SHO letter 21002 August 2021

DEPARTMENT OF HEALTH & HUMAN SERVICES
Centers for Medicare & Medicaid Services
7500 Security Boulevard, Mail Stop S2-26-12
Baltimore, Maryland 21244-1850

SHO# 21-002
RE: Updated Guidance Related to
Planning for the Resumption of
Normal State Medicaid, Children’s
Health Insurance Program
(CHIP), and Basic Health
Program (BHP) Operations Upon
Conclusion of the COVID-19
Public Health Emergency
August 13, 2021
Dear State Health Official:
Medicaid, the Children’s Health Insurance Program (CHIP), and the Basic Health Program
(BHP) have played critical roles in responding to the ongoing Novel Coronavirus Disease 2019
(COVID-19) outbreak. Over the course of the COVID-19 public health emergency (PHE), state
Medicaid, CHIP, and BHP agencies adopted many flexibilities offered by the Centers for
Medicare & Medicaid Services (CMS) to respond effectively to their local outbreaks. States also
made program changes to qualify for the Federal Medical Assistance Percentage (FMAP)
funding increase available under section 6008 of the Families First Coronavirus Response Act
(FFCRA) (Pub. L. 116-127) as amended by the Coronavirus Aid, Relief, and Economic Security
(CARES) Act (Pub. L. 116-136), including by satisfying a continuous enrollment requirement
for most Medicaid beneficiaries who were enrolled in the program as of or after March 18,
2020. 1
This State Health Official (SHO) letter outlines policy changes CMS is making to better support
states as they address the large volume of pending eligibility and enrollment actions they will
need to take after the PHE ends and minimize beneficiary burden. While this letter will assist
states in their planning efforts for the eventual end of the PHE, it does not signal nor confirm
when the federal PHE declaration will end. In the coming months, CMS will provide additional
detailed guidance on the updated policies described in this letter.

1

This includes Medicaid beneficiaries and beneficiaries enrolled in the state’s CHIP Medicaid expansion program.

Page 2 – State Health Official
Background
In December 2020, CMS released SHO #20-004, “Planning for the Resumption of Normal State
Medicaid, Children’s Health Insurance Program (CHIP), and Basic Health Program (BHP)
Operations Upon Conclusion of the COVID-19 Public Health Emergency” 2 (December 2020
SHO), to support states in planning for the eventual end of the PHE, and to ensure they are able
to transition back to normal operations efficiently when the PHE ends in a manner that
minimizes burden for both states and beneficiaries as well as limits coverage disruptions. Due to
disruptions to state operations during the COVID-19 PHE and the continuous enrollment
requirement under section 6008 of the FFCRA, states will be faced with a large number of
eligibility and enrollment actions (including renewals, redeterminations, and post-enrollment
verifications), which they will need to complete after the PHE ends. States have indicated that
the volume of post-enrollment verifications, 3 redeterminations based on changes in
circumstances, and renewals that will need to be processed when the PHE ends has increased as
the PHE has extended further into 2021. Medicaid and CHIP enrollment has grown to a record
high of more than 81 million individuals, 4 and the increase in enrollment is largely attributed to
the FFCRA Medicaid continuous enrollment requirement as churn in enrollment operations has
ceased. 5
States have raised concerns that they will need additional time to complete the growing backlog
of pending work, especially in states that are relying on manual workarounds to extend coverage
during the PHE. In addition, many states have expressed concern that having to complete all
pending actions within six months of the end of the PHE will result in a “renewal bulge” in
future years, which would result in ongoing administrative burden, as a more even distribution of
renewals over the course of the year is more manageable. This could result in additional burden
to beneficiaries in the future if states are unable to timely and accurately complete renewals
when they experience a “renewal bulge”
Stakeholders have also raised concerns that eligible beneficiaries are at risk of losing coverage if
states must complete pending work in a compressed timeframe because states would have less
time to conduct outreach and implement strategies to facilitate accurate redeterminations that
reduce burden for beneficiaries. In addition, less time to complete the growing backlog of
pending work may result in states providing beneficiaries less time to respond to requests for
needed information, resulting in increased inappropriate terminations of eligibility for procedural
reasons.

