The Biden administration proposed new regulations aimed at overhauling the application and renewal processes for Medicaid and other government programs, including ensuring a beneficiary's returned mail doesn’t automatically lead to coverage denials. 

The Centers for Medicare & Medicaid Services (CMS) released a proposed rule that makes changes to the enrollment process for Medicaid, Children’s Health Insurance Program (CHIP) and Basic Health Programs. The changes include new requirements for states, which are busy preparing for the unwinding of the COVID-19 public health emergency, and with it a continuous coverage requirement in Medicaid. 

“This proposed rule will ensure that these individuals and families, often from underserved communities, can access the health care and coverage to which they are entitled—a foundational principle of health equity,” said CMS Administrator Chiquita Brooks-LaSure in a statement. “In addition, this proposed rule will help more people pay their Medicare premiums by making it easier for them to enroll in the Medicare Savings Programs.”

The agency is proposing to limit renewals once every 12 months as well as to allow applicants 30 days to respond to any requests for information. States also must create a clear and consistent process for how beneficiaries can renew their coverage. 

In addition, there are specific guidelines by which a state must abide before they drop off a beneficiary due to returned mail. 

“Many of the individuals we serve in Medicaid and CHIP move frequently and lose coverage because they do not get the coverage [notice] in the mail,” said Daniel Tsai, the director of Medicaid and CHIP, on a call with reporters Wednesday.

Other proposed changes include:

  • Ensure automatic enrollment with limited exceptions into Qualified Medicare Beneficiary group.
  • Establish a clear process to prevent the termination of an eligible beneficiary that should transition from Medicaid and CHIP if their income changes or if a beneficiary is eligible for another program.
  • Allow CHIP beneficiaries to re-enroll or still be enrolled without any lockout period if they fail to pay premiums and remove waiting periods and lifetime or annual benefits in CHIP.
  • Create standardized time frames for when renewals must be completed. The regulation clearly “defines the types of eligible determination information and documentation to be maintained by states,” according to a fact sheet on the rule. States also have specific timelines to complete Medicaid and CHIP renewals.
  • New guidelines to ensure that if a beneficiary returns their information late, they are still properly evaluated for “other eligibility groups prior to being terminated,” the agency said.

The proposed rule could bring new requirements for states right as they must prepare for the end of the COVID-19 PHE. At the start of the pandemic, Congress increased the federal matching rate for Medicaid payments but only if a state agreed to not drop anyone off Medicaid for the duration of the PHE. 

The Department of Health and Human Services is expected to renew the PHE again this October for another 90 days. 

States in the meantime have been creating new processes and outreach efforts to alert Medicaid beneficiaries that they could lose coverage and have to redetermine their eligibility.

Senior CMS officials told reporters Wednesday that it will take some time for the rule to finalize things, but the PHE unwinding could help with implementation.

“We think a lot of the tactics will align well with this rule,” one official said.