CMS Releases New State Guidance on Medicaid Reforms

Earlier this month, the Centers for Medicare & Medicaid Services (CMS) issued additional guidance on how states should implement landmark community engagement requirements under the Working Families Tax Cut (WFTC) legislation.

According to a press release, the reforms are intended to connect able-bodied, working-age adults with employment and community involvement opportunities, cut down on improper enrollment, and improve the long-term viability of Medicaid and the Children’s Health Insurance Program (CHIP). States must adopt these requirements by January 1, 2027, but they can opt to do so sooner.

Community engagement requirements will bring Medicaid in line with other public benefits, such as the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF), which, for decades, have used similar policies to support beneficiaries on the path to prosperity.

Four key principles will guide policy development on community engagement:

1. Connect Members to Work and Community. Emphasize the link between health and work through community engagement and foster habits that promote success.
2. State Flexibility. Weigh the advantages of state flexibility against the potential costs, including system and operational expenses.
3. Promote Alignment. When possible, align policies with existing statutory and regulatory requirements, including those for Medicaid, SNAP, TANF, IRS, and the Marketplace. This approach helps reduce operational costs and simplify processes.
4. Protect Taxpayers. Make sure state community engagement determinations and verifications are straightforward to audit.

“I am very pleased that CMS is providing clear direction to states using breakthrough Medicaid community engagement tools that restore the dignity of work and lift people out of poverty, while supporting the sustainability of Medicaid for the most vulnerable,” said Health and Human Services (HSS) Secretary Robert F. Kennedy, Jr., in a statement.