When asked to pen an article on the subject of the effects of “unwinding” of the special rules put in place for Medicaid eligibility during the COVID-19 public health emergency (PHE), it seemed like a simple, straightforward task . However, I now see that nothing related to Medicaid post-PHE is simple and straightforward. I’ll thus endeavor to dive into the chaos of the state of the Medicaid system post-PHE. I’ll assume that the reader has a basic understanding of Medicaid coverage for the aged and disabled and how that system handles income, assets and transfers of assets.
What Are We Unwinding?
The Medicaid program is a Frankensteinian creation that muddles together federal and state statutes and regulations, borrows parts of the rules for Supplemental Security Income and then hurls the entire mess at 56 separate agencies, many of which are headed by political appointees who cycle through leadership. Presidents, Congresses, Governors, State Legislatures and agency heads at the federal, state and local level can all have a direct effect on Medicaid policy. As the Medicaid system begins unwinding the rules that were put in place during the PHE, the disparities and discrepancies that exist among the states as a result of this mash up become clear.
Under the Families First Coronavirus Response Act, (the Act) passed by Congress in March 2020, states became eligible for increased federal funding for their Medicaid programs, provided they implemented “maintenance of effort” protections. The two main requirements were a ban on implementing any new, more restrictive requirements and a continuous enrollment requirement, prohibiting states from disenrolling anyone who was receiving Medicaid as of Jan. 1, 2020.1
Beyond a pause on disenrollments, states requested waivers and used their interpretations of the Act to modify how they process applications and determine eligibility. Eighteen states accepted self attestation for proof of eligibility criteria with the exception of citizenship, dramatically lowering the paperwork necessary to receive benefits. Many accepted self-attestation for income, while other states, like Washington, accepted self attestation for all eligibility criteria.2 This allowed individuals to become eligible for Medicaid without providing the state with any written verification of assets or income. Nine states relaxed their eligibility criteria, allowing individuals to qualify with lower levels of disability, treating COVID-19 as a covered disability or allowing Medicaid recipients to accumulate excess income during the PHE without the requirement to spend the funds by the end of the month.3
Much of the discussion surrounding the PHE rules and unwinding has centered around modified adjusted gross income (MAGI) Medicaid coverage and coverage under the Children’s Health Insurance Plan. These two programs target low income individuals in the community and typically are tied to eligibility for Supplemental Security Income. Most elder law attorneys are dealing with non-MAGI Medicaid recipients who are receiving Medicaid benefits because of age or disability, including Medicaid skilled nursing facility coverage (also known as long-term services and supports (LTSS)) or home and community-based services (HCBS) for this population. These programs have slightly different eligibility requirements and possible complicating factors such as divestment penalty. Waiting lists for HCBS services don’t seem to have been affected significantly by the PHE rules, staying fairly steady from 2019 through 2021.4
Because of the ban on disenrollments, states haven’t been imposing divestment penalties on transfers made by individuals receiving HCBS or LTSS from Medicaid.5 The Center for Medicare & Medicaid Services (CMS) has clearly stated that any recoupment by the state of benefits paid during the PHE won’t be allowed.6
The Basic Problem
With each state having its own waivers in place and its own system of processing renewals, each state will also have its own unique issues to manage during the unwinding process. As of May 22, 2023, three states hadn’t yet made their unwinding plans public.7
States are using a variety of methods to communicate with Medicaid recipients. By using colorful envelopes for mailings, holding webinars, texting individuals and using service providers to help spread the word, states are trying to ensure that enrollees know that they need to make certain their contact information is up to date with the Medicaid agency.8 The U.S. Department of Health and Human Services has estimated that over half of the individuals who lose Medicaid coverage during the unwinding process will be eligible individuals losing coverage due to “procedural disenrollments.” In most cases, the individual either doesn’t receive the renewal notice, doesn’t understand it or requires assistance to complete it.9
While many states are making the renewal process more streamlined via online portals and other measures, these tools aren’t likely as accessible to the aging and disabled population. Residents in long-term care (LTC) facilities may have their renewal forms sent to family members or to old addresses. Attorneys should try to ensure that all clients and their caregivers know to be looking for these forms in the event that they aren’t sent to the attorney’s office. If possible, check the address of record for clients through a state portal.
