On May 27, CMS circulated a Dear Colleague letter to states announcing that it would be "ramping up financial oversight activities" related to state Medicaid spending and coverage for services provided to undocumented immigrants and "individuals with an unsatisfactory immigration status." CMS issued this letter pursuant to President Trump's February 19 EO, which directed federal agencies to take steps to prevent taxpayer resources from "fueling illegal immigration to the United States, and to ensure . . . that no taxpayer-funded benefits go to unqualified aliens."
Although undocumented individuals and many other noncitizens are ineligible for full Medicaid coverage, federal Medicaid funding is available for emergency services if an individual would be eligible for Medicaid but for their immigration status. CMS' press release asserts that some states "have pushed the boundaries" of this coverage, providing impermissible services to immigrants under the emergency benefit.
The letter and press release announce CMS' plans to increase financial oversight of emergency Medicaid, including through focused reviews of reported state expenditures and in-depth financial management reviews. The letter encourages all states to review their policies, cost allocation plans, and IT systems to ensure federal Medicaid dollars are not expended on ineligible services.
CMS also announced it would be assessing its existing eligibility rules to "close loopholes" and strengthen enforcement of immigration restrictions.
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