1 DEP ART MENT OF HEALT H AND HUMAN SERVICES Centers for Medicare & Medicaid Services 12 7500 Security Boulevard, Mail Stop S2- 26- 1850 Baltimore, MD 21244- SM D: 18 -002 R E: Opportunitie s to Promote Work and Community Engage me nt Among M e dicaid B e neficiarie s 1 January 1 , 2018 D e ar State Me dicaid Dire ctor: he Centers for Medicare & T Medicaid Services (CMS) is announcing a new policy designed to assist states in their efforts to improve Medicaid enrollee health and well -being through work and community engagement among non-elderly, non-pregnant adult incentivizing 1 Medicaid beneficiari es who are eligible for Medicaid on a basis other than disabilit y. Subject to the full federal review process, CMS will support state efforts to test incentives that make participation in work or other community engagement a requirement for continued Medic a id eligibility or coverage for certain adult Medicaid beneficiaries in demonstration projects authorized under section 1115 of the Social Security Act (the Act). Such programs should be designed to promote better mental, physical, and emotional health in furtherance of Medicaid program objectives. Such programs may also, separately, be designed to help individua ls and families rise out of poverty and attain independence, also in furtherance of Medicaid program 2 objectives. T his guidance describes considerations for states that may be interested in pursuing demonstration projects under section 1115(a) of the Act that have the goal of creating incentives It for Medicaid beneficiaries to participate in work and community engagement activities. addresses the application of CMS’ monitoring and evaluation protocols for this type of demonstration and identifies other programmatic and policy considerations for states, to help them design programs that meet the objectives of the Medicaid program, consistent with federal statutory requirements. 1 St at es will h av e t h e flexib ilit y t o id en t ify act iv it ies, o t her t h an employment, which promote health and wellness, and which will meet the states’ requirements for continued Medicaid eligibility. These activities include, but are not , community service, caregiving, education, job training, and substance use dis order treatment. limit ed t o 2 Section 1901 of the Social Security Act authorizes appropriations to support State Medicaid programs: “For the purpose of enabling each State, as far as practicable under the conditions in such State, to furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and indi viduals attain or retain capability for independence or self -care [.]”
2 Page 2- State Medicaid Director He alth B e ne fits of Community Engage me nt, including Work and Work Promotion While high -qualit y health care is important for an individual’s health and well -being, there are many other determinants of health. It is widely recognized that education, for example, can lead 3 to improved health by increasing health knowledge and healthy behaviors. CMS recognizes that a broad range of social, economic, and behavioral factors can have a major impact on an individua l’s health and wellness, and a growing body of evidence suggests that targeting certain health determinants, including productive work and community engagement, may improve 4 health outcomes. For example, higher earnings are positively correlated with longer lifespan. One comprehensive review of existing studies found s trong evidence that unemployment is generally harmful to health, including higher mortality; poorer general health; poorer mental 5 health; and higher medical consultation and hospital admission rates. Another academic found strong evidence for a protective effect of employment on depression and general a na lys is 6 . A 2013 Gallup poll found that unemployed Americans are more than twice as mental health 7 -time jobs to say they currently have or are being treated for depression. likely as those with full ed with improved Other community engagement activities such as volunteering are also associat 8, 9 health outcomes , and it can lead to paid employment. CMS, in accordance with principles supported by the Medicaid statute, has long assisted state incentives to dis a ble d efforts to promote work and community engagement and provide beneficiaries to increase their sense of purpose, build a healthy lifestyle, and further the positive physical and mental health benefits associated with work. CMS supports state efforts to enable e ligible individ ua ls Op tiona l Me dic a id programs such as the to gain and maintain employment. Medicaid Buy-In, for example, allow workers with disabilit ies to have higher earnings and For beneficiaries who are able to work but have been unable maintain their Medicaid coverage. to find employment, some states encourage employment through concurrent enrollment in state - sponsored job training and work referral, either automatically or at the option of the Medicaid beneficiary. A number of states have also initiated programs to connect non-disabled Medicaid benefic iaries to existing state workforce programs. States also provide a range of employment supports to individuals receiving home and community based services under section 1915(c) waivers or section 1915(i) state plan services. These include habilitat ion services designed to “assist individua ls in acquiring, retaining and improving the self -help, socialization, and adaptive skills necessary to reside successfully in 3 Bartley, M and Plewis, I. (2002) Accumulated labor market disadvantage and limiting long term illness. -41. International Journal of Epidemiology 31:336 4 etty R, Stepner M, Abraham S Ch The association between income and life expectancy in the United States, , et al. 2001 JA MA . 