Medicaid Redetermination: 500,000 Patients Falsely Lost Coverage

Just halfway into the Medicaid redetermination problem, the first major challenge has presented itself—and it’s a big one. 

Over half a million people, including children, were falsely dropped from the Medicaid program for procedural reasons. Meaning there was an error in the renewal process that prompted their removal despite remaining eligible. 

What happened?

In August 2023, the Centers for Medicare and Medicaid Services realized there was a major problem with people falsely losing coverage. If patients did not self-report for their renewal, a computer analyzed their account based on existing wage information and insurance discovery. In many states, these computer programs analyzed households as a whole rather than as a group of individuals. 

It’s worth noting the importance of analyzing individuals vs. households was not mentioned in unwinding preparatory materials released by CMS prior to redetermination. According to the Washington Post article, many states had no idea they were even in the wrong. 

Regardless, CMS ordered states to evaluate their practices and report back in two weeks whether they had falsely removed Medicaid patients, whether intentionally or unintentionally. After the two week period, 30 states found to be in the wrong had to stop the redetermination process. CMS did not release complete official data on which states made the list, but identified some, including New York, Pennsylvania, Nevada, Virginia and Maryland. 

Now, some have course-corrected and are ready to move forward, but others will take months to get back on track depending on how many patients were falsely removed. Some of the 30 states, like New York, will send follow-up notices to affected patients offering to pay for any medical expenses incurred while they were uninsured.

Who was impacted?

This “systems glitch,” as CMS is calling it, particularly impacted children. Often, children remain eligible for Medicaid even if their parents do not. According to the Kaiser Family Foundation, nearly 1.4 million children lost Medicaid coverage between April and August 2023. While CMS did not release exact numbers on how many children were erroneously removed from coverage, The Washington Post spoke with Joan Alker, the director of the Georgetown University Center for Children and Families. According to Alker, children likely made up the “vast majority” of the half-million people falsely dropped.

In addition to children, the impact of the glitch also hit mixed immigration households and households with disabilities. Unfortunately, it looks like predictions about vulnerable populations facing the brunt of any negative consequences from redetermination are coming true. 

What does this mean moving forward?

We’re only halfway through the Medicaid redetermination process, and this is a major problem. Half a million people, particularly children, have erroneously lost coverage for procedural reasons, essentially over a computer glitch no one thought to double check. We can’t know for sure what other guidelines may have been glossed over in the time leading up to redetermination. 

Additionally, as people continue to lose coverage throughout redetermination (7.4 million total have been removed as of writing), we’re still anticipating an increase in self-pay patients as newly uninsured populations seek care nationwide. 

Whether you’re preparing for the redetermination impacts we can see coming or course-correcting from an unanticipated systems glitch, one thing is clear: it remains much easier to navigate this process with the right digital tools. 

For example, the accounts falsely dropped from Medicaid this year were those that were auto-analyzed. The patient did not self-report and fill out the proper paperwork, so AI had to step in. Tools like a patient portal, secure document exchange and digital communication system makes it much easier to engage patients in the process and make sure they have the chance to provide their own information. 

lear we as healthcare finance professionals need to continue learning and sharing with our colleagues. Many states had no idea they weren’t following proper procedure! By participating in continuing education opportunities and tapping into our personal networks, we can help each other by sharing tips and advice for a smoother redetermination process. 

If you clicked on this article and made it this far, you’re doing your part. Hats off to you for staying updated and informed as we navigate Medicaid redetermination together!

It’s never too late to improve your self-pay patient management process and tackle any challenges you or your patients are experiencing throughout Medicaid unwinding. We’ll help you put the right tools in place - reach out to the Office Ally team today.

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