Centers for Medicare & Medicaid Respond to Eligibility System Issues

*The Centers for Medicare & Medicaid are requiring states to determine whether they have an eligibility systems issue that could cause people, especially children, to be disenrolled from Medicaid or the Children’s Health Insurance Program (CHIP) even if they are still eligible for coverage, and requiring them to immediately reinstate coverage.

Following the end of pandemic-era conditions, states across the country have resumed regular processes for renewing individuals’ Medicaid and CHIP enrollment. States are required by federal regulation to use information already available to them through existing reliable data sources (e.g., state wage data) to determine whether people are still eligible for Medicaid or CHIP. Auto-renewals make it easier for people to renew their Medicaid and CHIP coverage, helping to make sure individuals are not disenrolled due to red tape.

CMS believes that eligibility systems in a number of states are programmed incorrectly and are conducting automatic renewals at the family-level and not the individual-level, even though individuals in a family may have different eligibility requirements to qualify for Medicaid and CHIP. For example, children often have higher eligibility thresholds than their parents, making them more likely to be eligible for Medicaid or CHIP coverage even if their parents no longer qualify.

If a state’s eligibility system has the issue CMS has identified, the letter specifies that states must immediately take the following steps to avoid CMS taking action to bring states into compliance:

1. Pause procedural disenrollments for those individuals impacted,
2. Reinstate coverage for all affected individuals,
3. Implement one or more CMS-approved mitigation strategies to prevent continued inappropriate disenrollments, and
4. Fix state systems and processes to ensure renewals are conducted appropriately and in accordance with federal Medicaid requirements.

States must take these steps to protect coverage for eligible individuals, including children, in order to avoid additional federal oversight and action, such as CMS withholding a state’s enhanced federal funding or issuing a corrective action plan.

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