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Page 11 – State Health Official Letter 1903(v)(5) of the Act. We remind states that availability of FFP is limited to payment for emergency Medicaid coverage during the remainder of the continuous eligibility period under sections 1902(e)(12) or 1902(e)(16) of the Act for such Medicaid beneficiaries who are not FFP-eligible noncitizens or eligible under a state’s election of the CHIPRA 214 option.47 For CHIP applicants and current CHIP beneficiaries who are not FFP-eligible noncitizens and are not eligible for CHIP coverage under a state’s election of the CHIPRA 214 option, no FFP is available on and after October 1, 2026, as there is no authorization for coverage of emergency services in a separate CHIP. Beginning October 1, 2026, FFP will no longer be available for current CHIP beneficiaries in a continuous eligibility period under sections 2107(e)(1)(L) or 2107(e)(1)(K) of the Act who are not FFP-eligible noncitizens,48 unless the state has elected the CHIPRA 214 option for these populations. Thus, states would terminate separate CHIP eligibility for such beneficiaries after providing required sufficient notice and review rights.49 Operational Considerations for States and Territories The changes made to the availability of FFP for Medicaid and CHIP in sections 1903(v)(5) and 2107(e)(1)(R) of the Act could require states to update eligibility determination processes for new applicants and current beneficiaries. We expect these updates would include changes to eligibility systems and related operational processes. Below we address key operational considerations for states when implementing these changes, including updates to applications and other materials, verification of immigration status or category, and considerations for managed care plans.50 As states make system and operational changes by October 1, 2026 to ensure proper FFP claiming and accurate Medicaid and CHIP eligibility determinations consistent with section 1903(v)(5) of the Act, states are also reminded that they should take appropriate measures to ensure erroneous payments are not made as a result of eligibility errors in accordance with section 1903(u)(1) of the Act, as amended by section 71106 of the WFTC legislation.51

https://www.medicaid.gov/resources-for-states/downloads/contin-elig-ltr-to-states.pdf. CMS expects to provide additional technical assistance to states about the potential impact of section 1903(v)(5) of the Act for currently approved section 1115 demonstrations. 47 CMCS SHO letter #25-001, “Section 5112 Requirement for all States to Provide Continuous Eligibility to Children in Medicaid and CHIP under the Consolidated Appropriations Act, 2023,” (Jan. 15, 2025), available at: https://www.medicaid.gov/federal-policy-guidance/downloads/sho25001.pdf. 48 This includes children in a continuous eligibility period under the state plan or section 1115 demonstrations under section 2107(e)(1)(L) of the Act; individuals covered during a period of continuous postpartum coverage under the state plan or section 1115 demonstrations under section 2107(e)(1)(K) of the Act, (but not for individuals covered through an HSI under section 2105(a)(1)(D)(ii) of the Act); and individuals receiving authority for an expanded continuous eligibility period under the terms of a section 1115 demonstration. For additional discussion of applicability to section 1115 demonstrations, see footnotes 46 and 47. 49 42 C.F.R. §§ 457.340(e), 457.1130(a), and 457.1180 (2023). 50 The term “managed care plan” in this guidance refers to managed care organizations (MCOs), prepaid inpatient health plans (PIHPs) and prepaid ambulatory health plans (PAHPs) as defined in 42 C.F.R. § 438.2. 51 This provision is applicable beginning fiscal year 2030.