Medicaid Eligibility Verification

If Medicaid billing feels like walking a tightrope in a windstorm, you are not imagining it. Coverage can change mid-month. Plans can switch. Patient liability can update. And one missed verification can snowball into denials, rework, delayed cash, and uncomfortable conversations with residents and families.

That is why Medicaid eligibility verification is not a “nice to have.” It is a revenue protection habit, like locking the building at night. Medicaid is the primary payer for a large share of nursing facility residents (for example, MACPAC reports 59% in 2019) and that reality makes verification accuracy directly tied to financial stability.

In our 20+ years serving Skilled Nursing Facilities (SNFs) and Assisted Living Facilities (ALFs), LTCPro has seen the same pattern over and over: most preventable billing errors trace back to a missing or incomplete eligibility check. This guide breaks down what to verify, when to verify it, and how to build a workflow your team can actually sustain, even with staffing pressures and constant regulatory change.

Why eligibility verification matters in long-term care

Eligibility verification sits at the crossroads of compliance and cash flow.

• Denials and payment delays: If the member is not eligible on the date of service, or you bill the wrong plan (especially under Medicaid managed care), your claim can stall or be denied.
• Compliance risk: Federal oversight of improper payments is real. CMS measures improper payments through PERM, which includes an eligibility component. CMS reports a 2024 Medicaid improper payment rate of 5.09% overall, with an eligibility rate of 3.31% in its rolling national rates table. 
• Operational drag: Every denial creates rework: phone calls, portal checks, documentation pulls, corrected claims, and appeals. Multiply that by 30, 60, 90 claims and suddenly your business office is doing detective work instead of running the business.

Here is the blunt truth: eligibility changes faster than your staffing schedule. Your process has to assume change, not hope for stability.

What “Medicaid eligibility verification” really means (it is not just yes or no)

A solid eligibility check answers five questions, not one:

1. Is the resident eligible on the date(s) of service? (active coverage and effective dates)
2. Which Medicaid program category applies? (eligibility group and benefit package)
3. What is the payer structure today?
   • Fee-for-service Medicaid, or
   • Medicaid managed care (and which plan)
4. What are the billing constraints? (prior auth requirements, service limitations, benefit carve-outs)
5. What is the resident’s financial responsibility? (patient liability, spend-down, room and board rules in certain settings, etc.)

And here is the complicating factor: states run Medicaid, and verification rules, portals, and documentation expectations vary. CMS maintains state Medicaid/CHIP Eligibility Verification Plans and related verification policy references, which is a good reminder that “one-size-fits-all” does not work in Medicaid. 

The most common billing errors eligibility verification prevents

Below are the errors that show up in SNFs and ALFs again and again:

• Billing for dates outside eligibility span (coverage ended, suspended, or not yet active)
• Billing the wrong payer during Medicare-to-Medicaid transition for dual-eligible residents
• Billing the wrong Medicaid managed care plan after an auto-assignment or plan switch
• Missing prior authorization where required (state- or plan-specific)
• Incorrect patient liability applied (or not applied) leading to recoupments or resident balance issues
• Failure to capture retroactive eligibility (claims never rebilled, money left on the table)
• Wrong benefit package assumptions (covered services differ by eligibility group)
• Using an old ID or mismatched demographics causing rejections
• Not documenting the eligibility proof (no audit trail when challenged)
• Delayed updates after renewal/redetermination cycles, leading to avoidable gaps

These are not “billing mistakes.” They are process gaps.

Medicaid eligibility verification: a step-by-step workflow for SNFs and ALFs

The goal is simple: verify early, verify often, and document every time. The trick is doing it without burning out your team.

Step 1: Pre-admission and referral (before the bed is promised)

What to do:

• Verify Medicaid status and effective dates
• Confirm whether the resident is:
  • Medicaid fee-for-service, or
  • Enrolled in Medicaid managed care (and which plan)
• Identify known risks:
  • Pending Medicaid
  • Spend-down / patient liability complexity
  • Out-of-county/out-of-state eligibility concerns
  • Coverage likely to change at month-end

Operational tip: Create a one-page “payer snapshot” that travels with the admission packet.