The majority of states are prioritizing renewals, rather than using the straight “month of application” approach. However, the methodology for this prioritization isn’t clear, because most report that they won’t prioritize those individuals they believe to be ineligible or who haven’t responded to communications from the agency during the PHE.10
Multiplying the Backlog
CMS provided states with a template to report the status of their unwinding process along with data on their ongoing case processing metrics.11 The first report required was a baseline of numbers from pre-pandemic through the beginning of the unwinding process. These baseline reports were due by the eighth day of the calendar month in which the unwinding process begins.12 According to CMS, all states should have begun unwinding by April 2023.13 Georgetown University has begun compiling these reports. However, 32 states haven’t yet released their baseline data, and only four states have released subsequent reports.14
The template provided by CMS includes statistics on applications pending, renewals completed and fair hearings that have been pending longer than 90 days.15 Reports made publicly available by some states don’t necessarily show the data requested on the report. For example, instead of releasing its CMS reports, Iowa has created a public dashboard that shows its Medicaid enrollment numbers, the number of total applications and a total number of cases for each county.16 Minnesota shows the renewals processed and cases by renewal date.17 When looking at these dashboards, and others, in comparison to the numbers requested by CMS, it’s notable that in many of the states using these dashboards in lieu of the CMS template, the dashboards don’t reflect the number of pending applications or the number of overdue fair hearings.18 These are the metrics that would indicate whether the agency staff are keeping up with the workload.
Of the states that have released data, a comparison of the reports from April 2023 shows which states have their process under control and which don’t. To put these numbers in perspective, a comparison of the number of new applications filed relative to the number of total Medicaid enrollees in a state gives an indicator of the overall workload of the state agency. In April 2023, California received new applications equivalent to 1.56% of its total Medicaid enrollment, while Texas was processing applications representing 4.5% of the total enrollment number. See “Which Jurisdictions Have Their Processes Under Control?” this page.
Eight states reported both the number of renewals due in April 2023 as well as the number of those renewals that weren’t yet completed as of the end of the month. California reported 55 incomplete renewals out of over 1 million due in April. At the other end of the scale, Indiana reported 90% of its renewals for the month of April were still incomplete at the end of the month. See “Percentage of Uncompleted Renewals,” p. 29.
Some of these numbers likely result from systematic issues in a state’s Medicaid processing system. For example, the CMS report asks for the number of fair hearing requests that have been pending for more than 90 days. Without any historical background for these numbers, a comparison of the hearings backlog to the renewal completion rate shows a correlation between the two. Indiana, the state with the second highest number of overdue fair hearings, also had the highest percentage of incomplete renewals. Kentucky, the state with the highest number of overdue fair hearings, didn’t report the total number of renewals that were due in April or the number of incomplete renewals.
States have reported that as much as 20% of their workforce is comprised of newly hired staff who may have never been through a renewal process.19 Out of the 25 states that responded to a recent Kaiser Family Foundation (KFF) survey, seven states have a greater than 20% staff vacancy rate for their eligibility staff, and five states had more than 20% of their call center positions unfilled.20 Because Indiana and Kentucky didn’t respond to the KFF survey and none of the states with large vacancy rates submitted reports to CMS, it’s impossible to draw any definitive conclusion from this data. The numbers bear watching, however, to see if the increased workload resulting from the unwinding does lead to greater backlogs in the system as a whole. When asked how they would address staffing shortages, 30 states said they would be approving additional overtime, while 26 states plan to hire new staff, and 29 states will be using contractors or temporary workers to fill the gap.21 Rather than putting the cart before the horse, this is like trying to chase down the horse that’s left the barn. New staff and contract or temporary workers can help with some tasks, but ultimate decisions over terminations will have to be made by experienced staff after a review of the case file.
