DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, Maryland 21244-1850 
 
CMCS Informational Bulletin 
  
DATE:   May 22, 2018 
  
FROM:  Timothy B. Hill, Acting Director 
 
SUBJECT:    Coordination Between HHS Appeals Entity and Medicaid and CHIP 
Agencies  Assessment States  
 
This Informational Bulletin discusses federal requirements and provides technical assistance 
related to coordination of appeals among insurance affordability programs in states that have 
elected for the Federally-facilitated Exchange (FFE) to make an assessment of eligibility for 
Medicaid and the Childrens Health Insurance Program (CHIP) (assessment states).  This 
Bulletin does not apply to states that have delegated authority to the FFE to make final 
determinations of Medicaid and CHIP eligibility.  
The Department of Health and Human Services (HHS) Appeals Entity has provided a 
Memorandum of Agreement (MOA) to each state agency in an assessment state for review and 
signature.  The MOA will govern the relationship between the state agency and the HHS Appeals 
Entity and define the roles and responsibilities of each with respect to the coordination of 
eligibility determinations for, and enrollment in, the appropriate insurance affordability program, 
when the HHS Appeals Entity issues an appeal decision finding that an individual is potentially 
eligible for Medicaid or CHIP.  This Bulletin explains the state agencies responsibilities under 
the MOA.  
Regulations in 42 CFR 435.1200 and 457.348, published in a November 2016 final rule at 81 
Federal Register 86382, set forth the responsibilities of state Medicaid and CHIP agencies in 
effectuating a coordinated appeals process with the Exchange operating in the state.  The HHS 
Appeals Entity, which conducts appeals of eligibility determinations made by a Federally-
Facilitated Exchange (FFE), is responsible for effectuating a coordinated appeals process with 
state agencies in states served by a FFE.  As used in this document, references to a FFE include 
reference to a State-Based Exchange using the federal eligibility and enrollment platform 
pursuant to 45 CFR 155.200(f), for which the HHS Appeals Entity adjudicates eligibility 
appeals. 
In this Bulletin, the term Exchange-related appeal means an appeal of a determination by the 
FFE related to an individuals eligibility for enrollment in a Qualified Health Plan (QHP) 
through the Exchange and, if applicable, for advance payments of the premium tax credit 
(APTC) and cost-sharing reductions (CSR).  State agency is used when the information in this 
Bulletin applies to both the state Medicaid agency and the CHIP agency.  In addition, while the 
regulations refer to the Exchange and Exchange Appeals entity, in this Bulletin, we will 
refer to the FFE and HHS Appeals Entity, as these are the names of the entities to which the 
content of this Bulletin is relevant.   CMCS Informational Bulletin  Page 2 
 
 
Federal Requirements 
 
When the FFE assesses an applicant as ineligible for Medicaid or CHIP, regulations at 45 CFR 
155.302(b)(4) provide the applicant with a choice of whether to request a full eligibility 
determination by the state agency or to withdraw his or her application for Medicaid and CHIP.  
In some cases, an applicant who withdraws his or her Medicaid and CHIP application will appeal 
the Exchange-related eligibility determination (e.g., the level of APTC and CSRs for which the 
individual was determined eligible).  Similarly, an individual who has applied to the state agency 
and been determined ineligible for Medicaid and CHIP and had his or her application transferred 
to the FFE, may appeal the FFEs determination related to eligibility for QHP enrollment 
through the Exchange or the amount of APTC or CSRs for which he or she is determined 
eligible, but may not contest the state agencys denial of eligibility for Medicaid or CHIP.  In 
both cases, there is an Exchange-related appeal, but not an appeal of the denial of eligibility for 
Medicaid or CHIP. 
 
In either of these situations, in conducting the Exchange-related appeal, the HHS Appeals Entity 
may determine the individual to be eligible for Medicaid or CHIP, contrary to the initial 
assessment or determination.  If this is the case and the individual has not received a denial of his 
or her Medicaid or CHIP application from the state agency (because the individual had submitted 
the application to the FFE and then, with respect to Medicaid and CHIP, withdrew the 
application following the FFEs assessment, rather than requesting a full determination by the 
state agency), regulations in 42 CFR 435.907 and 457.330 and 45 CFR 155.302(b)(4)(A), 
provide for the reinstatement of the application initially submitted by the individual.  This 
reinstatement is necessary, as the state agency will now need to determine the individuals 
eligibility, taking into account any new information and documentation obtained by the HHS 
Appeals Entity during the appeals process.  With respect to individuals who requested a full 
Medicaid determination from, or who had submitted their application to, the state agency and 
were denied eligibility for Medicaid or CHIP by the state agency, if the HHS Appeals Entity 
determines they are eligible for Medicaid or CHIP, regulations at 42 CFR 435.1200(g)(7)(i) 
and 42 CFR 457.351 provide that the state agency may either accept the determination of 
Medicaid or CHIP eligibility made by the decision of the HHS Appeals Entity as a final 
determination of eligibility in accordance with 435.1200(c), or accept the determination of 
Medicaid or CHIP eligibility made by the HHS Appeals Entity as an assessment of Medicaid or 
CHIP eligibility in accordance with 42 CFR 435.1200(d).  If the state agency accepts the HHS 
Appeals Entitys determination as an assessment of eligibility, it must make a new 
determination, taking into account any additional information provided to or obtained by the 
HHS Appeals Entity in conducting the Exchange-related appeal. 
  
State agencies have a number of responsibilities to ensure a coordinated eligibility, enrollment 
and appeals process in the circumstances described above.  For assessment states, federal 
regulations provide that the state agency must: 
1.  Enter into an agreement with the HHS Appeals Entity to achieve the necessary 
coordination;  
2.  Establish a secure electronic interface to transfer accounts, and other information relevant 
to conducting an appeal, between the state agency and the HHS Appeals Entity;  CMCS Informational Bulletin  Page 3 
 
3.  Treat Exchange-related appeal decisions of Medicaid or CHIP eligibility as an 
assessment of eligibility or accept Exchange-related appeal decisions as a final 
determination of eligibility (state option); 
4.  Consider Medicaid or CHIP eligibility based on the information obtained during the 
Exchange-related appeal as well as the initial application; and 
5.  Notify the FFE of final eligibility decisions through secure electronic interface. 
 
Each of these requirements is discussed in more detail below. 
 
1.  Enter into a signed agreement (42 CFR 435.1200(b) and 457.348(a)).   
State agencies in assessment states must enter into an agreement with the FFE or HHS Appeals 
Entity to ensure coordination of appeals.  The regulations further require the agreement between 
the state agency and the Exchange or Exchange Appeals Entity delineate the responsibilities of 
each program to achieve a coordinated appeals process. 
 
2.  Establish, and receive appeals information through, a secure electronic interface (42 CFR 
435.1200(d)(1), 435.1200(g)(2,), 457.348(c). 
  
The State must establish a secure electronic interface with the FFE or HHS Appeals Entity that 
can be used to exchange individuals electronic accounts and other information related to an 
appeal.  State agencies must accept, through this interface, the electronic account of an individual 
assessed as potentially eligible for Medicaid and CHIP and notify the FFE or HHS Appeals 
Entity of receipt of the electronic account.  States may use an existing electronic interface 
between the FFE and the state to fulfill this responsibility.  
 
The electronic account is defined in 42 CFR 435.4, and includes information related to the 
individuals eligibility and enrollment, and any information collected as a part of the Exchange 
appeals process conducted under 45 CFR 155, subpart F. 
3.  Accept the HHS Appeals Entity decision either as an assessment or determination of 
Medicaid and CHIP eligibility (42 CFR 435.1200(g)(7) and 457.351) 
States have a policy choice in how to treat the decision made by the HHS Appeals Entity.  If the 
HHS Appeals Entity finds an individual potentially eligible for Medicaid or CHIP, the state 
agency has the option either to:   
1.  Accept the decision made by the HHS Appeals Entity as a final determination of 
eligibility; or 
2.  Treat the decision made by the HHS Appeals Entity as an assessment of Medicaid or 
CHIP eligibility (similar to an assessment of eligibility made by the FFE) and make a 
final determination of eligibility itself.  Under this option, the state agency must take into 
account any additional information provided to, or obtained by, the HHS Appeals Entity 
in conducting the appeal. 
4.  Consider Medicaid or CHIP eligibility based on the information obtained during the 
Exchange-related appeal as well as the initial application (42 CFR 435.907(h), 
435.1200(d), 435.1200(g)(7), 457.348(c), and 457.351(a))  CMCS Informational Bulletin  Page 4 
 
If the state has elected to accept HHS Appeals Entity decisions as a final determination of 
eligibility, the agency does not need to make its own determination; it need only begin furnishing 
coverage.  Note that the effective date of eligibility must take into account the date the initial 
application was filed (see discussion below).  In states that treat decisions made by the HHS 
Appeals Entity as an assessment of eligibility, the agency must process the account and make a 
final determination.  In so doing, the agency must take into account both information obtained 
during the initial application process, as well as any information and additional documentation 
obtained by the HHS Appeals Entity during the appeal process. 
  
Accept findings made in accordance with state policies and procedures and avoid duplicative 
documentation requests (42 CFR 435.1200(d)(4), 435.1200(g)(4), 457.348(c)(4), and 
457.351(a)).  In order to maximize administrative efficiency and minimize the burden on 
individuals, states that elect to treat the HHS Appeals Entity decision as an assessment of 
eligibility must accept any findings relating to a specific criterion of eligibility made by the FFE 
or HHS Appeals Entity without further verification, if such finding was made in accordance with 
the state agencys policies.  Further, states may not request information or documentation from 
the individual which is already included in the individual's electronic account or contained in the 
Electronic File Transfer (EFT). 
 
Effective date of eligibility (42 CFR 435.915(b), 435.907(h)).  States have the option to make 
eligibility for applicants approved for Medicaid effective as of either the date of the individuals 
application or the first day of the month of application.  Retroactive eligibility for up to three 
months prior to the month of application also is required under 42 CFR 435.915(a) if the 
individual incurred covered medical expenses and would have been eligible during that period 
had he or she applied. 
  
This policy applies equally to applicants whose eligibility for Medicaid is approved after the 
HHS Appeals Entity has assessed an individual as eligible for Medicaid and the state agency 
either has accepted that assessment as a final determination or has made its own final 
determination approving eligibility after receiving the individuals account from the HHS 
Appeals Entity.  This means that the effective eligibility date for an individual determined 
eligible for Medicaid following an Exchange-related appeal is the date of his or her initial 
application (or the first day of the month of initial application).  In the case of individuals whose 
application for Medicaid eligibility previously had been denied by the state agency, eligibility 
will not necessarily be effective back to the date or month of the initial application.  Instead, the 
state agency will need to determine whether any additional information collected by the HHS 
Appeals Entity during the course of the appeal warrants reconsideration of the initial denial back 
to the initial date or month of application (or some date between the initial date or month of 
application and the date reflected in the Account Transfer (AT) triggered by the assessment of 
Medicaid eligibility made by the HHS Appeals Entity). 
  
Under 42 CFR 457.340(g), states have greater flexibility in establishing the effective date of 
coverage for new applicants in CHIP.  The effective date of coverage in CHIP, which can be 
based on the date of application or any other reasonable method that ensures coordinated 
transitions of children between CHIP and other insurance affordability programs, is set forth in 
each states CHIP state plan.  Typically, states provide for prospective enrollment in their 
separate CHIP, effective the first of the month after the eligibility determination is made.  CMCS Informational Bulletin  Page 5 
 
5.  Notify entity the FFE of final eligibility determination (42 CFR 435.1200(d)(5)and  
457.348(c)(5)) 
 
The state agency must notify the FFE of the final Medicaid or CHIP eligibility determination 
through a secure electronic interface. 
  
