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Federal agency asks states to pause Medicaid unwinding; DHS says request does not apply to Arkansas

Members of the group Arkansas Community Organizations protest the state's Medicaid unwinding process at the State Capitol on Aug. 22, 2023.
Daniel Breen
Little Rock Public Radio
Members of the group Arkansas Community Organizations protest the state's Medicaid unwinding process at the State Capitol on Aug. 22, 2023.

The U.S. Centers for Medicare and Medicaid Services (CMS) sent a letter to all 50 states Wednesday, asking some to restore coverage for people who were recently disenrolled for procedural reasons.

The request does not apply to Arkansas, Department of Human Services spokesman Gavin Lesnick said in an email.

DHS conducts Medicaid eligibility reviews on an individual basis and does not require eligibility information for every member of someone’s household to provide benefits to that person, he said.

Wednesday’s letter from Daniel Tsai, CMS’ director of the Center for Medicaid and the Children’s Health Insurance Program (CHIP), asks states to pause procedural disenrollments if they “are sending renewal forms requesting information for all household members, and, if the renewal form is not returned… disenrolling all individuals in the household, including those who should have been determined to be eligible.”

The federal government extended Medicaid coverage regardless of continued eligibility from March 2020 to May of this year due to the COVID-19 pandemic. States have been “unwinding” the extension since April and disenrolling people whose eligibility they cannot confirm for a variety of reasons, including unreturned paperwork.

DHS has disenrolled more than 144,000 Arkansans from Medicaid after not receiving required eligibility information in addition to the clients who asked to be disenrolled or now make too much money to be eligible, according to department data.

Arkansas has drawn national attention this year for its number of procedural disenrollments and for its plan to do so in half a year. Most states have a full year to conduct the “unwinding,” but a 2021 state law gave Arkansas a maximum of six months.

Tsai wrote that conducting Medicaid eligibility reviews on a household basis can hurt not only eligible people in households with missing information but also children in households with at least one Medicaid-eligible adult.

Denying one person’s Medicaid eligibility based on missing documentation for another person violates federal Medicaid renewal regulations, he wrote.

Tsai asks states who conduct this type of eligibility review to pause procedural disenrollments, reinstate Medicaid coverage for people whose eligibility was undetermined and send CMS a “mitigation plan” for approval by Sept. 13.

Although Arkansas’ Medicaid renewal system seeks to determine individual eligibility, advocates have repeatedly expressed concern that some Arkansans who are still eligible for coverage could lose it or have already lost it due to bureaucratic hurdles. Some said they have had difficulties ensuring that DHS has accurately recorded or updated their income and contact information.

About 36% of the state’s disenrolled Medicaid clients from April through June were children, according to data collected by health policy researcher KFF, which has been tracking the Medicaid unwinding process nationwide.

Last week, Arkansas Community Organizations wrote a letter to Tsai asking his division of CMS to work with Arkansas officials on improving the state’s administration of Medicaid benefits.

The letter also requested that Arkansas pause disenrollments of Medicaid recipients whose coverage was extended because of the pandemic.

Medicaid recipients have also repeatedly petitioned DHS for broader health care coverage from the program, a less cumbersome application process and better customer service.

Tess Vrbin is a reporter with the nonprofit, nonpartisan news organization Arkansas Advocate. It is part of the States Newsroom which is supported by grants and a coalition of readers and donors.