CMS push for Medicaid work requirements likely to be challenged in court

CMS has released guidance for how states can seek Medicaid waivers imposing requirements for beneficiaries to work in order to receive coverage, a move which some healthcare groups quickly condemned and threatened to sue in order to stop.

CMS Administrator Seema Verma, MPH, had previously signaled the change was coming in a Nov. 2017 speech to the National Association of Medicaid Directors on expanding what changes states can make through Section 1115 waivers. Opposing work requirements for able-bodied beneficiaries, she said, was “soft bigotry” on the part of the Obama administration, which hadn’t approved a waiver Verma helped design in Indiana which originally contained such a provision.

States have continued to show interest in the idea, however, with South Dakota Gov. Dennis Daugaarda announcing just days ahead of the guidance’s release he would include a work requirement in the state’s next waiver request.

“Medicaid needs to be more flexible so that states can best address the needs of this population. Our fundamental goal is to make a positive and lasting difference in the health and wellness of our beneficiaries, and today’s announcement is a step in that direction,” Verma said in a press release.

The guidance to state Medicaid directors said CMS is committed to supporting state experiments requiring adult beneficiaries to “engage in work or community engagement activities,” such as skills training, education, searching for a job, caregiving or volunteer service. The goal, CMS said, would be to determine “whether sustained employment or other productive community engagement leads to improved health outcomes.”

Any work requirements would exclude beneficiaries eligible for Medicaid due to a disability, pregnant women, elderly beneficiaries and children. Individuals would be also be exempt if a medical professional determines they’re medically frail or have an acute condition preventing them from working.

To justify the change, the CMS letter cited studies showing a higher income correlated to a longer lifespan and that unemployment is “generally harmful to health,” with those out of work showing higher hospital admission and mortality rates.

“This is a shift from prior agency policy regarding work and other community engagement as a condition of Medicaid eligibility or coverage, but it is anchored in historic CMS principles that emphasize work to promote health and well-being,” the guidance said.

When asked if the policy will lead to a drop in Medicaid enrollment, Verma told reporters on a conference call that would be “a good outcome because we hope that means they don’t need the program anymore.”

American College of Physicians (ACP) president Jack Ende, MD, said the result of this new policy will be restricting Medicaid eligibility in a statement opposing work requirements.

“Medicaid was designed as a health care program, to provide vulnerable members of our society with access to care they badly need,” Ende wrote. “Work requirements impose an additional, unnecessary barrier to allowing patients access to vital health care services for people who need access and coverage the most.”

Democrats in Congress and liberal-leaning groups which have supported the Affordable Care Act were quick to criticize the concept of work requirements. Sen. Patty Murray, D-Washington, the ranking Democrat on the Senate health committee, said it “speaks volumes” about President Trump’s priorities that CMS would pursue a policy she said would “pull the rug out from people who simply want affordable health care they can rely on.”

Families USA’s senior director of health policy, Eliot Fishman, argued the requirement is “contrary to Medicaid law” and “a shocking abuse of administrative authority” which will likely be challenged in court.

“Families USA is working closely with the National Health Law Program and others to support those legal challenges. Many lives are at stake if today’s CMS decision stands—we will be working to ensure that it does not,” he said.