2016; 315(16):1750 -1766. -2014. 5 Waddell, G. and Burton, AK. Is Work Good For Your Health And Well -Being? (2006) EurErg Centre for Health and Social Care Research, University of Huddersfield, UK 6 Van der Noordt, M, Jzelenberg, H, Droomers, M, and Proper,K. Health effects of employment: a systemic review o f p ro s pectiv e s tudies. BMJo urnals. Occu patio nal an d En v iro nmental Med icin e. 2014: 71 (10). 7 Crabtree, S. In U.S., Depression Rates Higher for Long -Term Unemployed. (2014). Gallup. h ttp ://news.gallu p .com/po ll/171044/d epressio n -ra t es -higher -a mo ng -long -term -unemployed.aspx 8 United Health Group. Doing good is good for you. 2013 Health and Volunteering Study. 9 Jenkins, C. Dickens, A. Jones, K. Thompson -Coon, J. Taylor, R. and Rogers, M. Is volunteering a public health intervention? A systematic review and meta- analysis of the health and survival of volunteers BM C Pu b lic Healt h 2013. 13 (773)
3 Page 3- State Medicaid Director 10 These activities have been historically focused on home and community based settings." services and programs for individua ls with disabilit ies and receipt of these supports is not a condition of eligibilit y or coverage. The successes of all these programs suggest that a spectrum of additional work incentives, including those discussed in this letter, could yield similar outcomes while promoting these same objectives. Ne w Opportunity for Promoting Work and Othe r Community Engage me nt for Non- Elde rly, Non -Pre gnant Adult B e ne ficiarie s Who Are Eligible for Me dicaid on a B as is Other than Dis abilit y On March 14, 2017, the Department of Health and Human Services (HHS) and CMS issued a letter to the nation’s governors affirming the continued commitment to partner with states in the administration of the Medicaid program. In the letter, we noted that CMS will empower states to develop innovative proposals to improve their Medicaid programs. Demonstration projects under section 1115 of the Act give states more freedom to test and evaluate approaches to improving quality, accessibility, and health outcomes in the most cost -effective manner. CMS is committed to allowing states to test their approaches, provided that the Secretary determines that the demonstrations are likely to assist in promoting the objectives of the Medicaid program. Some states ar e interested in pursuing demonstration projects to test the hypothesis that requiring work or community engagement as a condition of eligibilit y, as a condition of coverage, as a paying reduced condition of receiving additional or enhanced benefits, or as a condition of premiums or cost sharing, will result in more beneficiaries being employed or engaging in other productive community engagement, thus producing improved health and well -being. To determine whether this approach works as expected, states wil l need to link these community engagement requirements to those outcomes and ultimately assess the effectiveness of the 11 demonstration in furthering the health and wellness objectives of the Medicaid program. Today, CMS is committing to support state demonstrations that require eligible adult beneficiaries to engage in work or community engagement activities (e.g., skills training, education, job search, caregiving, volunteer service) in order to determine whether those obtaining sustainable employment or other productive requirements assist beneficiaries in community engagement and whether sustained employment or other productive community engagement leads to improved health outcomes. This is a shift from prior agency policy regarding work and other community engagement as a condition of Medicaid eligibility or 12 coverage , but it is anchored in historic CMS principles that emphasize work to promote health -being. and well We look forward to working with states interested in testing innovative approaches to promote work and other community engagement, including approaches that make participation a condition of eligibilit y or coverage, among working-age, non-pregnant adult Medicaid beneficiaries who qualify for Medicaid on a basis other than a disability. Consistent with section 10 Social Security Act, section 1915 (c)(5)(A) 11 h t t p s:/ / www.med icaid .gov /med icaid /sect io n -1115 -demo/about -1115/in d ex.h tml 12 h t t p s:/ / www.med icaid .gov /med icaid /sect io n -1115 -demo/demonstration -and -wa iv er -lis t /?en try =29927
