CMS Releases New Guidance on Unwinding the Medicaid Continuous Coverage Requirement

Yesterday, CMS released additional guidance and tools for states and Medicaid stakeholders on resuming routine operations when the Medicaid continuous coverage provision is lifted at the end of the public health emergency (PHE). While the State Health Official (SHO) reinforces prior guidance, it also provides new content and emphasizes the importance of protecting enrollees from churn and periods of uninsurance during the unwinding period. As we continue to analyze the contents of the 46-page SHO letter and other tools, we wanted to share some highlights of the latest guidance.

The guidance provides more details about when states can begin to initiate renewals and when the unwinding time period concludes. States still have 12 full months to catch up on delayed renewals and changes in circumstances. What’s new is that the guidance indicates that states may initiate renewals starting two months before the end of the PHE but may not terminate coverage until the last day of the month in which the PHE ends. Such time could coincide with the Biden administration’s promise to give states a 60-day notice before the end of the PHE, if states are ready to start. CMS also notes that it generally takes states more than 30 days to complete a renewal. Thus, the guidance clarifies that the 12-month maximum unwinding period applies to “initiating” not “completing” renewals. Specifically, the last batch of renewals must be initiated no later than the 12th month after the first batch of renewals is initiated, but states will be given an additional two months to complete the last batch of renewals.

CMS makes it clear that even if a state chooses to forgo the enhanced federal Medicaid funding and begin disenrolling individuals before the end of the PHE, it must still comply with the guidance. All states are required to complete a full renewal and consider all eligibility pathways before terminating anyone’s Medicaid coverage. States will still be subject to data reporting requirements, monitoring by CMS, and potential oversight if eligible individuals lose coverage erroneously. 

The guidance emphasizes the importance of continuity of coverage and avoiding disenrollments due to procedural reasons. CMS recommends that states not initiate renewals for more than one-ninth of its caseload in any given month, and underscores the importance of pacing renewals to avoid future spikes in workload that will recur annually. The agency also reinforced the importance of taking a risk-based approach that prioritizes action on individuals who are more likely to be no longer eligible.

To monitor the unwinding, CMS will require states to report baseline data and additional data on a monthly basis for a minimum of 14 months. If states are not meeting timelines or the data indicates compliance issues, including potentially erroneous disenrollments of eligible individuals, states may be expected to report additional data and/or report data more frequently. CMS will provide a reporting template for states to use to report required data.

The guidance provides details on additional flexibilities for states to promote continuity of coverage. Section1902(e)(14)(A) allows the agency to grant waivers “as necessary to ensure that states establish income and eligibility determination systems that protect beneficiaries.” The agency details several ways this authority can be used, but indicated that other actions may be approved as long as the strategies protect enrollees and are associated with the unwinding period. Specific strategies detailed in the guidance include using recertification from the Supplemental Nutrition Assistance Program (SNAP) to renew Medicaid, how to address circumstances for people with $0 income, partnering with managed care organizations (MCOs) to update contact information, and extending the timeframe to take final action on fair hearing requests.

In Appendix B, CMS reiterates several strategies to promote continuity of coverage and mitigate churn. These include:

  • adopting 12-month continuous eligibility,
  • extending postpartum coverage to 12 months,
  • improving ex parte renewal processes,
  • aligning policies and procedures for dual eligibles and people with disabilities with MAGI i.e. standards used for income based eligibility determinations,
  • using information from other programs like SNAP to renew eligibility, and
  • modifying or suspending periodic data matching.

The appendix also encourages states to re-establish communications and outreach with enrollees by:

  • updating contact information,
  • expanding methods of communications with enrollees,
  • updating notices and consumer-facing messages,
  • review communications strategies for individuals with limited English proficiency and people with disabilities,
  • utilizing MCOs and other stakeholders to conduct outreach, and
  • engaging other stakeholders on an ongoing basis to identify opportunities to assist enrollees with updating their contact information and making sure that enrollees understand the need to respond to state notices and complete the renewal process.

In addition to the SHO, CMS updated a prior slide deck on working with MCOs, and released an updated eligibility and enrollment planning tool and a new communications toolkit. While much of the guidance reinforces what CMS has previously released, there is new emphasis on oversight and avoiding gaps in coverage, and the SHO identifies new flexibilities that can be used to protect enrollees during the unwinding period. This comes at a critical time as our recent report estimates that millions of children are at risk of losing coverage and becoming uninsured if states don’t approach the unwinding thoughtfully and take the time to get it right.