Work Requirements Regulation Released
CMS released the long-awaited rules outlining how states will be required to implement Medicaid work requirements beginning January 1, 2027. Under last year’s legislation, Medicaid expansion enrollees, unless granted an exemption, must work or participate in 80 hours of community engagement per month to maintain their coverage. The regulations released by the Administration are stricter than expected regarding the granting of exemptions. One of the main exemption categories is for medically frail beneficiaries. CMS regulations make granting exemptions more difficult, as beneficiaries must document not only a severe condition, but also document that the condition impairs their ability to work. CBO estimates that the work requirement regulation will reduce Medicaid enrollment by 5 million, although CMS’s interpretation of the law may result in higher-than-expected enrollment losses. The rule is an interim final rule, so while changes are possible, it is more likely that this will be a final rule governing state actions when requirements take effect.
The changes also have operational implications as many states will need to rework operational plans and systems to meet the deadlines. States will need to incur significant costs to implement the rules, and delays could result in a higher number of beneficiaries being disenrolled.
Changes to No Surprises
CMS also finalized a rule regarding Federal Independent Dispute Resolution Operations (IDR) which processes disputes under the No Surprises Act. The changes are designed to reduce operational complexity and costs. In particular, the changes should reduce the administrative burden associated with ineligible disputes, as well as make it easier to batch multiple items or issues into a single dispute. Consequently, administrative costs with associated with disputes should decrease, but the changes in more disputes are being decided on. Providers are winning the vast majority of disputes.
Upcoming Regulations
A number of regulations already at OMB are expected to have significant impacts across different lines of business. The proposed rules address changes to Medicaid financing, short-term, limited-duration plans, and Medicare payments related to ESRD and quality incentives. There are also requests for information pending release regarding essential health benefits and PBM data collections. All are expected to be released this summer.