4 Page 4- State Medicaid Director -by-case basis to 1115(a) of the Act, demonstration applications will be reviewed on a case determine whether the proposed approach is likely to promote the objectives of Medicaid. CMS ity for the health outcomes produced by the is also committe d to ensuring state accountabil program, and demonstration projects approved consistent with this guidance will be required to -base d evaluations , based on evaluation designs subject to CMS approval . conduct outcomes demonstration projects that promote positive health outcomes may also We note that approved achieve the additional goal of the Medicaid program to promote independence. State Flexibility in P rogram Design In its work with states, CMS has identified a number of issues for s tates to consider as they develop programs to promote work and other forms of community engagement among Medicaid beneficiaries. Each state is different, and states are in the best position to determine which n their specific populations and resources. In approaches are most likely to succeed, based o drafting demonstration project applications, states should articulate the reasoning behind their proposal. While CMS will evaluate each demonstration project application on its own merits, we believe the fol lowing considerations will facilitate states’ work to develop proposals and allow them to focus their resources on permissible areas of innovation while allowing CMS to maintain its oversight and fiduciary responsibilit ies. Alignment with Other Programs Many states already have systems in place for implementing employment and community engagement programs. For instance, beginning in 1996, welfare reform provided states with more flexibilit y to manage their state welfare programs under the Temporary Assist ance for Needy Families (TANF) program consistent with the four statutory purposes of TANF. Supplemental Nutrition Assistance P rogram ( SNAP) rules require all recipients to meet work Exemptions may include, but are not limite d to a ge , requirements unless they are exempt. disabilit y, responsibilit y for a dependent, participation in a drug addiction or alcohol treatment and rehabilitation program, or another state -specified reason. CMS supports states’ efforts to align SNAP or TANF work or work-related requirements with the Medicaid program as part of a demonstration authorized under section 1115 of the Act, ve of improving where such alignment is appropriate and consistent with the ultimate objecti health and well -being for Medicaid beneficiaries. Based on states’ experiences with their TANF or SNAP employment programs, they may wish to consider aligning Medicaid requirements with certain aspects of the TANF or SNAP programs, such as : • Excepted populations (e.g., pregnant women, primary caregivers of dependents, individua ls w ith dis a bilit ie s or he a lth -related barriers to employment, individua ls participating in tribal work programs, victims of domestic violence, other populations w ith extenuating circumstances, full time students); • P rotections and supports for individua ls with disabilit ies and others who may be unable to meet the requirements; • Allowable activities (e.g., subsidized and unsubsidized employment, educational and vocational programs, job search and job readiness, job training, community service, caregiving, and other allowable activities under TANF or SNAP ) and required hours of participation (e.g., hours/week, including hours completed under TANF or SNAP );
5 Page 5- State Medicaid Director Changes to requirements or allowable activities due to economic or environmental factors • (e.g., unemployment rate in affected areas); • Enrollee reporting requirements (e.g., frequency and method for reporting work a c tivitie s ) ; or • (e.g., transportation or child care) for The availabilit y of work support programs individua ls subject to work and community engagement requirements. CMS will consider the extent to which proposed Medicaid community engagement or work and whether that alignment is requirements align with features of the TANF or SNAP programs , a consistent with Medicaid objectives. For example ligning certain requirements across these programs would streamline eligibility and could reduce the burden on both states and beneficiaries and maximize opportunities for beneficiaries to meet the requirements. Many states have already developed or are developing integrated eligibility systems, and have taken -87 cost allocation rules (available through CY advantage of the waiver of OMB Circular A ion of eligibility systems between health and human services 2018) to support the integrat programs. These integrated systems may be poised to allow for alignment of eligibilit y requirements for a segment of the Medicaid population, and to facilitate implementation of streamlined appl ication and verification processes. Where additional information technology systems enhancements are required to support Medicaid demonstration activities, costs will be expected to be reasonable and comply with Medicaid statute and regulations. Federal M edicaid f unding w ill be limite d to a llow a ble a c tivitie s dir e c tly linke d to Me dic a id be ne f ic ia r ie s . Individua ls enrolled in and compliant with a TANF or SNAP work requirement, as well as tically be considered individua ls exempt from a TANF or SNAP work requirement, must automa to be complying with the Medicaid work requirements. To the degree that specific good cause exemptions exist in a state TANF or SNAP program, the state should make a reasonable effort to ork for a Medicaid community engagement and