b. Community Engagement Requirement for Enrolled Beneficiaries at Implementation

The requirement for States to consider community engagement compliance as a condition of eligibility no later than January 1, 2027, applies to applicable individuals already enrolled in the State's Medicaid program as of that date, as well as to those newly applying on or after that date who enroll. Further, section 1902(xx)(1)(B) of the Act provides that States must require applicable individuals enrolled in Medicaid to demonstrate community engagement for 1 or more months during the period between the individual's most recent determination of eligibility and their next regularly scheduled redetermination of eligibility. However, the statute does not explicitly state when States must first verify compliance with the community engagement requirement for individuals already enrolled in the State's Medicaid program as of January 1, 2027 (or the earlier implementation date selected by the State). On any given date, a portion of the State's Medicaid population will be in the process of having their eligibility redetermined as part of required periodic renewals of Medicaid eligibility. As such, all States will have some renewals in progress on the State's community engagement implementation date.

Section 1902(xx)(a)(1) of the Act requires that States “provide, as a condition of eligibility for medical assistance for an applicable individual, that such individual is required to demonstrate community engagement . . . as part of such regularly scheduled redetermination.” The language in the statute is ambiguous for eligibility periods that began prior to a State's implementation date and for which the renewal process is under way on the State's community engagement implementation date. Consistent with other guidance provided to States when applying a change in policy that affects renewals, [ 107 ] we interpret section 1902(xx)(a)(1)(B) of the Act to allow States to begin verifying an applicable individual's compliance with community engagement at the first renewal initiated on or after the State's implementation date. A renewal is considered initiated when the State begins reviewing reliable information available to the State in an effort to complete a beneficiary's renewal without requiring a renewal form or other information from the beneficiary in accordance with § 435.916(a)(2) ( ex parte renewal). We considered whether States should be required to first assess compliance with the community engagement requirement based on the end date of the beneficiary's eligibility period, rather than when the renewal process is initiated; that is; first verifying compliance with community engagement if the end date of the eligibility period occurs on or after the State's implementation date. However, based on discussion with State systems and operational staff, many States have a renewal process that takes between 60 to 90 days. As such, if a State were required to begin verifying compliance for applicable individuals with a renewal due on January 31, 2027, many States would be required to apply the community engagement requirement at renewals initiated as early as November 2026. This would require States to request information about community engagement activity prior to the State's implementation date. We conclude it is a reasonable approach to base the first required verification of an enrolled beneficiary's compliance with the community engagement requirement on when a renewal is initiated in relation to the State's implementation date.