Reconciliation Bill Would Phase Out Medicaid Continuous Coverage Requirement with Key Enrollee Protections

There are many positive provisions in the Build Back Better Act (BBB) reconciliation bill as described by my colleague, Edwin Park, including filling the Medicaid coverage gap in non-expansion states, extending postpartum coverage, and making CHIP permanent. The BBB bill also phases out the 6.2 percentage point increase in the federal Medicaid funding and allows states to resume processing annual renewals and changes in circumstances under specific conditions starting in April 2022. It’s hard to predict whether or not the need for enhanced federal Medicaid funding and enrollment protections will have eased up enough by April but on the positive side, having a date certain for the end of the continuous coverage requirement is helpful for planning purposes. The legislation’s special enrollment rules will also help protect eligible enrollees from experiencing a gap or losing coverage as states resume routine eligibility and enrollment operations. Here are the details:

Phases out the increase in federal Medicaid funding starting in April 2022. The 6.2 percentage point bump in federal funding has been in place since the first quarter of 2020. Starting in the second quarter of 2022 (April – June), the enhanced federal match declines to a 3-percentage point increase, and then to 1.5 percentage points in the third quarter (July – September). To qualify for the extended increase in federal Medicaid funding, states must follow special enrollment rules that help protect consumers from inappropriate terminations of coverage.

Reinforces current CMS guidance requiring states to conduct a fresh review of eligibility based on current circumstances and to consider eligibility for all categories of Medicaid. Revised guidance issued by CMS in August 2021 allowed states to take up to a full year to catch up on delayed renewals and pending actions. The updated guidance reversed prior guidance from the Trump administration that would have allowed states to start keeping a disenrollment list up to six months prior to the end of the PHE.

Promotes manageable workloads by limiting the number of renewals or redeterminations processed in a month. States will be limited to initiating renewals or processing changes in circumstances for no more than 1/12th of enrollees in each month from April through September 2022. This is hugely important since it will help ensure that eligibility workers and call centers are better able to handle the workload and need for consumer assistance. It also protects enrollees in states where leaders have taken action to rush the process which would inevitably result in a loss of coverage for eligible children and families. During this six-month period, states may only act on delayed renewals or changes in circumstances for individuals enrolled for at least 12 months.

Requires states to take action to update contact information and handle returned mail. States will be required to make a good faith effort to update mailing addresses and contact information, including through managed care plans and other state health or human service programs, before disenrollment. States may not disenroll an individual based on returned mail before making at least two attempts to contact an individual and providing a 30-day notice before the disenrollment takes effect after the second attempt. This is a significant improvement over current regulations that allow states to terminate coverage when mail is returned without advance notice. Moreover, it’s a policy that should be permanently adopted.

Collects key data to monitor the impact on enrollees. We have continued to push for timely reporting of performance indicator data that will aid in monitoring the unwinding of the continuous eligibility requirement to ensure that eligible children and families are not losing coverage. While states have been required to report most of these performance indicators since 2014, only application and enrollment data have been consistently reported by CMS on a state-by-state basis.

Call Center statistics are the canary in the coalmine. The required data includes call center statistics – call volume, wait times, and abandonment rates. These data are key to assessing whether or not consumer assistance resources are adequately meeting the demand for assistance. As call volume increases, wait times increase which in turn results in higher call abandonment rates when individuals are unable to wait for their place in the queue. As a result, call center statistics can signal the need to boost consumer resources or slow down the process to ensure that eligible enrollees can get the help they need to stay enrolled.

Disenrollment data will help identify how many enrollees are losing coverage due to procedural (non-eligibility related) reasons. States will be required to report the number and outcome of renewals or redeterminations processed, including the share of individuals whose coverage is renewed versus those who are disenrolled. Of those disenrolled, states must report the share of individuals who were disenrolled for procedural reasons, many of whom may continue to be eligible. If a large number of individuals are losing coverage for non-eligibility reasons, it can signify the need for more outreach, improved communications with enrollees, and follow-up when action is needed to retain coverage.

While the end of the continuous coverage requirement certainly carries the risk of eligible children and families experiencing a gap or loss of coverage, we no longer have to speculate about when the PHE will end. Even if enactment is delayed until sometime in November, states will have more than four months to finalize their plans and prepare for resumption of renewals.

We are pleased to see that between the CMS revised guidance and the BBB, most of the improvements we recommended in this blog have been incorporated, all toward a goal of making sure that all eligible children and families retain coverage.