CMS Rule to Crackdown on Medicaid Eligibility Withdrawn

The proposed Medicaid rule would have scrutinized eligibility determinations in the Medicaid program. Scheduled for publication in April, the policy was withdrawn Tuesday, March 24 by the Centers for Medicare & Medicaid Services.

The proposed rule was meant to strengthen the integrity of the Medicaid eligibility determination process including verification, changes in circumstance, and redetermination.

The Government Accountability Office conducted a review of Medicaid eligibility determinations for the years following the passage of the Affordable Care Act and noted that federal and state audits showed several accuracy issues, and some resulted in errors.

It warned states that CMS hadn’t recouped federal funds with eligibility error rates exceeding 3%, but planned to start in FY 2022.

The GAO reported that after the ACA made significant changes to Medicaid eligibility rules,  including new ways of calculating income and new requirements related to electronically verifying applicants’ information, little is known about the accuracy of states’ Medicaid eligibility determinations.

The Medicaid and Chip Payment and Access Commission isn’t convinced the way payment errors are measured could lead to wrong conclusions about the extent of fraud in the Medicaid program, according to reporting by Modern Healthcare.

More importantly for Arizona, an HHS financial report concluded that the error rate for fee-for-service Medicaid was 16.30% compared with just 0.12% for managed care Medicaid.

Organizations including the Health Financial Management Association predicted when finalized the rule would put downward pressure on program enrollment – something the federal government is unlikely to pursue during the public health emergency of the COVID-19 pandemic.

Read more from Modern Healthcare and Bloomberg Law

Read the GAO highlights of its review of Medicaid eligibility determinations from 2014 to 2018.