SHO # 20-004. Planning for the Planning for the Resumption of Normal State Medicaid, Children’s Health
Insurance Program (CHIP), and Basic Health Program (BHP) Operations Upon Conclusion of the COVID-19 Public
Health Emergency. Available at: https://www.medicaid.gov/sites/default/files/2020-12/sho20004.pdf.
3
States have the option to enroll individuals based on self-attested information and verify eligibility postenrollment, consistent with the state verification plan.
4
February 2021 Medicaid and CHIP Enrollment Trends Snapshot, available at
https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/downloads/february-2021medicaid-chip-enrollment-trend-snapshot.pdf.
5
Medicaid and CHIP Enrollment Snapshot Shows Almost 10 Million Americans Enrolled in Coverage During the
COVID-19 Public Health Emergency, available at https://www.cms.gov/newsroom/press-releases/new-medicaidand-chip-enrollment-snapshot-shows-almost-10-million-americans-enrolled-coverage-during.
2

Page 3 – State Health Official
Given growing state and stakeholder feedback and the continued extension of the PHE, CMS is
updating certain policies set forth in the December 2020 SHO, which we believe are critical to
ensuring that states are able to manage the significantly increased workload and ultimately
resume normal operations efficiently, while also ensuring that eligible beneficiaries are not
inappropriately terminated when the PHE ends.
Revisions to December 2020 State Health Official Letter
This letter outlines policy areas for which CMS is revising the guidance provided in the
December 2020 SHO. Many aspects of the December 2020 SHO remain unchanged with this
updated guidance. While states should continue to process eligibility and enrollment actions to
the extent possible during the PHE, this updated guidance primarily relates to the pending
eligibility and enrollment actions that states have not addressed prior to the end of PHE. In the
coming months, CMS will provide additional detailed guidance on the updated policies
described in this letter.
Specifically, CMS is revising the guidance in the December 2020 SHO in two key areas, as
follows.
Extending the timeframe for states to complete pending eligibility and enrollment actions to up to
12 months after the month in which the PHE ends
The December 2020 SHO encouraged states to work through their backlog as expeditiously as
possible and would have provided states with up to 6 months after the month in which the PHE
ends to complete pending post-enrollment verifications, redeterminations based on changes in
circumstances, and renewals (see pages 28-29 of the December 2020 SHO). Under our revised
guidance, states may take up to 12 months after the month in which the PHE ends to complete
pending verifications, redeterminations based on changes in circumstances, and renewals. CMS
believes the additional time is appropriate given the increased program enrollment and to ensure
states can reestablish a renewal schedule that is sustainable in future years.
This policy change does not affect the timeframe in which states must resume the timely
processing of all applications. The December 2020 SHO provides states with up to 4 months
after the month in which the PHE ends to resume timely processing of all applications (see page
28 of the December 2020 SHO). Because the FFCRA did not limit states’ ability to process
applications during the PHE and to ensure timely access to coverage for eligible individuals,
CMS is maintaining this timeframe. Thus, under our revised guidance, states continue to have
up to 4 months after the month in which the PHE ends to resume timely processing of all
applications. 6 CMS is available to provide technical assistance to states that are working to
complete pending eligibility and enrollment work within the 12-month timeframe, and we
remain interested in hearing state feedback and concerns as states plan for and resume routine
operations consistent with the expectations outlined in this letter.

See SHO # 20-004. Planning for the Resumption of Normal State Medicaid, Children’s Health Insurance Program
(CHIP), and Basic Health Program (BHP) Operations Upon Conclusion of the COVID-19 Public Health
Emergency. Section VI. Resuming Normal Eligibility and Enrollment Operations: Addressing Pending Eligibility
and Enrollment Actions, pp 28-29; Appendix C: Table C-1, pp 45-46). Available at:
https://www.medicaid.gov/sites/default/files/2020-12/sho20004.pdf.
6

