State says it’s reinstating 4,000 Medicaid recipients who should not have been dropped

Up to 4,000 Medicaid recipients in Wisconsin lost coverage and are to be reinstated because of errors in the state’s automatic renewal process.

The Wisconsin participants are among half a million people in 30 states who lost coverage and are being reinstated, according to the federal government. 

The error involved how states confirm that current Medicaid recipients still qualify for the program. For the first time in three years, all Medicaid recipients are being required to confirm they’re eligible and renew their participation.  

Medicaid normally requires participants to requalify for the program once a year, but that requirement was suspended at the start of the COVID-19 pandemic. Congress ordered the requirement reinstated effective this past spring, and the federal government established a year-long “unwinding” process to make it more orderly.

The federal Center for Medicare & Medicaid Services (CMS) is requiring that, where possible, states renew recipients through an automatic renewal process, cross-checking records across state agencies to ascertain if they qualify for Medicaid as well as for the federal Children’s Health Insurance Program (CHIP) — for example, using state Department of Revenue data to establish that a recipient’s income is below the maximum allowed for someone to remain eligible.

“Auto-renewals make it easier for eligible people to renew Medicaid and CHIP, helping to make sure individuals are not disenrolled due to red tape,” CMS stated in a report last week.

In Wisconsin, regular Medicaid coverage is limited in most cases to families or childless adults with incomes up to 100% of the federal poverty guidelines. Children in a household can qualify for health coverage under CHIP, which has a higher family income limit: 138% of the federal poverty guidelines. There are also other reasons that different members of a household might have different requirements to be eligible.

In August CMS told states that when using the passive review process to renew Medicaid enrollment, they must consider the qualifications of each member of the household separately. 

That was to avoid cutting off coverage for a family member who still qualifies when other family members do not. For example, a child in a family with an income above the poverty line but below the cut-off line for CHIP remains eligible even if the rest of the family no longer qualifies for Medicaid.

“Federal rules require states to use information already available to them through existing reliable data sources (e.g., state wage data) to determine whether people are still eligible for Medicaid or CHIP and to do so for each individual in a household, regardless of the eligibility of other household members,” CMS said in the new report, released Sept. 21.

CMS found that for various reasons 30 states were conducting auto-renewals without checking whether every member of a household qualified individually. 

“This problem does not only impact children, and it is not the only problem impacting children, but because every state covers children at higher income eligibility levels than parents, children are unquestionably the group that is primarily affected,” wrote Joan Alker, director of the Center for Children and Families at Georgetown University.

CMS reported that 30 states and territories, including Wisconsin, were processing at least some automatic renewals incorrectly, cutting off qualified Medicaid recipients in the process. Those states are now reinstating about 500,000 people who lost their Medicaid improperly, according to CMS.

In Wisconsin, about 4,000 recipients were removed from the program without a separate review for their individual qualifications, according to Elizabeth Goodsit, spokesperson for the state Department of Health Services (DHS). Their coverage will be reinstated by the end of October, retroactive to the date when they were dropped from Medicaid. The affected recipients could include “anyone – child or adult – whose eligibility wasn’t determined after someone else in their household was unable to be administratively renewed,” she said.

“Members will receive a notice explaining their reinstatement and how they can obtain coverage of unpaid medical bills,” Goodsit said.

Goodsit told the Wisconsin Examiner that in August DHS added an extra step to its auto-renewal process to ensure that people who qualify for Medicaid maintain their eligibility when others in their household no longer qualify. That change in the procedure will continue indefinitely as the state continues the renewal process, she said.

The need to consider household members individually when requalifying them automatically “was not raised” when states and the federal government were planning the unwinding process, Goodsit said.