DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
 
CMCS Informational Bulletin 
 
DATE:  January 23, 2015 
   
FROM:  Cindy Mann 
    Deputy Administrator and Director 
    Center for Medicaid and CHIP Services 
 
    Melanie Bella 
    Director   
    Medicare-Medicaid Coordination Office  
 
SUBJECT:     Enrollment and Retention Flexibilities to Better Serve Medicare-Eligible  
                        Medicaid Enrollees 
 
Many adults enrolled in Medicaid, including those in the new low-income adult group, will at 
some point become eligible for Medicare. This Informational Bulletin describes existing 
flexibilities that can: 1) assist states in meeting their obligations to screen Medicaid enrollees for 
Medicare Savings Programs and other categories of Medicaid when the enrollees become 
Medicare-eligible; and 2) improve the stability and continuity of Medicare Savings Program 
coverage. 
    
Screening for Medicaid and the Medicare Savings Program 
When Medicaid enrollees in the new adult low-income group become eligible for Medicare, they 
lose eligibility for that category of Medicaid.  However, before terminating or reducing the scope 
of Medicaid coverage, the state Medicaid agency is required to assess whether the individuals are 
eligible for any other category of Medicaid coverage.  
Many of these enrollees will continue to qualify for full Medicaid benefits or be eligible for 
Medicare Savings Programs (MSPs), including the Qualified Medicare Beneficiary (QMB) 
Program, Specified Low-Income Medicare Beneficiary Program (SLMB), and Qualifying 
Individual (QI) Program. MSPs cover Medicare beneficiaries premiums and provide automatic 
eligibility for the Part D low-income subsidy (LIS). The QMB program also covers beneficiaries 
other Medicare cost-sharing obligations. MSPs play a vital role in making Medicare coverage 
affordable for low-income beneficiaries. Maximizing enrollment in MSPs can also be 
advantageous to states, as the programs help increase the number of low-income residents who 
are enrolled in all Parts of Medicare, thus ensuring that Medicare is the primary payer for these 
individuals. 
 
Aligning Income and Asset Rules 
Differences in income and asset rules for different categories of Medicaid eligibility may 
complicate Medicaid agencies obligations to screen enrollees properly when the enrollees 
Medicaid status changes because they are Medicare-eligible. Most Medicaid enrollees now have 
their income eligibility determined based on Modified Adjusted Gross Income (MAGI) standards 
and are not subject to an asset test. When they become Medicare-eligible, however, their  CMCS Informational Bulletin- Page 2 
 
continued eligibility for Medicaid, including for MSPs, may be based on non-MAGI income 
rules and be subject to an asset limit.  
 
States can simplify their administrative processes by using flexibility under Section 1902(r)(2) of 
the Social Security Act. For example, states can disregard the income of other individuals, such 
as spouses, whose income is otherwise countable toward the prospective MSP enrollee.  The 
same provision can also be used to disregard specific amounts of income or categories of assets. 
In addition, states may use the flexibility authorized under Section 1902(r)(2) to set an overall 
asset limit at any level above the federal floor, or to disregard all assets. States have the option of 
using these flexibilities only for MSPs, or they may apply them to other categories of Medicaid 
as well. Some states have already taken these steps. 
 
Adopting these flexibilities affords multiple advantages to states, including: 
  Reducing burden on beneficiaries and the state agency  
  Promoting continuity in coverage and care  
  Generating administrative savings for states by simplifying verification procedures for 
income, and eliminating steps needed to verify assets (e.g., Alabama, Mississippi, and 
New York have reported some administrative savings from eliminating asset tests)  
Simplifying MSP Redeterminations 
Once beneficiaries are enrolled in MSPs, states can use existing flexibilities to enhance 
beneficiaries retention of their MSP eligibility. Federal law requires that Medicaid agencies 
redetermine MSP enrollees eligibility once every twelve months; there is no requirement that 
redetermination be done more frequently. Because enrollees qualifying for Medicaid under 
Modified Adjusted Gross Income (MAGI)-based eligibility must only be redetermined annually, 
and because MSP eligible populations typically experience limited fluctuation in income, state 
Medicaid agencies may find it advantageous to adopt the same redetermination schedule for 
MSPs to simplify administration.   
 
