed the very next day by the approval of a demonstration in Kentucky that, among many other things, imposes such requirements. As my colleague Joan Alker has noted, the state estimates that the demonstration will result in almost 100,000 beneficiaries losing coverage by the fifth year — an estimate that is likely low. The state projects this will reduce Federal and state spending on Medicaid coverage by $2.4 billion, of which about $2.0 billion is for CMS. (Judy Solomon at the Center on Budget and Policy Priorities unpacks Kentucky’s waiver here.)

The secret sauce in the Kentucky waiver is the paperwork needed to document compliance with the work requirements coupled with 6-month lock-out penalties for failure to pay premiums, report a change in circumstances, or complete eligibility redetermination within 90 days. Here is just one example of the paperwork and red tape that is going to rain down on beneficiaries. It is taken verbatim from CMS Special Term and Condition 48, Community Engagement: State Assurances (“community engagement” is the CMS euphemism for work requirement):

“Prior to implementation of the community engagement requirements as a condition of eligibility, the state shall:

d. Ensure that there are timely and adequate beneficiary notices provided in writing, including but not limited to:

i.  When the community engagement requirement will commence for that specific beneficiary;

ii. Whether a beneficiary is exempt, and under what conditions the exemption would end;

iii.  A list of the specific activities that may be used to satisfy community engagement requirements and a list of the specific activities that beneficiaries can engage in to cure an impending suspension, as described in STC 47(b);

iv.  Information about resources that help connect beneficiaries to opportunities for activities that would meet the community engagement requirement, and information about the community supports that are available to assist beneficiaries in meeting community engagement requirements;

v.  Information about how community engagement hours will be counted and documented;

vi.  What gives rise to a suspension, what a suspension would mean for the beneficiary, including how it could affect redetermination, and how to avoid a suspension, including how to apply for a good cause exemption and what kinds of circumstances might give rise to good cause;

vii.  If a beneficiary is not in compliance for a particular month, that the beneficiary is out of compliance, and how the beneficiary can cure the non-compliance in the immediately following month;

viii.  If a beneficiary has eligibility suspended, how to appeal a suspension, and how to have the suspension lifted, including the number of community engagement hours that must be performed within a 30 day period by the specific beneficiary to have the suspension lifted, and information on the option to take a re-enrollment course to have the suspension lifted; and

ix.  If a beneficiary has requested a good cause exemption, that the good cause exemption has been approved or denied, with an explanation of the basis for the decision and how to appeal a denial.”

It’s not immediately obvious how these nine separate bundles of requirements will “reduce administrative burden” for the state Medicaid agency or improve the “customer experience” of beneficiaries, much less promote their health and well-being. My guess is that the estimated 20,000 parents and 80,000 expansion adults targeted to lose Medicaid coverage will be surprised to learn that they are being “put first.” (Stay tuned for a blog from my colleague Tricia Brooks on what we’ve learned about the effect of paperwork on coverage of kids.)

The truth is the Kentucky waiver will bury both patients and the state Medicaid agency in red tape. It weaponizes paperwork to drive low-income parents and adults into the ranks of the uninsured. Coverage for children will be collateral damage.

Andy Schneider is a Research Professor at the Georgetown University McCourt School of Public Policy.