March 26, 2020 By Ross Margulies
Categories: Medicaid , Medicaid News , Medicaid Eligibility , Legislation
As my colleague Tom Barker wrote last week, the second emergency COVID-19 supplemental bill (officially referred to as the Families First Coronavirus Response Act), signed by the President on March 18, 2020, included a new section 6008 increasing each state Medicaid program’s federal medical assistance percentage (FMAP) by 6.2% during the period of the current national emergency to the extent they abide by certain minimum standards. CMS has now issued a lengthy FAQ on the availability of these new enhanced Federal funds, which were made retroactive to January 1, 2020 and will continue through the last day of the calendar quarter in which the COVID-19 public health emergency terminations. Experts estimate this funding boost will deliver roughly$35 billion in extra funding to states.
As Tom noted last week, Section 6008 does impose some conditions on states being able to access this higher FMAP rate. Specifically, a state may not tighten its eligibility standards to a level more restrictive than they were on January 1, 2020. The limitation applies to “eligibility standards, methodologies, or procedures under a State plan,” including those adopted via a waiver. So, too, states may not increase any applicable premiums for Medicaid coverage, nor may they terminate coverage for individuals currently enrolled in Medicaid until the end of the month in which the public health emergency ends. Lastly, section 6008 conditions the new enhanced FMAP on states offering COVID-19 testing services and treatments (including vaccines) without any cost-sharing.
As we discuss below, much of CMS’ guidance focuses on what states cannot do in order to access the increased FMAP. With an overarching goal of helping states to address immediate public health needs and prevent Medicaid cuts during the COVID-19 outbreak, CMS details a very bright line for the types of actions (or inactions) a state can take in order to access these enhanced dollars. To orient our readers from a historic perspective, we should note that temporary FMAP increases are a common response to economic downturns under both past Democratic and Republic administrations. For example, the 2009 Recovery Act provided an initial 6.2 percentage point FMAP increase to all states, plus increases based on state economic conditions (most states ended up receiving 10%).
In slightly unrelated news, we should flag for our readers that CMS has withdrawn its long-awaited eligibility determination rule, likely in response to concerns about “disturbing” the program during this time of crisis.
In the FAQ, CMS provides even more details to states eager to learn what sorts of “strings” may be imposed under the new FMAP increase.
Perhaps most notable in the guidance — the maintenance of effort requirements set forth in section 6008 and further detailed in the FAQ imposed upon those states receiving the increased FMAP under the Families First Coronavirus Response Act are quite strict. This is of course not by accident – in light of the ongoing public health emergency, Congress has offered states a “carrot” to keep in place coverage and benefits for those enrolled in – or soon to be enrolled in – their Medicaid programs. In light of unprecedented unemployment claims, we expect state Medicaid rolls will soon enter a period of rapid growth. It was clearly Congress’ hope that the increased FMAP will attract interest from states already struggling to maintain tight budgets. Still, advocates continue to press Congress for additional action, arguing that the increased FMAP, while welcome, is simply insufficient.