The Centers for Medicare & Medicaid Services (CMS) is releasing the Streamlining Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes (CMS-2421-F2) final rule. This final rule will make it easier for millions of eligible people to enroll in and retain their Medicaid, Children’s Health Insurance Program (CHIP), and Basic Health Program (BHP) coverage. The final rule responds to President Biden’s January 2021 and April 2022 Executive Orders to strengthen Medicaid and access to affordable, quality health coverage by simplifying the enrollment process and maintaining continuity of health coverage for underserved populations, including children, older individuals, and individuals who have a disability. With this final rule, CMS seeks to reduce coverage disruptions, further streamline Medicaid and CHIP eligibility and enrollment processes, reduce the administrative burden on states and people applying to and enrolled in Medicaid and CHIP programs, and increase enrollment and retention of eligible individuals.
Streamlining Application and Enrollment
The final regulation simplifies the process for eligible people to enroll in Medicaid coverage and keep their coverage, with the goal of preventing eligible people from experiencing gaps in Medicaid due to burdensome administrative processes or unnecessary paperwork. The rule makes the process of applying and enrolling easier by:
- Removing unnecessary barriers to enrollment. The rule prohibits states from requiring in-person interviews for individuals whose eligibility is based on being 65 or older or having blindness or disability. The rule also requires states to provide a reasonable period for applicants to return information and documentation when needed to determine eligibility.
- Streamlining the information that people have to submit. The rule clarifies that current regulations that require states to use electronic data they receive from other sources also apply to income and assets. This means that if information provided by an individual is reasonably compatible with information returned through an asset verification system, the state must determine eligibility based on that information and may not request further verification of assets from the individual.
- Ending burdensome requirements. The rule eliminates the requirement to apply for other benefits as a condition of Medicaid eligibility to ensure eligible individuals are not facing unnecessary administrative hurdles.
- Simplifying eligibility requirements. The rule allows states to use projected predictable medical expenses incurred by people living in the community for purposes of deducting these expenses from the applicant’s income when determining financial eligibility. Examples of these expenses include home care and prescription drugs.
Helping People Enroll and Stay Enrolled in Medicaid and CHIP Coverage
Keeping eligible individuals covered is an important component of ensuring equity and access to coverage. We know many individuals are eligible for coverage but fall through the cracks and lose coverage for a period of time. The following provisions are intended to reduce the number of eligible individuals who lose coverage and have to enroll again.
- For individuals whose eligibility is based on being 65 or older, having blindness, or having a disability, the final rule requires states to:
- Conduct renewals no more than once every 12 months with limited exceptions;
- Use prepopulated renewal forms;
- Provide a minimum 90-day reconsideration period after procedural termination for failure to return information needed to redetermine eligibility;
- Limit requests for information about a change in circumstances to information on the change; and
- Accept renewals through multiple modalities, including online, phone, mail, and in-person.
- Establishes a clear process to prevent termination of eligible individuals who should be transitioned between Medicaid and CHIP when their income changes or when the beneficiary appears to be eligible for the other program.
- Establishes specific guidelines for states to check available data prior to terminating eligibility when a beneficiary cannot be reached due to returned mail.
- Requires states to use certain types of available information to update addresses when individuals move within the state.
- Establishes a minimum timeframe (at least 15 days) for individuals to return information requested in connection with an initial application, as well as (at least 30 days) to provide documentation when it is needed to retain enrollment.
Removing Barriers to Children’s Coverage
Together, Medicaid and CHIP are vital programs for children, as well as pregnant and postpartum individuals, and this rule also focuses on removing barriers to CHIP enrollment that don’t apply to other insurance affordability programs:
- Allows CHIP beneficiaries to re-enroll without a lock-out period when a family fails to pay a CHIP premium.
- Removes the state option to require a waiting period prior to CHIP enrollment as a substitution for coverage prevention strategy.
- Prohibits annual and lifetime limits on benefits in CHIP.
In Medicaid, this rule establishes a specific pathway to eligibility for children with disabilities by finalizing an optional eligibility group for individuals under age 21 whose eligibility is excepted from use of the MAGI-based methodology (e.g., those living with a disability) or whose MAGI-based eligibility is not otherwise described, and for which such coverage is not already permitted in regulation.
Enhancing Integrity of Medicaid and CHIP
Updating outdated recordkeeping regulations for state Medicaid and CHIP agencies is critical to enabling appropriate oversight and identifying errors in state policies and operations. These rules were last updated in 1986, resulting in inconsistent practices across states and contributing to improper payments. Insufficient documentation is a leading cause of eligibility-related improper payments identified through the Payment Error Rate Measurement (PERM) program and other audits. To enhance the integrity of Medicaid and CHIP, this rule:
- Clearly defines the types of eligibility determination information/documentation to be maintained.
- Requires retention of Medicaid/CHIP records and case documentation for at least three years unless the individual has an estate subject to recoveries.
- Removes references to outdated technology and requires storage of records in electronic format.
- Requires states to make records available within 30 days upon request unless there are administrative or emergency circumstances beyond the state agency’s control.
- Establishes minimum standards for states to complete a timely determination of beneficiary eligibility at renewal and following a change in circumstances. These standards take into account delays that may occur when individuals return needed information at the end of the eligibility period.
For more information, visit https://www.federalregister.gov/documents/2024/04/02/2024-06566/medicaid-program-streamlining-the-medicaid-childrens-health-insurance-program-and-basic-health.
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