Automation glitch leads to wrongful removal of children from Medicaid

A glitch in the automated systems used for a massive eligibility review of the government-run Medicaid program is causing children in many states to be wrongly cut off from coverage, according to a top Medicaid official. The federal Centers for Medicare and Medicaid Services (CMS) is urging states to review their computer-automated processes to ensure that children are evaluated separately from their parents and not losing coverage due to their parents' ineligibility or inaction. While the exact scope of the problem remains unclear, it is likely affecting at least half of the states and potentially impacting millions of children.

Joan Alker, executive director of Georgetown University Center for Children and Families, described the issue as a significant problem. Most states allow children to qualify for Medicaid at higher household incomes than adults. However, eligible children are not being successfully renewed in many states, which violates federal requirements, according to Daniel Tsai, director of the CMS Center for Medicaid and Children's Health Insurance Program Services.

All states are currently conducting a large-scale eligibility review for Medicaid, following the end of a pandemic-era prohibition on removing people from the program. The freeze resulted in a significant increase in Medicaid enrollment, with about 5 million people already losing coverage during the eligibility reviews. States are encouraged to automatically renew Medicaid recipients by using computer programs to review income and household information submitted for other social services. If the automated process fails, states are supposed to send notices to households to verify eligibility information. Failure to respond leads to individuals being dropped from Medicaid.

Tsai explained that a systems glitch in some states is flagging entire households for further information and dropping all family members if there is no response. This is in contrast to the requirement of reviewing each individual separately and automatically renewing eligible children. Maryland is one of the states experiencing this issue, but they have taken immediate action to resolve it. They have paused procedural terminations, reinstated coverage for children who were not renewed automatically, and are working to fix their system as quickly as possible.

CMS has sent letters to states instructing them to report any similar problems with their automated renewal systems by September 13. States with issues are required to pause procedural terminations, reinstate coverage for those affected, and find a solution to prevent further wrongful cutoffs until the automated systems are fixed. Some states, like Missouri, have already implemented manual handling of cases where a child is eligible but a parent's eligibility is in question, causing delays in the process.

Overall, this glitch in the automated systems used for Medicaid eligibility reviews is causing children to be incorrectly cut off from coverage in many states. Federal officials are urging states to address the issue and ensure that children are evaluated separately from their parents to prevent wrongful cutoffs.


More from Press Rundown