Gov. Asa Hutchinson yesterday said all systems go on firing up the income verification letters with the 10-day response deadline (in practice, the state now gives extra time for processing before cancellations go out, so it’s actually 20 days at this point). All systems go with mailing out cancellation letters. All systems go with coverage terminations, even though many or most of those losing coverage are eligible for Medicaid according to the state’s own data. All of this despite the fact that the state has not yet reinstated all of the eligible beneficiaries who had coverage cancelled and have turned in their paperwork to DHS.

Currently, around 13,000 more beneficiaries are set to lose coverage on September 1 (more than 35,000 already lost coverage on August 1). That number is going to grow significantly over the coming days now that the governor’s moratorium is over. DHS officials don’t yet know how big the jump will be, but it’s coming.

Hutchinson said that DHS was caught up on processing the income verifications and had eliminated the backlog. When I heard him say this, I initially thought he meant that everyone who had sent in their income verification had been fully processed to avoid interruptions in coverage, including those who had their plans terminated (especially those who had coverage terminated!). But nope.

Remember, by DHS’s own admission, some beneficiaries who turned in their paperwork on time still got coverage terminated because DHS was overwhelmed and couldn’t process the paperwork on time. We heard today from brokers and beneficiaries who contacted DHS about situations like that today and heard back that they still hadn’t been reinstated. These are, by far, the people who have been most screwed: eligible beneficiaries who did what they were supposed to do and got cancelled anyways. You would think “eliminating the backlog” means dealing with all of them. Unfortunately, that’s not the case.

DHS has processed all new income verifications received through August 12. That means they’ve been opened, scanned, and sent to the appropriate case file — most importantly, those who haven’t yet been cancelled will not be automatically terminated from the program. Caseworkers still need to work through those cases and determine whether or not these beneficiaries are eligible.

But what about those who already have been cancelled? DHS officials confirmed to me yesterday afternoon that the reinstatement process remains ongoing for many beneficiaries with cancelled coverage who have turned in their paperwork. That includes both those who initially didn’t turn in their paperwork on time but have followed up and turned it in, as well as those who did turn in on time, but DHS didn’t process it in time. Many of these folks remain in limbo, with terminated coverage disrupting access to care and potentially their ability to get needed medication. They’re still waiting on DHS.

DHS has made tremendous progress in the last week, and there are staffers and caseworkers working overtime and doing yeoman’s work. Worth keeping in mind: they’re not the ones who set the policy, they’re the ones stuck doing their best to implement the governor’s policy choices. DHS processed almost 7,000 income verifications last week and fully completed 1,334 renewals (meaning that caseworkers finished the process and made an eligibility determination).

“We get new mail daily so we’ll work those as we go, but we expect that we’ll be able to keep up with the processing with the additional help in place,” DHS spokesperson Amy Webb said.

Here’s the challenge: in addition to the thousands of responses DHS will be getting as verification letters once again go out, there will likely be tens of thousands of additional responses to process as people who got cancelled attempt to get reinstated. Likely most of the people who have been cancelled are actually eligible, so DHS should expect a flood of reinstatements. Reinstatement, as a matter of federal law, should happen promptly, but that is going be a mammoth hurdle.
Indeed, we already have evidence that the reinstatement process will lag: there is already a backlog for people in that situation, a backlog that still exists! The governor is choosing to create new cases to process before they’ve made sure that eligible beneficiaries who lost coverage — and have now responded — get reinstated! It’s really quite shocking.

On top of the thousands of new income verifications coming in and the tens of thousands of reinstatements, DHS is also going to have to coordinate and manage a complicated reimbursement process with the two insurance companies who have chosen to unilaterally reinstate pharmacy coverage for some beneficiaries.

To make matters worse, all of the chaos has led to confusion and panic among beneficiaries, putting even more pressure on overwhelmed DHS county offices. In the short term, that’s likely to get worse, not better, as more beneficiaries discover cancellations. DHS phones and county offices have been swamped with questions. A temporary patch like the recent deal with two insurance companies is helpful, but also inherently confusing, and likely to lead to even more questions.

Finally, keep in mind that the entire point of this exercise is to determine eligibility. And DHS is not even close to being caught up with that. They’ve opened the response letters so people don’t automatically get terminated but they still have to work the cases. There’s no indication at this point of how long that’s going to take.

I asked Webb about all of these challenges. “We’re building up our capacity,” she said. “We cannot do it all overnight. We’re processing, we’ve got folks working overtime and we’re committed to making sure it gets done. Is it going to be perfect? Probably not, but we are trying very hard.”

Hutchinson defended the disastrous 10-day-deadline policy yesterday by saying that it was the “status quo” and by arguing that it would “invigorate the process,” speeding up eligibility determination. Under the current circumstances, however, this latter point is just bananas. Even if beneficiaries respond in time and avoid cancellation, DHS is still in the middle of a tremendous backlog in terms of actually completing the verification process (not to mention the reinstatement process). It could be weeks, or longer, before the state can complete the eligibility determination that Hutchinson is eager to hustle through. He’s rushing beneficiaries so their folder can sit in a pile.

DHS is “caught up with the backlog” only in the most narrow sense – hopefully, if they can truly handle the volume (which is about to explode even more), they won’t auto-terminate any more beneficiaries who respond in time. But the backlog remains for reinstating those who’ve lost coverage. The backlog remains for completing the eligibility determinations.

Yet when it comes to the 10-day response window that helped create this mess in the first place? All systems go, says Hutchinson.