Step 2: Admission Day (Day 0 to Day 1)

What to verify and document:

• Eligibility is active today
• Plan name and payer IDs are correct
• Coverage type is correct (LTC-related coverage vs limited benefits)
• Any prior auth or level-of-care requirements are flagged for follow-up
• Patient liability amount (if available) is captured and routed to whoever posts it

Documentation rule: Save a portal screenshot or reference number in the resident’s financial file. If you cannot prove you checked, in audits it is the same as not checking.

Step 3: Ongoing cadence checks (do not wait for billing day)

A realistic cadence for most facilities:

• Weekly for pending Medicaid or high-change residents
• Biweekly for stable Medicaid residents
• Immediately when any trigger event happens:
  • Hospital discharge/return
  • Month change
  • Notice of renewal/re-determination
  • Family reports “we got a letter”
  • Plan sends roster change
  • Patient liability letter update

Step 4: Pre-bill verification (your last line of defense)

Before claims go out:

• Re-verify eligibility for the claim span (especially cross-month claims)
• Confirm payer (FFS vs MCO)
• Validate patient liability postings match current determination
• Confirm authorization/reference numbers where required

Think of this like a claim “seatbelt check.” Annoying only until it saves you.

Step 5: Post-bill monitoring (catch drift early)

After submission:

• Track rejections/denials by reason code
• Identify if denials are eligibility-driven vs documentation-driven
• Feed root causes back into admissions and verification steps

Tools and methods: EVS portals, 270/271 transactions, and plan rosters

Facilities typically verify Medicaid eligibility using one (or more) of these:

1. State Medicaid EVS/Provider portal
2. Medicaid managed care plan portals
3. EDI eligibility transactions (270/271) through a clearinghouse or internal tool
4. Telephone IVR systems (still common in some states)

For example, Pennsylvania’s provider resources describe eligibility verification options that include telephonic requests and ANSI X12 270/271 transactions for batch submissions.

On the standards side, the 270/271 eligibility inquiry/response is widely used across healthcare administrative transactions, and operating rules efforts (such as those from CAQH CORE) aim to make eligibility data returned more consistent.

Practical recommendation: Standardize your facility workflow around the “best available” source in your state (often the state portal), then cross-check with MCO portals when managed care applies.

Documentation and audit readiness: build your “proof folder”

Eligibility issues often become painful not because the facility was wrong, but because the facility cannot prove what it knew on a specific date.

Why this matters: Federal oversight has repeatedly pointed to eligibility determination weaknesses. The HHS OIG summarized prior audits across multiple states and found that eligibility was not always determined in accordance with federal and state requirements, citing both human and system issues.
And CMS defines payment error broadly in the context of eligibility and other review types, reinforcing why documentation matters when payments are questioned.

What to retain (minimum):

• Eligibility verification screenshot or transaction response (with date/time)
• Plan enrollment confirmation (for managed care)
• Patient Liability Determination Notices and effective dates
• Authorization numbers and related correspondence (as applicable)
• Notes log: who called, who spoke, reference numbers, outcomes

Retention cadence: At least at admission, pre-bill, and at each change event.

High-friction scenarios and how to handle them

This is where most revenue leakage lives.

Scenario A: “Pending Medicaid” at admission

Risk: Care is delivered before eligibility is finalized, then claims pile up.

Playbook:

• Set a weekly verification schedule until approval
• Build a “pending tracker” with:
  • Application date
  • Caseworker contact
  • Missing documents list
  • Target approval window (as advised by the state/county)
• Hold claims appropriately, but do not forget them: create a rebill trigger the moment eligibility flips active

Scenario B: Retroactive Medicaid eligibility

Risk: Facility keeps the account as private pay, but never rebills Medicaid after retro approval.

