CMS Issues Guidance on Medicaid Community Engagement and Eligibility Reforms

The Centers for Medicare & Medicaid Services (CMS) has issued new guidance to states for implementing community engagement requirements under the Working Families Tax Cut (WFTC) legislation, marking significant changes in Medicaid eligibility and financing. These reforms focus on connecting able-bodied, working-age adults with work and community activities to promote sustainable enrollment and reduce improper participation in Medicaid and the Children’s Health Insurance Program (CHIP). States are mandated to adopt these requirements by January 1, 2027, with the option to implement them sooner. The community engagement criteria aim to align Medicaid policies with other public assistance programs like SNAP and TANF, which have long incorporated similar engagement measures. CMS highlights four guiding principles for the policy development: enhancing member connection to work and community, ensuring state-level flexibility balanced against operational costs, promoting policy alignment with existing statutory and regulatory frameworks, and protecting taxpayer interests through verifiable state determinations. This guidance is part of a broader effort under the WFTC legislation to tighten Medicaid and CHIP enrollment protocols, close financing loopholes, and support rural health providers. The reforms are intended to bolster the long-term sustainability of these programs by reinforcing state-federal partnerships and improving health outcomes for beneficiaries. CMS plans to issue further detailed guidance and initiate rulemakings to facilitate the implementation of WFTC provisions. These measures collectively seek to strengthen Medicaid and CHIP by promoting program efficiency, accountability, and alignment with federal assistance programs. The announcement underscores CMS's commitment to modernizing Medicaid and CHIP eligibility and financing in a way that balances beneficiary support with fiscal responsibility.