Proposed Eligibility Rule Simplifies Medicaid and CHIP Enrollment Process for Children

In a continuing effort to strengthen Medicaid and access to affordable, quality health coverage, the Biden Administration has proposed a series of eligibility rule changes. The Notice of Proposed Rulemaking (NPRM) seeks to streamline application and enrollment, improve retention rates, remove barriers specific to CHIP, and enhance program integrity.

Eliminates enrollment barriers and benefit caps in CHIP.

At the top of our list are the changes proposed for children, including eliminating CHIP waiting periods and enrollment lockouts following nonpayment of premiums. Such policies are red tape barriers that don’t apply to other coverage options. The NPRM would also disallow any annual or lifetime caps on CHIP benefits, which would likely have the positive effect of increasing access to dental services, a prime area of unmet need for children.

Strengthens coordination of eligibility and enrollment between Medicaid and CHIP.

The NPRM specifically would require separate CHIP programs to accept CHIP determinations made by the Medicaid agency and ensure that enrollment in CHIP is seamless. Likewise, Medicaid agencies would be required to accept MAGI determinations made by CHIP. In both situations, the state must issue a combined notice that informs enrollees of their disenrollment from one coverage source and eligibility for the other source. If families must take additional steps to enroll their children in a separate CHIP program, such as paying a premium, the notice must specify what actions are needed. According to a recent MACPAC churn analysis, 1 in 5 children experience a gap moving between Medicaid and CHIP and vice versa. These provisions are needed to achieve the ACA’s vision of seamless, coordinated enrollment for children transitioning between programs.

Requires states to take specific steps to resolve returned mail.

Currently, some states still disenroll individuals after receiving one piece of returned mail. The proposed rule would require states to take steps to locate the individual by checking other programs, using the USPS National Change of Address database, or working with managed care organizations and other third-party sources to update addresses. It would require states to make at least two additional attempts to contact an enrollee via phone or electronic communications, after mailing an initial notice requesting address verification.

Aligns Non-MAGI application and renewal policies with MAGI-based Medicaid.

The rule also proposes to align many of the streamlining and simplification measures implemented in MAGI-based Medicaid following the Affordable Care Act (ACA) for non-MAGI Medicaid, including:

  • disallowing a requirement for an in-person interview,
  • conducting renewals only once a year,
  • sending prepopulated renewal forms,
  • providing 30 days to return renewal information,
  • accepting renewals through the four modalities (online, phone, mail, in-person), and
  • providing a 90-day reconsideration period if information is returned after a procedural disenrollment.

There are also provisions that address issues with enrollment in Medicare Savings Programs (MSPs) and align certain requirements for home and community-based services with those for institutionalized care, which I’ll leave to experts in those areas to explain.

Proposes more detailed timeliness standards for enrollee response and agency action.

Changes are also proposed for specific timeliness standards that would differentiate between applications, changes, and renewals, as well as between MAGI and non-MAGI processes. It would also establish separate timeframes for an enrollee or applicant to return information and the time allowed for the agency to process the information. The NPRM would allow a shorter period of time for individuals to provide additional information after applying or reporting a change in circumstances. The rationale is that these individuals have already been in communication with the agency and would be expecting a response from the state. The proposed standards would apply to both Medicaid and CHIP, and more fairly allocate time for individuals to respond and for the state to take action.

Clarifies recordkeeping requirements to avoid improper payment errors that result from a lack of adequate documentation.

A large share of eligibility errors uncovered in recent Payment Error Rate Measurement (PERM) results were based on inadequate documentation of eligibility and enrollment. The current rules were last updated in 1986 (long before modernized IT systems and electronic data were being used) and don’t specify the amount of time records must be maintained. The proposed rule more clearly delineates what types of information Medicaid agencies must maintain and to prescribe a minimum retention period.

There’s more to unpack in the NPRM, and CMS seeks comments on a number of provisions or alternatives. The agency is keenly aware that these provisions would require a fairly lengthy implementation timeline, particularly considering the impending unwinding of the Medicaid continuous coverage protection. Over the coming weeks, we’ll have more to say about the NPRM but on the whole, we have a good feeling about the positive impact it will have on children and vulnerable non-MAGI groups. There will be a 60-day comment period that closes on November 7, 2022.