CMS notifies states of ‘commonsense guardrails’ to Medicaid & CHIP 

WASHINGTON – CMS has sent letters to states calling out policies that extend beyond statutory limits in the Medicaid and Children’s Health Insurance Program (CHIP) program, specifically policies on continuous eligibility and workforce initiatives. 

The agency highlighted two policies that it says require large investments of federal funds, estimated at more than $1 billion: 

• Expanded continuous eligibility allows some people to remain enrolled in Medicaid for a period of time, even if they are no longer qualified. As a result, states could be overpaying for coverage of individuals who would not normally be eligible for Medicaid or CHIP. 
• Workforce initiatives were intended to strengthen and build the workforce serving Medicaid through primary care, behavioral health, dental and home and community based services (HCBS). 

“For too long, Medicaid and CHIP have drifted away from their core mission of providing a safety net for the truly vulnerable—that ends now,” said CMS Administrator Dr. Mehmet Oz.  “CMS is restoring commonsense guardrails to Medicaid and CHIP, which will ensure that Medicaid remains a lifeline for those who are eligible and in need of quality health care.”   

CMS is notifying states that it does not anticipate approving new or extending existing section 1115 demonstration authorities that it says have allowed some individuals to remain enrolled in Medicaid or CHIP for extended periods of time, even if they may not have otherwise been eligible. 

The agency continues: “In some cases, children could have remained continuously enrolled in Medicaid or CHIP for up to six years, even if a change in their circumstances would have otherwise made them ineligible at some point. In other cases, CMS has approved up to 24 months of continuous eligibility for adults or targeted adult subpopulations. When this is allowed in many states over time, this practice can affect millions of enrollees and could lead to unsustainable expenditures.”  

Additionally, CMS is notifying states that it does not anticipate approving new or extending existing Medicaid-funded workforce initiatives—programs that use Medicaid dollars to fund certain job training or employment-related activities—which to date have involved more than $1 billion in federal commitments across California, Massachusetts, New York, North Carolina and Vermont. The agency says it will allow currently approved initiatives to run out their course but does not anticipate extending them nor approving new waivers. Going forward, it says it is focused on supporting actions that demonstrate clear health benefits, cost savings and strong accountability for federal spending. 

For more information, visit: 

• Continuous eligibility: https://www.medicaid.gov/resources-for-states/downloads/contin-elig-ltr-to-states.pdf 
• Workforce initiatives: https://www.medicaid.gov/resources-for-states/downloads/workforc-ltr-to-states.pdf 

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