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Medicare Advantage Regulatory Updates

Does the Unwinding Process Feel Unwieldy?

Medicaid Unwinding Process & Concerns

Medicaid is the largest health insurance program in the U.S., covering approximately one in five Americans. That equates to 82.3 million low-income Americans, including millions of children, older adults, people with disabilities, and two million veterans. Medicaid is the single largest source of health coverage for children.

In March 2020, federal COVID-19 legislation established the “continuous enrollment condition,” which gave states additional federal Medicaid funding in exchange for maintaining enrollments for all individuals, even if they are no longer eligible, through the end of the month that the federal COVID-19 Public Health Emergency (PHE) ends. While the continuous enrollment condition does not apply to Children’s Health Insurance Program (CHIP), many states implemented temporary policy changes that had a similar impact on CHIP enrollment.

What is the unwinding process? 

After the PHE ends, states are meant to return to normal operations, including resuming full Medicaid and CHIP eligibility renewals and ending coverage of ineligible enrollees, a year-long process known as “unwinding.”

  • States may begin their 12-month unwinding period at different times (the month before, during, or after the PHE ends). Under previous guidance, CMS gave states 12 months to begin (and 14 months total to complete) eligibility redeterminations for all Medicaid enrollees during the unwinding period following the end of the PHE
  • On April 1, states will resume Medicaid redetermination and terminations of coverage, essentially determining who is—and is not—eligible for Medicaid. Some numbers show an estimated 15 to 18 million people may be at risk of losing Medicaid facing coverage. This can include individuals no longer eligible, i.e., those who have increased their income.

    The unwinding plan and direction from CMS have been out since 2022. In October 2022, CMS provided a FAQ COVID-19 Public Health Emergency Unwinding FAQs (medicaid.gov) for additional clarity. States have begun the unwinding process already, starting with outreach to members. According to the National Association of Medicaid Directors (NAMD), states have been anticipating the “unwinding” of the Medicaid continuous enrollment condition. NAMD polled members and the results showed 58% of Medicaid agencies plan to start their unwinding period in April 2023 while 23% plan to begin in March 2023 and 16% plan to begin in February 2023.

    Risk-based Approaches for Medicaid Redeterminations 

    Per current CMS guidance, states must select one of the following four risk-based approaches for Medicaid redeterminations (Anderson, 2022):

    • Option 1: Population-Based Approach – Prioritizes cohorts of beneficiaries most likely to have become in-eligible.
      • States identify members they believe are no longer eligible for Medicaid, i.e., an individual enrolled before the age of 65 is now 65 and is Medicare eligible.
      • Individuals who reported an income increase.
      • Individuals who have not had a recent claim may be an indicator of coverage elsewhere.
    • Option 2: Time or Age-Based Approach – Prioritizes based on the length of time the action has been pending.
      • State will either prioritize enrollees whose renewals have been pended for the longest time during the PHE (i.e., start by processing enrollments that were due for renewal in 2020) or simply keep each enrollee’s existing renewal month (i.e., if an enrollee was initially scheduled for renewal in October 2020, their renewal month will now be October 2023).
    • Option 3: Hybrid Approach – Combines the population- and time-based approaches.
    • Option 4: State-Developed Approach – Ensures pending actions are handled appropriately to prevent improper terminations, mitigate churn, and provide smooth transitions to healthcare.gov.
      • States to create their own protocol for handling and prioritizing the eligibility redeterminations. There is heavy guidance around this option.

    CMS Documentation Requirements

    In its January 5,2023 guidance, Key Dates Related to the Medicaid Continuous Enrollment Condition Provisions in the Consolidated Appropriations Act, 2023, CMS reminds states that before beginning their unwinding periods, they are expected to submit detailed documentation to CMS, including documents related to renewal distribution, system readiness, and baseline data. States are required to report monthly on the particular metrics beginning April 1, 2023, through June 30, 2024. An example of such metrics include, but are not limited to, the number of eligibility renewals initiated, number of beneficiaries renewed on ex parte basis (using other data sources), number of individuals whose Medicaid, CHIP, or pregnancy-related coverage was terminated, including the number of individuals whose coverage was terminated for procedural reasons (i.e., required paperwork not returned, returned mail, etc.) and number of children enrolled in a separate CHIP program (for states that have these).

    As outlined in the SHO Letter (SHO# 23-002),states will be required to submit eligibility and enrollment data to CMS. States will also be responsible for submitting a baseline data report intended to serve as a starting point to track pending eligibility and enrollment actions that the state will need to address when its unwinding period begins. There are also clearly defined notification periods and the member’s right to appeal. 

    CMS has also provided states with section 1902(e)(14)(A) Waiver to support states facing significant operational issues with income and eligibility determination systems and to protect eligible beneficiaries from inappropriate coverage losses during the unwinding period. CMS has granted more than 40 states section 1902(e)(14)(A) waivers to support unwinding efforts.