Implementation of Federal Regulations:  HHS Appeals Entity and State Responsibilities 
 
HHS Appeals Entity Responsibilities 
  
Initiate Account Transfer and Electronic File Transfer.  In adjudicating an appeal, the HHS 
Appeals Entity engages in fact finding in order to decide whether the contested eligibility 
determination made by the FFE was correct at the time it was made.  If, at the informal 
resolution stage or following a formal hearing, the HHS Appeals Entity establishes that the 
appellants application information is incorrect, the HHS Appeals Entity will reevaluate the 
appellants eligibility taking into consideration the newly obtained information.  Often, the 
adjudication results in a determination that the appellant is eligible to enroll in a QHP through 
the Exchange and, if applicable, APTC and/or CSRs.  Occasionally, when the HHS Appeals 
Entity obtains updated eligibility information, this update results in an assessment that the 
appellant is potentially eligible for Medicaid or CHIP.  When this occurs, the FFE will 
automatically trigger an AT, sending the individuals electronic account to the state agency.  This 
AT will not appear to the state agency to be any different than an AT triggered by an assessment 
of eligibility by the FFE at the point of application; there is no indication that the AT is 
connected to an appeal.  However, the application date in the individuals electronic account is 
changed to the date that the HHS Appeals Entity updates the account, overriding the original 
application date.  Thus, the AT received by the state agency will not contain the date of original 
application. 
  
After the AT is sent, the HHS Appeals Entity will issue the appeal decision and collect the 
appeal record, including all relevant information and documents obtained during the application 
and appeal process, which it will transmit to the state agency via an Electronic File Transfer 
(EFT).  The EFT will include the appeals record, which will include the appeal decision,  the 
date of the original application, the appeal request form, documentation obtained by the HHS 
Appeals Entity, and any notices sent to the individual (e.g., any request for additional 
information).  The information in the EFT will be consistent with the information in the AT, 
except that the EFT will include the appeal decision (reflecting the correct original application 
date) and appeal record, neither of which is included in the AT. 
 
 State agency responsibilities 
 
1) Receive EFT and locate associated ATs and applications.  Upon receiving an EFT, the state 
agency will need to match the EFT sent by the HHS Appeals Entity with the AT previously sent 
by the FFE.  There is no prescribed way that states must perform this match, but typically 
matching is performed using designated fields, such as the name, date of birth, Social Security 
Number (if applicable), and application identification number found in the EFT and AT.   
State agencies can match EFTs with the associated AT on flow basis, whenever an EFT is 
received, or they can perform the required match on a periodic basis.  States may want to  CMCS Informational Bulletin  Page 6 
 
consider using the same process already established for Unsent File Records (UFRs); this is the 
process established to facilitate state processing of electronic accounts that are not successfully 
transmitted from the FFE to the state via AT.  
 
In some cases, a state agency may find there were two prior ATs associated with a given EFT.  
This would be the case for individuals who applied at the FFE and requested a full Medicaid or 
CHIP eligibility determination after the FFE initially assessed them as not likely Medicaid or 
CHIP-eligible (triggering an AT during the initial application process), and were denied 
eligibility by the state agency based on that initial AT.  If such an individual appeals an 
Exchange-related eligibility determination and the HHS Appeals Entitys re-evaluation results in 
an assessment of potential Medicaid or CHIP eligibility, the AT triggered by the HHS Appeals 
Entitys updating of the individuals account will trigger a second AT.  In such situations, the 
state agency will identify two ATs associated with the EFT.  For individuals who submitted their 
initial application to the state agency and were denied Medicaid eligibility, the state agency 
would have transferred the account to the FFE; the state will need to locate both the AT triggered 
when the HHS Appeals Entity updated the appellants account as well as the initial application 
filed with the state agency.1 
  
2) Determine eligibility based on EFT and prior AT(s) or application.  Once the state agency has 
located the previous AT(s) (and, if applicable, the original application) associated with the EFT, 
the state agency will need to examine the contents of the EFT and the information in the 
associated AT(s) or application to determine what additional action is required.  As discussed, 
states have the option to accept the HHS Appeals Entity determination of potential eligibility for 
Medicaid or CHIP as either an assessment or a final determination of eligibility.  The specific 
next steps depend on (1) the states election; (2) whether the state has completed processing the 
AT (triggered by the HHS Appeals Entitys assessment of Medicaid eligibility) before receiving 
the associated EFT; and (3) whether the state previously made a determination of ineligibility on 
the initial application. 
 
