CMS Withdraws Prior Approval for “Must-Work” Requirements in State Medicaid Programs

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On June 24, 2021, CMS sent letters to Arizona and Indiana informing them that the agency has revoked its approval of provisions in their state Medicaid demonstration projects that had required adults to be employed as a condition to receiving healthcare through the Medicaid programs. In its letters to Arizona and Indiana notifying them of the change, CMS emphasized that it “has serious concerns about testing policies that create a risk of substantial loss of health care coverage and harm to beneficiaries.” The agency concluded that these community engagement projects were unlikely to promote the objectives of the Medicaid program.

Previously on February 12, 2021, CMS had sent letters to Arizona and Indiana, as well as nine other states, informing them of its preliminary determination that demonstration projects with work requirement components did not further Medicaid’s objectives. That letter gave the states the opportunity to respond. Arizona did not respond to that letter, but Indiana responded by asserting its belief that work requirements promoted the health of Medicaid beneficiaries. Arizona and Indiana have 30 days to appeal CMS’s determination.

CMS has already taken similar action again Arkansas, New Hampshire, Wisconsin, and Michigan, which had each included work requirements in their Medicaid programs.

CMS’s letter to Indiana is available here, and its letter to Arizona is available here.

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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