On Thursday, the Centers for Medicare & Medicaid Services reported that approximately 500,000 individuals, including a considerable amount of children, were mistakenly removed from Medicaid due to errors in state systems.

The agency reported that twenty-nine states and Washington, D.C. were mistakenly assessing eligibility for Medicaid based on family status instead of individuals. As a result, many individuals, including children, were wrongly excluded from the low-income insurance program when they should have been automatically reenrolled.

CMS

Notified the affected states of the issue.

At the end of the previous month, it was mandated that they reinstate coverage promptly for those who had lost their insurance. They were also instructed to temporarily halt disenrollments for anyone else who may be impacted until they resolve the root problem. Failure to comply puts them at risk of losing federal funding.

Chiquita Brooks-LaSure, the CMS Administrator, stated to reporters that by addressing the technical issue in various states, we can prevent additional families and children from being removed due to bureaucratic obstacles.

The agency has made an announcement regarding the review of Medicaid eligibility by states for the first time in three years. Due to the pandemic, states were not allowed to terminate anyone from Medicaid, even if they were no longer eligible, in order to receive increased federal funding. However, this requirement ended earlier this year.

According to KFF, over 7.1 million individuals have been disenrolled from Medicaid since the unwinding process began in April.

Multiple Medicaid administrators from impacted states stated that they were not informed of their failure to comply with federal regulations until CMS notified them in August. They expressed a desire for the federal agency to have informed them earlier, in January, when they were creating renewal strategies.

Kate McEvoy, the executive director of the National Association of Medicaid Directors, stated that it could have been a beneficial time for CMS to emphasize this to states.

Due to the error, certain families have been wrongly marked as ineligible for Medicaid benefits, even if a child or other member of the household may still qualify on an individual basis. In most states where Medicaid has been expanded, adults can qualify for the program if their income is up to 138 percent of the federal poverty level, while children may still be eligible at up to 200 or 300 percent, depending on their location.

CMS found that mistakes in the system resulted in children losing healthcare coverage in 18 states and Washington, D.C. Additionally, adults in 22 states lost coverage due to discrepancies in their eligibility status. Some states experienced both issues, while 23 states and territories did not have any problems with coverage.

Daniel Tsai, the deputy administrator and director of the Center for Medicaid & CHIP Services at CMS, stated that the agency is unsure of the exact number of children among the 500,000 individuals who lost coverage. However, it is expected that they make up a significant portion of this group.

Nevada and Pennsylvania have reported the largest decreases in health insurance coverage, affecting over 100,000 people in each state. Nevada has already restored coverage for approximately 114,000 individuals who were affected by the issue, while Pennsylvania is still determining the exact number of individuals affected and is taking steps to restore coverage at the individual level.

According to a representative from the Pennsylvania Department of Human Services, the state has been following a CMS-approved plan to gradually unwind their operations, which was approved in April and includes determining eligibility at the household level.

Cindy Beane, the Medicaid director of West Virginia and the board president of the National Association of Medicaid Directors, said that it required a lot of effort to determine if there were any issues in their systems. This involved collaborating with their vendors and eligibility workers.

According to Beane, he would have confirmed that we were in full compliance if you had asked him before he received the letter. However, due to a systems issue, approximately 5,500 children were mistakenly removed by his state. He also stated that it was never explicitly stated that this was a violation of the rules or regulations. If it had been, they would have made changes a long time ago.

Tsai stated that CMS will hold meetings with all 29 states and Washington, D.C. in order to address and ensure compliance with federal regulations. The agency expects that certain states will have a solution implemented by the end of this month, before the next wave of disenrollments, but others may require more time to resolve the issue.

The organization has provided states with various methods to handle the issue of coverage reduction while they work on finding solutions. These include pausing renewals for households with multiple members or postponing renewals for affected individuals by 12 months. States cannot start renewing affected individuals until the matter has been resolved.