CMS proposes rule to protect Medicaid enrollees from improper terminations
The Centers for Medicare & Medicaid Services has issued a proposed rule to strengthen safeguards for Medicaid eligibility determinations. This move addresses widespread coverage losses during the post-pandemic unwinding process. The rule aims to ensure states comply with federal requirements for notices and appeals.
On October 10, 2023, the Centers for Medicare & Medicaid Services (CMS) announced a proposed rule designed to prevent improper terminations of Medicaid coverage. The initiative comes amid the ongoing 'unwinding' of continuous enrollment policies implemented during the COVID-19 pandemic, which had prohibited states from disenrolling eligible individuals since April 2020.
During the pandemic, Medicaid enrollment reached record highs, with millions gaining coverage under the enhanced protections. However, as the continuous enrollment requirement ended in April 2023, states began redetermining eligibility, resulting in over 20 million people losing coverage by October 2023. CMS reports that procedural errors, such as inadequate notices or failure to consider all available information, have contributed to unwarranted disenrollments.
The proposed rule would mandate that states provide more detailed and timely notices to enrollees, including clear explanations of why coverage is ending and instructions on how to appeal or submit additional documentation. It also requires states to screen for other potential coverage options before terminating Medicaid benefits and to assist enrollees in transitioning to programs like the Children's Health Insurance Program (CHIP) or Affordable Care Act marketplaces.
"This proposed rule would help ensure that states follow the law when making eligibility determinations," said CMS Administrator Chiquita Brooks-LaSure in a statement. She emphasized the importance of protecting vulnerable populations, noting that families with children and low-income adults are disproportionately affected.
Public comments on the proposed rule are being accepted until December 11, 2023, allowing stakeholders—including patient advocates, state officials, and health organizations—to weigh in. If finalized, the rule could take effect as early as 2024, potentially reducing the rate of coverage losses and stabilizing access to care for millions.
This development builds on CMS's prior guidance issued in 2023 to improve the unwinding process, but advocates argue that stronger enforcement is needed to address disparities in state implementation. For instance, some states have reported higher denial rates due to administrative burdens, while others have extended protections voluntarily.