25M lost Medicaid since 2023, 70% for procedural reasons. Learn how enrollment churn increases bad debt and strategies to protect revenue.
by
VitalCX Healthcare Operations Team
February 10, 2026
7 minutes
Medicaid redetermination is the process by which states verify whether enrolled individuals still meet eligibility requirements for Medicaid coverage. Since the end of the COVID-19 continuous enrollment provision in April 2023, more than 25 million Americans have been disenrolled from Medicaid — and the Kaiser Family Foundation (KFF) reports that approximately 70% of those disenrollments were procedural, meaning the individuals likely still qualified for coverage but were dropped due to administrative failures. For health systems, this enrollment churn has created a revenue crisis that shows no sign of stabilizing in 2026.
Medicaid eligibility is not permanent. Federal law requires states to redetermine eligibility at least annually — verifying income, household size, residency, and other factors that determine qualification. Before the COVID-19 pandemic, this was standard operating procedure.
In March 2020, the Families First Coronavirus Response Act (FFCRA) established a continuous enrollment provision: states that accepted enhanced federal matching funds were prohibited from disenrolling Medicaid beneficiaries during the public health emergency. For over three years, no one lost Medicaid coverage through redetermination. Enrollment swelled to a historic 94 million people.
When the continuous enrollment provision ended on March 31, 2023, states began the massive process of redetermining eligibility for their entire Medicaid populations — what CMS and the media call the "Medicaid unwinding." Every state had 14 months to complete redeterminations for all enrollees.
The process varies by state but generally involves the state Medicaid agency sending renewal packets to enrollees, requiring them to verify continued eligibility by submitting documentation or confirming information. If an enrollee doesn't respond or can't be reached, they're disenrolled — even if they still qualify.
The numbers are staggering. According to KFF's Medicaid Enrollment Tracker, as of early 2026:
The Centers for Medicare & Medicaid Services (CMS) tracked the unwinding through monthly state reporting. CMS issued guidance requiring states to follow specific procedures — including multiple contact attempts, use of available data for ex parte renewals (automatic renewals using existing data), and extended processing timelines. Despite
States like Arkansas, Texas, and Florida reported procedural disenrollment rates above 75%. States that invested in ex parte renewal systems — like Oregon and Rhode Island — maintained significantly lower procedural disenrollment rates, sometimes below 40%.
The National Association of Medicaid Directors (NAMD) has published lessons learned, but the damage to coverage continuity was already done. By 2026, health systems are living with the downstream consequences.
This distinction is critical because it determines whether the disenrollment was appropriate.
Eligibility-based disenrollment occurs when a state completes the redetermination process and determines the individual no longer meets Medicaid eligibility criteria — their income increased, they moved out of state, they gained other coverage. This is the system working as intended.
Procedural disenrollment occurs when the individual is removed from Medicaid without a substantive eligibility determination — typically because:
KFF's analysis found that 70% of all disenrollments fell into the procedural category. That means roughly 17.5 million people lost healthcare coverage not because they didn't qualify, but because the administrative process failed them.
For health systems, the distinction is financial: a patient who loses Medicaid coverage procedurally still shows up for care. They still need treatment. But now there's no payer — the bill goes to self-pay, and the probability of collection drops from 85-90% (Medicaid reimbursement) to 10-20% (self-pay collection). That delta is the bad debt crisis.
The Healthcare Financial Management Association (HFMA) and multiple health system CFOs have reported 15-25% increases in bad debt directly attributable to Medicaid enrollment churn. The mechanism works as follows:
1. Coverage Gaps Create Self-Pay Encounters
When a patient loses Medicaid coverage — even temporarily — any healthcare encounter during the coverage gap generates a self-pay balance. For patients who were previously covered by Medicaid, self-pay collection rates are typically very low. These patients often have incomes below 138% of the federal poverty level; they qualified for Medicaid for a reason.
