Community Engagement Requirement

(a) Eligible to enroll or is enrolled under the State plan under § 435.119; or

(i) Include organizations described in section 501(c)(3) of the Internal Revenue Code of 1986 ( 26 U.S.C. 501(c)(3) ) and other organizations.

(ii) Must provide oversight of the activity, which must not serve a partisan purpose, and have a process in place to track the community service completed by individuals, including the type of community service activity, dates and hours the community service is completed, and a point of contact who can confirm the hours completed.

Educational program means a program that is one of the following:

(i) An institution of higher education as defined in section 101 of the Higher Education Act of 1965 ( 20 U.S.C. 1001 );

(ii) A program of career and technical education as defined in section 3(5) of the Carl D. Perkins Career and Technical Education Act of 2006 ( 20 U.S.C. 2302(5) );

(iii) A high school as defined in title VIII of the Elementary and Secondary Education Act ( 20 U.S.C. 7801 et seq. ); and

(iv) A State-approved program of study leading to a certificate of high school equivalence for an applicable individual who has not received a high school diploma.

Work means:

(i) Work in exchange for money;

(ii) Work in exchange for goods or services (“in-kind” work); and

(iii) Unpaid work (other than community service as defined in this paragraph (b)).

Work program means a program that is one of the following:

(i) A program under title I of the Workforce Innovation and Opportunity Act (WIOA) ( Pub. L. 113-128 ) ( 29 U.S.C. 3111 et seq. );

(ii) A program under section 236 of the Trade Act of 1974 ( 19 U.S.C. 2296 );

(iii) A program of employment and training operated or supervised by a State or political subdivision of a State that meets standards approved by the Governor of the State, including a program under subsection (d)(4) of section 6 of the Food and Nutrition Act of 2008 ( 7 U.S.C. 2015(d)(4) ), other than a supervised job search program or job search training program. However, a program under this subsection may include supervised job search or job search training as subsidiary activities as long as such activity is less than half the required hours of the program;

(iv) A program of employment and training for veterans operated by the Department of Labor or the Department of Veterans Affairs. For the purposes of this paragraph, any employment and training program of the Department of Labor or Veterans Affairs that serves veterans must be an approved work program; and

(v) A workforce partnership under subsection (d)(4)(N) of section 6 of the Food and Nutrition Act of 2008 ( 7 U.S.C. 2015(d)(4)(N) ).

(c) Enrollment in an educational program. An applicable individual's enrollment status in an educational program (full-time, half-time, less than half-time) is determined by the school or institution.

(1) The enrollment status of the individual begins on the first day of the school term for the educational program.

(2) The enrollment status will continue through normal periods of attendance, vacation, and recess. During periods of vacation and recess, the enrollment status shall be based on the individual's status just prior to the school break.

(3) The enrollment status will end at the end of the month that the student is expelled, withdraws, completes the school term and is not registered for the next school term (excluding optional terms such as winter or summer sessions), or graduates (unless the student is enrolled in another educational program).

(d) Less than half-time enrollment in an educational program. If an applicable individual is enrolled in an educational program for less than half-time as determined by the school, the educational program hours shall be the following:

(1) For educational programs that use credit hours:

(i) Multiply the number of each one credit hour of instruction by 3 to get the total of education hours in a week.

(ii) Multiply the weekly total as determined under paragraph (d)(1)(i) of this section by 4.33 weeks to get total hours in a 1-month period.

(2) For educational programs that do not use credit hours, the hours spent ( printed page 33471) attending class and participating in educational activities will count towards meeting this requirement.

(e) Combination of activities. An applicable individual may demonstrate community engagement for a month if the individual engages in any combination of activities described in paragraphs (a)(1) through (4) of this section for a total of not less than 80 hours.

(1) The hours for work under paragraph (a)(1) of this section, community service under paragraph (a)(2) of this section, and participating in a work program under paragraph (a)(3) of this section, need only be combined with educational program hours if the individual is enrolled in an educational program less than half-time.

(2) The hours for work under paragraph (a)(1) of this section, community service under paragraph (a)(2) of this section, and participating in a work program under paragraph (a)(3) of this section must be determined separately and based on the time spent on the specific activity in such month.

(i) If the monthly income is less than the applicable Federal minimum wage requirement under 29 U.S.C. 206(a)(1)(C) multiplied by 80 hours, and the agency does not have documentation regarding the number of hours worked, the agency may calculate the hours for work under paragraph (a)(1) of this section based on the monthly income as determined under paragraph (f)(2) of this section provided that the agency must use a reasonable method to allocate work hours between members of the household.

