A community health center administrator asked us in January whether the Medicaid work requirements were something she needed to think about this year or next. The honest answer is both. The requirement itself does not apply until 2027, but the states are building their systems now, the federal guidance is arriving in pieces, and the coverage churn that follows will land on the front desk of every practice that sees Medicaid expansion adults.
Here is where things stand as of February 2026, what the law actually requires, and the operational changes we think practices should make before the end of the year.
Key takeaways
- The July 4, 2025 reconciliation law requires states to apply an 80-hour monthly community engagement requirement to Medicaid expansion adults aged 19 to 64 by January 1, 2027, with six-month redeterminations for that group.
- CMS issued its first implementation guidance to states on December 8, 2025 and owes an interim final rule by June 1, 2026; states may start earlier or, with a good-faith extension, as late as the end of 2028.
- The practice-level effect is churn: more terminations discovered at the visit, more retroactive reinstatements, and more requests for physicians to document exemptions.
- Check Medicaid eligibility the day before and the day of every visit, and hold terminated-coverage denials for reinstatement rather than converting them to patient balances.
- Decide now who handles exemption documentation requests and how, so the clinical judgment and the paperwork are handled consistently.
What the law says
The reconciliation law signed on July 4, 2025 added a community engagement requirement to Medicaid for adults aged 19 to 64 who are eligible through the expansion group and are not otherwise exempt. To keep coverage, an applicable individual must show 80 hours per month of work, community service, participation in a work program, or at least half-time enrollment in an education program, or some combination. Earning at least 80 times the federal minimum wage in a month, which is $580 at the current $7.25 rate, also satisfies the requirement.
The exemptions matter for practices because clinicians will be asked to document some of them. Exempt categories include people who are pregnant or postpartum, people who are medically frail or have a disability, parents and caregivers of dependent children or of a disabled individual, people in substance use disorder treatment, former foster youth under 26, American Indians and Alaska Natives, and people already meeting work requirements under TANF or SNAP, among others. The "medically frail" category is the one where a physician's documentation is most likely to decide the outcome.
The timeline
| Date | What happens |
|---|---|
| July 4, 2025 | Law enacted |
| December 8, 2025 | CMS issued initial guidance to states on implementation |
| June 1, 2026 | Deadline for HHS to issue an interim final rule with definitions and procedures |
| Mid 2026 | States expected to begin outreach to affected enrollees |
| December 31, 2026 | Renewals on or after this date for expansion adults move to a six-month cycle |
| January 1, 2027 | States must have the work requirement in place, unless granted a good-faith extension |
| December 31, 2028 | Latest date for states granted an extension |
Some states will move earlier through existing waivers. Georgia has operated a work requirement since July 2023 and several states have signaled they intend to start before the federal deadline. Watch your own state's Medicaid agency announcements; they will name the start date and the verification process.
The December 8 guidance, an informational bulletin from the Center for Medicaid and CHIP Services, is the most concrete federal document so far. It walks states through who counts as an applicable individual, which exclusions and exemptions apply, how states must verify hours (using reliable information already available to the state, such as wage data, before asking the enrollee for more), the procedures for noncompliance including a notice and 30 calendar days to demonstrate compliance or an exemption before termination, the outreach states must do before the requirement starts, and the good-faith extension process. It also confirms that the requirement applies at application and at renewal, so a new applicant who cannot show compliance for the look-back period the state chooses will be denied rather than enrolled and later terminated. Practices with Medicaid application assisters on staff should read that section closely; it changes the conversation at intake.
Why this reaches the practice
The experience with Arkansas in 2018, where roughly 18,000 people lost coverage in a few months, mostly for paperwork reasons rather than because they were not working, is the reference point. Whatever one thinks of the policy, the operational effect of a monthly or semi-annual verification is that some share of eligible people lose coverage for a period and regain it later. For a practice that means more patients arriving with Medicaid that has just terminated, more retroactive terminations discovered after the visit, more retroactive reinstatements, and a redetermination cycle that is twice as frequent as today for expansion adults.
Every one of those is an eligibility workflow problem, and the practices that handle it well will be the ones that treat Medicaid eligibility as something to check at every visit rather than once a year.
What to set up in 2026
- Eligibility at every visit for Medicaid patients. Not at scheduling only, and not only for new patients. The 271 response for Medicaid should be read the day before and the day of the visit, because terminations post quickly and reinstatements post retroactively.
- A retroactive coverage work queue. Claims denied for terminated coverage should be held rather than moved to patient responsibility for at least 90 days, because a patient who regains coverage often gets it back to the date of loss. Rebill when eligibility reappears.
- A documentation approach for exemptions. Patients will ask their physician for documentation supporting a medically frail or disability exemption. Decide now who handles these requests, what form the state will want, and how to respond consistently. This is a clinical judgment for the physician and an administrative process for the practice; keep the two separate.
- Presumptive eligibility and enrollment assistance. Know how presumptive eligibility works in your state, and have the state's enrollment assistance contact at the front desk. A patient who has just lost coverage over a missed report is often re-enrollable.
- A sliding fee or self-pay policy that is written down. Practices that see many Medicaid patients will see more uninsured visits in 2027. A written policy applied consistently protects the practice and the patient.
- Monitoring your state. Assign someone to read the state Medicaid agency's provider bulletins monthly through 2027. The verification process, the exemption forms and the start date will all arrive that way.
What we do not know yet
The interim final rule due by June 1 will define terms the statute leaves open: how states verify hours, what counts as a work program, how "medically frail" is determined and by whom, and how much of the verification states can do automatically from wage and other data. States that verify automatically will produce less churn than states that require monthly reporting. We will write about the rule when it arrives. Until then, the safe assumption for planning is more churn, not less.
Our medical billing service already runs eligibility for Medicaid patients on the day-before and day-of schedule described above, and holds terminated-coverage denials for reinstatement rather than converting them to patient balances. Practices that want to think through the front desk process before their state announces a start date can book a call.
Questions we hear
Does the requirement apply to all Medicaid patients?
No. It applies to adults 19 to 64 eligible through the expansion group and certain waiver populations, and not to people who are exempt. Children, pregnant women, people on Medicare, people eligible through disability pathways, and most parents of young children are outside it. In a typical practice the affected group is a subset of the adult Medicaid panel, and the size depends heavily on the state.
Is this operational guidance or legal advice?
Operational. The statute and the forthcoming rule set the requirements, and states will implement them differently. For questions about a specific patient's eligibility or the practice's obligations under state law, ask the state agency or counsel.
Will Medicaid managed care plans tell us when a patient is at risk of losing coverage?
Some will, because a disenrolled member is lost revenue for the plan too, and several plans have said they intend to run outreach campaigns to help members report hours or claim exemptions. Ask each plan's provider representative whether they will share a monthly list of attributed members with a pending redetermination or a noncompliance notice. If they do, that list is the front desk's outreach queue. If they do not, the eligibility response is your only early warning, which is why it needs to run every visit.
What to do this month
- Count your Medicaid expansion adults by plan so you know the size of the affected panel.
- Set Medicaid eligibility checks to run the day before and the day of every visit, and make sure staff read the termination and reinstatement dates.
- Create the retroactive coverage work queue and the 90-day hold rule for terminated-coverage denials.
- Draft the exemption documentation process with the physicians: who receives requests, what form, what turnaround.
- Put the state Medicaid agency's provider bulletin on one person's monthly reading list through 2027.
- Review the written sliding fee or self-pay policy and confirm the front desk applies it consistently.
