States need to complete their “Medicaid unwinding” activities by the end of 2026, the Centers for Medicare & Medicaid Services informed state Medicaid programs in a recent memo.

According to the agency,

… all states are required to complete a compliance assessment, demonstrate compliance with federal Medicaid and CHIP renewal requirements described at 42 C.F.R. §§ 435.916 and 457.343, and submit a plan outlining steps and milestones for addressing identified areas of non-compliance to CMS by December 31, 2024. Compliance plans will detail how states will achieve compliance with all applicable requirements no later than December 31, 2026.

“Medicaid unwinding” refers to the launch of efforts to redetermine eligibility for individuals on states’ Medicaid rolls – a process that was suspended during the COVID-19 pandemic as a condition of additional federal Medicaid matching funds from the federal government.  Many states have struggled with this work, which officially began in April of 2023, leading CMS to intervene in their efforts, clarifying and modifying the tools they have at their disposal for redetermining eligibility, requiring states to submit plans to complete the work, and closely monitoring their progress.  “Nearly all states,” CMS notes in its memo to the states,

…were required to implement at least one mitigation strategy during unwinding, including states that needed to reinstate beneficiaries or temporarily pause renewal processing to protect coverage for eligible individuals.

The CMS memo outlines a timeline for states’ remaining unwinding efforts, reminds them of the tools they can use to redetermine eligibility, and warns that

States that fail to demonstrate compliance with all renewal requirements by December 31, 2026, may face additional agency action based on CMS’ assessment of the state’s circumstances and the nature of the non-compliance. 

Community safety-net hospitals have a considerable stake in the outcome of Medicaid eligibility redeterminations because so many of the residents of their communities are currently enrolled in the program.

Learn more about CMS’s attempt to draw to a close a process that was supposed to end more than a year ago from the Becker’s Hospital Review article “CMS:  States have 2 years to fix Medicaid renewal problems” and the CMS memo to state Medicaid programs.