CMS Releases Guidance on Timely Processing of Applications and Extension of Unwinding Flexibilities

The unprecedented volume of Medicaid redeterminations generated by the expiration of the continuous coverage provisions has been somewhat of a “stress test” for state Medicaid systems. The number of Medicaid applications exceeding federal timeliness standards is one indicator that a state is not doing well on this stress test and a signal that something needs to be done to remedy the situation. The Center for Medicare and Medicaid Services (CMS) heeded that call to action this week by issuing two informational bulletins.

Application Timeliness

In the first of two informational bulletins (CIB), CMS reminds states of federal standards for timely action on Medicaid applications. Back in 2022, we explained how application processing times provide insight into state capacity to manage the Medicaid workload. A growing share of applications processed outside federal standards is an indicator of when states are experiencing backlogs that could be affecting access to care and delaying re-enrollment of people who have lost coverage due to procedural reasons. And keep in mind that people who lose Medicaid for procedural reasons can submit missing information without filing a new application during the 90-day reconsideration period; these are also counted as applications. If it takes weeks to re-enroll after being disenrolled for paperwork reasons, there’s no doubt it impacts access to and continuity of care.

Medicaid regulations establish a 45-day standard for acting on Medicaid applications for low-income children, families, and adults (known as MAGI groups), and a 90-day standard for timely processing of non-MAGI applications for people with disabilities and low-income seniors with dual eligibility for Medicaid and Medicare. In March, CCF began posting state-level application volume and timeliness data. In January 2023, more than 10% of the applications processed were outside the federal standards in nearly half of the states (22); the situation is particularly dire in TX (40.3%), NM (56.8%), and MO (57.8%).

The CIB identifies a number of immediate and longer-term strategies to improve application processing times. To mitigate the impact of backlogs, CMS encourages states to implement the (e)(14) flexibilities to improve real-time determinations and ex parte renewals; invest in workforce improvements; and expedite access to care for individuals pending a final determination through presumptive eligibility and verification policy changes, such as post-enrollment verification. For the longer term, CMS urges states to invest in modernized systems; conduct routine trainings for workers and vendors; increase use of electronic data sources; and ensure effective communications and sufficient assistance for consumers. CMS continues to provide technical assistance to states but unfortunately, the CIB is silent on any compliance action CMS may take if states do not quickly dedicate resources or implement other strategies to resolve these backlogs.

Extension of Unwinding-Related Flexibilities

The second informational bulletin extends state flexibility to reduce red tape and make it easier for people to navigate the renewal process.

States and stakeholders credit the 1902(e)(14)(A) waivers as having a positive impact on unwinding renewal outcomes. These flexibilities were set to expire in June 2024, but were extended through December 2024; and now until June 2025. Stakeholders are pushing for permanent adoption of the most effective of these waivers, and the CIB confirms that CMCS is reviewing all the waiver strategies to determine which can be implemented on a longstanding basis. I’ll spare Say Ahhh! readers all of the weedy details on using a strategy more than once for a given individual but you can dive in more deeply here.

The CIB also extends other flexibilities, including use of temporary verification policies and procedures (such as conducting post-enrollment income verification) and the authority to pause procedural disenrollments for one or more months to conduct targeted outreach. The bulletin concludes with some helpful Q&As.

The extension of these flexibilities will be a relief for some states that are still in the midst of the unwinding. It also allows states to continue these strategies as CMS assesses which may be used on an ongoing basis.

The guidance on application timeliness and extension of unwinding flexibilities reminds states of strategies that can improve their work processes as they strive to return to normal operations. But so far in the unwinding, 13 million children, families, and other adults have lost coverage due to procedural or paperwork reasons, and many of them (45% based on ASPE projections) remain eligible. CMS should ensure that states experiencing backlogs in application processing implement strategies that can immediately ensure a prompt review of eligibility and re-enrollment for millions of eligible people who have lost coverage, many through no fault of their own.

Tricia Brooks is a Research Professor at the Center for Children and Families (CCF), part of the McCourt School of Public Policy at Georgetown University.