On August 30, CMS revealed that a number of states were incorrectly processing ex parte (automated renewals), an issue that mostly often impacts children although there are circumstances where other eligible members may be affected. In a nutshell, if one person in the family could not be renewed automatically via ex parte, no one is being renewed through the automated process. Then all members of the family are disenrolled if the renewal form or requested information is not returned – even though the state had information confirming ongoing eligibility for some members of the household. This mostly impacts kids because of their higher Medicaid and CHIP income eligibility levels.

In its letter to state officials, CMS took a strong stance requiring states to determine if they are or are not in compliance with federal rules. Today, September 13, is the day all states must report their findings or to attest that the state complies with federal renewal requirements. But don’t be surprised if some states need more time. If a state has not completed its assessment, it must still report its preliminary findings to CMS with a timeline for completing the analysis. In other words, all states must report something to CMS, which will give the agency a clearer sense of the scope of the problem and how many states are affected.

But what about separate CHIP programs? As we’ve been assessing this issue, we’ve learned that some states are NOT automatically enrolling children eligible for CHIP through the ex parte process. Separate CHIP programs should be growing as states review Medicaid eligibility, as my colleague Joan Alker noted in this blog. The Urban Institute estimated that 57 percent of children no longer eligible for Medicaid would be eligible for CHIP as states resumed renewals. And while 1.24 million children have been disenrolled from Medicaid in 38 states, CHIP enrollment remains flat based on CMS May enrollment data and in CCF analysis of state-reported separate CHIP enrollment in 14 states with more timely data. And while the mitigation template requires states to reinstate all affected members, the CMS letter suggested that states only need to reinstate children in households with more than one member. That won’t capture the CHIP problem, so CMS should take additional steps to ensure that states are automatically determining eligibility for CHIP and transitioning children seamlessly. If a state has that problem, CMS should require it to suspend any premiums and enrollment fees to remove barriers to enrollment or minimally require states to honor the 30-day payment grace period upon enrollment. But let’s turn back to what states are required to report today.

What happens if a state has one or more issues? CMS has provided a mitigation template that states may use to provide information about who is affected and how the state plans to remedy the problem. If a state chooses not to use the template, it must still identify the populations and number of affected individuals. The state must describe its current process and plan for pausing disenrollments until mitigations strategies or system fixes are in place. The state must also confirm that all affected individuals will have coverage reinstated, and if the state is unable to do so quickly, it must reinstate coverage for all members of the household. States must inform affected individuals with instructions for obtaining payment for unpaid medical bills or ensure services are covered while the individual was disenrolled. The state’s response must include a timeline for reinstatement, its plan for system fixes, and which mitigation strategies it will implement and when.

What mitigation strategies can states implement while they work on system fixes? States must first pause procedural terminations for affected populations and reinstate coverage back to the date of termination. While system and procedural issues are being fixed, the state may implement one of the following mitigation strategies:

• Identify and renew eligibility for affected individuals prior to disenrollment. Under this scenario, states would manually renew coverage for those who remain eligible. This is the most concerning of all strategies, since it requires worker capacity that states lack and would be prone to human errors.
• Suspend renewals while the state implements needed systems and operational fixes. This approach would pause renewals for affected individuals, which may be more difficult than you might think. If a state is unable to identify affected individuals, it must suspend all renewals. How long a state would need to pause depends on technical resources needed to troubleshoot and fix these complicated systems, but doing so will extend the state’s unwinding period.
• Extend Medicaid or CHIP eligibility for impacted household members for up to 12 months. This is a great solution for children and stakeholders should encourage their state to consider this option especially if the issues are so complex that it will take months to remedy. It also moves children’s renewals to 2024 and beyond when all states are required by federal law to provide 12-month continuous eligibility for children in Medicaid and CHIP. This option would also allow states to concentrate on identifying adults who are no longer eligible while taking the time to implement permanent system fixes.
• Identify alternative strategies that must be approved by CMS.

What if a state doesn’t have the issue? If a state has determined that it complies with individual-based eligibility rules, it must attest to the following:

• It determines eligibility on an individual basis.
• It does not require information needed to determine Medicaid or CHIP eligibility for an individual if able to do so based on reliable information contained in the individual’s account or other more current information available to the agency.
• It does not condition renewal of Medicaid or CHIP eligibility for individuals in the household on the return of a renewal form when the individuals’ ongoing eligibility has been confirmed based on available information via the ex parte.
• It has not disenrolled any eligible individual since April 1, 2023 due to a failure to account for the individual’s eligibility status, independent of that of others in the household.

How will we know whether or not states conducted a thorough assessment to ensure they don’t have the problem? Well, that’s the question of the day, and one that CMS should address. We’ll have to wait and see the state responses and take a close look at their renewal outcomes to detect potential problems. CMS should also do its own discovery to ensure that a state conducted a thorough review. The diagnostic tool developed by the State Health Values and Strategies (SHVS) offers questions that stakeholders may want to ask their state to ensure that the state has conducted an in depth assessment of its systems and processes.

In the meantime, we urge CMS to post state mitigation templates or other documents submitted by the states in real time. Stakeholders need to know if their state has the problem and what it intends to do about it so they can help enrollees and patients understand what is going on. At best, this is going to be a heavy lift for states and messy in its implementation. Communications with plans, providers, enrollees, assisters, and other stakeholders will be essential in enlisting their help as states fix this massive flaw in state systems.

[Editor’s Note: This is the 42nd blog in the Unwinding Wednesday series. For more information, visit our Unwinding resource page where you’ll find other blogs in this series, reports, webinars and the 50-state tracker.]