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Pallone & Wyden Question State Contractors on Preparation and Planning for Redetermining Medicaid Eligibility

May 6, 2022
Press Release
“Failure to approach this transition period thoughtfully and to invest the necessary resources for this task could result in millions of children and adults losing coverage and becoming uninsured.”

House Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ) and Senate Finance Committee Chairman Ron Wyden (D-OR) wrote to companies contracting with states to assist in determining who is eligible for Medicaid and Children’s Health Insurance Program (CHIP) coverage at the end of the COVID-19 Public Health Emergency (PHE). 

Under the Families First Coronavirus Response Act, each state received a federal medical assistance percentage (FMAP) increase of 6.2 percentage points in exchange for following certain maintenance of effort requirements including maintaining continuous Medicaid enrollment for beneficiaries until the end of the COVID-19 PHE. The Biden Administration has said it will provide states 60-day notice before the PHE expires, providing states time to prepare for the large and complex task of redetermining Medicaid eligibility. 

“As states prepare for this enormous effort, we note that some have engaged with private companies for assistance to conduct these eligibility redeterminations,” Pallone and Wyden wrote. “However, we are aware of reports that some of these companies include those with a track record of poor performance in delivering on government contracts and are troubled by this information given the serious consequences that could result from mistakes made during the redetermination process.” 

The lawmakers also stressed the importance of holding contractors to the same high standards as states and noted that their contracts should not include incentives to disenroll people. 

“To protect access to health coverage for millions of eligible Medicaid beneficiaries, it is essential that contractors be held to the same level of compliance with the law as are states,” the Committee Chairmen wrote. “Contracts with private companies should also not be created with financial incentives that could result in eligible beneficiaries improperly losing coverage, such as contracts that increase contractor compensation based on the sheer number of individuals disenrolled.”

The Committee Chairmen also expressed concern that many of the most vulnerable populations could fall through the cracks during eligibility redeterminations if states and private contractors are not properly prepared. 

“We are concerned that the redetermination process and access to care could be jeopardized by several factors, including the significant increases in Medicaid and CHIP enrollment during the PHE and the disruption to eligibility and enrollment operations,” Pallone and Wyden continued. “People who make up a greater proportion of Medicaid beneficiaries, including children, people of color, and individuals with limited English proficiency, are the most at-risk to experience coverage disruptions during the redetermination process, which will exacerbate racial and ethnic health inequities."

In light of these concerns, the Committee Chairmen requested documents and answers to a series of questions from each of the companies, including: 

  • A detailed description of the business relationship with the state and a copy of the executed contract;
  • A detailed description of the organizational experience in working with state Medicaid agencies in general and specifically with assisting with Medicaid eligibility determinations, or any portions of eligibility determinations with Medicaid and CHIP programs; and
  • A detailed description of the organizational capacity to perform the scope of tasks the company has been contracted to perform. 

Copies of the letters to each of the companies are available below: