Arkansas and a handful of other states began terminating Medicaid coverage in April, and the early reports show something that should change how every practice runs eligibility checks: most of the people being disenrolled so far are not being found ineligible. They are being terminated because a renewal form was not returned. Arkansas's first monthly unwinding report, released in early May, showed more than 50,000 April closures that were procedural, the large majority of everyone the state disenrolled that month. The national estimate before the unwinding began was that around 6.8 million people who still qualify would lose coverage this way. The early state numbers suggest that estimate was not pessimistic.
For three years the Medicaid eligibility check was the one that always came back active. Now a patient can be active on Monday and terminated on the first of the month, reinstated three weeks later when the paperwork arrives, and moved to a different managed care plan in the process. The annual check most practices ran is useless against that. This is how we run it now.
Key takeaways
- Most early unwinding terminations are procedural, which means many terminated patients will be reinstated, often with coverage backdated, once the paperwork arrives.
- The 271 response carries the coverage end date, the assigned plan, the benefit level and any other insurance. Read those fields, not just the word "active".
- Run three checks: a batch check two business days before the visit, a real-time check at arrival, and a daily recheck of every claim held for inactive Medicaid.
- Have the coverage conversation before the visit with a script and a written policy, and never send a Medicaid patient a statement until the date of service is confirmed uncovered.
- Four weekly numbers tell you whether the unwinding has reached your patients and whether your process is recovering the reinstatements.
What the 271 response actually tells you
The eligibility inquiry (270) and response (271) is the standard transaction behind every "verify eligibility" button. Practices click it and look for the word active. The response contains much more, and during the unwinding the other fields are where the information is.
| 271 field | What to look at | Why it matters now |
|---|---|---|
| Coverage dates (DTP segments) | Begin and end dates of the eligibility period | An end date within 30 days is a termination notice you can act on before the visit |
| Payer and plan (NM1 and REF) | The managed care organization currently assigned | Reassignments after reinstatement change where the claim goes |
| Benefit type and level | Full benefits, limited benefits, share of cost, spend-down | Some people move from full Medicaid to limited programs and the visit may not be covered |
| Primary care provider assignment | Name and NPI of the assigned PCP | Some MCOs deny or reduce payment for visits outside the assigned PCP |
| Other insurance (third-party liability) | Commercial or Medicare coverage the state has on file | Medicaid is the payer of last resort; a new job means a new primary payer |
| Response codes (AAA segments) | Rejection reasons such as patient not found or invalid subscriber ID | A "not found" during unwinding usually means terminated, not a typo |
Most practice management systems display only part of this. Ask your vendor or clearinghouse how to see the full response, or at least the coverage end date and the plan name. If the system cannot show the end date, the batch check is not doing its job.
The three checks
- Pre-visit batch check, two business days before. Run the 270 for every scheduled patient. Sort the exceptions: inactive, end date within 30 days, plan changed since last visit, new third-party liability. Each exception gets a phone call before the visit, not a conversation at the desk.
- Real-time check at arrival. A patient who was active two days ago can be terminated today, because terminations post on the first of the month and reinstatements post whenever the state processes the form. The check takes seconds and it is the last chance to have the conversation before the service is rendered.
- Daily recheck of the coverage-gap hold. Every claim held for inactive Medicaid gets rechecked automatically every day, or at minimum weekly, for 90 days. When coverage reappears with a retroactive start date, release the claim. This is the step that recovers the reinstatement cases, and it is the step nobody does by hand.
The 90-day figure is not arbitrary. Federal rules require states to give people terminated for procedural reasons a 90-day reconsideration period in which returning the renewal form reinstates coverage without a new application, and many states backdate the reinstatement to the termination date. Your recheck window should match it.
