Medicaid Maintenance of Eligibility (MOE) Requirements: Issues to Watch When They End
To help support states and promote stability of coverage amidst the COVID-19 pandemic, federal legislation provides a temporary increase in federal Medicaid matching rates to states conditioned on states providing continuous eligibility for existing enrollees and meeting certain other eligibility requirements. This brief provides an overview of these maintenance of eligibility (MOE) requirements, examines what happens when the MOE expires, and discusses key issues to consider looking ahead. Key findings include the following:
- The Families First Coronavirus Response Act (FFCRA) provided a 6.2 percentage point increase in the federal share of certain Medicaid spending with requirements to meet certain MOE requirements that include ensuring continuous coverage for current enrollees. Beyond the MOE requirements, states can streamline eligibility and enrollment processes to help connect people to coverage more quickly, and many are doing so through emergency authorities. The MOE requirements are tied to the Public Health Emergency (PHE) period, but specific requirements expire at different times.
- Clear guidance with sufficient lead time will be key for helping states establish redetermination policies and processes when the MOE requirements end. In the absence of guidance from the Centers for Medicare and Medicaid Services (CMS), states are beginning to develop policies to address redeterminations and renewals based on the current PHE end date. CMS guidance could specify the requirements and procedures that states must follow when redeterminations and renewals restart after the PHE ends.
- States will likely face both a large backlog of renewals as well as a surge in new applications when the MOE ends. CMS can provide guidance that would help states manage backlogs of renewals and ensure that enrollees who remain eligible for coverage are not disenrolled when the MOE requirements expire. As states grapple with restarted renewals, many states may also see a surge in new applications tied to the economic downturn. From February to May 2020, total Medicaid enrollment grew by 2.3 million, growth that states have attributed to the economy and the MOE. Congress could consider legislation to extend the amount and duration of the fiscal relief and MOE requirements.
What are the MOE requirements for states?
The FFCRA provided a 6.2 percentage point increase in the federal share of Medicaid spending with requirements to maintain eligibility and provide continuous coverage for Medicaid enrollees. The increase does not apply to Affordable Care Act (ACA) Medicaid expansion adults, for whom states continue to receive a 90% federal matching rate. The Federal Medical Assistance Percentage (FMAP) increase was retroactive to January 1, 2020, and is in place until the end of the quarter in which the PHE ends.
To receive the enhanced federal matching funds, states must meet certain MOE requirements that include ensuring continuous coverage for current enrollees. Specifically, states must provide continuous eligibility through the end of the month in which the PHE ends for those enrolled as of March 18, 2020, or at any time thereafter during the PHE period, unless the person ceases to be a state resident or requests a voluntary coverage termination. Medicaid eligibility during this time must continue “regardless of any changes in circumstances or redeterminations at scheduled renewals that would otherwise result in termination.”1 These provisions apply to pregnant women who would otherwise lose Medicaid coverage 60 days postpartum.
Beyond continuous coverage, the law requires states to meet certain other requirements as a condition of receiving the enhanced funding. States must apply Medicaid eligibility standards, methodologies, and procedures that are no more restrictive than those in effect on January 1, 2020. States cannot increase Medicaid premiums above those in effect on January 1, 2020.2,3,4 States must cover coronavirus testing and COVID-19 treatment without cost-sharing. States cannot increase political subdivisions’ contributions to the non-federal share of Medicaid costs beyond what was required on March 1, 2020.5 In guidance to states, CMS interprets the MOE to prohibit states from reducing “medical assistance for which a beneficiary is eligible” and states must “ensure that beneficiaries be treated as eligible for the benefits in which they were enrolled.” The guidance further states that “an increase in cost-sharing reduces the amount of medical assistance for which an individual is eligible” so would not be permissible. 6 CMS also clarifies that states can terminate coverage for individuals who are deceased.7
By drawing down the enhanced federal funds, states are indicating to CMS that they will comply with the MOE conditions.8 CMS will not require a separate demonstration of compliance from states but will allow states to passively attest by drawing down the funds. If CMS later determines that the state does not satisfy all of the conditions, the state must return the enhanced funds.9
Beyond the MOE requirements, states can streamline eligibility and enrollment processes to help connect people to coverage more quickly, and many are doing so through emergency authorities. Nearly all (48) states are making changes to streamline eligibility and/or enrollment through State Plan Amendments (SPAs) or other administrative authority beyond what is required to access the enhanced federal funding. States can make changes through a regular SPA or Disaster-Relief SPA as well as other authorities. States have flexibility to expand eligibility or modify eligibility rules, eliminate or waive premiums, and streamline application and enrollment processes. Specific actions states are taking include expanding Medicaid coverage to optional groups, allowing increased used of self-attestation to expedite enrollment, eliminating premiums, as well as expanded use of presumptive eligibility.
What happens when MOE requirements end?
The MOE requirements are tied to the PHE period, but specific requirements expire at different times (Appendix Table 1). The PHE ends when the Secretary declares that the emergency no longer exists, or after 90 days, whichever happens first, although the Secretary can renew the PHE declaration for subsequent periods.10 The most recent declaration extended the PHE an additional 90 days from July 25, and will end on October 23rd if it is not extended. The Department of Health and Human Services (HHS) has not specified if the PHE will be renewed again. The requirement for states to provide continuous eligibility to enrollees expires the last day of the month in which the PHE ends (“continuous eligibility period”). The other four MOE requirements and the enhanced FMAP funding last through the end of the quarter in which the PHE ends (“MOE period”). State policy changes to streamline eligibility and enrollment through Disaster-Relief SPAs will also expire at the end of the PHE. As such, states may consider whether to continue changes through regular SPA authority or revert to pre-pandemic policies. Changes that states have made to verification processes through a verification disaster addendum, such as accepting self-attestation for eligibility criteria, are also tied to the emergency period, but the exact end date varies based on state option.