Playbook:

• Ask at intake: “Has an application been filed that could be retroactive?”
• Once retro eligibility is confirmed:
  • Identify rebill span
  • Confirm patient liability rules for that span
  • Rebill timely and track until paid

Scenario C: Managed care plan switch mid-stay

Risk: You bill the old plan, get denied, and waste 30 days.

Playbook:

• During biweekly checks, confirm:
  • Plan name
  • Effective date of enrollment
• Maintain a “plan change alert” rule:
  • Any mismatch between last check and current check triggers immediate billing system update
• Verify authorization transfer rules if applicable

Scenario D: Patient liability changes (and nobody updates it)

Risk: Under-collection creates bad debt; over-collection creates refunds and trust issues.

Playbook:

• Route liability notices to a single accountable owner (not “whoever saw it”)
• Post changes with:
  • Effective date
  • Source document
• Reconcile monthly:
  • Expected liability vs posted vs collected

H3: Scenario E: Redetermination/renewal disruption

Risk: Coverage gaps appear unexpectedly.

Playbook:

• Add a “renewal watch” field in your payer snapshot
• Increase verification cadence during renewal windows
• If coverage terminates unexpectedly:
  • Verify if reinstatement is possible
  • Document all contacts and advice given
  • Escalate quickly (days matter)

What to measure: eligibility KPIs that actually move cash

If you cannot measure it, you cannot improve it. Here are practical metrics:

• Eligibility verification compliance rate (checks completed on schedule)
• Eligibility-related denial rate (count and dollars)
• Time to resolve eligibility discrepancies (days)
• Clean claim rate (Medicaid and MCO separately)
• Days in A/R for Medicaid (trend line)
• Patient liability variance (expected vs collected)

Even small improvements here tend to show up as fewer write-offs and faster cash.

Where LTCPro fits: verification that runs like a system, not a scramble

Many facilities do not need “more effort.” They need less chaos.

LTCPro supports SNFs and ALFs with back-office services designed specifically for long-term care, including revenue cycle workflows that reduce preventable denials and rework. In working with facilities nationwide, we have found that the best results come from:

• Standardized eligibility check cadence
• Clear ownership (who checks, who posts, who escalates)
• Documentation discipline
• A tight handoff between admissions, MDS/clinical, and billing

That is how eligibility verification stops being a daily fire drill and becomes a quiet, reliable control.

 

FAQ

How often should SNFs verify Medicaid eligibility?

At minimum: admission, before billing, and at every change event. Many facilities also do biweekly checks for stability and weekly checks for pending or high-risk accounts.

Does Medicaid eligibility verification differ for managed care?

Yes. You must verify both Medicaid eligibility and plan enrollment, because billing the wrong plan commonly triggers denials.

What should we document after an eligibility check?

Save a screenshot or transaction response that includes the date/time, coverage details, and plan information, plus any reference numbers.

What is retroactive Medicaid eligibility and why does it matter?

Some approvals apply to prior dates. If you do not rebill those spans, you may leave legitimate reimbursement uncollected.

Is “improper payment” the same as fraud?

No. Federal reporting distinguishes improper payments from fraud. CMS and GAO both emphasize this distinction in program integrity reporting. 

Where can we find state-level verification guidance?

CMS hosts state Medicaid/CHIP eligibility verification plans and policy references on Medicaid.gov. 

 

Medicaid billing does not usually fail because teams do not care. It fails because eligibility changes quietly, and workflows do not catch the change until money is already lost.

Here are the key takeaways to keep your claims clean and your cash steady:

• Verify early (pre-admission and Day 1), not just at billing time
• Verify often (cadence checks plus change-event checks)
• Verify the full picture (dates, plan enrollment, benefits, and patient liability)
• Document every check so your facility can prove what it knew and when
• Track eligibility denials as a KPI, not a “billing nuisance”

If you want help building a verification process that actually sticks, schedule a consultation with LTCPro. We will review your current workflow, identify leakage points, and help you implement controls that reduce denials and administrative burden.

What is the one eligibility issue your team fights most often: plan switches, patient liability changes, or pending Medicaid?