States also have multiple tools to streamline the redetermination process, thereby avoiding 
unnecessary coverage lapses and minimizing administrative burdens related to closing and re-
opening cases, including the following: 
 
  Use available data sources.  Federal regulations (42 CFR 435.916(a)(2) and (b)) require 
states to use available information whenever possible when conducting redeterminations. 
MSP participants circumstances can be particularly amenable to these ex parte 
redeterminations, as these beneficiaries often rely primarily on stable, federal income 
sources such as Supplemental Security Income (SSI) and Social Security Disability 
Insurance (SSDI), which can be verified by the agency electronically without contacting 
the beneficiary. If there is no change in circumstances, no action is required of the 
beneficiary.   
  Reduce steps in processes.  Eliminating processes such as in-person interviews, signing 
renewals forms, or filling out new applications, eases burdens on beneficiaries, increasing 
the likelihood of uninterrupted coverage. Where additional or updated information from 
the beneficiary is needed, use of prepopulated renewal forms can reduce burden and 
increase retention rates among eligible beneficiaries. These changes also conserve agency  CMCS Informational Bulletin- Page 3 
 
time and administrative resources while assuring, based on a viable data source, that 
program integrity is maintained. 
  Make redetermination more automatic.  Even if the agency cannot verify continued 
eligibility using the ex parte process described above, as long as the agency does not have 
access to information indicating a beneficiarys circumstances have changed such that 
she no longer is eligible, it may send a redetermination letter to the enrollee directing her 
to respond if she has any changes to report; otherwise the individual is automatically 
renewed.   
  Leverage Medicare Advantage Plans as partners.  As more beneficiaries have Medicare 
coverage through Medicare Advantage plans, states may find it worthwhile to share 
enrollee redetermination dates with Medicare Advantage plans so that plans may assist 
their members in maintaining MSP eligibility. Such information sharing should be 
consistent with federal privacy regulations at 42 CFR Part 431, Subpart F, as well as 
applicable state privacy rules.   
As noted, states that have adopted simplified redetermination policies report administrative 
savings.  For example, Louisiana reported annual savings of over one million dollars following 
the implementation of administrative renewal processes and other streamlined approaches, such 
as ex parte review and telephone and web-based processes.  
 
Medicare Part A Buy-in Agreement 
 
As with Part B, States may enter into a Medicare Part A buy-in agreement with CMS.  Part A 
buy-in agreements allow low-income individuals to receive premium-free Part A.  These 
agreements target individuals who are otherwise eligible for QMB but who cannot afford 
Medicare Part A because they have not worked the required number of quarters of Medicare-
covered employment to receive premium-free Part A.  
To date, 36 States and the District of Columbia have entered into a Part A buy-in agreement. 
Advantages of this agreement include: 
  Allowing the State to enroll Medicare beneficiaries eligible for QMB benefits into 
Medicare Part A at any time of the year, without late enrollment penalties.  
  In states without a buy-in agreement, these individuals can only enroll in Part A at 
o
specific times of year, and states are responsible for paying a late-enrollment 
penalty.  
  Providing financial benefits for states as well beneficiaries because the agreements result 
in Medicare Part A, rather than Medicaid, becoming the primary payer for inpatient 
services.  
  Creating further opportunities to streamline administration.  States may: 
  Automate enrollment of SSI recipients with Medicare Part B into the Part A buy-
o
in on a monthly basis.   
  Exchange data between the State and CMS frequently, e.g. on a daily instead of 
o
monthly basis, to reduce delays in the individual receiving benefits. 
States without a buy-in agreement with CMS are free to enter into an agreement at any time. 
State Medicaid agencies can obtain more information about entering into one by emailing 
statebuy-in@cms.hhs.gov with Part A Payer Conversation in the subject line.   
  CMCS Informational Bulletin- Page 4 
 
Building on Other Recent Improvements to MSP Rules 
In recent years, a number of changes to MSP rules have made it easier for eligible beneficiaries 
to qualify for MSP. States should take the opportunity verify that their policies and materials, 
including application forms, reflect these updated policies, including:  
  Increasing asset levels for QMB, SLMB, and QI programs to that of Part D LIS, and 
adjusting annually for inflation (see Section 112 of the Medicare Improvement for 
Patients and Providers Act of 2008 (MIPPA)).  
  Disregarding annual increases in income due to Social Security Cost of Living 
Adjustments (COLAs) until the annual federal poverty guidelines take effect (see Section 
1905(p)(2)(D) of the Social Security Act).  
  Eliminating estate recovery for MSP benefits, i.e., premium, deductible, and co-insurance 
(see Section 115 of MIPPA).  
---------------- 
Medicaid enrollees who become eligible for Medicare are often also eligible for continued 
coverage under different categories of Medicaid, including Medicare Savings Programs. 
Adopting the flexibilities outlined in this Informational Bulletin can help improve the continuity 
and stability of coverage for these beneficiaries. A number of these provisions can also enhance 
administrative efficiencies for states. For additional information about implementing these 
flexibilities, please contact Gene Coffey at 410-786-2234 or Gene.Coffey@cms.hhs.gov.