CMS’ interim final rule implementing Medicaid work requirements was published June 1, and hospital leaders are weighing the risks and gauging how the effects could play out across their patient population.
Organizations nationwide are preparing for Medicaid eligibility changes tied to HR 1, legislation projected to cut nearly $1 trillion from Medicaid over the next 10 years. Many of the coverage eligibility changes tied to HR 1 are scheduled to begin rolling out in late 2026 and 2027, including new Medicaid work requirements, more frequent eligibility renewals for some enrollees and a narrower definition of which immigrants qualify for coverage.
Under the rule, low-income, nonpregnant adults ages 19 to 64 must work, perform community service or attend school — or some combination — for at least 80 hours a month to maintain Medicaid coverage. States must have the requirement running by Jan. 1, 2027. The rule takes effect July 31, the same day public comments are due. HR 1 also requires states to conduct eligibility redeterminations every six months for the adult expansion group, up from the current annual renewal cycle.
Scott Raynes, president and CEO of Huntington, W.Va.-based Marshall Health Network, said he is watching closely how the work requirement gets administered and overseen at the state level.
“Between that and eligibility redetermination happening two times per year, there is an administrative load that states are taking on that have potential for negative impacts to health systems and providers,” Mr. Raynes told Becker’s. “The eligibility status question that already exists today has the potential to increase dramatically if systems and processes are not in place to satisfy the volume of work that will inevitably occur at the state level.”
Mr. Raynes said his system is monitoring the situation closely and is prepared to adjust operations as needed. “For us and for most hospitals and health systems in West Virginia and throughout Appalachia, a stressed payer mix, including underinsured and uninsured, is a world we know too well. So our ability to adjust and persevere will be acted upon again,” he said.
When Georgia launched its own Medicaid work requirement in 2023, a Government Accountability Office report found it led to coverage losses without increasing employment — and the state spent twice as much on administration as it did on enrollee care.
Richard “Chip” Davis, PhD, president and CEO of Rochester (N.Y.) Regional Health, said his system has modeled the potential impact of HR 1 and Medicaid work requirements, including the likelihood of increased uncompensated care as more individuals lose coverage.
“While implementation details continue to evolve, those projections reinforce the importance of the work already underway at Rochester Regional Health to strengthen operations, optimize our clinical and real estate footprint, reduce administrative costs and invest in technologies that help us operate more effectively in an increasingly challenging healthcare environment,” Dr. Davis told Becker’s. “Our focus remains on protecting access to high-quality care while continuing to advocate for policies that support the patients and communities we serve.”
Chicago-based Cook County Health, one of the nation’s largest public health systems, has taken a proactive approach. The system launched a website and communications toolkit to educate the public about looming Medicaid eligibility changes, and it is positioning the effort as something other health systems could replicate nationally.
“We were out talking about all of the HR 1 changes and the impacts,” CEO Erik Mikaitis, MD, told Becker’s in May. “At first, we framed it around our health system and the broader county and state. As we talked through those changes and impacts, we started taking the position that we’re not helpless in this situation. We’re not just going to sit back and let these changes impact us and see what happens.”
Cook County Health estimates roughly 400,000 Illinois residents could lose coverage because of HR 1’s eligibility changes. “We sincerely hope other organizations use this as a resource to replicate or build their own materials and information so we can reduce unnecessary coverage loss in 2027,” Dr. Mikaitis said.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.