b. Criteria for Good Faith Effort Determination

Section 1902(xx)(11)(B) of the Act outlines the criteria CMS will consider when determining whether a State has demonstrated a good faith effort towards implementing the community engagement requirement. These criteria, which must be addressed in the State's request, include:

1. Any actions taken by the State toward compliance with the requirements of implementing community engagement;

2. Any significant barriers to, or challenges in, meeting such requirements, including related to funding, design, development, procurement, or installation of necessary systems or resources;

3. The State's detailed plan and timeline for achieving full compliance with such requirements, including any milestones of such plan (as defined by the Secretary); and

4. Any other criteria determined appropriate by the Secretary.

Generally, when addressing these criteria, we encourage States to demonstrate the use of standardized and industry accepted project management principles and accountability.

At § 435.560(b)(1), we implement the first criterion, which requires the State to provide any actions it has taken to date towards compliance with timely implementation of the community engagement requirement. We are primarily interested in actions that demonstrate consistent effort and progress towards implementation across multiple overarching domains, such as procurement, policy development, and operational preparations. Examples of actions that fall under these domains may include, but are not limited to, efforts towards: securing funding not already available to the State; passage of State legislation necessary to implement community engagement; developing necessary State-level guidance, regulations, policies, and procedures; procuring vendors for necessary system and operational changes, as described in section II.K.3 of this IFC ( Systems Changes Needed to Implement Community Engagement ); making preparations to ensure sufficient staffing and training for such staff; establishing a communication plan for beneficiaries and other external interested parties; and engaging in and making use of technical assistance opportunities and resources. We encourage States to provide data on or otherwise quantify the scope of their actions.

In addition to these aforementioned domains and examples, it is also important for a State to identify any actions it has already taken towards identifying risks, notifying CMS of such risks and seeking technical assistance from CMS, if needed, as soon as practicable, developing a risk mitigation plan, and implementing such mitigations.

At § 435.560(b)(2), we implement the second criterion, which requires the State to identify significant barriers or challenges the State has faced towards implementing the community engagement requirement. We recognize the timeframe for implementing the community engagement requirement is limited. Section 1902(xx)(11)(B)(ii) of the Act specifically notes an interest in “significant barriers or challenges related to the funding, design, development, procurement, or installation of necessary systems or resources.” In describing barriers or challenges related to necessary systems or resources, a State should reference specific elements in section II.K.3 of this IFC ( Systems Changes Needed to Implement Community Engagement ). To support our understanding of the scope of the barriers and challenges, a State should, where possible, provide data or otherwise quantify the noted barriers and challenges.

At § 435.560(b)(3), we implement the third criterion, which requires the State to provide a detailed plan and timeline for fully implementing the community engagement requirement. The plan and timeline must, at a minimum, include key milestones towards full compliance and planned steps to address any challenges identified by the State as part of its request. The plan and timeline must also provide sufficient detail to allow CMS to meaningfully assess the State's progress over time.

The statute's fourth criterion permits CMS to identify additional criteria for assessing whether a State has demonstrated a good faith effort to implement the community engagement requirement. At § 435.560(b)(4), we add an additional criterion, that permits CMS to take into consideration any exigent circumstances that States might encounter, such as when there is an administrative or other emergency beyond the State's control, like a cybersecurity incident or natural disaster.

Good faith effort exemptions will be considered on a case-by-case basis and will be approved for States that demonstrate they have a detailed work plan and have been diligently making demonstrable progress on that work plan throughout 2026. In general, as part of any request for a good faith effort exemption, we anticipate providing technical assistance on a State's detailed plan and timeline for achieving full compliance. Additionally, we expect that approvals of good faith effort exemptions will be limited to States that demonstrate meaningful effort towards implementation and experience extraordinary, severe, or unexpected issues that hinder their progress.