Managed care plans offer recommendations to CMS on rollout of Medicaid work requirements

By Paige Minemyer / November 3, 2025

Two leading organizations representing Medicaid managed care plans are offering several key suggestions to the Trump administration for managing the rollout of work requirements in the program.

In the letter (PDF), experts at Medicaid Health Plans of America (MHPA) and the Association for Community-Affiliated Plans (ACAP) urged the Centers for Medicare & Medicaid Services (CMS) to allow insurers to deploy more modern communication methods and to enable critical data sharing to support the launch of the requirements.

The agency and states are set to begin rolling out a slew of reforms to the Medicaid program that were enacted under the One Big Beautiful Bill Act (OBBBA). Mandatory work requirements would be in place nationwide Jan. 1, 2027, as part of the law.

The letter notes that, under the OBBBA's model, Medicaid managed care organizations (MCOs) are not able to stand in as the compliance entity for the work requirements. However, the organizations said insurers can play a major role in referring members to key resources and keeping them informed about the program.

"We request that CMS clarify that MCOs can serve in this function," they wrote. "Medicaid MCOs can serve as an important resource for enrollees to ensure that eligible individuals who are compliant with community engagement requirements continue receiving Medicaid benefits."

For example, the MHPA and the ACAP said payers played a critical part in keeping patients in the loop during the broad post-COVID redetermination process. Within that, plans were granted flexibility from stringent communication requirements under the Telephone Consumer Protection Act that allowed for more effective outreach.

The organizations are asking for similar flexibilities to be extended as states navigate these Medicaid changes.

These flexibilities resulted in "higher call connection rates, email open rates and text received rates" during the redetermination process as compared to before the pandemic, according to letter, proving that allowing for easier communication worked.

The payer groups are also recommending that the administration make it easier for states to share key information with the Social Security Administration and other agencies, as that can ensure the work requirements are managed more efficiently.

A lag time for missing data can cause significant delays in eligibility determinations, per the letter. And MCOs have limited access to key demographic data, for example, though that could be found through other means, such as identifying an individual as being under the age of 14 through Supplemental Nutrition Assistance Program benefits.

"Avoiding procedural disenrollments and ensuring the high-fidelity implementation of OBBBA’s community engagement provisions will require detailed guidance on new datasharing best practices for MCOs, states and federal agencies," the organizations wrote.

The groups are also recommending the CMS allow self-attestations to be applicable as a way for states to determine compliance with the requirements, as it is not explicitly barred under the OBBBA. 

In addition, the letter expresses concern about the downstream impacts on Medicaid rates. There are already a number of major factors pressuring rates from managed care plans, including rising pharmaceutical costs, tariffs, program design changes and more.

The organizations warn that the work requirements are set to have the largest impact on the expansion population, which is often healthier than other enrollees.

"We anticipate the community engagement requirements will lead to coverage losses and churn of healthier expansion population enrollees; this will result in MCO capitation rates that are not reflective of the acuity of the remaining members," they wrote in the letter. 

"Given this, we recommend that CMS encourage states to review and adjust capitation rates based on emerging data at least quarterly and disseminate guidance to states on risk mitigation strategies in managed care to ensure the sustainability of states’ managed care programs as they navigate a time of significant uncertainty," the organizations said.

KFF released a new survey Friday highlighting some of the major challenges states face in implementing the work requirements, and the results dovetail with the concerns highlighted by the MHPA and the ACAP. States said they will need to implement significant changes to their eligibility systems and interoperability infrastructure and face a risk for error should CMS guidance be limited.

States are also bracing for widespread confusion among enrollees and coverage losses due to a tight, accelerated timeline to roll out the updates.

The study found that states will need to make significant choices around systems and workflow design before CMS guidance is in place, making the implementation even more challenging, "as well as to identify individuals who qualify for mandatory exemptions and optional exceptions. States expressed concern over having to make such major system changes in a very short timeframe, noting the long lead times typically needed to design, procure, and build new systems," per the survey.