Page 4 – State Health Official
Completing an additional redetermination for individuals determined ineligible for Medicaid
during the PHE
States have continued to process eligibility and enrollment actions during the PHE, but as a
condition for claiming the temporary 6.2 percentage point FMAP increase, they have suppressed
taking any adverse actions for Medicaid beneficiaries that would violate the continuous
enrollment requirement. 7 The December 2020 SHO provided states the option to avoid
completing another redetermination prior to terminating coverage after the PHE ends if certain
conditions were met, including that the eligibility action processed during the PHE was
completed within six months of the beneficiary’s termination after the PHE (see pages 14-15 of
the December 2020 SHO). The option in the December 2020 SHO for states to avoid “repeat
redeterminations” carries inherent risk that coverage will be terminated for some eligible
beneficiaries. Given that states will now have 12 months to complete all pending postenrollment verifications, redeterminations based on changes in circumstances, and renewals
following the end of the PHE, we are rescinding the option provided in the December 2020 SHO.
Under the revised policy, states may not terminate coverage for any individual determined
ineligible for Medicaid, but not terminated, during the PHE, including individuals who failed to
respond to a request for information, until the state has completed a redetermination after the
PHE ends. States must complete an additional redetermination in accordance with 42 C.F.R.
§435.916 prior to taking an adverse action with respect to any beneficiary. 8 This includes
checking available information and data sources to attempt a redetermination without contacting
the beneficiary and requesting documentation to obtain reliable information when eligibility
cannot be renewed based on available information, as appropriate.
As required at 42 C.F.R. §435.916(a)(3)(i)(B), states must provide beneficiaries eligible based on
modified adjusted gross income (MAGI) methodologies a minimum of 30 days to return their
pre-populated renewal form and any requested information. Non-MAGI beneficiaries must be
provided with a reasonable period of time to return their renewal form and any required
documentation. For redeterminations based on changes in circumstances, beneficiaries must be
given a reasonable period of time to provide information or other documentation to establish that
the information received by the agency is not correct and the individual continues to meet any
eligibility criterion at issue.
As discussed in the CMCS Informational Bulletin (CIB), “Medicaid and CHIP Renewal
Requirements,” we believe it would be reasonable for states to allow beneficiaries 30 days to
respond and provide any necessary information needed to verify eligibility following a change in
circumstances. Renewal forms and notices must be accessible to persons who are limited
English proficient and persons with disabilities consistent with 42 C.F.R. 435.905(b). A
Individuals enrolled in a separate CHIP and BHP are not subject to the FFCRA continuous enrollment
requirement, and states should terminate coverage for ineligible individuals enrolled in a separate CHIP or BHP
during the PHE.
8
For individuals determined ineligible for Medicaid who are still within their 12-month eligibility period (or shorter
period elected by the state for individuals enrolled on a basis other than modified adjusted gross income), states must
follow the requirements to complete another post-enrollment verification or redetermination of eligibility consistent
with 42 C.F.R. § 435.916(d). States must complete a full renewal for individuals determined ineligible at renewal
during the PHE or who are no longer within their eligibility period when the state processes the redetermination
again after the PHE ends.
7

Page 5 – State Health Official
minimum of 10 days advance notice and fair hearing rights must also be provided prior to
termination or other adverse action, in accordance with 42 C.F.R. Part 431 Subpart E. 9
States may refer to the “Medicaid and CHIP Renewal Requirements” CIB which is available to
assist states in meeting their obligations to make accurate redeterminations of eligibility. 10 A
description of the CIB and more information on how states may access the guidance is included
in the Appendix of this SHO. States may access the Renewal CIB on Medicaid.gov
(https://www.medicaid.gov/federal-policy-guidance/downloads/cib120420.pdf).
States are also required to take steps to smoothly transition beneficiaries who are determined
ineligible after the PHE to other insurance affordability programs, as appropriate, in accordance
with 42 C.F.R. § 435.1200 and § 457.350 and 42 C.F.R. §600.330(a). As states redetermine
eligibility after the PHE ends, states must assess potential eligibility for other insurance
affordability programs for individuals determined ineligible for Medicaid, consistent with 42
C.F.R. § 435.916(f)(2), and transfer individuals’ electronic account to the appropriate program
(e.g., the Marketplace) in a timely manner. 11
Additional Considerations
The December 2020 SHO requires states to adopt one of four risk-based approaches (based on
age of the case, population, a combination, or other approach) in order to prioritize completion of
pending work (see pages 23-24 of the December 2020 SHO), and we understand that many states
have begun to plan for this work. Given that states will now have 12 months, instead of 6, to
complete all pending post-enrollment verifications, redeterminations based on changes in
circumstances, and renewals after the PHE ends, states are encouraged to reassess their riskbased approach to prioritizing pending work and make adjustments to their plans to restore
routine operations after the PHE ends, as appropriate.
In addition, states must consider ways to ensure that their risk-based approach promotes
continuity of coverage for eligible individuals and limits delays in processing actions for
individuals who become eligible for new or more comprehensive coverage. States also are
encouraged to consider adopting new flexibilities to streamline eligibility and enrollment
processes, especially for individuals dually eligible for Medicaid and Medicare, children, and
other population whose eligibility tends to be stable (see pages 33-34 of the December 2020
SHO for discussion of such strategies as well as the Appendix of this SHO for a brief description
of these strategies). CMS plans to provide additional guidance to assist states in prioritizing
actions as well as outline ways states may reestablish a renewal workload that is sustainable in
future years given the extended timeframe.

