New CMS Policy Allows States to Test Medicaid Work Requirements

States are now allowed to require able-bodied, working-age Medicaid beneficiaries to be employed or participate in community engagement activities.

The Centers for Medicare and Medicaid Services (CMS) recently implemented new guidance that may improve health outcomes among Medicaid beneficiaries through community engagement, according to a press release.

CMS reports that the new policy is a response to requests from states to implement Medicaid demonstration projects that require work or other engagement activities, such as skills training, education, job search, volunteering, or caregiving.

The program would only include able-bodied, working-age adults and would exclude patients with a disability, elderly individuals, children, and pregnant women, according to the release.

The policy allows states to create demonstration projects that promote Medicaid’s objectives and are in line with federal requirements. CMS said that state programs should promote physical and mental health to achieve Medicaid objectives.

“Medicaid needs to be more flexible so that states can best address the needs of this population. Our fundamental goal is to make a positive and lasting difference in the health and wellness of our beneficiaries, and today’s announcement is a step in that direction,” said CMS Administrator Seema Verma.

Ten states have submitted demonstration project proposals that include work and engagement requirements, according to the release.

“Our policy guidance was in response to states that asked us for the flexibility they need to improve their programs and to help people in achieving greater well-being and self-sufficiency,” Verma said.

Along with the proposal, CMS outlined a number of potential issues that states may face when implementing these requirements. States are advised to account for regions in which unemployment or caregiving is prevalent, according to the release.

States will be required to devise strategies that help individuals meet these requirements and provide resources for job training.

CMS plans to support state efforts that align Medicaid work and community engagement with SNAP and TANF as a part of this demonstration where appropriate, according to the release. Aligning these requirements may streamline eligibility, reduce burdens on states and individuals, and help beneficiaries meet requirements, according to CMS.

“States have the opportunity to help individuals improve and enhance the skills that employers truly value,” Verma said. “People who participate in activities that increase their education and training are more likely to find sustainable employment, have higher earnings, a better quality of life, and, studies have shown, improved health outcomes.”

States must comply with federal disability and civil rights laws to protect patients with disabilities and to ensure they are not denied coverage. Reasonable modifications or exemptions will be offered to these patients, according to CMS.

The program will also modify requirements for patients who are being treated for substance use disorders. Modifications can include counting treatment time towards community engagement requirements or exempt those in intensive treatment as an effort to support state efforts to combat the opioid epidemic, according to the release.

“This new guidance paves the way for states to demonstrate how their ideas will improve the health of Medicaid beneficiaries, as well as potentially improve their economic well-being,” said Brian Neale, CMS deputy administrator and director for the Center for Medicaid and CHIP Services.