    States will receive additional funding through 2023. For the first quarter of 2023, states will continue to get the 6.2 percentage point boost they’ve received through out the pandemic. In the second quarter, that will drop to 5 percentage points. In the third quarter, it will fall to 2.5 percentage points. In the fourth quarter of 2023, states will receive 1.5 percentage points in additional federal Medicaid funding.

    What are a few concerns of unwinding? 

    Outreach - Although states can receive 50 percent administrative federal financial participation (FFP) for advertising/outreach efforts related to unwinding, the outreach task may be daunting. This can be a heavy lift for the state to contact individuals regarding the unwinding process; addresses or contact information may need to be updated. The most concerned members are individuals truly eligible but who cannot be reached due to transient living situations and cannot be contacted for other reasons. There are laws in place, one being that you cannot disenroll a member simply based on undelivered mail. The state must show they made a good-faith effort to find the person. The law’s requirements reinforce the imperative for states, Medicaid health plans, providers, and other partners to renew efforts to confirm enrollee contact information.

    The article, Understanding the Role of Medicaid Managed Care Plans in Unwinding Pandemic-Era Continuous Enrollment: Perspectives from Safety-Net Plans | KFF (Hinton et al., 2023), says plans highlighted strategies that could help address unwinding challenges, including strengthening communication across state and county agencies, providers, community-based organizations (CBOs), and health insurance Marketplaces; providing detailed, timely data transfers to enable plans to conduct targeted outreach; increasing automatic (“ex parte”) renewals; maximizing lead time for plans to conduct outreach to members before terminating coverage; state consideration of adopting continuous eligibility policies, and improving the alignment of eligibility requirements and processes across programs/eligibility pathways. To help ensure eligible enrollees retain coverage, states may direct MCOs to seek updated contact information from enrollees. If plans contract with a third party to collect this information, they must confirm the accuracy of updates with enrollees directly. MCOs may share this information with the state or assist individuals in providing their updated contact information to the state. States may accept updated enrollee contact information from MCOs, including mailing addresses, telephone numbers, and email addresses, provided the state complies with specific beneficiary notice requirements (to confirm the accuracy of updated contact information) or the state receives a waiver of such provisions from CMS.

    Unintended Disenrollment: There is some concern that unintended disenrollment, loss of coverage due to procedural reasons (missing documents, incomplete forms) will impact our most vulnerable, children, dual-members, IDD members, pregnant women, who may lose coverage during the unwinding period. Each state is responsible for ensuring measures are in place to prevent such a vulnerable population from disenrollment. The share of individuals disenrolled across states will vary due to differences in how states prioritize and process renewals. Most children in the U.S. receive their health insurance through Medicaid. As unwinding begins, some children who no longer qualify for Medicaid may transition to CHIP or other healthcare coverage. Nationally, 54 percent of all children are covered through Medicaid/CHIP. In appreciation of the risk of children becoming uninsured, the Consolidated Appropriations Act (CAA) requires states to provide 12 months of continuous Medicaid and CHIP eligibility to children under age 19 beginning on January 1, 2024.

    Impact on the Plan - A decline in Medicaid enrollment, related revenue loss, enrollee churn, and, most notably, the disruption of care for the member are of concern. The pandemic highlighted how disruption of care impacts a member, especially individuals with chronic conditions, and the significant impact of interrupted coverage on access to needed services (e.g., loss of access to HIV, behavioral health, hypertension, or diabetes care). The unwinding will create new considerations for Medicaid health plans with respect to enrollee support, case mix, and rate-setting issues.

    The overall impact of unwinding on the member is yet to be seen. Studies repeatedly demonstrate that uninsured individuals are less likely than those with insurance to receive preventive care and services for significant health conditions and chronic diseases and report that they do not have a regular source of healthcare. Because uninsured individuals are less likely to receive follow-up screenings, they are more likely to be diagnosed at later stages of diseases. They have a higher mortality rate than those insured. Uninsured children and children with special needs are at the highest risk. Children with common childhood illnesses and injuries do not receive the same level of care as others and are at higher risk for preventable hospitalizations and missed diagnoses of severe health conditions.

    Learn more about population health management solutions from ZeOmega to help you navigate CMS requirements.

    Anderson, S. (2022, December 28). Medicaid eligibility redeterminations will resume in 2023. Here’s what enrollees need to know. Healthinsurance.org. https://www.healthinsurance.org/blog/should-medicaid-recipients-worry-about-losing-their-coverage-in-2022/

    SHO# 23-002 RE: Medicaid continuous enrollment condition changes, conditions for receiving the FFCRA temporary FMAP increase, reporting requirements, and enforcement provisions in the consolidated appropriations Act, 2023. (2023). Medicaid.gov. https://www.medicaid.gov/federal-policy-guidance/downloads/sho23002.pdf