(ii) If the agency uses the option under paragraph (e)(2)(i) of this section, the agency must calculate the hours for work by dividing the monthly income as determined under paragraph (f)(2) of this section by the applicable Federal minimum wage requirement under 29 U.S.C. 206(a)(1)(C) .

(3) The hours for less than half-time enrollment in an educational program must be calculated as provided in paragraph (d) of this section.

(4) After the agency determines an applicable individual's hours for work, completing community service, participating in a work program, and less than half-time enrollment in an educational program, the hours must be added together. Adding the hours will provide the total hours for the combined activities.

(f) Monthly income. (1) An applicable individual demonstrates community engagement for a month if the individual has a monthly income that is not less than the applicable Federal minimum wage requirement under 29 U.S.C. 206(a)(1)(C) multiplied by 80 hours.

(2) The agency must determine the monthly income based on the individual's MAGI-based income, for their MAGI-based household, as defined at § 435.603, and applied to a month in the period under § 435.556(a), as applicable for demonstrating community engagement.

(g) Average monthly income for seasonal workers. (1) An applicable individual demonstrates community engagement for a month if the individual is a seasonal worker as described in 26 U.S.C. 45R(d)(5)(B) and had an average monthly income over the preceding six months that is not less than the applicable Federal minimum wage requirement under 29 U.S.C. 206(a)(1)(C) multiplied by 80 hours.

(2) The agency must determine the average monthly income based on the individual's MAGI-based income, for their MAGI-based household, as defined at § 435.603, and applied to a month in the period under § 435.556(a), as applicable for demonstrating community engagement.

A State must deem an applicable individual to have demonstrated community engagement under § 435.552 for a month if—

(a) For part or all of that month, the individual was:

(1) Under the age of 19 years;

(2) Entitled to or enrolled for Medicare benefits under part A or enrolled for benefits under part B of title XVIII of the Act;

(3) Described in any mandatory coverage groups in subclauses (I) through (VII) of section 1902(a)(10)(A)(i) of the Act under the Medicaid State plan; or,

(4) A specified excluded individual as defined at § 435.554.

(b) At any point during the 3-month period ending on the first day of that month, the individual was an inmate of a public institution.

(a) For purposes of this section—

Caretaker relative means a relative of a dependent child or a disabled individual, as those terms are defined in this section, by blood, adoption, or marriage with whom the child or disabled individual is living, who assumes primary responsibility for the dependent child's or disabled individual's care, and who is one of the following—

(i) The dependent child's or disabled individual's father, mother, grandfather, grandmother, brother, sister, stepfather, stepmother, stepbrother, stepsister, uncle, aunt, first cousin, nephew, or niece.

(ii) The disabled individual's husband, wife, son, daughter, stepson, stepdaughter, grandson, or granddaughter.

(iii) The spouse of such parent or relative, even after the marriage is terminated by death or divorce.

(iv) At State option, another relative of the dependent child or disabled individual based on blood (including those of half-blood), adoption, or marriage; the domestic partner of the parent or other caretaker relative; or an adult with whom the dependent child or disabled individual is living and who assumes the primary responsibility for the dependent child or disabled individual's care. To the extent a State has elected to include any of these relationships for the purpose of eligibility for the group at § 435.110, the same elections shall apply for this definition for such State.

Dependent child means a child 13 years of age or under who relies on another individual for care.

Disabled individual means an individual who meets the Americans with Disabilities Act definition of disability at 28 CFR 35.108 . An individual need not be eligible for Medicaid or other Federal programs on the basis of a disability to be a disabled individual under this definition.

Family caregiver means an adult family member or other individual who has a significant relationship with, and who provides care within a broad range of assistance to, a dependent child or a disabled individual as both terms are defined in this section.

Guardian means an adult appointed by a court to care for and make personal decisions for a dependent child or disabled individual, as defined in this section, who cannot care for themselves, in accordance with applicable State law.

Parent means an individual with the legal status of a mother or father, including by adoption, in accordance with applicable State law, who provides some level of care to a dependent child or disabled individual, as defined in this section.

(b) An individual who meets the criteria for one or more of the categories described in paragraph (c) of this section is excluded from the definition of an applicable individual as defined at § 435.551. Community engagement is not a condition of eligibility for specified excluded individuals.

(c) An individual is a specified excluded individual if he or she meets one of the following: ( printed page 33472)

(1) The individual meets the definition of the eligibility group serving former foster care children, described at section 1902(a)(10)(A)(i)(IX) of the Act as amended by Public Law 115-271 , regardless of whether the individual turned age 18 on or after January 1, 2023.