incorporate similar exemptions within a framew work requirement. States should also describe how they will communicate to beneficiaries any differences in program requirements that individuals will need to meet in the event they transition off of SNAP or TAN F but remain subject to a Medicaid community engagement or work requirement. Populations Subject to Work Promotion/Community Engagement Requirements States should clearly identify the eligibilit y groups subject to the work and community rements and included in the demonstration. States may consider submitting for engagement requi CMS consideration a proposal to tailor such requirements to adults within specific eligibilit y groups or sub-populations within the eligibilit y group. CMS recognizes that adult s who are eligible for Medicaid on a basis other than disability (i.e. classified for Medicaid purposes as “non-disabled”) will be subject to the work/communit y engagement requirements as described in this guidance. These individua ls , however, may have an illness or disability as defined by other federal statutes that may interfere with their ability to meet the requirements. States must comply with federal civil rights laws, ensure that individua ls with disabilit ies are not denied Me dic a id f or ina bilit y to meet these requirements, and have mechanisms in place to ensure that reasonable modifications are provided to people who need them. States must also create exemptions for individua ls determined by the state to be medically frail and should also exempt
6 Page 6- State Medicaid Director from the requirements any individua ls with acute medical conditions validated by a medical professional that would prevent them from complying with the requirements. , to States are required, in the design and administration of Medicaid demonstration projects c omply w ith a ll a pplic a ble f e de r a l c ivil r ights la w s , inc ludin g the A me r ic a ns w ith D is a bilitie s Act, Section 504 of the Rehabilitation Act, Section 1557 of the Affordable Care Act, Title VI of the Civil Rights Act, the Age Discrimination Act, and othe r applicable statutes. The federal disabilit y rights laws are of particular importance, given the broad scope of protection under these laws and the fact that disabilit ies can affect an individua l’s ability to participate in work activities. States may not impose such requirements on individua ls and community engagement classified as “disabled” for Medicaid eligibilit y purposes. CMS recognizes that individuals who are eligible for Medicaid on a basis other than disabilit y (and are therefore classified f or Medicaid purposes as “non-disabled”) may have a disability under the definitions of the Americans with Disabilit ies Act and Section 504 of the Rehabilitation Act of 1973, or section 1557 of the Affordable Care Act. States should include, in their proposals, information regarding their plans for compliance with these requirements, including provision of reasonable modifications in work or community engagement requirements. The reasonable modifications must include exemptions from participation where individua l is unable to participate for disabilit y-related reasons, modification in the number of an hours of participation required where an individua l is unable to participate for the required number of hours, and provision of support services necessary to participate, where participation is possible with supports. States may not receive Federal Medicaid match for such supportive services for individua ls enrolled in these Medicaid demonstrations. In addition, States should evaluate individua ls’ ability to participate and the types of reasonable modifications and supports needed. CMS, in consultation and coordination with the HHS Office for Civil Rights, is available to assist states in designing projects that comply with the civil rights laws. CMS also re cognizes that many states currently face an epidemic of opioid addiction, which has been declared a national public health emergency by the Secretary. States will therefore be take certain steps to ensure that eligible individua ls with opioid addiction and other required to substance use disorders (who may not be defined as disabled for Medicaid purposes but may be protected by disability laws ) have access to appropriate Medicaid coverage and treatment services. States must make reasonable modifications f or these individua ls , consistent with states’ obligations under civil rights laws described above, and specifically identify such modifications in their demonstration applications. Such modifications may include counting time spent in medical treatment towards an individua l’s , or work/community engagement requirements exempting individua ls participating in intensive medical treatment (e.g. inpatient treatment or intensive outpatient treatment) for substance use disorder from the work/c ommunity engagements requirements. CMS will also consider other reasonable modifications that states may design and propose in furtherance of their obligations under disability laws. Finally, states should identify, in their demonstrations, other strategies to support such individua ls in meeting the requirements, and in obtaining access to treatment when they are ready.
