CMS Indicates Reversal of Medicaid Work Requirements

Foley Hoag LLP - Medicaid and the Law
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Foley Hoag LLP - Medicaid and the Law

[Author: Regina DeSantis, Law Clerk]

On Friday, February 12, the Centers for Medicare and Medicaid Services (CMS) took a first step to ending Medicaid work requirements.  Acting CMS Administration Elizabeth Richter sent letters to Medicaid Directors in states which had previously received  1115 waiver approvals to implement so-called “community engagement” requirements, explaining CMS now does not believe that requiring employment as a condition for Medicaid coverage promotes the program’s objectives and intends to commence a process of determining whether to withdraw the waiver approvals.  States have 30 days to send CMS information to the contrary.  States receiving letters included: Arizona, Arkansas, Georgia, Indiana, Kentucky, Michigan, Nebraska, New Hampshire, Ohio, South Carolina, Utah, and Wisconsin.

CMS arguably has the authority to disallow states from continuing their Medicaid work requirements.  The Terms and Conditions associated with the 1115 waivers that states use implement work requirements contain provisions explicitly allowing CMS to withdraw the waivers if the agency determines that continuation would “no longer be in the public interest or promote the objectives of Title XIX.”[1]  The Terms and Conditions also require CMS to notify the states in writing of the withdrawal decision and effective date and to give the states sufficient time (prior to the effective date) to challenge the determination.

As we have previously written about in Medicaid and the Law (here, here, here, and here), former CMS Administrator Seema Verma’s approval for Medicaid work requirements has been an ongoing topic of debate—and the subject of various legal challenges.  Most recently, the Supreme Court agreed to hear arguments to determine the legality of HHS’ authority to approve the requirements.  While the Trump Administration believed that HHS had the power to approve work requirements—recall how outgoing HHS Secretary Alex Azar filed a Supreme Court brief supporting work requirements on January 19, 2021 (the final full day of the Administration)—these letters indicate the Biden Administration’s opposition.  Further, the two Administrations have diametrically opposing views on how work requirements promote Medicaid’s objectives.

While the Supreme Court has not heard arguments, the transition from the Trump Administration to the Biden Administration could result in a change in legal approach.  However, it is unclear if the Biden Administration will take any action prior to oral arguments.

It is also important to note that the Biden Administration has not appointed a permanent head of CMS.  Additionally, President Biden’s candidate for HHS Secretary, former California Attorney General Xavier Becerra, has not received a Senate confirmation.  We will update as further leadership developments are announced.

[1] CMS, New Hampshire 1115 waiver approval, Withdrawal of Waiver or Expenditure Authority (Nov. 11, 2018) available at: https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/nh/nh-granite-advantage-health-care-program-ca.pdf/.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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