CMS published its interim final rule for state implementation of Medicaid work requirements June 1.
HR 1 outlined how low-income, nonpregnant people between ages 19 and 64 must work, engage in community service or attend school — or some mix of these — for at least 80 hours per month. This applies to expansion states and some states with section 1115 demonstrations covering a similar population. However, a rule with specifics on community engagement requirements was due this month. The rule’s comment period runs until July 31.
“Able-bodied individuals on Medicaid spend an average of 6.1 hours watching TV or just hanging out [per day],” CMS Administrator Mehmet Oz, MD, said on a June 1 press call. “This is a concern, not criticism.”
Nebraska has already implemented work requirements through a state plan amendment, and Montana is following suit in July. Nebraska did not hire additional staff to accommodate the change, the Nebraska Examiner reported. However, CMS officials emphasized collaboration with states.
The rule has faced scrutiny due to possible coverage gaps and administrative burden.
“The new, unnecessary administrative burdens will increase the number of eligible Medicaid beneficiaries without coverage, creating further barriers to care while increasing uncompensated care costs for essential hospitals,” America’s Essential Hospitals President and CEO Jennifer DeCubellis said in a statement.
Here eight new things to know from the rule:
1. CMS is building the Eligibility Made Easy tool, known as Emmy, to serve as a federally operated electronic service for states to access community engagement information. Data sources available to states would show if someone is subject to work requirements and whether they have fulfilled them. States have to do the heavy lifting with these data resources first, rather than resorting to contacting the beneficiaries.
2. CMS Deputy Administrator and Director of Medicaid and CHIP Services Dan Brillman said states should be “data first.” However, throughout 2027, states can accept self-attestation to confirm compliance or eligibility. In 2028, though, states can only rely on statements or information provided under penalty of perjury once during a recipient’s enrollment to confirm medical frailty or special medical needs exemptions. “We’re forgiving, but we’re not foolish,” Dr. Oz said about self-attestation on the call.
3. To prevent statutory violations, states cannot establish “waiting” or “lock-out” periods to block coverage if a recipient is disenrolled due to compliance issues.
4. The inpatient short-term hardship exception will also cover home- and community-based services. “We believe that limiting the short-term hardship exception … to individuals receiving services in institutions and not allowing it to be available to individuals receiving services of similar acuity outside of institutions would fail to account for the realities of current service delivery methods and place favor on institutional-based care in a way that is inconsistent with our efforts and policies with regard to individual choice,” the rule said.
5. The rule outlined a two-part definition for the “medical frailty” exemption. An individual must first fall into one of five diagnostic categories — including blindness or disability, substance use disorder, disabling mental disorder, a physical or developmental disability that impairs activities of daily living, or a serious or complex medical condition — and that condition must “significantly impair” their ability to fulfill the 80-hour monthly requirement.
6. CMS estimated that each state would face a one-time cost of $15 million to upgrade their eligibility systems. Total systems upgrades will cost $1.52 billion from 2026 through 2036. The federal government will contribute $1.289 billion.
7. As a “conflict of interest safeguard,” states cannot contract with managed care organizations to assist with compliance verification.
8. States must submit relevant data to CMS, including enrollment totals of individuals applying for and receiving medical assistance, processing information, eligibility determination outcomes, and populations facing the requirements and who is meeting them. The rule did not establish a reporting cadence.
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