'It's finally here': States have long sought Medicaid eligibility redetermination deadline

States have been preparing for a while for when they must start redetermining the eligibility of Medicaid recipients. Now, a deadline is in sight: April 1.

A must-pass omnibus spending package included a requirement for states to start eligibility redeterminations by April 1. The concrete deadline—combined with a gradual phase down of federal funding—means states can reach out to beneficiaries to detail the impending change, experts say. 

“The more lead time states have, the better because it enables them to really plan out how they will phase this process,” said Jennifer Tolbert, associate director of the program on Medicaid and the uninsured at the Kaiser Family Foundation, in an interview with Fierce Healthcare. “You can’t get too far ahead and tell people you need to go through [the] renewal process when that might not happen for nine months or even a year.”

States can also now move to put out firm dates and timelines to beneficiaries on their eligibility status. 

“Everyone has a clear sense of what is going to happen and what timeline and what action it is going to take,” said Jack Rollins, director of policy for the National Association of Medicaid Directors (NAMD), in an interview with Fierce Healthcare. 

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Most states have been moving for months to prepare for the redeterminations, which are expected to start at the end of the COVID-19 public health emergency (PHE). 

At the start of the pandemic, Congress boosted the federal matching rate for state Medicaid payments. However, states had to agree to not drop anyone off the Medicaid rolls for the duration of the PHE, which currently goes through January. States have been calling for at least a 120-day notice for the end of the PHE to prep for the process. 

While states didn't get a 120-day notice, they now have 90 days for the beginning of a process that could stretch for a whole year.

The omnibus includes several other changes, chief among them a phase-down of the 6.2% boost to the Medicaid matching rate. 

Currently, the boosted rate goes away at the end of the quarter in which the PHE ends. However, instead of a sharp drop-off, there will be a gradual phase-down. From April through June of 2023, the rate will be 5% and then gradually decline to 1.5% by the end of Dec. 2023. 

“The phase down provides a glide path for states and avoids a fiscal cliff,” said Tricia Brooks, a research professor with Georgetown University’s Center for Children and Families, in an interview with Fierce.

There are some requirements for a state to qualify for the gradual phase-down, including monthly reports on the unwinding. A state also cannot disenroll someone on the sole basis of returned mail. Officials must take other steps to follow up with them, including reaching out via email. 

“The key for states is really to focus and try and reduce the number of people who lose coverage and remain eligible who lose coverage for procedural reasons,” said Tolbert. “Either because they didn’t receive a notice and couldn’t respond to the state’s request.”

Having financial certainty could also help give states an opportunity to not wrap up redeterminations quickly. While most states are planning for at least a year to finish redeterminations, some legislatures and governors are pushing for a shorter timeframe.

But the gradual funding phase down “may encourage states that were planning to move quickly to reconsider their timelines,” said Brooks. 

The process itself will be a massive undertaking that could impact a lot of lives. An August analysis from the Department of Health and Human Services found that approximately 15 million people could lose their Medicaid coverage during the redetermination process, although most would go to other coverage sources such as the Affordable Care Act’s exchanges or employer-sponsored insurance. 

Pushing to finish the redeterminations soon could be a strain on local staff, which already have major challenges.

“This will be a very heavy lift for states at a time when almost all states have notable eligibility staff vacancy rates,” said Brooks. “NAMD recently reported that one in four states have a vacancy rate of more than 20 percent. So, I do worry that this will not go well in states that have staff or system challenges.”