7 Page 7- State Medicaid Director Range of community engagement activities We encourage states to consider a range of activities that could satisfy work and community- engagement requirements. Career planning, job training, referral, and job support services offered should reflect each person’s employabilit y and potential contributions to the labor market. As many Medicaid beneficiaries live in areas of high unemployment, or are engaged as caregivers for young children or elderly family members, states should consider a variety of activities to meet the requirements for work and community engagement, including volunteer activities identified to meet the requirements and tribal employment programs, in addition to the under SNAP or TANF. Beneficiary supports States will be required to describe strategies to assist beneficiaries in meeting work and community engagement requirements and to link individua ls to additional resources for job training or other employment services, child care assistance, transportation, or other work supports to help beneficiaries prepare for work or increase their earnings. However, this demonstration opportunity will not provide states with the authority to use Medicaid funding to this letter changes the types of services eligible finance these services for individua ls. Nothing in for Federal match; states may only receive Federal Medicaid match for allowable services in accordance with statute. tory CMS expects that states will design their programs consistent with statutory and regula procedural requirements, including through provisions to ensure Medicaid beneficiaries’ due process rights are protected. States are encouraged to include procedures that allow for an a s s e s s me nt of individ ua ls ’ dis a bilit ie s , medical diagnosis, and ot her barriers to employment and s e lf -sufficiency to identify appropriate work and community engagement activities and in order reasonable modifications necessary to services, supports, and any for those individua ls participate in work and community engageme nt activities and attain long-term employment and -sufficiency. s e lf Attention to market forces and structural barriers CMS recognizes that States will need flexibility to respond to the local employment market by phasing in and/or suspending program fea tures, as necessary. A state may need time to establish supports for beneficiaries in regions with limited employment opportunit ies, for example, or or lack of viable transportation. The state should localities facing particular economic stress describe its plan for assessing and addressing these and related issues in its demonstration application. In addition, the state should consider whether other circumstances may arise that could prevent individua ls from complying with a community engagement and wor k requirement. States should detail how they would support individuals in meeting program requirements during those periods, which may include incorporation of good cause exemptions similar to those used in SNAP and TANF. Transparency CMS remains committed to supporting reasonable public input processes that provide states an opportunity to consider the views of Medicaid beneficiaries, applicants, and other stakeholders and gather input that may support continuous improvement of the program. Demonstration projects under section 1115 of the Act intended to promote work and other community
8 Page 8- State Medicaid Director engagement are subject to all relevant public notice and transparency requirements, including those described in 42 C.F.R. P art 431, subpart G. Where applicable, states will also be required to comply with tribal consultation requirements and describe how they are responding to comments received through the tribal consultation process. Budget Neutrality To promote long-term sustainability of the Medic aid program for states and the federal government, we will continue to require states to demonstrate that projects authorized under are budget neutral. CMS will work with states to identify those section 1115 of the Act components of the demonstration tha t will be included in budget neutrality calculations and provide technical assistance as needed in determining budget neutrality. States will not be permitted to accrue savings a reduction in enrollment that may occur as a result of using from n 1115 authority. States will be required to document the financial performance of the this s e c tio demonstration and track expenditures to ensure the demonstration does not exceed established budget neutrality limits. States will provide updated budget neutrality workbooks with every required monitoring report, and the specific reporting requirements for monitoring budget neutrality will be set forth in the demonstration special terms and conditions (STCs). Monitoring and Evaluation CMS remains committe d to ensuri ng state accountability for the health and well -being of Medicaid enrollees. Monitoring and evaluation are important for understanding these outcomes and the impacts of the state innovations being demonstrated. We are undertaking efforts to help onitor the elements of their programs, while giving them the flexibility to adapt to states m changing conditions in their states. States will be required to develop monitoring plans and submit regular monitoring reports describing progress made in implementing their requirements for work and other community engagement activities. We will also undertake our own monitoring and technical assistance efforts through regular communications with states and will review written reports from states on a quarterly basis. Monitoring States approved to implement work and other community engagement requirements for Medicaid beneficiaries will submit to CMS a draft of proposed metrics for quarterly and annual monitoring reports, and CMS will work with the state to jointly identify metrics for these reports. Metrics will reflect the major elements of the demonstration, including but not limited to data that applies to the work and other community engagement initiatives. CMS will combine these programmatic metrics with general metrics aimed at monitoring beneficiary enrollment and termination for failure to meet program requirements, access to services for both beneficiaries and individua ls terminated for failure to meet the requirements, and the overall functioning of the demo nstration. States will be subject to other monitoring and reporting requirements, consistent with regulations in 42 C.F.R. § 431.420 and § 431.428. State reports will be required to provide sufficient information to document key challenges, underlying c auses of those challenges, and strategies for addressing those challenges, as well as key achievements and the conditions and efforts that lead to those successes. Specific details related to monitoring and reporting for each state’s demonstration will be discussed with states and described in the demonstration STCs.
