Medicaid 'outage' raises questions: The latest

Medicaid reimbursement portal access has been restored in some states after what the Trump administration described as an "outage" on Jan. 28 that potentially affected more than 79 million Americans across Medicaid and CHIP.

Oregon Sen. Ron Wyden's office was among the first to confirm that Medicaid portals maintained by HHS were down nationwide on Jan. 28, shortly after the Trump administration shared plans to pause agency grants, loans and other financial assistance programs. However, a federal judge temporarily blocked the funding freeze until Feb. 3.

About two hours later, White House Press Secretary Karoline Leavitt said on X that, "The White House is aware of the Medicaid website portal outage. We have confirmed no payments have been affected — they are still being processed and sent. We expect the portal will be back online shortly." 

Meanwhile, at least 20 states were unable to draw funds from the Medicaid payment system, The Washington Post reported. As of Jan. 29, some states had regained access to portals, though others continued to experience operational issues, according to The Hill. Some states reported no problems at all.

Illinois Gov. JB Pritzker said the state was shut out of Medicaid the morning of Jan. 28, the Chicago Sun-Times reported. Connecticut Sen. Chris Murphy said in a Jan. 28 X post that the state's Medicaid payment system was "turned off." 

"Doctors and hospitals cannot get paid," Mr. Murphy said. "Discussions ongoing about whether services can continue."

The portal issues came after the White House attempted to pause agency grants, loans and other financial assistance programs nationwide. The status of Medicaid in the pause, set to take effect at 5:00 p.m. EST Jan. 28, was communicated with ambiguity. While federal guidance published Jan. 27 said that mandatory programs like Medicaid and SNAP would continue, Ms. Leavitt said she would "check back" to see if state Medicaid payments would be affected by the funding freeze during a Jan. 28 press conference. 

U.S. District Judge Loren AliKhan temporarily suspended the administration's planned funding freezes until Feb. 3, CNBC reported. Separately, 23 states have filed a lawsuit against the federal government to stop the funding freeze.

On Jan. 29, the White House retracted its original memo outlining the temporary pause on funds; however, President Donald Trump's executive orders on federal funding remain in effect.

"We're currently reviewing what impact the temporary pause in financial assistance programs may have on patient care," the Federation of American Hospitals said in a statement to Becker's. A spokesperson for AHA told Becker's they were looking into the day's events and distributed an advisory to their members. 

"Taking funds from the neediest in the guise of fiscal prudence is reckless, creates unnecessary chaos, and is simply inhumane," Martha Santana-Chin, CEO of L.A. Care Health Plan, the nation's largest Medicaid managed care plan, said in a Jan. 28 statement shared with Becker's. "Make no mistake, if left unchecked, these actions will dramatically jeopardize any progress we've made to uplift communities living in poverty. L.A. Care will be closely following this issue and advocating for policies that protect our members' health and wellbeing."

Medicaid, which provides health insurance coverage to low-income individuals, is funded jointly between the federal and state governments. The federal government matches state Medicaid spending through a formula called the Federal Medical Assistance Percentage, which varies by state. States are reimbursed for Medicaid on a quarterly basis, but they can access funds more frequently through the HHS payment system. A prolonged freeze would force states to rely entirely on their own funds, posing a challenge for some.

Federal funds make up the largest share of total Medicaid spending in New Mexico, Mississippi, Oklahoma, West Virginia, and Kentucky.

Becker's reached out to the American Medical Association, America's Health Insurance Plans and America's Essential Hospitals for comment and will update this story should more information become available.

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