Federal officials warn of ‘inappropriate’ Medicaid terminations; Maryland, other states told to review redetermination process

As Maryland continues the redetermination of 1.8 million residents’ eligibility for Medicaid, the federal government is requiring all states to suspend the disenrollment of some who would have normally been kicked off the low-income health care plan, and reinstate the enrollment of others.

At issue is a concern from the federal Centers for Medicare and Medicaid Services (CMS) that some people were inappropriately disenrolled, and the agency instructed states to evaluate their redetermination metrics to ensure as many qualified people can stay enrolled as possible.

For years, Medicaid enrollees were required to reapply every year to maintain coverage, but at the height of the COVID pandemic, reenrollments were automatic. That changed this year, as the federal global health emergency came to an end.

With the end of automatic reenrollment, the Maryland Health Department launched an informational campaign to remind Medicaid enrollees to update their contact information so they can be notified of when it’s time to reenroll. The state health department has been using a phased approach to reevaluate the eligibility of 1.8 million Marylanders on Medicaid in monthly cohorts.

But on August 30, CMS sent a letter to all 50 states and the District of Columbia, informing officials the agency has identified “systems and operational issues affecting multiple states, which may be resulting in eligible individuals being improperly disenrolled.”

The main issues are specifically with so-called ex-parte renewals, through which households may be automatically reenrolled based on information that the state already has, such as state wage data.

CMS explains in the letter:

“Specifically, we understand that some states are conducting ex parte renewals at the household level, without regard to differing eligibility statuses and income thresholds for individuals within the household.

“As a result, while a state may have sufficient information during the ex parte process to renew Medicaid or CHIP (Children’s Health Insurance Program) coverage for some individuals in a multi-member household, states are sending renewal forms requesting information for all household members, and, if the renewal form is not returned, states are disenrolling all individuals in the household, including those who should have been determined to be eligible through the ex parte process.”

CMS warns that those “actions violate federal renewal requirements and must be addressed immediately.”

In response to the letter, the Maryland Department of Health suspended Medicaid terminations for “procedural reasons” in August, and reinstated Medicaid coverage for “5,153 children under 19 who may have been impacted,” according to a written response from the department. Coverage was reinstated retroactively for those 5,000 kids, whether they were rolled off in May, June or July.

“Maryland’s goal throughout the Medicaid unwinding process is to ensure that all eligible individuals keep coverage, and that individuals no longer eligible for Medicaid are referred to other sources of low or no cost health coverage,” according to a written statement from the department.

Since April, the Maryland Department of Health has published monthly updates to track how many people retain or lose coverage throughout the process of “unwinding” COVID-era reenrollment rules.

The data typically includes the total number of Medicaid cases reevaluated each month, how many were continued, how many were terminated and the reason for termination, and how many were still being processed.

The quirk in data for the month of August makes it challenging to know just how many people will ultimately lose coverage; Maryland Matters previously reported that there had already been 100,000 people who lost Medicaid coverage between May and July..

As for the August data, there were 116,438 total Medicaid reevaluations. Out of that total, 93,405 people were able to continue Medicaid coverage. Another 9,324 cases are still pending review.

There were still some disenrollments in August due to eligibility reasons, according to state data.

There were 13,709 people disenrolled because they earned too much money, aged out of the program, or moved to Medicare, the federal health care plan for retirees over the age of 65.

But the number of people disenrolled for “procedural reasons” is left blank for August. Maryland retained Medicaid coverage for about 19,938 people who would have lost it in August if it weren’t for the federal government’s instructions to suspend procedural terminations.

>> TALK TO US: Maryland Matters wants to hear from people affected by changes in their health care coverage during the Medicaid unwinding process. If you would like to share your story, click here.

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