As they say, when it rains, it pours.
Last month, the federal Centers for Medicare and Medicaid Services (CMS) issued two sets of changes to Medicaid that will have significant implications for the HCH Community. To help you understand the changes and what steps you can take, we developed four new resources. This month’s Closer Look blog provides an overview of the two changes and outlines our new resources:
- Update #1: New CMS guidance on Medicaid work reporting requirements outlines how states should implement the changes in H.R.1.
- Resource #1: Updated Medicaid Work Reporting Requirements: Summary & Actions
- Resource #2: Updated letter to states with work requirement recommendations
- Resource #3: Internal Strategies and Frontline Staff Checklist
- Update #2: CMS’s Dear State Medicaid Director letter to states outlines a new approach to budget neutrality for 1115 waivers.
Overview of Medicaid Work Reporting Requirements
The new CMS guidance, required by H.R. 1, differs significantly from the informal guidance the agency provided to states for months. The most impactful change is a more restrictive definition of medical frailty that requires individuals to now prove both that they have a qualifying condition AND that the condition “significantly impairs” their ability to work.
Having to prove inability to work will be a major documentation burden for enrollees and will likely result in many vulnerable individuals losing coverage. It also increases the administrative burden on providers who will likely need to evaluate patients and submit documentation related to their ability to work.
States were surprised by the higher standard and are outraged and scrambling to scrap their prior plans and now adapt new systems. To fight these changes, 25 states filed a lawsuit against the Trump administration, arguing that the medical frailty changes go beyond what is required in the law.
Our new Updated Medicaid Work Reporting Requirements: Summary & Actions fact sheet highlights the changes most relevant to the HCH community.
Key takeaways include:
- Many HCH patients/clients will likely meet some exemption criteria, but aging state Medicaid systems may struggle to accurately identify them. [See checklist.]
- The medical frailty exemption now requires individuals to demonstrate both a qualifying medical condition AND an inability to work.
- The optional short-term hardship exception could include medical respite care.
- The HCH Community is likely to see increased coverage loss, financial strain, and administrative burden over the next several years.
- There are internal operations and external advocacy actions that can reduce the impact of these changes.
Take Action
States have policy options to reduce coverage losses and make the impact less harmful—but advocacy is needed to ensure these options are adopted. Our fact sheet provides a list of recommended actions, and we updated our letter to states to reflect the changes in the new CMS guidance. We strongly encourage you to share the letter with your State Medicaid Director and state lawmakers.
Recommendations to Prepare Your Organization, Staff, and Clients
In addition to the external advocacy recommendations, the following two resources will help your teams prepare internally:
The Internal Operations Strategies resource includes recommendations on the Medicaid changes, encouraging programs to:
- Prioritize Medicaid and SSI/SSDI enrollment
- Talk about upcoming changes
- Estimate coverage losses and revenue shortfalls
Our Medicaid “Community Engagement” Compliance Checklist can be shared with frontline staff so they can estimate how many clients should qualify for exemptions and how many will likely be subject to the work requirements. This document is intended to alleviate stress about how many clients will need to comply and allow time to plan additional support for impacted clients.
CMS State Medicaid Director Letter on 1115 Waivers
The new State Medicaid Directors letter makes major changes to Medicaid 1115 waivers, requiring the Chief Actuary at CMS to approve the waivers and certify the demonstration is budget neutral under stricter methodology before approval. These changes will reduce states’ ability to expand Medicaid populations or services through 1115 waivers, impacting new and existing initiatives.
This Summary of CMS State Medicaid Director Letter on Medicaid 1115 Waivers fact sheet details:
- Three major changes to determining budget neutrality
- How budget neutrality will be monitored
- How savings roll over into subsequent renewals
- Outstanding questions states will need to consider
- A chart indicating which states have 1115 waivers for supportive housing or medical respite care
Take Action
The fact sheet provides a list of recommended actions, including engaging with your Medicaid director, state lawmakers, and creating a waiver task force.
