Proposed rule may reduce Medicaid beneficiary churn, simplify enrollment process

By Robert Pittman

A game-changing proposal for Medicaid beneficiaries is on the horizon – interrupting what’s been a stagnant period for the development and improvement of the program’s enrollment process. While those of us with commercial healthcare insurance provided by a company sign up only once a year, Medicaid beneficiaries often must recertify or reenroll multiple times each year, depending on the rules of the state in which they reside–resulting in a tedious and cumbersome enrollment process that oftentimes can produce mistakes and unnecessary churn.

A new rule proposed by the Biden-Harris Administration seeks to streamline the process for Medicaid beneficiaries by limiting renewals to once a year across the board, no matter the state in which an individual lives. (This change would also apply to the Children’s Health Insurance Program and Basic Health Programs.)

“This rule, if finalized, would standardize commonsense eligibility and enrollment policies, such as limiting renewals to once every 12 months, allowing applicants 30 days to respond to information requests, requiring prepopulated renewal forms, and establishing clear, consistent renewal processes across states,” according to a news release from the U.S. Department of Health and Human Services.

By creating this consistency, building a uniform timeline across all states and utilizing existing data, clerical errors resulting in inappropriate disenrollment can be mitigated, thus allowing disadvantaged populations to continue receiving these important health benefits.

Updating the recertification, renewal process

Today, member churn occurs for two primary reasons. The individual is:

• no longer eligible, meaning the process is working and those who aren't eligible are removed from Medicaid; or
• denied coverage because of clerical, administrative or data errors.

Requiring Medicaid members to recertify more than once a year has resulted in a difficult and often cumbersome process for beneficiaries. Eligible members are often purged from the rolls unnecessarily and when this happens, the individual must reenroll, which is time-consuming and fraught with the potential for considerable errors. “Medicaid redeterminations,” according to the Commonwealth Fund, “have always been a source of coverage losses among eligible people because of paperwork barriers.”

The current practice generally creates a negative impact on beneficiaries by lessening access to critical healthcare services, especially preventive care, and pushing the population to an emergency setting to address health-related issues that could have been mitigated at a reduced cost.

“The proposed rule, if finalized, would streamline the application process for these programs by removing unnecessary administrative hurdles for people who do not have – but are eligible for – Medicaid, CHIP, or BHP coverage,” the U.S. Department of Health and Human Services (HHS) news release states. “These individuals are often eligible for Medicaid, but are not yet enrolled or have trouble staying enrolled because of systemic barriers, potentially missing life-saving coverage and care because of burdensome processes.”

Potential coverage gap

As part of the process to enact this rule, there is an open comment period, which ends on November 7. When the comment period concludes, HHS will review the feedback received from stakeholders, including State Medicaid agencies, and potentially incorporate suggested modifications into the final rule, which is expected to be enacted sometime in 2023.

Because of the COVID pandemic, millions of people were enrolled in Medicaid for the first time as part of the Public Health Emergency (PHE). While the PHE temporarily expanded the number of people eligible for Medicaid, it is expected to expire in January 2023—resulting in millions of beneficiaries being subject to state redetermination efforts. Nearly 10 million low-income adults and children were enrolled in Medicaid during the COVID-19 pandemic through the PHE program. When PHE funding is eliminated, it will trigger mass recertification of nearly all 80.5 million people enrolled in Medicaid. (Currently, the PHE stops Medicaid enrollment from decreasing.)

In effect, millions of people could lose coverage between the end of the PHE funding and the implementation of this new rule. “CMS guidance gives states 12 months after PHE expiration to return to normal income eligibility, though states could do so more rapidly,” according to a recent Urban Institute report titled “What Will Happen to Unprecedented High Medicaid Enrollment after the Public Health Emergency?” “If all states process their redeterminations within 6 months, 15 million people could lose coverage during that period.”

While many people will be removed from Medicaid for the right reasons—they are now employed and receiving company-sponsored benefits—many are also expected to lose coverage unintentionally because of rushed processes, bad data or errors in the enrollment system.

Understanding the impact

For Medicaid members, implementation of this proposed rule will make the enrollment process easier and less difficult to recertify when necessary.

For healthcare organizations that provide services to Medicaid beneficiaries, the introduction of this rule and its implementation is expected to decrease inappropriate churn of Medicaid beneficiaries caused by the existing redetermination process. Consistent coverage and care can help reduce healthcare service fluctuations and help ensure individuals receive uninterrupted services. In addition, dependable, ongoing access to high-quality care services can help improve health outcomes and lower costs for taxpayers.

Robert Pittman is Senior Vice President of Government Affairs at Modivcare.