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Federal Officials Outline Ways for States to Simplify Eligibility Determinations

By Rebecca Adams, CQ HealthBeat Associate Editor

May 20, 2013 --Medicaid officials are suggesting five ways for state officials to simplify their eligibility procedures as they transition from current standards to new rules required by the health care law.

The Centers for Medicare and Medicaid Services (CMS) suggested the optional techniques in a 12-page guidance letter to state Medicaid directors issued late last week. The goal is to ease the administrative burden on states facing a huge task this fall as they shift to a new Medicaid system under the health care law (PL 111-148, PL 111-152).

On Oct. 1, all states, whether or not they are expanding their Medicaid programs, have to start using different income criteria to determine eligibility for new recipients because the overhaul law requires the uniform use of modified adjusted gross income, known as MAGI. As state officials are shifting to this new eligibility process, they are expecting an onslaught of new Medicaid applications for coverage that will take effect in January. At the same time, officials will be running new applications through the existing eligibility system to see whether applicants might already qualify for Medicaid and their benefits could begin before Jan. 1.

Federal officials said they are suggesting ways to simplify the process. For example, one goal is to avoid making state officials do two different eligibility tests for the same applicant during the transition. States that want to pursue any of the proposed techniques would have to get formal permission from CMS through a waiver, but the letter makes clear that federal officials are eager to approve those requests. CMS will provide sample language that states can use for a waiver request.

"States are encouraged to consider implementing any or all of the following strategies and also to suggest other strategies to CMS," said the letter, signed by CMS Deputy Administrator Cindy Mann.

The five ideas would encourage states to change the system by:

  • Acting earlier to start using MAGI standards. Instead of implementing the new income standards for coverage beginning on Jan. 1, states could use it for Medicaid coverage as of Oct. 1. That would eliminate the need to run applications through two eligibility screens.
  • Delaying the renewal dates of people who are already enrolled in Medicaid. CMS officials suggest waiting until March 31, 2014, to check the eligibility of any beneficiary whose coverage is up for renewal in the first quarter of the year. The reason is that the health care law had a provision intended to protect current Medicaid recipients. That provision says no one can be kicked out of the program because of the new MAGI methodology until at least March 31. That clause would mean that states would have to run the numbers two different ways, using both the 2013 methodology and the new MAGI formula, to anyone whose renewal date falls between Jan. 1 and March 31, 2014. If states choose to wait until the end of March to process renewals, they would only have to use the new MAGI methodology.
  • Enrolling people who are eligible for food stamps under the Supplemental Nutrition Assistance Program into Medicaid in 2014 and 2015. Most SNAP recipients would be eligible for Medicaid because the income of food stamp beneficiaries cannot be more than 130 percent of the federal poverty level. Many states might find it easier to enroll food stamp recipients than to check the MAGI for all of those beneficiaries.
  • Enrolling parents into Medicaid based on their children's eligibility.
  • Using a continuous 12-month eligibility period for adults. "For states, the option can mitigate the problems associated with 'churning,' the enrollment and re-enrollment of eligible people when they lose coverage due to procedural reasons or slight fluctuations in income," the memo said. Many states already use continuous eligibility in their Medicaid or CHIP programs for kids. The memo said that 32 states have used 12-month continuous eligibility in their Medicaid or CHIP programs for children, with 23 states implementing it for both programs.

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