Biden administration warns states as millions lose Medicaid

The criteria don’t reflect all potential challenges with states’ unwinding processes, the letters are only based on data reported by states in May and some states are missing data.

Still, CMS’ decision to make the letters available online represents a sharp about-face for an agency that has refused for months to single out any state it believes may be violating federal law — or even name specific criteria that would trigger stronger action against states — for fear of damaging its relationships with them.

“It looks like this is certainly part of the paper trail to move to more explicit and hopefully rigorous enforcement activities,” said Joan Alker, executive director and co-founder of Georgetown University’s Center for Children and Families. “It’s a positive sign that CMS is becoming more transparent about their enforcement activities.”

It also comes as the agency faces increasing pressure both from Congress and state-level advocates who are alarmed by the high rates of coverage losses and have called on the agency to take more forceful action for noncompliant states, like yanking federal funding.

More than 4 million people have had their Medicaid benefits terminated in the last four months, including nearly three-quarters who have lost coverage because of paperwork problems.

More than half of states were flagged by CMS as having high rates of people who lost their Medicaid benefits for procedural reasons, meaning the state was unable to make a determination about whether the person was or was not eligible for coverage.

CMS said the data indicate people may not be receiving renewal notices, are unable to understand them or are running into challenges submitting renewal forms — in short, eligible people may be losing coverage. The agency noted that federal regulations require it to continue to provide Medicaid to eligible individuals until they are found ineligible.

Sixteen states were flagged for having long call center wait times and high call abandonment rates, which CMS said are “impeding equitable access” to Medicaid coverage and may indicate potential noncompliance with federal requirements under the Social Security Act.

Sixteen states were also singled out because a large number of Medicaid applications based on income were not processed within the 45-day window required by regulation.

Jim Beardsworth, a spokesperson for Rhode Island’s Department of Human Services, said the state has a “rigorous quality control program” to review procedural terminations and has delayed ending coverage for families and children until the beginning of 2024.

He added that the state has plans to soon increase its call center support through a cross-agency partnership, and is working with federal officials to build additional capacity, and that the state had reduced its application processing times to meet federal guidelines as of Aug. 1.

The four other states flagged for all three criteria did not respond to requests for comment on Thursday, nor did CMS.

While much attention has been paid to Republican-led states that have prioritized removing ineligible people from their Medicaid rolls as quickly as possible and have, as a result, seen high rates of coverage losses, the letters suggest significant problems in blue states, which are by and large taking their time with the unwinding process.

New Mexico and Rhode Island, two of the states flagged for all three criteria, are run by Democrats. And four more blue states were identified as falling short on two of the criteria.

“They need to apply these criteria across the board, and they’re doing that, and that’s good,” Alker said.