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On June 2, 2026, the Centers for Medicare & Medicaid Services (CMS) issued the highly anticipated Interim Final Rule (IFR) on implementing the Medicaid work and community engagement听requirements听set forth in听the 2025 budget reconciliation act, P.L. 119-21.听States are expected to implement the requirements by January 1, 2027,听leaving听Medicaid听authorities, health plans, providers, and community-based partners听with a compressed timeline听to听design, test, and deploy new workflows that听will听fundamentally change how eligibility and compliance are administered.

This article builds on 量子资源网 (量子资源网) colleagues’ ongoing analysis of federal Medicaid policy changes stemming from the Working Families Tax Cut Act and evolving federal priorities (see Connecting the Dots听here听and听here)听and explores the implications for听enrollees,听state agencies,听health plans,听and providers.听

Community engagement requirements听create risk and exposure for听all of听these interest-holders,听opening them to听the possibility of听increased enrollment churn, particularly during the听early stages听of implementation听as听enrollees and administrators adapt to new processes.听Even听Medicaid enrollees听who meet compliance requirements or qualify for exemptions听could experience听temporary coverage losses or disruptions听because of听delays in documentation, notice response, or case processing.听

Plans and providers, meanwhile,听may听encounter听downstream听effects听on听capitation rate adequacy, financial and membership forecasting, risk adjustment, care management continuity, quality performance, and network stability.听

From Policy to Practice: A Systemwide Operational Shift听

Many elements听of the IFR听align with statutory provisions;听however,听it听introduces new operational expectations that will reshape eligibility processes, including:听

• Structured verification and documentation requirements听
• Expanded exemption frameworks tied to functional ability to work听
• New reporting and oversight obligations听
• Increased reliance on enrollee notifications and engagement听

Collectively, these changes introduce a new layer of administrative听expectations听that extend beyond traditional eligibility and enrollment functions and require coordination across听state and local听agencies,听health plans and providers, and community partners.听

Notably, CMS has provided targeted flexibilities鈥攑articularly through income-based compliance pathways鈥攚hich will allow states to leverage existing data sources and potentially reduce administrative burden, if implemented effectively.听

States Need听to Build听an Operational Foundation听

For state Medicaid agencies, the immediate priority is translating federal requirements into scalable, consistent processes.听

Key actions include:听

• Redesign eligibility and听compliance听workflows.听States will need to听identify听affected populations, track compliance,听adjudicate听exemptions and hardships, and manage appeals鈥攁ll within tight implementation timelines.听
• Invest in verification infrastructure.听Although automation opportunities exist,听particularly using income and existing eligibility data,听many determinations (e.g., medical frailty, caregiving, hardship) will require individualized review and new documentation standards.听
• Strengthen cross-agency coordination and data integration.听Effective implementation will depend on integrating data from workforce, social services, and other programs to support compliance and reduce manual processes.听
• Develop robust communication strategies.听Experience from prior Medicaid initiatives听demonstrates听that coverage loss often results from administrative barriers,听not ineligibility,听making clear, proactive communication essential.听
• Balance automation and administrative complexity.听States that effectively听leverage听automation and streamline enrollee-facing processes will be better positioned to听maintain听coverage continuity while meeting federal requirements.听

Implications for Health Plans: Expanding the Role of Member Engagement听

Health plans will play a pivotal role in implementation, although they cannot determine enrollee compliance with the new requirements. States听rely on听plans to听identify听members who听may be听subject to community engagement requirements,听to听assist听with member communications, and听to听connect members听with听resources that support compliance or听exemption听eligibility.听Even though these activities occur outside the traditional managed care financing framework, plans may be听called upon听to听accomplish听the following:听

• Enhance outreach and education capabilities.听Plans are often the primary point of contact for members and will need to support awareness, compliance, and navigation of new requirements.听
• Identify听and support at-risk populations.听Plans can help flag members likely to qualify for exemptions and听assist听with documentation and care coordination to reduce inappropriate disenrollment.听
• Prepare for enrollment volatility.听Increased churn听driven by documentation delays and administrative barriers听may affect financial performance,听care听continuity, and quality outcomes.听
• Align with state expectations and funding constraints.听Because these activities fall outside traditional听Medicaid听benefits, states and plans must carefully define roles, accountability, and funding mechanisms.听

Implications for Providers: A New Interface with Eligibility Systems听

Providers,听particularly safety听net organizations,听will be directly affected by new documentation and enrollee support responsibilities听and should be prepared听to address the following:听