The conversation at the desk
When the check shows inactive, the front desk needs a script and a decision the practice made in advance. The script has three parts. First, tell the patient plainly: "The state's system shows your Medicaid ended on April 30. Did you receive a renewal packet?" Second, give them the state's renewal phone number and website and explain that many people are reinstated when they return the form, in many states with coverage backdated. Third, explain what happens today: the practice's policy on seeing the patient, and what the patient will owe if coverage is not restored. Put the third part in writing and have them sign it. Patients who lose Medicaid because their income rose should also hear about the HealthCare.gov special enrollment period that runs through July 31, 2024.
The phone call two days before the visit is the same script, and it works better, because the patient can call the state before the appointment rather than after. In practices that have started making the call, a meaningful share of patients had no idea they had been terminated. The call is the first they hear of it, and the practice becomes the reason they get reinstated.
What to do with the claims
A claim for a terminated patient has three possible futures, and the hold should reflect them.
- Reinstated with retroactive coverage. Release the claim to the plan shown in the new 271, which may not be the old plan. If the claim was already denied CO-27, correct and resubmit rather than appeal.
- Reinstated without retroactive coverage, or enrolled in a new plan with a later effective date. The visit is uncovered. Whether the patient can be billed depends on your state's rules and the form the patient signed. Do not send a statement to a Medicaid patient until you have confirmed the date of service was not covered.
- Not reinstated after 90 days. Transfer to self-pay according to the signed acknowledgment, or write off according to your financial assistance policy. Record the reason code specifically ("Medicaid unwinding termination") so you can measure it.
A worked month
A fictional pediatric practice with 900 Medicaid visits a month runs the pre-visit batch for the first time in the second week of May. It finds 61 patients with inactive coverage, 38 with an end date inside 30 days, and 14 whose managed care plan has changed since the last visit. The 61 inactive patients get calls; 40 are reached, and 29 of those did not know. The practice sees the patients anyway under its written policy and holds 61 claims, about $6,700 at its Medicaid rates, in the coverage-gap queue. By the end of June, the daily recheck has released 34 of them to a payer, 9 of those to a different MCO than the one on file. Twelve remain on hold. Fifteen have passed 90 days and moved to the self-pay or financial assistance decision. Without the batch check, all 61 would have been billed to the old plan, denied CO-27 or CO-109, and most would have been written off or, worse, sent to the patient.
Numbers to watch, weekly
- Percentage of Medicaid pre-visit checks returning inactive or ending within 30 days.
- Count and dollars in the Medicaid coverage-gap hold, and the share released to a payer within 90 days.
- Claims sent to the wrong MCO (CO-109) as a share of Medicaid managed care claims.
- Medicaid visits as a share of total visits, against the first quarter of 2023.
The first number tells you the unwinding has reached your patients. The second tells you whether your process is recovering the reinstatements. If the release share is low, the daily recheck is not running.
Questions we hear
Our clearinghouse charges per eligibility transaction. Is checking every visit worth it?
The transaction cost is small relative to one denied visit, and most clearinghouses offer batch pricing. If cost is the concern, run the pre-visit batch for every Medicaid patient and the real-time check only when the batch showed an end date or a change. That covers most of the risk.
Should we stop scheduling patients who show inactive?
We do not recommend it. Many of these patients will be reinstated, and refusing care to them damages the relationship and your quality measures. Schedule, call ahead, and have the coverage conversation before the visit so the patient can act on it.
Can Revelrex run these checks for us?
The three checks above are part of the daily routine for practices using Revelrex billing, and the coverage-gap hold is reported weekly. For practices that keep billing in-house, the RCM audit includes a review of how eligibility is run and where the exceptions go.
What to do this week
- Ask your practice management vendor or clearinghouse to show the coverage end date, plan name and third-party liability from the 271 on the eligibility screen.
- Schedule the batch 270 to run two business days before every appointment day and assign one person to work the exception list by phone.
- Create the Medicaid coverage-gap hold with a daily or weekly automatic recheck for 90 days.
- Write the three-part desk script and the practice's policy on seeing patients who show inactive, and have the front desk sign off on both.
- Start the four weekly numbers this Friday, with the first quarter of 2023 as the baseline.