State Residence Matters
As a part of its unwinding process, California has sought approval to continue renewing eligibility for non-MAGI recipients based on the existing information in the state system.22 This would mean automatic renewals for most non-MAGI cases. On Jan. 1, 2024, California will become the only state to eliminate its asset test for non-MAGI eligibility for Medicaid.23
Wisconsin has been one of the few states to make their divestment policy for LTC services during unwinding clear. Any divestments reported during the PHE or during the unwinding process will have penalties imposed beginning with the individual’s renewal date.24 Kansas is taking a similar position.25 Although nothing has been placed in writing, Indiana officials have said that they’ll impose penalty periods for gifts made during the PHE as if the penalty period began as it should have absent the PHE. So if a gift was made by an individual in January 2021, which should have resulted in a penalty period through October 2023, assuming it was all properly reported to Medicaid, Indiana would impose the remaining penalty period from April 1, 2023 through October 2023. South Carolina has included provisions in its Medicaid Policies and Procedures Manual to clarify that it will treat transfers made during the PHE in the same manner as Indiana. The penalty period will be calculated and then treated as if it began in the month following the transfer, as it would under normal rules. Any penalty months that fall after the individual’s post-PHE renewal will be imposed.26
In looking for clarification from CMS on how transfers during the PHE should be penalized, multiple CMS state call transcripts show the question being asked and no clear answer being given.27 On several occasions, CMS clarified the treatment of transfers made by individuals who applied for Medicaid LTC services during the PHE. But there’s been no clarification on how transfers that couldn’t be penalized during the PHE should be treated during the unwinding. It’s times like this unwinding of the temporary PHE rules when the differences among how the states administer their Medicaid programs becomes apparent. In the absence of any clear guidance from CMS, states will create their own policies, which are often unequal.
Amplification of Problems
The unwinding process of the PHE rules will amplify problems that have infected the Medicaid system for years. Understaffing, delays, inconsistencies and unclear rules are nothing new to the system. They’ve been a source of complaints from elder law attorneys since the concept of elder law arose. The PHE unwinding is just the most dramatic example, garnering news coverage, but unfortunately not getting the attention of the policymakers who can solve the issue.
Endnotes
1. Jessica Schubel and Jennifer Wagner, “State Medicaid Changes Can Improve Access to Coverage,” Center on Budget and Policy Priorities (Sept. 9, 2020), www.cbpp.org/sites/default/files/atoms/files/5-27-20health.pdf.
2. “Medicaid Emergency Authority Tracker: Approved State Actions to Address COVID-19,” Kaiser Family Foundation (KFF), www.kff.org/coronavirus-covid-19/issue-brief/medicaid-emergency-authority-tracker-approved-state-actions-to-address-covid-19/.
3. Ibid.
4. Alice Burns, Molly O’Malley Watts and Meghana Ammula, KFF, “A Look at Waiting Lists for Home and Community-Based Services from 2016 to 2021,” www.kff.org/medicaid/issue-brief/a-look-at-waiting-lists-for-home-and-community-based-services-from-2016-to-2021/.
5. State of Wisconsin, Department of Health Services, Division of Medicaid Services, DMS Operations Memo. 23-08, www.dhs.wisconsin.gov/dms/memos/ops/dms-ops-2023-08.pdf.
6. Center for Medicare & Medicaid Services, COVID-19 “Frequently Asked Questions (FAQs) for State Medicaid and Children’s Health Insurance Program (CHIP) Agencies,” at p. 27, www.medicaid.gov/state-resource-center/downloads/covid-19-faqs.pdf.
7. Georgetown University Health Policy Institute Center for Children and Families, “50-State Unwinding Tracker,” https://ccf.georgetown.edu/2023/04/01/state-unwinding-tracker/.
8. Princeton University, “State Health and Value Strategies, States of Unwinding” (April 14, 2023), www.shvs.org/states-of-unwinding-resources/states-of-unwinding-april-14-2023/.