9 Page 9- State Medicaid Director Evaluation States will also be required to evaluate health and other outcomes of individua ls that have been ed to conduct enrolled in and subject to the provisions of the demonstration, and will be requir robust, independent program evaluations. Evaluations must be designed to determine whether the demonstration is meeting its objectives, as well as the impact of the demonstration on Medicaid beneficiaries and on individua ls who experience a lapse in eligibil ity or coverage for failure to meet the program requirements or because they have gained employer -sponsored insurance. A draft evaluation design should be submitted with the application, and the final or CMS approval no more than 180 days after evaluation design will be submitted f demonstration approval. Evaluation designs will be expected to include a discussion of the evaluation questions and hypotheses that the state intends to test, including the hypothesis that requiring certain Medic a id beneficiaries to work or participate in other community engagement activities increases the those Medicaid beneficiaries will achieve improved health, well -being, and (if the like lih oo d tha t ndependence as contemplated in the State designs its program to pursue this additional goal) i objectives of Medicaid. Evaluation designs will be expected to include analysis of how this requirement affects beneficiaries’ ability to obtain sustainable employment, the extent to which individua ls who transition from Medicaid obtain employer sponsored or other health insurance coverage, and how such transitions affect health and well -being. The hypothesis testing should include, where possible, assessment of both process and outcome s should be selected from nationally-recognized sources and measures, and proposed measure national measures sets, where possible. The evaluation design should use both quantitative and qualitative methods, and will need to identify comparison groups and appropriate statistical analyse s to evaluate the impact of the demonstration. Evaluation designs should also include descriptions of multiple data sources to be used, including but not limited to multiple stakeholder perspectives, surveys of beneficiaries (both enrolled and those no longer enrolled as a result of the implementation of program requirements), claims data, and survey data (such as Consumer Assessment of Healthcare Providers and Systems (CAHPS)). To the extent permitted by federal and state privacy laws, states should be prepared to track and evaluate health and community engagement outcomes both for those who remain enrolled in Medicaid, and those who are subject to the requirements but lose or experience a lapse in eligibility or coverage during the course of the demonstration, and provide details on how they will track these outcomes in their demonstration evaluation designs. Ongoing monitoring and evaluation efforts will help CMS learn more about the challenges and successes states experience while implementing innovative policies to increase productive community engagement, which we will then be able to share with other states looking to achieve similar goals related to their residents’ well -be ing. We hope this information is helpful, and we look forward to continuing to work with states to implement innovative solutions to improve their Medicaid programs. Questions and comments regarding this policy may be directed to Judith Cash, Acting Dir ector, State Demonstrations Group, CMCS, at 410-786-9686.
10 Page 10- State Medicaid Director Sincerely, /s/ Brian Neale Director Cc: National Association of Medicaid Directors National Academy for State Health Policy National Governors Association American Public Human Services Association Association of State and Territorial Health Officials Council of State Governments National Conference of State Legislatures Academy Health National Association of State Alcohol and Drug Abuse Directors