CMS issues new guidance on Medicaid demonstrations as work requirements go before judge

The Centers for Medicare & Medicaid Services rolled out new monitoring and evaluation tools for Medicaid Section 1115 waivers on Thursday—the same day the controversial work requirements went before a judge.

CMS unveiled the guidance and resources that set monitoring metrics and suggest research approaches for Medicaid demonstrations approved by Section 1115 waivers. 

While the agency said it “ushered in a new era in Medicaid” by approving waivers, including work requirements in several states, it said the new tools will enable it to better monitor how well demonstrations are working. 

In an accompanying blog post, CMS Administrator Seema Verma wrote that it’s crucial for states to have flexibility options through these waiver demonstrations, as the Affordable Care Act expanded Medicaid to a population it was not built originally to serve, namely childless adults without disabilities. 

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The guidance, Verma said, allows CMS to be flexible in allowing states to test approaches in Medicaid to meet their individual populations while also allowing for strong oversight of such demonstrations. 

“Too many Americans are trapped in poverty, and they deserve our continued focus as we work to find new means to improve their lives and their health,” Verma said. “And while we do this, we have a responsibility and have made an effort to evaluate, monitor and share the results of state reform efforts with the public so that they can contribute to a larger body of knowledge.”

The guidance was released just hours after a federal judge heard oral arguments in two lawsuits challenging work requirements that CMS approved in Kentucky and Arkansas.  

The Trump administration has approved waivers in seven states so far, though Arkansas is the only one to roll out such a requirement. Medicaid work requirements are controversial, and critics warn that they can cull a significant number of people from the rolls. 

The Kaiser Family Foundation estimates that more than 18,000 people lost coverage in Arkansas between June and December 2018, and that number should grow by a wide margin as the state is expanding the population under the requirements for 2019. 

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Most people who lost coverage (94%) were booted from the program due to some kind of administrative error, KFF found, such as failing to receive a notice about the requirements as it was sent to the wrong address. In addition, just 8% of people who were removed from Medicaid have since reapplied and re-enrolled in 2019, according to the report. 

Verma and other administration officials argue that the work requirements aim to lift people out of poverty and thus improve their health; however, the requirements’ opponents say this idea runs counter to the purpose of Medicaid, which is to provide insurance coverage to the poor. 

Jane Perkins, one of the attorneys litigating the two waiver cases on behalf of the National Health Law Program, said in a statement that approving the requirements is part of the administration’s goal to “blow up” the ACA and Medicaid expansion. 

“The stated purpose of the Medicaid Act is to furnish medical assistance to individuals in need; work requirements ignore this essential rule,” Perkins said. 

Kentucky’s work requirements were initially spiked by federal Judge James Boasberg, of the District Court of the District of Columbia, where he argued that CMS has failed to consider whether the requirements would adhere to the stated goals of Medicaid in its approval. CMS later reapproved the waivers. 

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Verma pushed back on these criticisms in the blog post, saying “it’s not surprising” that many of the loudest voices against work requirements also support health reform efforts such as a single-payer system. 

The administration has made clear that state flexibility in Medicaid is one of its central goals, Verma said. 

“They decry the very notion of linking eligibility for programs like Medicaid with expectations of work and community engagement, despite these being long-standing bedrock values of our society,” Verma wrote. “And they argue vociferously that we have overstepped our authority by allowing states to test these theories.” 

“Instead, I argue that prior administrations have undermined the clear intent of Medicaid to operate as a partnership between the state and federal government,” she added. “States were repeatedly rebuffed at every turn when presenting CMS with new solutions—I know, it happened to me.” 

Boasberg will also rule in the latest Kentucky and Arkansas cases.

He said Thursday during oral arguments that a decision is likely before the end of the month, The Washington Examiner reported. How Boasberg approaches Kentucky's case will be one to watch, as the ruling will likely take on more directly whether work requirements are legal under the Medicaid statute instead of whether CMS fully evaluated the proposal in approving it.