Are MCOs ready for Medicaid redetermination?

By Russ Pederson, principal, and Jennifer Sturm, managing director, Deloitte Consulting LLP

The White House recently extended the COVID-19 public health emergency (PHE) until January 12, 2023.¹ Once the PHE ends, state Medicaid directors and managed care organizations (MCOs) will need to determine which beneficiaries are still eligible for coverage through Medicaid or the Children’s Health Insurance Program (CHIP). While redetermination is nothing new, it has never taken place at such a massive scale. An estimated 15 million people could lose their coverage due to changes in employment status, age, income, household composition, or geography.²

Redetermination must be completed for all Medicaid members who are currently enrolled before any action can be taken to end eligibility. But determining who is no longer eligible for benefits, and reaching them, could require a Herculean effort. Some members likely haven’t provided eligibility information since the pandemic began. In addition, Medicaid enrollees are often hard to reach. Many are transient and might not have a way to receive mail, email, or text messages from the state or the MCO. Unlike other government-sponsored benefits, ineligibility for Medicaid coverage doesn’t result in an immediate consequence for the member. As a result, some people likely won’t realize they are no longer eligible for benefits until they seek health care services and are denied coverage. This sudden lack of coverage could cause some people to avoid needed care, which could lead to more serious and costly conditions down the road.

Medicaid enrollment jumped 25%

As the pandemic emerged more than two years ago, the Department of Health and Human Services (HHS) wanted to ensure that the most vulnerable didn’t lose access to health services. The agency offered to boost the federal matching rate for Medicaid payments to states if they agreed not to disenroll anyone while the PHE was in effect. The Families First Coronavirus Response Act authorized a 6.2% increase in the federal Medicaid match-rate for states that maintained eligibility. Since the start of the pandemic, states have received an estimated $100 billion in enhanced federal funding.³

To date, nearly 90 million people are covered by Medicaid—an increase of more than 25% since the pandemic began. Medicaid enrollment in Wisconsin, for example, grew to 1.5 million—an increase of about 35% from pre-pandemic numbers—and the state received an additional $1.2 billion in federal dollars.⁴ Wisconsin’s Medicaid agency is working on multiple fronts—with many community partners and MCOs—to avoid the potential loss of coverage. There are more than a dozen national, regional, and local health plans that provide Medicaid coverage in the state. MCOs often rely on Medicaid revenue to meet their reserve requirements, to meet their provider obligations, and to serve beneficiaries.

Health equity challenges

While 15 million people could lose Medicaid coverage, many could find new coverage through an employer, a spouse or parent, the insurance exchanges, or through another government program. While many people will remain eligible for Medicaid coverage, others will wind up uninsured. Lack of health coverage could be particularly dangerous for people who are still recovering from serious economic and health issues caused by the pandemic. COVID-19 continues to have a disproportionate impact on historically marginalized groups.

This could be especially important for the child population, which accounts for almost half of all Medicaid/CHIP enrollees (and about half of the new population that has joined Medicaid/CHIP since January 2020).⁵

What should MCOs do?

MCOs should work collaboratively with their state Medicaid agency to develop and implement a redetermination strategy that minimizes coverage disruptions among current Medicaid beneficiaries. This can include encouraging the state to take certain steps (e.g., updating archaic enrollment processes and working with health care providers and community organizations to help confirm contact information for members). MCOs should also encourage enrollees to complete their renewal or re-apply for Medicaid. People who no longer qualify for Medicaid should be encouraged to enroll in a subsidized qualified health plan (QHP) coverage through HealthCare.gov or a state-based exchange.

Many states will have a finite number of workers who are assigned to process the renewals. CMS is encouraging states to coordinate with payers, providers, enrollment navigators, and other community advocates to provide redetermination reminders and assistance to members. Many states are modernizing systems to reach members more effectively and streamlining eligibility and enrollment rules and processes. Some states have launched campaigns to nudge members to update their contact information and to sign up for an online account where they can complete their redeterminations.

MCOs should, if they haven’t already, contact the state Medicaid agency where they operate and request a month-by-month list of all renewal dates for the next 12 months for members. They should also ask for a list of members who will lose eligibility at the end of the current month because they have not responded to the state’s redetermination request. This should give the MCO an opportunity to complete concentrated outreach to members.

Here are four more strategies MCOs should consider:

• Re-evaluate coverage options in target markets: This might mean looking at QHPs that are available through a state-based exchange or HealthCare.gov. People who no longer qualify for Medicaid due to changes in income or household composition might be eligible for a subsidized QHP from the same MCO that administered the Medicaid plan.
• Deploy member-retention strategies: MCOs should use their resources to direct members to the most appropriate coverage while aligning to state-specific guidelines. Population-stratification analyses using claims records, demographics, and other information could be used in targeted member-retention efforts. Outreach specialists, community-based organizations, advertising, mailings, online announcements, and text messages could also be used to identify and convince members to complete the renewal process and, if eligible, enroll in a QHP. MCOs should stress the importance of preventative care, which could be disrupted if coverage is lost. Without coverage, the member might also be unable to access their current providers.
• Estimate the financial impact of redetermination: Some members are unlikely to complete their renewal and will no longer be eligible for coverage. However, if the member completes the renewal process late, states can keep those individuals (and families) on the program—without any gap in coverage—for the 90 days following the renewal month. 
• Encourage members to complete the redetermination via multiple outreach channels: MCOs should help members understand the importance of providing the state with accurate data. Even people who don’t think they are eligible for coverage should provide updated information. This can help ensure that some people who no longer qualify for Medicaid can be transferred to a subsidized QHP.

MCOs will inevitably face some significant challenges in 2023 as they redetermine benefits for millions of beneficiaries. But sticking to a well-thought-out strategy should help minimize that disruption. Many of us will be in Washington, D.C. later this month for the National Association of Medicaid Directors' Fall Conference where redetermination will likely be widely discussed.

Acknowledgements: Rebecca Mio, Elise Pennington, and Alison Muckle Egizi

Endnotes:

¹ Biden-Harris Administration releases strategy to strengthen health security and prepare for biothreats, White House Fact Sheet, October 18, 2022

² Unwinding the Medicaid continuous enrollment provision, Issue Brief, Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services, August 19, 2022

³ Families First Coronavirus Response Act, US Department of Labor 

⁴ As pandemic winds down, hundreds of thousands of Wisconsinites will lose Medicaid coverage, Milwaukee Journal Sentinel, March 15, 2022

⁵ June 2022 Medicaid and CHIP enrollment data highlights, Medicaid.gov

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