If states fail to comply with federal Medicaid eligibility redetermination requirements, the Centers for Medicare & Medicaid Services (CMS) could impose penalties and require states to submit correction plans.
The interim final rule, which was released Monday and will be published in the Federal Register on Wednesday, allows CMS to impose civil money penalties of up to $100,000 for each day a state is not in compliance with reporting requirements and fails to submit or implement an approved corrective action plan.
The regulation takes effect on Wednesday, but CMS will accept public comments until February 2 and based on the feedback could revise provisions within the interim rule.
KFF tracking data finds that in the past seven months, states have reviewed the Medicaid eligibility of more than 28 million people and terminated coverage for more than 11 million of them. Millions more will likely lose Medicaid in the coming months, KFF Health News reports.
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In the final rule, CMS said that most of the disenrolled individuals were kicked off the coverage due to procedural reasons, such as failure to return paperwork, not because they failed to meet Medicaid’s eligibility criteria. The high rates of these types of disenrollments led CMS to issue the interim rule to protect access to Medicaid coverage.
The rule will give CMS the authority to require states to submit a corrective action plan, suspend disenrollments from Medicaid for procedural reasons, and impose civil money penalties. The agency may also apply a reduction to the state-specific Federal Medical Assistance Percentage for failure to meet reporting requirements.
CMS said any delay in implementing enforcement tools within the rule would thwart its ability to take possible actions against noncompliant states and cold result in “serious harm to beneficiaries.” Enforcement actions are allowed under the Social Security Act that were added by the Consolidated Appropriations Act, 2023.