2. Retroactive Coverage Doesn't Always Fix the Problem
Some patients regain Medicaid coverage and the state applies retroactive eligibility. But retroactive coverage is limited (typically 3 months), not guaranteed, and requires the health system to rebill — a process that consumes revenue cycle resources and often results in denials for timely filing or documentation issues.
3. Charity Care and Uncompensated Care Increase
Patients who lose Medicaid and can't pay become candidates for charity care or financial assistance programs. While these programs serve an important mission, they represent revenue the organization would have collected had coverage remained intact.
4. ED Utilization Shifts
Patients without coverage delay primary care and preventive services, increasing ED utilization for conditions that could have been managed in lower-cost settings. ED encounters generate higher charges, higher write-offs, and contribute to capacity strain.
The American Hospital Association (AHA) estimated that hospitals provided over $42 billion in uncompensated care in 2023, with Medicaid disenrollment contributing meaningfully to the increase. By 2026, the cumulative effect of enrollment churn on health system balance sheets is substantial — particularly for safety-net hospitals and systems serving high-Medicaid populations.
(See Blog 4: Patient Financial Responsibility in 2026 and Blog 1: Why Revenue Cycle Management Is the Front Line of Hospital Survival for related financial analysis.)
Health systems cannot control state Medicaid policy, but they can operationalize strategies that reduce procedural disenrollment among their patient populations.
1. Proactive Patient Identification
Use EHR and claims data to identify patients with Medicaid coverage who may be approaching their redetermination date. Many state Medicaid programs share renewal timelines with providers. Build reports that flag at-risk patients 60-90 days before their redetermination deadline.
2. Address Verification and Contact Updates
The single biggest driver of procedural disenrollment is returned mail. At every patient encounter — registration, check-in, clinical visit — verify and update contact information. Capture cell phone numbers and email addresses for multi-channel outreach. Partner with community organizations for patients experiencing housing instability.
3. Patient Education and Outreach
Many Medicaid enrollees don't understand the redetermination process, don't recognize renewal packets when they arrive, or don't know the consequences of not responding. Health systems can educate patients through waiting room signage, text message campaigns, patient portal notifications, and care coordinator conversations. The National Association for Healthcare Access Management (NAHAM) has published patient communication templates.
4. Enrollment Assistance Programs
Certified Application Counselors (CACs) and navigators can help patients complete redetermination paperwork. Health systems can employ or contract enrollment specialists who assist patients on-site or by phone. The return on investment is clear: the cost of an enrollment specialist is a fraction of the bad debt generated by a single disenrolled patient's ED visit.
5. Marketplace Transition Support
For patients who are determined ineligible for Medicaid, connecting them to Health Insurance Marketplace coverage preserves their insured status. Special enrollment periods are available for individuals losing Medicaid, and many qualify for subsidized marketplace plans. CMS has promoted Medicaid-to-Marketplace transitions as a key strategy for maintaining coverage continuity.
Technology is the lever that makes redetermination support scalable.
Eligibility Verification Systems
Real-time eligibility verification at registration identifies patients whose Medicaid coverage has lapsed or is expiring. Batch eligibility checks can flag entire panels of patients approaching redetermination. Integration with state Medicaid eligibility files provides advance notice of coverage changes.
Automated Outreach Platforms
Text message, IVR, and email campaigns targeting patients approaching redetermination dates. Effective campaigns include: reminders to watch for renewal packets, instructions for completing online renewals, and direct links to state Medicaid portals. Multi-language support is essential — many Medicaid populations have limited English proficiency.
Enrollment Management Workflows
Platforms that track each patient's redetermination status, outreach attempts, and resolution. Dashboard reporting shows how many patients are at risk, how many have been contacted, and how many have successfully completed renewal. These workflows enable enrollment specialists to prioritize their caseloads.
Predictive Analytics
Machine learning models can predict which patients are most likely to experience procedural disenrollment based on factors like address history, contact responsiveness, prior redetermination outcomes, and demographics. Targeting outreach resources toward the highest-risk patients maximizes the impact of enrollment assistance programs.
(See Blog 13: Medicare Advantage Prior Authorization for related payer navigation challenges.)
