Medicaid Mistake: Half a Million People, Including Children, Inadvertently Dropped from Coverage

The Centers for Medicare & Medicaid Services stated Thursday that half a million people, including a considerable number of children, were wrongfully booted off Medicaid due to state system failures.

According to the FDA, 29 states and Washington, D.C. were incorrectly considering Medicaid eligibility at the family level rather than on an individual basis. This implies that thousands of individuals, including children, were declared ineligible for the low-income insurance program when they should have been reenrolled automatically.

CMS notified states of the problem late last month and instructed them to immediately reinstate coverage for everyone who had lost their insurance and halt disenrollments for anyone else who may have been affected as they worked to resolve the underlying issue — or risk losing federal money.

“By ensuring that the systems glitch in states across the country is fixed, we will help prevent more families and children from being disenrolled simply because of red tape,” CMS Administrator Chiquita Brooks-LaSure told reporters.

The statement by the government comes as states reassess Medicaid eligibility for the first time in three years. During the epidemic, states were prohibited from removing anybody off Medicaid, even if they were no longer eligible, as a condition of obtaining more federal funds, but that prohibition was lifted early this year.

According to KFF, more than 7.1 million people have been removed off Medicaid since the process began in April.

Several Medicaid directors from impacted states stated they were unaware they were in violation of federal standards until CMS notified them in August. They hoped the federal government had informed them when they were formulating renewal plans in January.

“That would have arguably been a great interval during which CMS could have really pointed that out to states,” said Kate McEvoy, executive director of the National Association of Medicaid Directors.

Medicaid Eligibility Error Leaves Many Ineligible Despite Qualifying Incomes

As a result of the error, households have been classified as ineligible for Medicaid coverage even though a child or other household member should still be eligible. Adults in most states that have extended Medicaid are eligible if their income is up to 138 percent of the federal poverty threshold, while children can still be eligible if their income is up to 200 or 300 percent, depending on where they reside.

CMS-identified system failures resulted in the loss of coverage for children in at least 18 states and Washington, D.C., as well as adult household members with varying eligibility statuses in another 22 states. Some states and territories have both problems, whereas 23 states and territories had neither.

CMS’s deputy administrator and head of the Center for Medicaid & CHIP Services, Daniel Tsai, said the agency doesn’t know how many of the 500,000 who lost coverage were children, but expects them to make up a “significant portion.”

Nevada and Pennsylvania reported the highest coverage losses, with upwards of 100,000 persons affected in each state, among the states that were able to estimate the number of affected individuals. Nevada health officials announced on Friday that they had reinstated coverage for approximately 114,000 people who had lost coverage due to the problem, while Pennsylvania is working on next steps for reinstatement and has implemented a manual change to process cases at the individual level.

Pennsylvania’s Approved Unwinding Strategy: Household-Level Eligibility Determination

The Pennsylvania Department of Human Services said that the state has been “operating under a CMS-approved unwinding strategy plan, which included approval of the eligibility determination at the household level, since April.”

In West Virginia, it took substantial labor — working with system suppliers and eligibility employees — to even determine if there was an issue, according to Cindy Beane, West Virginia’s Medicaid director and board president of the National Association of Medicaid Directors.

“If you had asked me before I got that letter, are we in complete compliance, I would have said yes,” said Beane, whose state removed almost 5,500 children in error due to a technical glitch. “It was never clear whether this was against the rule or the regulation, because if it was, we would have done things differently a long time ago.”

Tsai stated that CMS would meet with each of the 29 states as well as Washington, D.C., to develop a repair and bring them into conformity with federal regulations. The government estimates that some states will have a solution in place this month, ahead of the next round of disenrollments, while others may require several months to rectify the issue.

The administration has offered states numerous options for dealing with coverage losses while they establish remedies, including as temporarily halting renewals for multimember households or postponing scheduled renewals for impacted people for a year. States may refuse to process renewals for impacted persons until the issue is remedied.

Source: Politico