CMS Expresses Concern over States with Large Shares of Application Backlogs

Much has been written about the enormous task state agencies have faced as they returned to routine operations during the unwinding of the Medicaid continuous enrollment requirement. While the primary focus (rightfully) has been around renewals and the renewal process, states have other eligibility and enrollment operational responsibilities including processing applications for new applicants or individuals trying to reenroll after losing coverage for procedural reasons. Timely processing of applications is not only required, but is also critical to ensuring individual’s timely access to coverage and care.

States must conduct eligibility determinations for applications within 45 days for individuals with MAGI-based eligibility (e.g., children, pregnant individuals, parents, expansion adults). As the unwinding has unfolded, the share of states with 40% or more of Medicaid and Children’s Health Insurance Program (CHIP) modified adjusted gross income (MAGI) applications processed beyond the 45-day threshold has increased – going from one state in March 2023 (AK) up to seven states in March 2024 (AK, DC, GA, MO, MT, NM, and TX). This trend in applications being processed in an “untimely” manner has implications that extend beyond states’ unwinding timelines. Even though all but six states are estimated to have completed their unwinding process by the end of this month, the rebound effect on applications as individuals who lost coverage during the unwinding reapply for Medicaid and CHIP is likely just beginning; backlogs in processing applications will hamper these individuals’ ability to get timely access to coverage and needed care.

CMS appears to have similar concerns with the agency taking several actions related to application processing timeliness over the past few months. On May 9th, CMS issued an informational bulletin and accompanying slide deck reminding states of their obligations to promptly process applications. The materials also highlight key strategies and workflow processes that states can implement to improve application processing times.

Additionally, and more notably, CMS sent letters to several states that are experiencing persistent problems with application timeliness. Though these states were not identified by CMS, and therefore we don’t know all the states that received letters, the letters sent to Texas and Missouri have been released publicly by other stakeholders. The letters differed slightly but some key themes were consistent across correspondence to the two states.

  • There has been an ongoing problem with application processing timeliness. CMS’s letter was not the result of one or two months of concerning data, but based on several years of application processing times beyond the 45-day standard. Both Missouri and Texas have had documented backlogs since 2022. Though the states saw improvements in timely eligibility determinations in the period before the unwinding, data has indicated recent processing times far exceed requirements (in January 2024, 40% of MAGI eligibility determinations in Texas and 58% in Missouri exceeded 45 days).
  • Staffing vacancies are a factor. The letters to Missouri and Texas noted that application backlogs were caused, at least in part, by staff vacancies. Most agencies across the country noted frontline eligibility staff vacancies were having an impact on workloads in our recent survey with KFF. CMS identified that, in both Missouri and Texas, staffing levels were inadequate to address the volume of new applications and other competing priorities for staff time (like renewals or other program needs).
  • States were required to submit additional data and information to CMS by June 21, 2024. To conduct a focused review to identify potential mitigation strategies for the states’ application backlogs, CMS requested several pieces of information. The states were asked to provide monthly data for 2024 on the number of pending applications (both disability and non-disability) as well as the length of time the applications have been pending. Additionally, CMS asked for information on each state’s staffing plan, staff training plan, current mitigation or other strategies, and a process map for adjudicating applications. States were required to submit all information within 30 days of the dated letter (May 22, 2024 for both Missouri and Texas).

Much is still unknown and unclear. We don’t know which other states may have been sent a letter nor whether the states that received letters submitted the requested information to CMS within the 30-day timeline (or at all). It is not clear what next steps CMS will take to ensure state compliance with application timeliness standards. But it is evident that these efforts are important to the successful operation of state Medicaid programs beyond the unwinding and to ensuring eligible individuals seeking to enroll or re-enroll in Medicaid after losing it during the unwinding do not experience further gaps in coverage.

Allexa Gardner is a Research Fellow at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.