There are many lessons to be learned from the unwinding, but among the top items on the list is the discovery that many states are not following federal renewal regulations that have been in place for more than a decade. Noting that, the Government Accountability Office (GOA) has released a report entitled: “Medicaid: Federal Oversight of State Eligibility Redeterminations Should Reflect Lessons Learned after COVID-19.”
The report notes that amidst the complex and unprecedented undertaking of the unwinding, it has become clear that compliance with long-standing renewal requirements is lacking in many states. (The GAO report has a nice visual on page 4 if you are wondering what the renewal process should look like.) While some compliance issues have been remedied – remember the household vs. individual ex parte issue that mostly impacted kids in 29 states – others require longer-term solutions.
GAO echoes findings from other reports noting the challenges that states have faced during unwinding, including the sheer volume of work and staffing shortages. But the report highlights examples of state noncompliance with federal renewal rules that include system glitches and programming flaws resulting in erroneous eligibility determinations; states not reviewing eligibility on all bases/categories of Medicaid; and states failing to resolve fair hearing cases within the required 90-day window.
Unwinding has certainly been a stress test for Medicaid, revealing significant deficiencies and shortcomings in Medicaid eligibility systems. GAO notes that system limitations preceded the public health emergency (PHE) but that new system issues arose when states implemented various changes to restart renewals. To resolve or prevent disenrollment due to compliance problems, GAO reports that CMS worked with states to reinstate coverage in at least 35 states for enrollees who lost coverage erroneously. Additionally, some states voluntarily paused or were required by CMS to pause renewals until specific issues could be addressed. But the report observed that CMS has generally not required states to provide formal corrective action plans. Only in Nevada has CMS taken formal action to recoup federal funds, using enforcement authority established by the Consolidated Appropriations Act of 2023.
GAO reported that CMS’s thinking on future oversight was evolving in April 2024 but that the agency would likely be making changes to reflect lessons learned. CMS officials indicated that key lessons included the need for ongoing guidance and better monitoring, including engagement with states and stakeholders. For starters, CMS has drafted a compliance plan template that all states will be required to complete and return later this year. However, the template requires states to be transparent and self-attest to any deficiencies in their renewal processes, and we know from previous experiences that assurances from states may not fully identify all areas of noncompliance.
Given that CMS recognizes the value of feedback from non-state stakeholders, it will be important for Medicaid advocates to flag any areas where the state’s assessment differs from experiences in the field. But first stakeholders need to know what’s in their state’s compliance template, so it’s important for states and/or CMS to release the templates publicly.
As GAO notes, as the unwinding winds down, we must take stock of lessons learned to ensure that states hold system vendors accountable and competently administer federal renewal policies that are designed to balance state burden with beneficiary protections. So, there’s no rest for weary, friends – time to keep our sleeves rolled up to keep pressure on the states and CMS to fix the issues with Medicaid systems and renewal processes that have been exposed during unwinding.