Medicaid: Federal Oversight of State Eligibility Redeterminations Should Reflect Lessons Learned after COVID-19
Fast Facts
States must determine whether everyone on their Medicaid rolls is still eligible for the program each year. To do so, states should check paperwork, verify income data, and more.
Full redeterminations were paused during the pandemic but resumed in April 2023. Millions are expected to lose coverage, including some eligible people.
Our Q&A reports that federal Medicaid officials found many states didn't do them properly after the pandemic—and sometimes before. For example, over 400,000 eligible people lost coverage because states assessed household, not individual, eligibility.
Our recommendation is to improve federal oversight of the process.
Highlights
What GAO Found
During the COVID-19 public health emergency, Congress provided temporary enhanced federal funding to states to keep enrollees continuously enrolled in Medicaid. Beginning in April 2023, states resumed full eligibility redeterminations, including terminating enrollment for people either determined ineligible or who did not submit all the information required. This process is referred to as "unwinding." States had flexibility in their pace of unwinding and many states were still in the process as of May 2024.
During unwinding, the Centers for Medicare & Medicaid Services (CMS) found compliance issues with federal redetermination requirements in almost all states, including with long-standing requirements.
Examples of State Noncompliance with Federal Eligibility Redetermination Requirements Identified by CMS During Medicaid Unwinding
| Compliance issue | Number of states | Implications |
|---|---|---|
| Not conducting ex parte reviews at individual level | 29 | According to CMS, about 420,000 eligible individuals, including children, lost Medicaid coverage because states were not assessing eligibility at the individual level, as required, versus the household level when conducting ex parte reviews. Under these reviews, states are to use available reliable data rather than requesting it from enrollees. |
| Not conducting ex parte reviews for certain populations | 26 | CMS found in early 2023 that states were not prepared to conduct ex parte reviews for certain groups such as individuals with disabilities or over age 65. This could have resulted in disenrollment on the basis of an individual not providing information that was already available to the state. |
| Not allowing enrollees to submit renewal forms through all modalities | 19 | This could have made it harder for eligible individuals to respond to states’ requests for information if they, for example, lacked access to the internet and needed to respond in other ways. |
Source: GAO analysis of Centers for Medicare & Medicaid Services (CMS) and state information. | GAO-24-106883
As of April 2024, CMS and states had resolved some compliance issues and taken steps to remediate the effects for individuals—by, for example, reinstating eligible people who were erroneously disenrolled. According to CMS officials, the agency plans to continue working with states to reach full compliance, because state compliance will reduce the risk of people "churning," or moving out of and back into Medicaid coverage.
Going forward, CMS officials told GAO that the agency plans to incorporate lessons learned from unwinding in its oversight approach. For example, CMS officials noted the need for ongoing guidance, monitoring of data, and engagement with states and stakeholders. As of April 2024, CMS officials said they were planning to dedicate the staff resources needed to embed these practices into oversight. However, CMS had not documented the oversight practices that reflect lessons learned during unwinding or when the agency would implement them. CMS officials said they had not progressed further in their planning and implementation because unwinding was still ongoing and they were focused on supporting states' redetermination efforts. Documenting and implementing oversight practices that reflect lessons learned could help CMS more effectively identify and address compliance issues and serve the goals of federal redetermination requirements. Those goals include ensuring that only eligible individuals remain enrolled and minimizing erroneous disenrollments.
Why GAO Did This Study
During unwinding, millions of people are expected to lose Medicaid coverage. Disenrollments are expected to include people no longer eligible as well as those possibly eligible who would be disenrolled for procedural reasons, such as because they did not submit all the information required to have eligibility redetermined and coverage renewed. When eligible people lose coverage, it can result in people moving out of and back into Medicaid coverage. This process can result in worse health outcomes and higher program costs.
The CARES Act includes a provision for GAO to report on the federal response to the COVID-19 pandemic. Among other things, this report examines CMS's oversight of Medicaid unwinding.
GAO reviewed documentation of CMS's efforts to assess state compliance with federal redetermination requirements and resolve any noncompliance from March 2023 through April 2024 and interviewed CMS officials about plans for future oversight. GAO also interviewed Medicaid officials and reviewed documents from six states selected, in part, to capture variation in length of experience with unwinding.
Recommendations
GAO is recommending that CMS document and implement the oversight practices the agency learned during unwinding were needed for preventing and detecting state compliance issues with redetermination. (Recommendation 1) The agency concurred with GAO's recommendation and noted that work was underway to address it.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Centers for Medicare & Medicaid Services | The Administrator of CMS should document and implement the oversight practices the agency learned during unwinding were needed for preventing and detecting state compliance issues with redetermination requirements. (Recommendation 1) |
As of September 2024, we have not received an update from HHS on action taken to address this recommendation. When we confirm what action the agency has taken in response to this recommendation, we will provide updated information.
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