Further CMS guidance may specify the requirements and procedures that states must follow when redeterminations and renewals can restart after the PHE ends. Under current guidance, states are allowed to conduct regular renewals, periodic data matching to identify changes in circumstances, and redeterminations based on identified or reported changes in circumstances, but states cannot take action to terminate coverage for changes in circumstances or nonpayment of premiums until after the end of the month in which the PHE ends.11 Federal rules generally require states to use current income and determine eligibility on “all bases” before determining an enrollee ineligible.12 States must also provide beneficiaries with advance written notice of the termination at least 10 days in advance and inform the individual of their right to a hearing that must be provided within 90 days of the request.13 However, states are still looking for additional guidance from CMS about when delayed redeterminations can proceed, when data matches for income must be conducted, how to measure current income, and what notices will be required when the PHE ends.
In the absence of CMS guidance, states are beginning to develop policies to address redeterminations and renewals based on the current PHE end date. Some states are making changes to extend eligibility beyond the end of the PHE, potentially alleviating backlogs and reducing administrative burden. States may conduct ex parte renewals throughout the emergency and extend renewal periods for another 12 months.14 For example, Illinois is using electronic data matches to process automatic renewals and extend eligibility for a 12-month period. In addition, some states are planning to delay redeterminations and renewals after the PHE ends to prevent backlogs in renewals. States have the authority during an emergency to delay processing of renewals and changes in circumstances as long as those are documented to CMS.15 For example, Maryland has announced it will delay renewals that were due during the PHE until October 31, 2020, New York is extending renewals for an additional 12 months, and Wisconsin is planning to stagger postponement of renewals based on the original renewal date. In contrast, other states are developing policies designed to expedite redeterminations quickly after the PHE ends. For example, Colorado has released an emergency rule that does not require the state to redetermine eligibility at the end of the PHE and Texas released guidance in early August indicating that it would begin electronic renewals in mid-August for enrollees with a renewal date between March-September and those found ineligible would be notified that their coverage ends after the continuous eligibility period. States’ ability to implement these policies will likely depend on additional CMS guidance related to requirements for processing renewals at the end of the PHE.
What are the key issues looking ahead?
States and beneficiaries could face disruption without advance notice about when the PHE will end and clear guidance about how to transition from the MOE requirements. The Medicaid and CHIP Payment Advisory Commission (MACPAC) recently sent a letter to HHS requesting that states be provided with at least 90 days notice prior to the end of the PHE to plan for the end of enhanced federal match rate. The letter also requests clear guidance for states for returning to normal in a “manner that best protects and minimizes disruption for Medicaid beneficiaries, providers, plans, and states.” Although federal rules specify certain requirements related to renewals and periodic eligibility verifications, states will be looking for additional guidance from CMS about rules related to processing renewals and verifications when the PHE ends.
When the MOE requirements end, states may have a backlog of redeterminations for individuals whose renewal date fell during the continuous eligibility period. While some individuals may have had changes in circumstances that would make them ineligible, as a result of the economic downturn associated with the pandemic, it is likely that few enrollees had an increase in income that would make them ineligible given the state of the economy. However, once redeterminations start, individuals who remain eligible may lose coverage if they have trouble completing redetermination processes or providing verification. Analysis suggests that these issues contributed to enrollment declines prior to the pandemic.
CMS can take steps to help states manage backlogs and prevent coverage disruptions for individuals who remain eligible when the MOE requirements expire. For example, when the ACA went into effect and states faced an influx of enrollment and new Modified Adjusted Gross Income (MAGI) rules, CMS provided states the option to delay renewals.16,17 In addition, CMS suspended the eligibility determination component of the Payment Error Rate Measurement (PERM) reviews after implementation of the ACA. These reviews were reintegrated in the 2019 reviews. CMS could once again suspend these reviews in light of the potential backlogs related to the end of the MOE, minimizing coverage losses but also increasing Medicaid spending. However, while CMS suspended PERM reviews in light of the COVID-19 public health emergency, CMS has recently stated that these reviews will be reinstated.18 In addition, prior to the pandemic, CMS had emphasized reducing errors in eligibility determinations as part of program integrity efforts and indicated plans to change eligibility rules and tighten standards for eligibility verification.19 Such changes could contribute to further coverage losses among individuals who remain eligible due to challenges completing renewal processes or providing eligibility verification.
As states grapple with restarted renewals, many states may also see a surge in new applications tied to the economic downturn. From February to May 2020, total Medicaid enrollment grew by 2.3 million. States attribute the increase to the MOE requirements and the economic downturn. Typically, increases in Medicaid enrollment may lag behind other economic indicators like unemployment, but states anticipate accelerated enrollment growth in the next year. States may also be facing staff shortages and diminished administrative capacity due to COVID-19, adding further challenges to processing applications and conducting a large number of redeterminations.
Congress may consider legislation to extend the amount and duration of the fiscal relief and MOE requirements. Tying the enhanced FMAP and the MOE to the emergency period creates uncertainty about the duration of the fiscal relief as well as transition to normal operations. State groups have called for an increase in both the amount and duration of the FMAP relief. The Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act passed by the House in May would increase the enhanced FMAP to 14% effective July 1, 2020 through June 30, 2021; however, it remains unclear if Congress will provide additional relief through the FMAP or if they will revisit the MOE requirements. In addition, the outcome of the election will have significant implications for Medicaid. The Trump administration has favored policies to limit Medicaid enrollment, while Democratic nominee Joe Biden favors policies that support Medicaid coverage and expansion.