• Expand administrative and clinical workflows.听Providers will increasingly be asked to support medical frailty determinations, document functional limitations, and provide verification related to exemptions.听
• Prepare for increased administrative burden.听New documentation requirements and coordination with plans and states will听require听operational adjustments, particularly for organizations serving large Medicaid populations.听
• Mitigate impacts of coverage disruption.听Gaps in coverage鈥攐ften tied to procedural barriers鈥攎ay disrupt care continuity, particularly for high听need populations, and increase uncompensated care.听
• Serve as a critical partner in engagement efforts.听Providers are uniquely positioned to听identify听at-risk individuals, educate patients, and support compliance,听making them essential to implementation success.听

Many of the most complex determinations鈥攕uch as medical frailty and caregiving鈥攃annot be fully automated, requiring nuanced policy design and consistent operational execution.听As a result, successful implementation will depend on听the following:听

• Standardized documentation and review processes听
• Integrated data systems and verification pathways听
• Clear division of responsibilities听across听interest-holders听
• Coordination across policy, operations, and frontline personnel听

Act Now听to听Influence听Community Engagement Rollout听

States and stakeholders face dual, immediate priorities鈥攑reparing for implementation and engaging in the federal rulemaking process. CMS听is听accepting听comments on the IFR through听July 31, 2026, creating a critical opportunity to shape final policy while building operational readiness. At the same time, the compressed timeline to 2027听for听implementation听underscores the need for rapid decision-making on policy design, systems investments, and partner engagement.听

The Medicaid community engagement requirements听represent听one of the most significant operational transformations in the program鈥檚听60-year听history.听To succeed, organizations听should听act early,听coordinate with听interest-holders, and design implementation strategies that balance compliance, administrative efficiency, and coverage continuity.听

Now is the time to:听

• Establish cross-functional governance and implementation plans听
• Evaluate verification strategies and data integration opportunities听
• Define roles and expectations across plans, providers, and partners听
• Develop targeted communication and engagement strategies听
• Conduct readiness assessments and system testing听

量子资源网 can actively support state policymakers, health plans, and providers as they in navigate these challenges. For details, access the full 量子资源网听Issue听Brief听and explore the听Community Engagement State Support Hub.

Strategies to improve healthcare delivery, sustain coverage, and manage growing cost pressures听resulting from听federal policy changes and state budget dynamics听were key topics听of discussion at this year鈥檚听, May 21, 2026, in Baltimore, MD. Hosted by听听(SOR), an 量子资源网听Company,听the听program听convened听state听policymakers听and leaders of听health plans,听provider听groups,听and听community-based organizations听to听examine the most pressing healthcare issues in听Maryland.听

Across sessions, participants explored key policy priorities, including Maryland鈥檚 implementation of the Rural Health Transformation Program (RHTP), efforts to stabilize and expand health听insurance coverage, and听early lessons from听implementing听the听AHEAD (Achieving Healthcare Efficiency through Accountable Design)听total cost of care听(TCOC)听model.听

Sustaining Medicaid听and Marketplace Accessibility听Amid Federal Policy Changes听

Throughout the conference speakers and attendees engaged on myriad issues and concerns resulting from the 2025 budget reconciliation act, now referred to as the Working Families Tax Cuts (WFTC) Act, and its potential impact on state Medicaid programs and coverage stability. Maryland Deputy Secretary for Healthcare Financing and Medicaid Director Perrie Briskin joined Johanna Fabian-Marks, Deputy Executive Director of the Maryland Health Benefit Exchange (MHBE), and Melissa Horn, Director of State Legislative Affairs at the Arthritis Foundation, to examine strategies for mitigating coverage loss and maintaining affordability.听

Speakers emphasized the need for improved coordination between Medicaid and the MHBE, including clear and consistent consumer communications and targeted outreach in counties most affected by federal policy changes.听

For example, Maryland leaders described several innovative approaches the MHBE is using to help people in the state maintain Marketplace coverage, including state-funded subsidies to offset the expiration of enhanced premium tax credits, streamlined auto-renewals, and simplified enrollment pathways for individuals identified as uninsured听based on their听tax and employment听records.听The state reported an 8 percent decline in enrollment in April听2026, noting that without these mitigation strategies, enrollment could have dropped by as much as one-third.听

The MHBE is using artificial intelligence听(AI)听to support document verification听and is听deploying a chatbot to help consumers navigate听common questions.听

