CMS to Test Medicaid Waiver “Community Engagement” Incentives

January 11, 2018 - CMS plans to support the addition of “community engagement” incentives to state 1115 Medicaid waivers that contain work eligibility requirements for able-bodied adults, the agency announced in a press release.

The new policy guidance provides design support for state 1115 demonstrations looking to add flexible work requirements consistent with standard federal Medicaid rules. The guidance document suggests that state Medicaid directors should incorporate work requirements into other state programs that promote wellness, increase employment opportunities, and ultimately improve financially-based social health determinants.

“CMS recognizes that a broad range of social, economic, and behavioral factors can have a major impact on an individual’s health and wellness, and a growing body of evidence suggests that targeting certain health determinants, including productive work and community engagement, may improve health outcomes,” said the Centers for Medicaid and CHIP Services (CMCS) Director Brian Neale.

CMS additionally wants states to use the policy guidance to drive long-term health improvements and help Medicaid beneficiaries become independent and self-sufficient members of their communities.

“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.

“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 added.

States will be required to describe strategies that assist individuals in looking for work and what the state will do to connect Medicaid enrollees to employment or community programs.

CMS suggested that states developing Medicaid work requirements should consider programming that assists demographic areas with high unemployment rates and address caregiving for young children or elderly family members.

The new policy requires states to fully comply with federal disability and civil rights laws while ensuring that individuals with disabilities are not denied coverage.

States are required to provide eligibility modifications for appropriate enrollees and exempt individuals determined to be medically frail or have an acute condition that would prevent participation.

States are also required to incorporate opioid and substance abuse treatment programming into 1115 demonstrations with flexible work requirements.

“[1115 demonstration] modifications may include counting time spent in medical treatment toward an individual’s community engagement requirements or exempting individuals participating in intensive inpatient or outpatient medical treatment, as well as supporting other state efforts,” CMS said.

Adding work requirements for Medicaid may not drastically affect enrollment totals, since 78 percent of Medicaid beneficiaries are working, according to an analysis from the Kaiser Family Foundation (KFF).

KFF found that 64 percent of working Medicaid family members have full-time employment status while 14 percent have part-time employment status.

KFF expressed concerns about 1115 demonstrations with work requirements because the majority of Medicaid members not working said they have a major disability, while working Medicaid members could face other administrative obstacles in receiving benefits.

“While work requirements are intended to promote work among those not working, coverage for those who are working could be at risk if beneficiaries face administrative obstacles in verifying their work status or documenting an exemption,” KFF said. “In addition, some individuals who may be exempt may face challenges in navigating an exemption which could also put coverage at risk.”

Currently 10 states have submitted 1115 demonstrations with work requirements which Arizona, Arkansas, Indiana, Kansas, Kentucky, Maine, New Hampshire, North Carolina, Utah and Wisconsin.

Leaders at CMS continue to push the expanded use of 1115 waivers by states to address unique healthcare challenges for each state’s Medicaid beneficiaries and believe that states will use work requirements to increase healthcare and economic opportunities for enrollees.

“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,” Neale concluded.