New CMS Guidance on Medicaid Community Engagement Requirements Aims to Strengthen Work, Eligibility, and Program Integrity

The Centers for Medicare & Medicaid Services (CMS) has released new, detailed guidance to help states roll out the landmark Medicaid community engagement requirements created under the Working Families Tax Cut (WFTC) legislation (Public Law 119-21). These reforms represent one of the biggest shifts in Medicaid eligibility and financing rules in more than a decade. The goal is simple: ensure that able-bodied, working-age adults are connected to work opportunities, reduce improper enrollments, and secure the long-term stability of Medicaid and the Children’s Health Insurance Program (CHIP).

States are required to implement the Medicaid community engagement requirements by January 1, 2027, though they are allowed to move forward earlier if they choose.

A New Direction for Medicaid

Health and Human Services Secretary Robert F. Kennedy, Jr. praised the updated guidance, saying CMS is giving states the tools they need to “restore the dignity of work and lift people out of poverty.” He highlighted how community engagement programs can empower Americans to live healthier, more independent, and more fulfilling lives.

CMS Administrator Dr. Mehmet Oz also emphasized the importance of the new approach: many working-age Americans have been stuck in systems that unintentionally discourage work. With the Medicaid community engagement requirements, the message is clear—every person has agency, potential, and the ability to contribute.

These reforms bring Medicaid in line with long-standing federal programs like SNAP and TANF, which have required similar engagement to help beneficiaries build work habits and financial stability.

Four Principles Guiding the New Medicaid Community Engagement Requirements

CMS designed the updated Medicaid community engagement requirements around four core principles that will shape future policy development and state implementation:

1. Connecting Members to Work and Community

The first priority is strengthening the link between health and work. The Medicaid community engagement requirements help beneficiaries build routines, skills, and habits that support long-term success. Research consistently shows that meaningful engagement—whether through work, volunteering, or job training—improves both financial security and mental health.

2. State Flexibility

Every state has unique operational systems and budget limits. CMS will allow flexibility to help states adopt the Medicaid community engagement requirements in a way that works best for their populations, while still keeping costs manageable and outcomes measurable.

3. Promote Federal Program Alignment

The guidance encourages states to align the Medicaid community engagement requirements with policies already used within Medicaid, SNAP, TANF, the IRS, and the Health Insurance Marketplace. This reduces administrative burdens and improves accuracy, consistency, and efficiency across programs.

4. Protecting Taxpayers

To maintain trust and accountability, CMS requires that all determinations under the Medicaid community engagement requirements be fully auditable. States must use verification methods that are accurate, secure, and easy to review.

Additional Reforms Under the WFTC Law

Along with the Medicaid community engagement requirements, CMS issued an Informational Bulletin on November 18 outlining other major WFTC reforms. These include updates designed to:

• Ensure lawful enrollment
• Reduce financing loopholes
• Strengthen protections for rural hospitals
• Improve the sustainability of Medicaid and CHIP

The broader WFTC legislation aims to secure these programs for the most vulnerable Americans while creating a stronger, more efficient state-federal partnership.

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What Comes Next for States and Beneficiaries?

CMS has confirmed that this guidance is just the beginning. More documents, regulations, and technical instructions will be released to help states fully integrate the Medicaid community engagement requirements. These updates will clarify rules, timelines, and compliance standards to ensure that all states can seamlessly adopt the new framework.

The long-term vision is clear: modernize Medicaid, support work and independence, and ensure that taxpayer dollars are used responsibly.

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For more information, please visit: www.medicaid.gov/medicaidreforms.