(2) The individual meets the definition of Indian at § 447.51 of this subchapter.

(3) The individual is a parent, guardian, caretaker relative, or family caregiver, as each is defined in this section, and for family caregivers, meets one of the criteria identified at paragraphs (c)(1)(i)(A) through (C) of this section. For purposes of this exclusion:

(i) An individual who is a family caregiver as defined in this section is a specified excluded individual if he or she meets one of the following criteria:

(A) The individual primarily resides with a dependent child or disabled individual, as these terms are defined in this section, for whom he or she provides assistance that occurs on a regular basis and is not solely incidental in nature.

(B) The individual is a relative (as specified in the “caretaker relative” definition in this section, without regard to the requirements to live with and to assume primary responsibility) of a dependent child or disabled individual, as these terms are defined in this section, for whom he or she provides assistance that occurs on a regular basis and is not solely incidental in nature, and with whom he or she does not reside.

(C) The individual does not reside with and is not a relative (as specified in the “caretaker relative” definition in this section, without regard to the requirements to live with and to assume primary responsibility) of a dependent child or disabled individual, as these terms are defined in this section, for whom he or she provides not less than 80 hours of assistance that is not solely incidental in nature per month.

(ii) In residences with more than one parent, guardian, caretaker relative, or family caregiver, multiple individuals who meet the relevant definitions at paragraph (a) of this section may qualify as a specified excluded individual as described in this section.

(4) The individual is a veteran with a temporary or permanent disability from the Department of Veterans Affairs, rated as 100 percent (total) under 38 U.S.C. 1155 .

(5) The individual is medically frail or otherwise has special medical needs. For purposes of this exclusion:

(i) An individual who is medically frail or otherwise has special medical needs is defined as an individual whose physical, mental, or other behavioral health condition significantly impairs the individual's ability to comply with the community engagement requirement in this subpart and is an individual:

(A) Who is blind or disabled (as defined in section 1614 of the Social Security Act);

(B) With a substance use disorder, excluding an individual in stable recovery (which means, an individual who is in recovery for 5 or more years);

(C) With a disabling mental disorder;

(D) With a physical, intellectual, or developmental disability that significantly impairs their ability to perform one or more activities of daily living; or

(E) With a serious or complex medical condition which is a medical condition that is life threatening, seriously disabling without necessarily being life threatening, causing significant pain or discomfort that can cause serious interruptions to life activities, requiring a major time or effort commitment from caregivers for a substantial period of time, requiring frequent monitoring, associated with severe consequences or negative consequences for someone else, affecting multiple organ systems, requiring management to tight physiological parameters, requiring coordination of multiple specialties, requiring treatment that carries a risk of serious complications, or requiring adjustment in non-medical environments.

(ii) The State must develop a list of diseases, diagnoses, disorders, or other health conditions to identify individuals who meet the criteria in paragraphs (a)(5)(i)(A) through (E) of this section.

(A) The list must be auditable, justifiable, and consistent with the definitions established in paragraphs (a)(5)(i)(A) through (E) of this section.

(B) The State must revise this list on a regular basis to add or remove diseases, diagnoses, disorders, or health conditions based on the State's experience applying this exclusion.

(C) If an individual does not have a disease, diagnosis, disorder, or health condition on this list, the State must have reasonable processes and criteria in place for such individual to request consideration for the exclusion for individuals who are medically frail or otherwise have special medical needs.

(6) The individual is compliant with any requirements imposed by the State, in accordance with section 407 of the Act.

(7) The individual is a member of a household that receives Supplemental Nutrition Assistance Program (SNAP) benefits under 7 U.S.C. 2015 and is not exempt from a work requirement under such Act.

(8) The individual is participating in a drug addiction or alcoholic treatment and rehabilitation program, as defined in section 3(h) of the Food and Nutrition Act of 2008 ( 7 U.S.C. 2012(h) ). States may establish a minimum time commitment, consistent with appropriate clinical guidelines, for participation in such a program.

(9) The individual is an inmate of a public institution, as defined at § 435.1010.

(10) The individual is pregnant or entitled to postpartum medical assistance under section 1902(e)(5) or (16) of the Act.

(a) Scope. At State option, the agency may provide that an applicable individual, as defined at § 435.551, is deemed to have demonstrated community engagement, as defined at § 435.552, for a month in which, for all or part of such month, the individual experiences any one of the short-term hardship events described in paragraph (d) of this section.

