Medicaid redetermination rule gives reason for health plans and community health providers to join efforts

By: Cesar Herrera, Co-Founder and CEO

On June 1st, the Centers for Medicare and Medicaid Services (CMS) clarified the Medicaid Community Engagement Rule within H.R.1. As an Interim Final Rule with Comment (IFC), CMS has made it clear that feedback can be given, but this is happening.

As of January 2027, non-exempt Medicaid members will need to document 80 hours per month of work, education, or community service to keep their coverage or at the very least demonstrate monthly earnings of $580. Those who qualify for an exemption will need to prove their status and this will prove challenging for most.

While advocacy efforts are worth prioritizing and FQHCs should send their concerns to CMS before July 31st, changes to the ruling aren’t guaranteed and all stakeholders need to prepare.

What this means for at-risk patients

For many, this is a logistical hurdle. Many patients already meet the requirement, but proving it is a challenge, especially for seasonal or gig workers without a traditional pay stub or HR department. New applicants will also need to meet the minimum requirement for at least one month before applying, resulting in coverage gaps. And for those who don't qualify for an exemption and aren't currently working, finding a consistent 20-hours-per-week service role will be exceptionally difficult.

Patients living with cancer, HIV, and other serious medical conditions are among those expected to lose coverage if they can’t meet the 80-hour minimum. These are the patients who often need the most care and who, at the same time, may have a hard time finding reliable and supportive work or community service opportunities. If they are eligible for exemption due to their health status, they will have to prove it regularly. The new rule limits categorical exemptions, meaning the logistical hurdle applies to millions more people than community health leaders had hoped it would.

There is a slight reprieve, though, with states accepting self-declaration of medical frailty through 2027. This will change in 2028 when self-attestation is only allowed once per enrollment period. After that, documentation will be required at every renewal.

The fact is, people will lose coverage. When they do, they may delay care, skip appointments, or show up in emergency rooms for issues that could have been addressed with preventative care. When this happens, it leads to rising costs among hospitals, health plans, and safety-net providers, all of whom will absorb losses in Medicaid reimbursement.

The case for collaboration

FQHCs and health plans have largely operated in parallel, aware of each other, occasionally at the same table, but rarely moving together in the same direction. FQHCs often question the motive of the health plan and health plans often question the leadership value of the FQHC.

There could be a new path forward.

Both stakeholders need to keep patients enrolled. And we know, from existing collaborations, that joint efforts are possible and effective. In 2023, for example, UnitedHealthcare Community & State partnered with FQHCs specifically to engage in redetermination efforts, offering health navigator grants to increase outreach efforts.

Health plans have already demonstrated a willingness to invest in third-party solutions to maintain or boost enrollment. They have the capital to invest in retention but don't have the on-the-ground relationships, community trust, or care management infrastructure to act at the patient level. Community health providers serve the exact population this rule targets. They have the clinical presence and community trust. What they need is upfront revenue and administrative bandwidth to engage in these efforts.

Keeping members covered requires significant outreach, navigation support, and hands-on documentation assistance, work that FQHCs are uniquely positioned to perform, but can't afford to sustain alone. It only makes sense for health plans to cover these upfront costs, especially when 10% of their Medicaid membership reimbursements are at risk.

Taking action ahead of implementation

Navigating the work requirement or proving an exemption will require significant effort from all parties, but will lie heavily on FQHCs, as their patient populations will be hardest hit. Though it’s an added responsibility, patients can delegate authority to their providers to manage compliance documentation on their behalf, which the current regulatory structure supports, and which is a meaningful opportunity for FQHCs to step up and lead.

Part of this new ruling requires more than 43 affected states to send noncompliance notices and give individuals 30 days to demonstrate compliance before denying or terminating coverage. This is a critical window and one that requires quick, effective communications. To prevent gaps, states should work collaboratively with FQHCs to flag patients early and provide them with hands-on support.

What this looks like in practice

Many FQHCs are already engaging in on-the-ground creative thinking, including how to help patients meet the 80-hour minimum. Some are actively building a structured volunteer program to generate qualifying hours.

This innovative approach requires real infrastructure, as well as recruitment, onboarding, scheduling, training, coordination, and more. Add tech-enabled compliance support, automated eligibility tracking, and documentation tools and the resource demands quickly grow and become unreasonable for financially- and resource-strapped organizations.

This is exactly where health plan funding can make a difference.

Retaining a member is much less expensive than losing one to emergency care. Funding FQHCs upfront could help with these retention efforts, especially when these providers have the ability to screen for work requirement status, identify exemptions, flag patients before a noncompliance notice arrives, etc.

The best path forward

FQHCs have what health plans can't replicate, such as the ability to reach patients where they are, and health plans have what FQHCs need: capital and scale. Separately, both will struggle to support patient re-enrollments.

We know that the organizations acting now will be much better positioned for sustainability than those who wait. This is a critical moment for health plans and community health providers and it’s mutually beneficial for both to join the same table with a real proposal and a shared commitment. The ones who collaborate today will be better positioned to protect their patients, their members, and their financial sustainability.

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