These steps are outlined below and in the scenarios contained in Appendix 1 and 2.  After a final 
eligibility determination, the state agency must notify the FFE of the determination using a 
secure electronic interface.   
a)  If the state agency already has finished processing the AT received pursuant to the HHS 
Appeals Entity appeals process and determined the individual ineligible for Medicaid or 
CHIP, no further action based on the EFT is required.  
b)  If the agency has finished processing the AT triggered by the HHS Appeals Entitys 
decision and determined the individual eligible for Medicaid, it will need to adjust the 
effective date of eligibility back to the date of the original application, or the first day of 
the month of the original application.  If the agency had determined the individual 
eligible for CHIP, it may need to adjust the effective date of eligibility to be consistent 
with the state policy set forth in the CHIP State Plan. 
                                                            
1 This Information Bulletin addresses individuals who do not appeal a denial of Medicaid or CHIP to the state 
agency following a determination of ineligibility at initial application. If an individual denied Medicaid or CHIP 
eligibility by the state agency at initial application appeals that decision to the states appeals entity, the state is not 
required to redetermine eligibility following the HHS Appeals Entity decision.  Instead, the state agency would 
inform the FFE that the individual is not Medicaid or CHIP eligible and the FFE and HHS Appeals Entity must 
accept the states determination (45 CFR 155.345(h)).    CMCS Informational Bulletin  Page 7 
 
c)  If the state has opted to accept decisions of the HHS Appeals Entity as a final 
determination of Medicaid or CHIP eligibility and it has not completed processing the 
AT prior to matching the AT with the EFT, the agency need only provide coverage to the 
individual based on the original application date (for Medicaid) or in accordance with its 
CHIP state plan (for CHIP).  
d)  If the state has opted to treat decisions of the HHS Appeals Entity as an assessment of 
Medicaid or CHIP eligibility and it has not completed processing the AT, the agency 
should use the information contained in the AT and EFT to make a final determination 
and must (1) take into consideration any documentary evidence included in the EFT in 
making a final determination, including the original application date, and (2) accept any 
findings made by the HHS Appeals Entity related to specific eligibility criteria if made in 
accordance with state-approved policies and standards. 
e)  If the state previously has determined the individual ineligible for Medicaid or CHIP at 
initial application (based on an application submitted to the state agency or sent via AT 
by the FFE at initial application), the agency must determine whether any new 
information in the EFT changes the outcome of the agencys prior determination.  The 
new information may result in needing to provide eligibility back to the initial date or 
month of application or other date between the submission of the initial application and 
receipt of the EFT. 
 
Appendix 1 provides various scenarios to illustrate the specific steps that assessment states must 
take upon receiving an EFT from the HHS Appeals Entity if the state has opted to treat decisions 
of the HHS Appeals Entity as an assessment of Medicaid or CHIP eligibility. 
 
Appendix 2 provides various scenarios to illustrate the specific steps that assessment states must 
take upon receiving an EFT from the HHS Appeals Entity if the state has opted to accept 
decisions of the HHS Appeals Entity as a final determination of Medicaid or CHIP eligibility. 
 
Appendix 1, Appendix 2, and operational flows for each scenario provided in Appendix 1 and 2 
are available on the Eligibility page of Medicaid.gov: 
https://www.medicaid.gov/medicaid/eligibility/index.html. 
 
If you have any questions about the HHS Appeals Entity appeals policy or operations, please 
contact Eva LaManna at Eva.LaManna@cms.hhs.gov.  If you have any questions about the 
Medicaid or CHIP appeals requirements or operational procedures discussed in this Bulletin, 
please contact Sarah Lichtman Spector at Sarah.Spector@cms.hhs.gov. 
.