Bringing you the latest news impacting our network from Congress and the Administration.
In this Edition:
Work Requirements Guidance
Federal Fraud Bill
Minnesota Medicaid Provider Revalidations and What’s Next for Other States
Join Us for the Next “Capitol Conversations” Webinar on June 18
What Are We Reading?
Medical Frailty Restricted in CMS Guidance on Work Requirements
CMS released an interim final rule (IFR) on June 1, 2026, with guidance for implementing expanded Medicaid community engagement requirements (also known as work reporting requirements), mandated by H.R. 1. The rule requires many adult enrollees ages 19–64 to complete at least 80 hours per month of qualifying activities—such as work, education, job training, or volunteering—or meet a minimum income threshold to maintain coverage, while also setting standardized federal expectations for eligibility, exemptions, and compliance.
What’s changing?
For providers, one of the most significant implications is the shift to more frequent and structured eligibility verification based on work, community service, and other options. States must assess compliance at application and renewal, which may happen as often as every 6 months—and may conduct additional checks—with individuals generally given 30 days to provide documentation before coverage is denied or terminated. While the statute emphasized using existing data to minimize burden, the rule requires more frequent verification and phases in formal documentation requirements by 2028.
Medical Frailty Limitations
The rule differs from earlier expectations, particularly for individuals considered “medically frail.” Instead of allowing broader, diagnosis-based exemptions that states and advocates had anticipated under the law, the rule:
requires that a condition specifically and significantly impair an individual’s ability to meet work requirements.
limits state flexibility to expand exemption categories and
reduces states’ ability to automatically identify eligible individuals using existing data.
As a result, fewer patients are likely to qualify automatically, and providers may face increased requests to document functional limitations or certify patients’ inability to work—adding new clinical and administrative responsibilities. Further, the rule’s narrower exemption standard may make it more difficult for individuals with mental illness or SUD to qualify unless their condition clearly prevents them from working.
Anything else?
Overall, the interim final rule translates the statutory framework of H.R. 1 into a more detailed and prescriptive compliance system including:
tighter exemption criteria
more frequent verification, and
constrained state flexibility.
These differences—combined with an accelerated implementation timeline—are likely to increase operational complexity for state agencies and providers alike.
What to expect?
Providers should anticipate greater administrative demands, more frequent interactions related to patient eligibility and documentation, and potential impacts on care continuity as states move forward with implementation.
What to do?
Contact your Governor’s office, your state Medicaid agency, your state legislators, and your federal representatives to share your concerns.
House Bill Advancing that Will Further Withhold Federal Funds
House lawmakers are expected to take up H.R. 8464, the “Stop Fraudulent Payments Act,” as early as this week, following its approval in committee on June 4 and a scheduled Rules Committee vote on June 8. The bill would create a new federal authority allowing agencies—including the Treasury Department—to delay, condition, or block federal payments based on a determination that there is an “elevated” risk of fraud.
The details
While framed as an anti-fraud measure, the legislation uses broad and subjective standards that could have significant implications for nonprofit organizations. Because federal agencies would have wide discretion to determine what constitutes “sufficient reason” to halt payments, nonprofits that rely on federal grants, contracts, or pass-through funding could face delays or disruptions in funding flow. The authority would apply across major funding streams, including programs administered by states, raising further concerns about cash flow instability, increased administrative burden, and uncertainty in program delivery.
What you can do now
Join us in contacting your House lawmaker to urge a No vote when this legislation comes to the House floor. Use our quick and easy advocacy tool to send a message now.
Minnesota’s accelerated effort to revalidate Medicaid providers in “high-risk” service categories has led to significant disruption, highlighting the challenges of implementing rapid federal oversight directives. Minnesota launched a large-scale revalidation campaign covering more than 5,800 providers and involving extensive reviews and unannounced site visits.
What’s happening?
By the May 31 deadline, only about 1,000 providers had been approved, leaving thousands still pending and ultimately disenrolled, according to provider groups. Advocates report that many of these were legitimate providers who had submitted required documentation but were removed due to the state’s inability to complete reviews in time.
Impact for providers and beneficiaries
These disenrollments have raised serious concerns about access to care, particularly for individuals receiving disability services and addiction treatment. Providers describe sudden revenue loss and disruptions to patient care, with some warning that individuals could lose services or be pushed into more acute systems such as homelessness or emergency care.
The state’s experience underscores the operational risks of compressed timelines and large-scale administrative reviews, even where baseline error rates are relatively low.
Now what?
In April, CMS Administrator Oz announced that states are being asked to rapidly revalidate Medicaid providers operating in “high risk” areas and issued letters to that effect to all Governors and State Medicaid Directors. The letters gave states just 10 business days to indicate whether they will commit to expedited revalidation of high-risk providers and submit a proposed timetable, alongside a separate 30-day deadline for a broader two-year revalidation strategy. Information on how each state plans to respond is emerging gradually and some initial examples are below:
Missouri: Governor’s office committed to implementation beginning May 5
Nebraska: DHHS letter announcing full support and immediate planning on April 23
Ohio: Governor’s office issued May 18 EO to implement emergency rules to require more frequent revalidation of providers being identified as higher-risk for committing fraud
South Dakota: Submitted its provider revalidation strategy to CMS with accelerated timing. The plan goes beyond CMS requirements, expands provider risk categorization, and includes more frequent renewals/recertifications plus occasional onsite visits for certain groups.
Arizona: Reportedly responded to CMS with a commitment to revalidate high-risk Medicaid providers and announcing the launch of "a first-of-its-kind AI-informed Medicaid prepayment review system.
New HampshireMedicaid will be conducting an accelerated review of provider enrollment records, meaning some providers may be selected for revalidation earlier than the standard five-year schedule. NH Medicaid anticipates beginning phased revalidation activities on or about July 1, 2026, with provider outreach occurring over the following 2 years.
What’s next for Minnesota
With appeals processes now underway and federal reimbursement still in question, the coming months will be critical in determining how Minnesota—and other states following similar mandates, like California—will balance fraud prevention with maintaining a stable and sufficient Medicaid provider network.
Join Us for the Next "Capitol Conversations" Webinar
Join us on June 18 from 1-2 p.m. ET for an in-depth conversation on behavioral health measurement and how organizations can continue to drive better, long-term outcomes aligned with payment.
For more information, please contact Sarah Dobson, Senior Director of Public Policy and Advocacy.
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