See SHO # 20-004. Planning for the Resumption of Normal State Medicaid, Children’s Health Insurance Program
(CHIP), and Basic Health Program (BHP) Operations Upon Conclusion of the COVID-19 Public Health
Emergency. Section III. P. 9; Section IV., pp 14 -15; Appendix B: Table B-1, p. 40. Available at:
https://www.medicaid.gov/sites/default/files/2020-12/sho20004.pdf
10
CMCS Informational Bulletin, Medicaid and Children’s Health Insurance Program (CHIP) Renewal
Requirements, available at: https://www.medicaid.gov/federal-policy-guidance/downloads/cib120420.pdf.
11
Individuals enrolled in a separate CHIP and BHP are not subject to the FFCRA continuous enrollment
requirement, and states should terminate coverage for ineligible individuals enrolled in a separate CHIP or BHP and
ensure smooth transitions of coverage during the PHE.
9

Page 6 – State Health Official
CMS also recognizes that some Medicaid Section 1135 waivers approved for states or territories
may no longer be in use. States and territories should end any flexibilities that are no longer
needed. Prior to ending a Section 1135 waiver before the end of the PHE, states and territories
should contact their CMS State Lead and identify the waivers that the state or territory is
terminating, so that CMS may provide technical assistance.
Closing
CMS remains committed to providing states and territories with the resources and ongoing
technical assistance necessary to respond effectively to the COVID-19 outbreak and restore state
operations upon the eventual conclusion of the current PHE. Please submit any additional
requests for technical assistance to your CMS State Lead.
Sincerely,

Daniel Tsai
Deputy Administrator and Director
Cc:
National Association of Medicaid Directors
National Academy for State Health Policy
National Governors Association
American Public Human Services Association
Association of State and Territorial Health Officials
Council of State Governments
National Conference of State Legislatures
Academy Health
National Association of State Alcohol and Drug Abuse Directors

Page 7 – State Health Official
Appendix
State Resources
State Health Official Letter (SHO) #20-004, “Planning for the Resumption of Normal State
Medicaid, Children’s Health Insurance Program (CHIP), and Basic Health Program
(BHP) Operations Upon Conclusion of the COVID-19 Public Health Emergency”
(December 2020 SHO): This December 2020 SHO provides guidance to states on planning for
the eventual return to regular operations, including ending temporary authorities when the PHE
concludes, making temporary changes permanent in certain circumstances, procedures for ending
coverage and policies authorized under expiring FFCRA provisions, and addressing pending
eligibility and enrollment actions that developed during the PHE. Unless otherwise noted in this
letter the guidance in the December 2020 SHO, including guidance on strategies states may take
to support routine eligibility and enrollment operations, remains in effect.
•

Section VII. Strategies to Support Returning to Routine Operations (pages 30-35): This
section outlines strategies states may adopt to facilitate efficient restoration of Medicaid and
CHIP operations upon conclusion of the PHE. The strategies include options that require the
submission of a state plan amendment, such as providing 12 month continuous eligibility for
children, adopting 12 month renewals for non-MAGI beneficiaries, or adopting the facilitated
enrollment state plan option to rely on income determinations made by another program if
the state is certain the individuals would be income-eligible using MAGI based methods.
The listed strategies also include options that states may take without submitting a SPA, such
as maximizing the use of ex parte renewals by accessing additional data at renewal or
modifying verification policies to accept self-attestation to verify certain eligibility criteria.

States may access the December 2020 SHO at https://www.medicaid.gov/federal-policyguidance/downloads/sho20004.pdf.
CMCS Informational Bulletin (CIB), “Medicaid and CHIP Renewal Requirements”
(Renewal CIB): This Renewal CIB reminds states about current federal requirements and
expectations codified in existing regulations at 42 C.F.R. §435.916 and §457.343 for completing
redeterminations of eligibility for Medicaid and Children’s Health Insurance Program (CHIP)
beneficiaries. These requirements are intended to ease administrative burden on states and
beneficiaries by limiting requests for information to information needed to determine eligibility,
ensuring beneficiary eligibility is assessed on all bases before determining an individual is
ineligible and promoting seamless transitions of coverage, and minimizing the churn of
beneficiaries on and off Medicaid and CHIP coverage for procedural reasons.
States may access the Renewal CIB at https://www.medicaid.gov/federal-policyguidance/downloads/cib120420.pdf.