Less than six months after a federal court blocked Medicaid work requirements in Kentucky, the Centers for Medicare & Medicaid Services (CMS) has reapproved the state's waiver.
Wednesday's approval (PDF) comes after the agency was forced to restart the waiver application process after approving Kentucky's proposal at the beginning of the year. In June, a D.C. district judge said the agency "never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid."
The agency's top officials have shown little willingness to back down since then, recently approving Wisconsin's waiver to implement work requirements.
The newest version of Kentucky HEALTH, set to begin on April 1, is not markedly different from the first. Medicaid beneficiaries between the ages of 19 and 64 are required to complete 80 hours of so-called "community engagement" per month, which can include employment, education, job skills training, job search activities and community service.
There are certain exceptions for pregnant women, survivors of domestic violence, caregivers and those with an acute medical condition. The approval could spark a new round of legal challenges from opponents of the policy.
CMS did go to greater lengths to explain how the waiver promotes the objectives of Medicaid. The waiver notes that CMS and Kentucky made several changes to the original waiver, including a requirement that Kentucky submit a demonstration plan and monitoring protocol to address community engagement "consistent with CMS requirements in other community engagement demonstrations."
As part of the court-mandated reconsideration, CMS opened a new 30-day comment period on Kentucky's waiver in July. An analysis by the Kentucky Center for Economic Policy found nearly 8,500 of the 9,400 unique comments submitted were unsupportive.
CMS spokesperson Johnathan Monroe said CMS "worked diligently to analyze and consider the comments received."
"As outlined in the approval letter, CMS believes that the Kentucky HEALTH program is likely to promote the objectives of Medicaid," he added.
In the approval letter, CMS Chief Principal Deputy Administrator Paul Mango responded to commenters concerned that more Kentucky residents would lose coverage, touting new guardrails in the form of new special terms and conditions and a provision allowing CMS to discontinue the program if necessary.
Mango also argued that "the community engagement requirement is designed to help beneficiaries achieve success," and that demonstration projects are meant to "test hypotheses and develop data that may inform future decision-making."
"Regardless of the degree to which Kentucky's demonstration project succeeds in achieving the desired results, the information it yields will provide policymakers real-world data on the efficacy of such policies," he wrote. "That in itself promotes the objectives of the Medicaid statute."
Kentucky officials touted the program as a way to improve the health of Kentuckians and ensure the "long-term viability" of the state's program.
"Kentucky HEALTH creates an opportunity for Kentuckians to actively engage in their health as well as gain new skills to help transition them successfully into Kentucky’s workforce,” Education and Workforce Development Cabinet Secretary Derrick K. Ramsey said in a statement.
The approval comes as a similar demonstration in Arkansas has removed more than 12,000 people from the Medicaid program, inviting criticism of the state's implementation. Earlier this month, the Medicaid and CHIP Payment and Access Commission (MACPAC), called on HHS Secretary Alex Azar to pause the demonstration in Arkansas until it can provide beneficiaries the appropriate tools.
Kentucky officials have estimated the work requirements would remove 95,000 beneficiaries from the program over the five-year period, either through noncompliance or by earning enough money to make them ineligible.