9. Tricia Brooks, “Unwinding Wednesday #26: As the Medicaid Continuous Coverage Protection Ends This Week, It’s Important to Understand Procedural Disenrollments and Why They Occur” (March 29, 2023), https://ccf.georgetown.edu/2023/03/29/unwinding-wednesday-26-as-the-medicaid-continuous-coverage-protection-ends-this-week-its-important-to-understand-procedural-disenrollments-and-why-they-occur/.
10. KFF, “Medicaid and CHIP Eligibility, Enrollment, and Renewal Policies as States Prepare for the Unwinding of the Pandemic-Era Continuous Enrollment Provisions,” https://files.kff.org/attachment/REPORT-Medicaid-and-CHIP-Eligibility-Enrollment-and-Renewal-Policies-as-States-Prepare-for-the-Unwinding-of-the-Pandemic-Era-Continuous-Enrollment-Provision.pdf.
11. “Medicaid and Children’s Health Insurance Program Eligibility and Enrollment Data Specifications for Reporting During Unwinding” (December 2022), www.medicaid.gov/resources-for-states/downloads/unwinding-data-specifications.pdf.
12. Ibid., at p. 3.
13. CMS, “Anticipated 2023 State Timelines for Initiating Unwinding-Related Renewals,” www.medicaid.gov/resources-for-states/downloads/ant-2023-time-init-unwin-reltd-ren-02242023.pdf.
14. Georgetown University’s Center for Children and Families 50-State Unwinding Tracker, https://docs.google.com/spreadsheets/d/1tOxmngYs7jDPTGltp-diD1SGvHvZVJOm3G2YuUq0btg/edit#gid=0).
15. Supra note 11.
16. Iowa Department of Health and Human Services, Medicaid and COVID unwind, https://hhs.iowa.gov/medicaid-covid-unwind.
17. Minnesota Department of Human Services, Renewal Dashboard, https://mn.gov/dhs/medicaid-matters/renewal-dashboard/.
18. See, for example, Washington State Health Care Authority, www.hca.wa.gov/assets/free-or-low-cost/apple-health-phe-unwind-enrollment-data.pdf, Virginia Department of Medical Assistance, www.dmas.virginia.gov/data/return-to-normal-enrollment/eligibility-redetermination-tracker/, Idaho Department of Health and Welfare, https://healthandwelfare.idaho.gov/medicaidprotection.
19. Farah Erzouki, “States Must Act to Preserve Medicaid Coverage as End of Continuous Coverage Requirement Nears, Centers on Budget and Policy Priorities” (Feb. 26, 2023), at p. 6, www.cbpp.org/sites/default/files/1-17-23health.pdf.
20. Supra note 10.
21. Ibid.
22. “New DHCS Federal Request on Asset Flexibility During Continuous Coverage Unwinding, California Department of Health Care Services,” www.dhcs.ca.gov/Pages/031723StakeholderUpdate.aspx.
23. California Department of Health Care Services, “Asset Limit Changes for Non-MAGI Medi-Cal Eligibility and Enrollment Plan,” www.dhcs.ca.gov/services/medi-cal/eligibility/Documents/Eligibility-and-Enrollment-Plan-Asset-Test-Changes-for-Non-MAGI-MC.pdf.
24. State of Wisconsin, Department of Health Services, Division of Medicaid Services, “Ending of Temporary Health Care Policies Related to COVID-19,” DMS Operations Memo. 23-08, www.dhs.wisconsin.gov/dms/memos/ops/dms-ops-2023-08.pdf.
26. South Carolina Department Of Health And Human Services, Medicaid Policy And Procedures Manual, Chapter 702, 702.02.03B Resource Verification, at p. 10.
27. CMS, COVID-19 Medicaid and CHIP All State Call (Nov. 5, 2020), at p. 13, www.medicaid.gov/resources-for-states/downloads/covid19transcript11052020.pdf; CMS, COVID-19 Medicaid and CHIP All State Call (May 19, 2020), at p. 12, www.medicaid.gov/resources-for-states/downloads/covid19transcript05192020.pdf; CMS, COVID-19 Medicaid and CHIP All State Call (Dec. 8, 2020), at p. 111, www.medicaid.gov/resources-for-states/downloads/covid19transcript12082020.pdf.