On the Medicaid side, the state听is consulting听multiple data sources鈥攊ncluding CRISP听(Chesapeake Regional Information System for our Patients), labor, and education data鈥攖o听verify听eligibility听and,听compliance with听community engagement听requirements听to听reduce administrative burdens.听

Rural Health Transformation Program Implementation and Early Priorities听

Maryland鈥檚 RHTP, supported by听nearly $168.2 million听in first-year funding from the Centers for Medicare & Medicaid Services (CMS),听was a hot topic at the conference.听State leaders and implementation partners emphasized the program鈥檚 role in addressing rural health disparities, strengthening care delivery infrastructure, and improving chronic disease outcomes.听

Elizabeth Kromm, PhD,听Assistant Secretary, Maryland Department of Health,听outlined the听three pillars听of听the state鈥檚听RHTP plan:听

• Expand the rural healthcare workforce听
• Increase access to integrated primary, specialty, and behavioral health services听
• Address the underlying drivers of chronic disease through nutrition and food system interventions听

Together, these initiatives highlight Maryland鈥檚 focus on both clinical care delivery and broader population health strategies.听

State officials听also discussed the听funding opportunities听听in听April 2026, one of which seeks to support care delivery innovation, improve chronic condition management, and advance value-based care models.听Speakers emphasized that connection is central to the program鈥檚 success鈥攂oth the strength of community relationships, the connections enabled through technology, and the integration听of听clinical and nonclinical services.听

AHEAD Model: Advancing Total Cost of Care and Population Health听

Maryland鈥檚 participation in CMS鈥檚 AHEAD听Model听represents听a听significant听shift听toward听healthcare cost containment and system transformation. As听one of听the first states to implement听the听framework, Maryland is testing a statewide approach to managing听TCOC听while improving quality and population health outcomes.听

A panel discussion including leaders from the MedChi, Johns Hopkins, CareFirst Blue Shield, and Kaiser Permanente, addressed implementation considerations, open policy implications, and how providers and payers were approaching these changes in payment for healthcare services. Reimbursement strategies for primary care services were still uncertain and may differ significantly from those used under the Maryland TCOC model. Panelists also discussed what this model means in the broader healthcare environment of reductions in Medicaid payments resulting from the reconciliation legislation and additional funding coming from the Rural Health Transformation Fund. They also described how Maryland could serve as an example for other states working to implement AHEAD in the coming years.听

Speakers noted that successful implementation will听require听strong coordination among providers, payers, and state agencies,听and more details are necessary to听fulfill the requirements.听The model鈥檚 10-year听timeline positions Maryland as a leading test听case for听future federal and state efforts to scale听TCOC听approaches.听

AI听in Healthcare: From Innovation to Real-World Impact听

AI鈥檚听role in healthcare delivery and policy continues to evolve, with growing attention on its practical applications and regulatory implications. A session led by 量子资源网 (量子资源网) Principal听Brandon Greife, JD,听and听speakers听from听Microsoft AI, the Pair Team, the Center for Virtual Care, and听b.well听Connected Health听explored听how healthcare organizations听conceptualize听AI use cases to deploy solutions that demonstrate measurable impact.听

AI holds promise for improving care delivery, but realizing that potential requires navigating ethical, regulatory, and operational challenges. Mr.听Greife听led a panel discussion听on how听the healthcare industry听is听transitioning from abstract use cases for AI toward听evaluating听the real-world impact of deployed solutions.听

Session speakers听also听explored听how听healthcare is advancing听from听AI tools that support clinicians and听payers听to听patient-facing AI听that supports care navigation,听chronic disease management, and听community outreach. They rounded out the session听with a focus on fundamentals of healthcare鈥攃oncepts like data quality, clinical trust, patient safety, and demonstrated value at the point of care.听

Looking Ahead听

If听you are looking for听strategies听and听solutions听to address urgent healthcare policy and operational challenges, 量子资源网 experts are available to help听you听navigate these complex changes听and听identify听practical paths forward.听

Through听the听,听听partnership events, and other听量子资源网 convenings听across the country, we connect state leaders, providers, health plans, and community stakeholders to share听insights, elevate lessons,听and advance solutions. Join us at an upcoming event鈥攊ncluding our next听量子资源网 National Conference听in听New Orleans, LA听on听October 5-7, 2026鈥攐r explore听additional听opportunities to engage with 量子资源网 and access the full schedule of conferences and resources.听

State of Reform develops its conference agendas through collaboration with 量子资源网 subject matter experts/market leads and stakeholders across the public and private sectors, including state officials, community-based organizations, providers, payers, and more.听