CMS has released its long-awaited, interim final rule implementing the new Medicaid community engagement (work) requirements for certain adults. Under the rule, states that have expanded Medicaid, as well as certain states covering expanded populations through section 1115 demonstrations, must require affected individuals to demonstrate “community engagement” as a condition of eligibility. States must implement the requirement no later than January 1, 2027.
Stakeholders, including state agencies, advocates, and providers, have long awaited this rule. Under the Working Families Tax Cut Act (HR 1), Medicaid expansion adults are subject to work requirements beginning on January 1, 2027. States are beginning to take legislative and regulatory action to be in compliance with this timeline. Nebraska is the first state to take steps to implement work requirements for the expanded population.
Demonstrating Community Engagement
For individuals subject to the work requirements, CMS will require a minimum of 80 hours of community engagement each month, with some unique permutations.
Community engagement requirements can be met by:
- Working a job or internship (including work in exchange for services or goods)
- Completing community service hours (with rules and oversight on tracking completion)
- Participating in a workforce program, such as through the Workforce Innovation and Opportunity Act (WIOA)
- Going to school or college at least half-time
- Or any combination of the above methods.
Specifically Excluded Individuals
CMS provided the following list of people who are to be excluded from the work requirements:
- Former Foster Children
- American Indians
- Parents, Guardians, Caretaker Relatives, or Family Caregivers of a Dependent Child 13 Years of Age and Under or a Disabled Individual
- Veterans with a Disability Rated as Total
- Individuals Who are Medically Frail or Otherwise have Special Medical Needs
- Individuals Compliant with TANF Work Requirements and Individuals Not Exempt from SNAP Work Requirements
- Participant in a Drug or Alcohol Rehabilitation or Treatment Program
- Inmate of a Public Institution
- Pregnant or Otherwise Entitled to Postpartum Coverage
Additional Info on Medical Frailty/Key parts
Of particular interest to many patients, providers, advocates, and businesses has been the role of medical frailty and special medical needs.
The guidance offered by CMS requires states to specify a list of conditions that may qualify patients as medically frail, thereby exempting these individuals from the community engagement requirements. In addition to blindness and physical and mental disabilities, CMS offered a preliminary list of conditions that qualify as a serious or complex medical condition, including:
| Cancer | Amyotrophic Lateral Sclerosis (ALS) |
| End-Stage Renal Disease (ESRD), | Parkinson’s disease, |
| Viral Hepatitis, | Huntington’s disease, |
| SCD, | Cystic Fibrosis, |
| Chronic Obstructive Pulmonary Disease (COPD), | Multiple Sclerosis, |
| HIV/AIDS, | Spinocerebellar Ataxias, |
| Sarcoidosis | Muscular Dystrophy, |
| Cognitive impairment, | Hemophilia, |
| Heart disease, | Trauma Disorders (E.g. PTSD), |
| and Thalassemia Major | |
However, having one of these conditions is explicitly not grounds for exemption in itself, which raises significant interest in how states will shape their state plans to evaluate patients’ needs and applicability of these requirements.
In verifying status as an excluded individual, States may consider:
- Information from effective electronic data sources;
- Information from Federal, State or local agencies;
- Information in the State’s eligibility system;
- Information in the individual’s case record;
- Payroll data;
- Beneficiary Claim information that was adjudicated in the preceding 12 months, including claims that have been paid, pended or denied; and
- Encounter data for the preceding 12 months.
When there is no reliable information available to the State, the agency may require documentation or accept a statement or other information under penalty of perjury that provides sufficient information to verify an applicant or beneficiary is medically frail or otherwise has special medical needs.
Assessing Compliance
States must verify whether an applicant or beneficiary has met the community engagement requirement or if the application is of an optional excepted status or is a “specified excluded individual” and the requirement does not apply.
Recognizing that each State’s administrative capacity, eligibility system infrastructure, and prior experience with the community engagement requirement all vary, CMS provides flexibility for States to implement this requirement in a way that matches the state’s specific needs.
Key Takeaways
The decision-making isn’t over. CMS left many questions to be answered by the states. Most pressing for many is how states will navigate medical frailty and what documentation will be sufficient for proving a patient’s needs. States must also decide if they will include short-term hardship exemptions and what those may include. What role will managed care plans play in supporting enrollees?
States are facing many operational burdens. Within the next 6 months, many administrative changes need to be made by each state agency in order to carry out this Act. For example, guidance from CMS encourages collaboration between state Medicaid agencies and other social service programs such as TANF and SNAP to help verify the applicability of work requirements for enrollees. Interoperability between state agencies is often a significant technical challenge, which may require substantive digital transformation at the state level to be practicable. Also, most notably, states will need to develop the infrastructure for collecting and storing all of the materials that applicants and enrollees submit to either prove they met the community engagement requirements or qualify as an excluded individual. These represent additional hurdles states will need to adapt in the near term.
There is a tight deadline for implementation. States are expected to implement these requirements by January 1, 2027. CMS currently estimates that approximately 10 States will need to prepare and submit a good-faith exemption request.
Why Stateside
How these guidelines will ultimately impact state policy and Medicaid programs largely remains to be seen. While some states have hurried to implement work requirement programs, most have waited for this critical guidance from CMS. These regulations will require states to pursue regulatory action in response to the changes, likely varying widely state-to-state. Depending on a state’s rulemaking process, state legislatures may need to reconvene to create new policies or amend statutes to align with this federal requirement.
Interested in how state plans are responding to cuts and changes to Medicaid, and the impacts on patients? Contact us today.