The new guidance clarifies federal mandates and allows payment only for emergency care and services. It limits coverage for individuals ineligible for full Medicaid to emergency medical conditions and prohibits including this population in other payment arrangements, thereby reducing states' flexibility to offer comprehensive, coordinated care and wraparound services (e.g., preventive care, chronic disease management, and primary care addressing SDOH needs). This includes services that would prevent future emergency care needs. States that want to provide emergency and comprehensive care to individuals ineligible for full Medicaid may experience significant administrative burdens, negative fiscal impacts, and fragmentation, especially those with large populations with unspecified documentation status, as they seek alternative payment models to serve this population. The net equity effect will depend heavily on how individual states implement the policy, whether they provide supplemental state‐funded services for this community, how they coordinate care, and how they monitor outcomes. If poorly implemented, this policy could widen health disparities by restricting access to non-emergency, preventive, and coordinated care.
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An internal instruction issued by a government agency outlining policies, procedures, or actions to be followed by agency employees. While not legally binding outside the agency, these directives guide agency operations and decision-making.
Who It Impacts: Employees and divisions within the issuing federal agency. These directives guide how staff enforce regulations, allocate resources, and interpret laws. They may also affect industries regulated by the agency.
Who Is Not Impacted: The general public and businesses are not directly bound by agency directives, though these policies may indirectly influence enforcement practices that affect them.
Summary
The guidance from the Center for Medicare and Medicaid Services (CMS) directs how providers and health systems claim federal Medicaid funds to provide care for individuals ineligible for full Medicaid, under the “emergency medical condition provision” of the Social Security Act. Under this interpretation, risk-based capitation payments made to managed care organizations (MCOs), prepaid inpatient health plans (PIHPs), and prepaid ambulatory health plans (PAHPs) for those ineligible for Medicaid will no longer qualify for federal matching funds.
Impact Analysis
Legal Challenges
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Take Institutional Action
Encourage your state to fill gaps and support partnerships and care-coordination models among health systems, providers, safety-net providers, and community-based organizations to reduce administrative burden and provide more comprehensive managed care services, resulting in better population-level health outcomes.
Document impacts. This shift in interpretation may harm healthcare organizations and patients. Documenting harms can help to build the case for future action.
Associated or Derivative Policies
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Policy Prior to 2025
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Additional Resources
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