CMS probes Texas, Missouri Medicaid over enrollments backlog

The Centers for Medicare and Medicaid Services is scrutinizing how Texas and Missouri process Medicaid and Children's Health Insurance Program enrollments and commencing a process that could result in funding cuts.

In letters sent to both states' Medicaid agencies May 22, CMS wrote that Texas and Missouri are failing to advance applications quickly enough to meet federal standards, leading to backlogs. These actions follow an interim final rule the agency published in December that clarifies states must enact corrective action plans and may be fined or lose federal Medicaid dollars if they do not comply with enrollment and reporting requirements.

“CMS is concerned that the state’s current efforts are not sufficient to achieve and sustain compliance with federal timeliness requirements for applicants, particularly given the prolonged period of the state’s noncompliance,” CMS wrote Texas Medicaid director Emily Zalkovsky.

Missouri Medicaid received a similar letter, a spokesperson wrote in an email. CMS declined to say whether it sent letters on this matter to other states.

CMS gave Texas until June 22 to submit application data, updates on how it adjudicates applications, its staffing and staff training plans, and its mitigation strategies. If Texas doesn't appropriately respond, CMS will initiate a formal compliance case and require the state to submit a corrective action plan, wrote Sarah deLone, director of the Children and Adults Health Programs Group at the Center for Medicaid and CHIP Services.

States are required to determine eligibility within 45 days for most Medicaid and CHIP applicants and within 90 days for people seeking coverage because they have disabilities. As of February, Texas, Missouri, four other states and the District of Columbia were processing at least 40% of Medicaid and CHIP applications for longer than 45 days, according to a Georgetown University database.

Related: CMS extends Medicaid 'unwinding' waivers into 2025

Texas' "application processing times are amongst the worst in the country; the situation is ripe for CMS to issue a corrective action plan,” Joan Alker, executive director of the Georgetown University Center for Children and Families, wrote in an email.

The Texas Health and Human Services Commission has been meeting with CMS and providing monthly status reports on application timeliness, a spokesperson wrote in an email.

“HHSC is also working with our federal partners to implement immediate strategies to reduce the number of [Supplemental Nutrition Assistance Program] and Medicaid applications in the queue and ensure that the redetermination process operates as smoothly as possible,” the spokesperson wrote.

This federal attention to how states administer Medicaid and CHIP follows a chaotic, year-long campaign of "unwinding" the continuous coverage provisions of a federal COVID-19 relief program. States received extra money for these programs and, in exchange, had to suspend eligibility redeterminations during the public health emergency. That policy expired in April 23, triggering tens of millions of redeterminations nationwide.

As of June 4, 22.8 million people were disenrolled from Medicaid and CHIP during the unwinding, according to CMS data compiled by KFF. The majority, 69%, were for procedural reasons, not because states deduced the enrollees were ineligible for coverage. Texas disenrolled 2.1 million people, the most among states. Missouri is closer to the middle of the pack with 277,000 disenrollments.

As those numbers grew during the unwinding, CMS uncovered a multitude of compliance issues. Last month, CMS notified state Medicaid authorities that it expects them to continuing providing regular updates about their eligibility redeterminations to enable the agency to track adherence to federal requirements.