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CMS Guidance for States to Maintain Increased FMAP

In a Jan. 27 letter to state health officials, the Centers for Medicare & Medicaid Services (CMS) outlines changes to the Medicaid continuous enrollment requirement for states to maintain the temporary increased federal medical assistance percentage (FMAP) while returning to normal Medicaid operations. The letter also reviews reporting requirements, compliance monitoring, and corrective action.

Under the Families First Coronavirus Response Act (FFCRA), states claiming a temporary 6.2 percent increased FMAP were unable to terminate enrollment for most individuals enrolled in Medicaid due to the COVID-19 public health emergency (PHE). Now, under the Consolidated Appropriations Act, 2023 (CAA, 2023), the increased FMAP and continuous enrollment requirement no longer are tied to the PHE ending.

On April 1, states claiming the increased FMAP no longer will be required to maintain enrollment of a Medicaid beneficiary who is no longer eligible for Medicaid and for whom a state completes a renewal. This letter provides guidance on these changes.

Conditions for Receipt of Temporary FMAP Increase

Currently, the temporary increased FMAP is 6.2 percent. The CAA, 2023 amends the FFCRA to decrease the temporary FMAP increase gradually through Dec. 31, 2023, as follows:

  • April 1–June 30: 5 percent
  • July 1–Sept. 30: 2.5 percent
  • Oct. 1–Dec 31: 1.5 percent

To continue to receive the increased FMAP through Dec. 31, states must continue meet certain conditions:

  • Maintenance of Effort: States may not impose eligibility standards, methodologies, or procedures that are more restrictive than those in effect on Jan. 1, 2020.
  • Maintenance of Medicaid Premium Levels: States must ensure that the amounts in their Medicaid premium schedule do not exceed the amounts that were in place under the state plan or any waiver of the plan as of Jan. 1, 2020. If states want to increase their premium, they must meet three conditions laid out in guidance.
  • Coverage without Cost Sharing for COVID-19 Testing, Vaccines, and Treatment: States must continue to cover these services without cost sharing.

CMS also added new conditions for states to receive the increased FMAP:

  • Compliance with Federal Renewal Requirements: States must comply with federal requirements related to redeterminations of eligibility, including regulations regarding ex parte renewals, renewal forms, reasonable timeframe and modalities to return the renewal form, determination of eligibility on all bases, advance notice and fair hearing rights, assessment of eligibility for other insurance affordability programs and transfer accounts as appropriate, and the reconsideration period.
  • Up-to-Date Contact Information: A state must attempt to update contact information for every individual going through the renewal process, including the beneficiary’s mailing address, phone number, and email address. CMS asks states to consider various sources for this information, have a plan to confirm information is up to date and have attempted to update information recently, and document their strategies to obtain updated information.
  • Contact Beneficiaries Using More than One Modality prior to Terminating Enrollment on the Basis of Returned Mail: States must make a good faith effort to contact individuals when they receive returned mail. States must have a process to obtain up-to-date mailing addresses and additional contact information and must attempt to reach an individual through at least two modalities using the most up-to-date contact information that the state has.

Reporting Requirements

States will need to report eligibility determinations and redetermination data on a monthly basis through June 30, 2024, regardless of when the states begins renewals. Data to be reported includes the number of renewal initiations, renewals, ex parte renewals, terminations, terminations for procedural reasons, CHIP enrollments, and call center volume, as well as average wait times and average abandonment rate.

Marketplaces on the federal platform must report the number of individuals transferred from the state Medicaid agency, the number who apply for and are eligible for a qualified health plan (QHP), and the number who select a plan. State-based marketplaces must report the number of accounts received by the marketplace, the number of individuals eligible for a QHP, and the number who select a plan.

Monitoring State Progress and Corrective Action

If states fail to satisfy the reporting requirements, their increased FMAP may be reduced. CMS will provide future guidance on this issue and may require states to submit and implement a corrective action plan. If states fail to do so, they may be required to suspend some or all Medicaid terminations and can be subject to a civil money penalty.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Julie Kozminski is a senior policy analyst at America's Essential Hospitals.

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