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July 19, 2018

Verma: CMS will keep advancing Medicaid work requirements—despite Kentucky ruling

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    CMS Administrator Seema Verma on Tuesday said a federal judge's decision to block Kentucky from implementing Medicaid work requirements will not stop the Trump administration from advancing efforts to implement such requirements—and the agency might have a plan to get Kentucky's Medicaid requirements back on track.

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    Background: Federal judge blocks Kentucky's Medicaid work requirements

    HHS in January approved Kentucky's Medicaid waiver request to implement a demonstration program called Kentucky Helping to Engage and Achieve Long Term Health, or Kentucky HEALTH, which would require certain able-bodied adults without dependents to participate in job training or community engagement, such as volunteer work, in order to remain eligible for Medicaid. Affected beneficiaries would have to work or volunteer for at least 20 hours per week to meet the requirements. Overall, able-bodied adults under the program would have to engage in so-called "employment activities" for a minimum of 80 hours a month.

    Kentucky officials have estimated that Kentucky HEALTH would generate $33 million in savings for the state in part because it would reduce its number of Medicaid beneficiaries by about 90,000. The requirements were scheduled to take effect July 1.

    However, late last month, U.S. District Judge James Boasberg vacated HHS' approval of Kentucky's waiver request and sent the waiver request back to HHS "for further review."

    Boasberg in the ruling wrote that the HHS "secretary never adequately considered whether Kentucky HEALTH would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid," adding, "This signal omission renders his determination arbitrary and capricious."

    The ruling did not apply to the other states that have received HHS' approval to implement Medicaid work requirements, but Tim Jost, an emeritus professor at Washington and Lee University and an expert on health law, at the time said, "If you read the decision, it's pretty hard to envision any argument that would justify any work requirement program."

    CMS looks for 'path forward' on work requirements

    However, Verma during a Politico event Tuesday said the administration is "very committed to" allowing states to implement work requirements and is looking at how it can continue approving such initiatives. "We want to be respectful of the court's decision while also wanting to push ahead with our policy initiatives and our goals. … We are trying to figure out a path forward," she said.

    CMS is particularly focused on how it can get Kentucky's Medicaid work requirements back on track, and is planning to announce a fix it hopes will address Boasberg's concerns, Politico reports.

    According to The Hill, a CMS spokesperson said the agency "is planning to open a new 30-day federal public comment period on the [Kentucky] HEALTH demonstration to better inform any future decision on the demonstration that was remanded back to [HHS] for further review."

    Lawyers for the administration are hopeful that allowing an additional public comment period on the request will address Boasberg's concerns that HHS did not consider the waiver request's potential effects, Politico reports. Catherine Easley, a spokesperson for Kentucky's Cabinet for Health and Family Services, said, "Based on recent conversations with CMS, we are confident that we are on the path towards implementing our innovative, transformative program that will strengthen Medicaid by engaging beneficiaries in their own health outcomes."

    But some advocates and observers have said they do not think the public comment period will properly assuage Boasberg's concerns.

    According to Axios' "Vitals," Boasberg's main critiques were on CMS' response to public comments, not its process for collecting them. For instance, Boasberg criticized CMS "for failing to account for how many people would lose Medicaid coverage under work requirements, and said the [agency] hadn't sufficiently explained how work requirements fit in with Medicaid's goals as a source of health insurance," "Vitals" reports.

    Jane Perkins—legal director of the National Health Law Program, which was one of three organizations that had sued to block Kentucky's work requirements—said, "We continue to believe that many of the things that were approved in the now vacated Kentucky waiver cannot be consistent with the Medicaid Act."

    According to The Hill, HHS could choose to appeal Boasberg's ruling if the public comment period does not satisfy his concerns (Diamond/Pradhan, Politico, 7/18; Goldberg, Politico, 7/17; Baker, "Vitals," Axios, 7/19; Sullivan, The Hill, 7/18).

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