Healthcare Business News

Reform Update: CMS creates workarounds to ensure Medicaid coverage

By Virgil Dickson
Posted: January 7, 2014 - 4:45 pm ET

Faced with the reality that still has limited ability to transmit completed Medicaid applications to state agencies, the CMS has come up with two new workarounds to ensure people get covered.

As many as 100,000 Americans who were told they were eligible for new Medicaid or Children's Health Insurance Program coverage have not been enrolled because of the technology problems, according to a report in the Washington Post attributing the figure to federal and state officials.

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However, states remain split on whether to use the workarounds or wait until fully automated transfers can take place, which means thousands of applicants will remain in limbo waiting for coverage that was supposed to begin Jan. 1.

The 36 states that are not operating their own insurance exchanges are relying on the federal marketplace to screen for Medicaid eligibility when applicants seek coverage through

To date, no state is getting full Medicaid applications that they can use to actually enroll potential beneficiaries. Some are getting completed applications, but they are meant only to test transmissions between their systems and HealthCare.Gov. States getting these files are analyzing them for quality and accuracy.

Others are getting weekly data transmissions with limited information about individuals who have been tentatively deemed eligible for Medicaid. These transmissions, known as “flat files,” were never meant to be used to enroll anyone, according to the CMS. Rather, they were meant to prepare agencies for the work of sorting through new enrollees. Some states have complained that these files are riddled with errors.

In December, the CMS committed to improving the quality of the flat files and said it would grant waivers that allow states to use the files for Medicaid enrollment. Few took them up on the offer. To further entice states, the CMS held a call and sent out a letter Jan. 3 in which it highlighted additional enhancements to the flat files that states with added data fields for income and gender.

One state that has gotten a waiver is Arkansas, where the process has not been as smooth as promised by the CMS, according to Amy Webb, communications director for the Arkansas Department of Human Services.

Arkansas differs from most states that are expanding their Medicaid programs in that it's using funds from the federal government to enroll those earning between 100% and 138% of the federal poverty level into private plans sold on the insurance exchange instead of adding those individuals to the state's Medicaid rolls.

The files have not specified the counties where applicants live, for example, which the state needs in order to identify plans for them.

As a result, they've had to manually figure it out.

The CMS is also offering to call those tentatively deemed eligible to apply directly through their state's website instead of waiting for their application to be transmitted from However, states must ask the federal agency to make the calls.

For some, the option doesn't go far enough. Jennie Melendez, a spokeswoman for the Oklahoma Health Care Authority, said the CMS declined a request to add a message to the federal website that directs applicants to state sites. “This was the compromise,” Melendez said.

Pennsylvania, another state that’s directing potential beneficiaries to apply through its own website, is assuring residents that glitches with the federal website won’t prevent anyone from getting enrolled as long as they tried to sign up on time.

“We’re trying to get people into the system as quickly as possible and if you signed up by Dec. 24, your coverage will be retroactive to Jan. 1,” said Eric Kiehl, director of communications at the state’s Department of Public Welfare.

CMS approves Medicaid premiums waiver in Michigan

The CMS has approved a waiver to allow Michigan to charge monthly premiums that are up to 2% of a person's monthly income. This group will also be responsible for a co-payment for services rendered.

The compromise means that up to 500,000 additional people are now eligible to join the state's Medicaid program this year. The state had to get a waiver to charge the premium because Medicaid law prohibits charging the fees to program beneficiaries who earn less than 150% of the federal poverty level.

Failure to pay the premium will not result in loss of Medicaid coverage but could result in a physician declining to continue to treat a patient, said Angela Minicuci, a spokeswoman at the Michigan Department of Community Health.

Those under the poverty line will only be responsible for copays. They cannot lose coverage or be denied services for failing to pay them.

This is the second premium waiver approved by the CMS in recent weeks. Iowa's waiver, approved in December, will waive the fees for beneficiaries who participate in wellness initiatives such as an annual health assessment.

The fact that the agency has approved two such waivers in recent weeks shows that premiums for Medicaid beneficiaries may become much more common as the federal agency works to make some sure some of the poorest American have health coverage.

“This seems a reasonable compromise to move coverage forward,” said Joan Alker, executive director of the Georgetown Center for Children and Families.

Still, many advocates and policy experts are concerned as there is evidence that for low-income people, especially those with chronic diseases, cost-sharing policies like premiums can lead people to skip out on necessary care. And experts say imposing premiums and other requirements sharply reduces poor people's participation in health insurance programs.

“Medicaid traditionally has had very little cost-sharing, so as states experiment with this, we need to be monitoring closely to see if it has adverse impact on beneficiaries, especially those who have significant medical problems,” said Dr. Benjamin Sommers, an assistant professor of Health Policy and Economics at Harvard School of Public Health.

Follow Virgil Dickson on Twitter: @MHvdickson

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