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October 22, 2019

Amid legal uncertainty, Arizona halts plans to implement Medicaid work requirements

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    Arizona officials on Thursday notified CMS that the state is suspending its implementation of Medicaid work requirements.

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    The news comes nearly a week after a three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit heard oral arguments in a pair of cases challenging the Trump administration's approval of Medicaid work requirements. The judges appeared likely to support a lower court's ruling against the requirements.

    Arizona suspends implementation of Medicaid work requirements

    Jami Snyder—the director of the state's Medicaid program, called Arizona Health Care Cost Containment System (AHCCCS)—in a letter to CMS on Thursday said state officials decided to postpone the implementation of the state's waiver request, which is scheduled to take effect in January 2020.

    Under the approved waiver, Arizona beginning Jan. 1, 2020, can require Medicaid beneficiaries ages 19 to 49 to complete and report a minimum of 80 hours of "qualifying community engagement activities" per month. Those activities can include community service or job training.

    Arizona under the waiver would provide affected Medicaid beneficiaries with a three-month grace period to comply with the work requirements. After the grace period ends, affected beneficiaries who do not comply with the work requirements would lose their Medicaid coverage for two months, and then have their coverage automatically reinstated as long as they continue to meet all of the state's other Medicaid eligibility requirements.

    The new work requirements were expected to affect about 120,000 Arizona Medicaid beneficiaries, including Native Americans who are not enrolled as citizens of their tribes. The waiver included a first-of-its-kind exemption for beneficiaries who are members of federally recognized tribes.

    The waiver also exempts beneficiaries who:

    • Are actively seeking treatment for a substance use disorder;
    • Are former foster youth;
    • Are medically frail;
    • Are pregnant; or
    • Have a disability or certain mental illnesses.

    Snyder in the letter to Calder Lynch, the deputy administrator and acting director of CMS' Center for Medicaid and CHIP Services, said the decision is based on "the evolving national landscape concerning Medicaid community engagement programs and ongoing litigation regarding the topic."

    Heidi Capriotti, a spokesperson for the AHCCCS, said state officials remain "committed" to moving forward with the implementation of the work requirements, but they are waiting to see how the courts will rule in cases challenging work requirements.

    A CMS spokesperson said, "CMS remains steadfast in our commitment to supporting local innovation and will continue to defend programs designed to lift families from poverty. Community engagement demonstrations are state-led reforms, and each is designed to allow adjustments in response to local needs" (Brady, Modern Healthcare, 10/18; Romoser, Inside Health Policy, 10/18 [subscription required]).

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