DEPARTMENT OF HEALTH & HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-14-26 
Baltimore, Maryland 21244-1850 
 
Center for Medicaid and State Operations 
Disabled and Elderly Health Programs Group (DEHPG) 
 
July 6, 2006 
 
 
Dear State Medicaid Director: 
 
We want to alert you to two important developments in the Medicare Part D low-income subsidy 
(LIS) deeming and auto-enrollment processes that will take place over the summer.  The first is 
the annual redetermination of LIS deemed status, and the second is expanding auto-enrollment to 
include prospective full-benefit dual eligibles. 
 
Redetermination of Deemed LIS Status 
 
In August 2006, CMS will begin determining which beneficiaries are entitled to deemed LIS 
status for calendar year 2007. This re-deeming process will be based on the July 2006 State 
MMA file.  It includes both full and partial dual eligible beneficiaries identified on state MMA 
files, as well as SSI-only beneficiaries identified by Social Security Administration (SSA). 
 
Individuals previously unreported to CMS will be deemed from the beginning of the earliest 
month of dual eligibility (including retroactive months) through December 31, 2007.  Individuals 
previously reported to CMS who appear as LIS-eligible on the July State file will have the end 
date of their deemed status extended from December 31, 2006 to December 31, 2007.  
Subsequently, beneficiaries who appear as subsidy-eligible on a State file for the first time 
between August 2006 and December 2006 also will be deemed from the earliest month of 
reported dual eligibility through December 31, 2007. 
 
Beneficiaries previously deemed eligible for the LIS based on State data, who do not appear in 
July 2006 State files or in State files in a later month in 2006 as subsidy-eligible,  will not be 
deemed for calendar year 2007. Their deemed status will end on December 31, 2006.   CMS will 
also use the July State file to establish an individuals subsidy level for calendar year 2007.   
 
Notices 
 
CMS will implement procedures to notify beneficiaries who will be losing deemed status 
effective January 1, 2007 and will provide details separately.   
 
What States Need to Do? 
 
In August, CMS will notify all beneficiaries who are no longer deemed LIS-eligible based on the 
States inclusion or exclusion of beneficiaries from their July MMA files.  Thus, States need to 
be aware of the importance of the July file in identifying those who will be deemed eligible for 
LIS in calendar year 2007. 
  Stat e Medicaid Director  Page 2 
 
 
Auto-Enrolling Prospective Full-Benefit Dual Eligibles 
 
We are implementing a further step to promote a seamless transition from Medicaid to Medicare 
drug coverage by initiating an earlier process for auto-enrolling Medicaid-only individuals who 
transition to full dual eligible status.  To address this, CMS is requesting States assistance in 
early identification of this population so that CMS can deem them for LIS and assign them to a 
Part D plan before the start of their Part D eligibility, making possible effective, seamless 
coverage on the first day of Part D eligibility.  
 
While CMS has the Medicaid Statistical Information System (MSIS) data, this data lags by a 
number of quarters.  Therefore, this file is not useful of identifying those who are about to 
become eligible for Medicare.  As a result, effective August, 2006, we are asking States to 
include individuals on the monthly file who may not be known full dual eligibles, but are: 
  Medicaid eligibles age 64 and 7 months or older in the reporting month, or 
  likely to reach the end of the 24-month SSA disability determination waiting period.  The 
ability of States to target this population may vary by State, and may result in some States 
including broader groups of non-aged disabled Medicaid eligibles than others.   
 
CMS will match State data on Medicaid-only individuals who may be prospective full dual 
eligibles against its database of prospective Medicare eligibles.  Individuals for whom a match is 
found will be deemed for LIS and auto-enrolled, and will receive a notice from CMS to this 
effect.  States will receive feedback as follows: 
  data on Medicare eligibility will be returned on the response file the first time a match is 
found 
  data on LIS deeming will be returned on the MMA response file in the month following 
the month a match is found 
  data on auto-enrollment will be returned on the MMA response file approximately two 
months prior to the start of Part D eligibility  
 
For details and file specifications, please see the updated MMA Data Dictionary, on the CMS 
website at:  http://www.cms.hhs.gov/States/12_DataExchange.asp#TopOfPage  
 
Contact Information
We appreciate States continued assistance in ensuring dual eligible beneficiaries have timely, 
affordable, and comprehensive coverage under the Medicare Part D prescription drug benefit.  
For information about the LIS redetermination process, please contact Jill Gotts at 
Jill.Gotts@cms.hhs.gov or (410) 786-7794.  For information about auto-enrolling prospective 
full dual eligibles, please contact Sharon Donovan at Sharon.Donovan@cms.hhs.gov or (410) 
786-2561. 
 
            Sincerely, 
Gale P. Arden 
            Director