(b) Definitions. For purposes of this section—

(1) Dependent means an individual who is:

(i) The minor (as defined under State law) child of an applicable individual who is living with the applicable individual;

(ii) The tax dependent of an applicable individual (whether or not the tax dependent is a minor child of the applicable individual or residing with the applicable individual); or

(iii) An individual for whom the applicable individual has been appointed a guardian by a court.

(2) Individual acting on behalf of the applicable individual means any individual from whom a State is required to accept an application under § 435.907(a).

(c) Procedures. If the agency elects the option described in paragraph (a) of this section, it must provide, including as part of the noncompliance procedures at § 435.558(c)(1):

(1) Notice, as described under § 435.561(b)(3)(ii), informing applicable individuals that the State offers a short-term hardship exception from the community engagement requirement, and, for the circumstances in paragraphs (d)(2) and (3) of this section, the anticipated end date of the exception;

(2) For the circumstances in paragraphs (d)(1) and (4) of this section, the State must also provide: ( printed page 33473)

(i) Notice of the method by which an applicable individual or an individual acting on behalf of the applicable individual may request a short-term hardship exception;

(ii) Notice of the timeframe for requesting a short-term hardship exception;

(iii) A timely process for determining whether a request for a short-term hardship exception will be granted;

(iv) Notice to the applicable individual of the State's determination, which shall include the anticipated end date of the exception (if granted); and

(v) A process under which the applicable individual or an individual acting on behalf of the applicable individual can appeal an adverse determination.

(d) Short-term hardship event. A short-term hardship event exists when, for all or part of a month, and subject to a request in the circumstances described in paragraphs (d)(1) and (4) of this section by an applicable individual or an individual acting on behalf of the applicable individual, the criteria for any of the following circumstances are met:

(1) The applicable individual receives:

(i) Inpatient hospital services as defined at § 440.10 of this subchapter, nursing facility services as defined at § 440.155 of this subchapter, services in an intermediate care facility for individuals with intellectual disabilities as defined at § 440.150 of this subchapter, or inpatient psychiatric hospital services including the services defined at § 440.160 of this subchapter for individuals under the age of 21 without regard to whether such services are in an institution for mental diseases; or

(ii) Other services of similar acuity, including:

(A) Inpatient services furnished in a critical access hospital consistent with § 440.170(g) of this subchapter;

(B) Inpatient services furnished in an emergency hospital consistent with § 440.170(e) of this subchapter;

(C) Inpatient services furnished in an institution for mental diseases;

(D) Inpatient services furnished by other facilities that are not covered under Medicaid but are otherwise recognized by the State; and,

(E) Noninstitutional services that an applicable individual receives that, but for the receipt of such services, would likely result in the applicable individual receiving services specified in paragraphs (d)(1)(i) and (d)(1)(ii)(A) through (D) of this section, regardless of whether they are received in an institutional setting.

(iii) States must use the definition of “inpatient” at § 440.2 of this subchapter for any inpatient services described in paragraphs (d)(1)(i) and (ii) of this section.

(2) The applicable individual resides in a county or equivalent unit of local government in which there exists an emergency or disaster declared by the President pursuant to the National Emergencies Act ( 50 U.S.C. 1601 et seq. ) or the Robert T. Stafford Disaster and Emergency Assistance Act ( 42 U.S.C. 5121 et seq. ).

(i) A short-term hardship exception based on an emergency declared pursuant to the National Emergencies Act ( 50 U.S.C. 1601 et seq. ) exists when the emergency affects the ability of applicable individuals to demonstrate community engagement in a particular county or other equivalent unit of local government, or multiple counties, or statewide.

(ii) A State must timely notify CMS of its plan to effectuate a short-term hardship exception based on an emergency declared pursuant to the National Emergencies Act.

(iii) CMS will review States' use and implementation of a short-term hardship exception based on an emergency declared pursuant to the National Emergencies Act to ensure compliance with paragraph (d)(2)(i) of this section.

(iv) The duration of an exception for an emergency or disaster declared by the President pursuant to the Robert T. Stafford Disaster and Emergency Assistance Act ( 42 U.S.C. 5121 et seq. ) will be the first month in which the incident period begins and through at least the end of the month in which the incident period ends, and may extend beyond such month if approved by CMS upon request of the State, based on information the State provides in support of an extended period. The State must base its request for a longer duration on information showing that barriers to demonstrating the community engagement requirement under § 435.552 in the relevant area persist.

(3) Through a request from the State to CMS made in an electronic or hard-copy format, the State demonstrates and CMS determines, based on data from the U.S. Bureau of Labor Statistics or another reliable source such as a State labor department, that the applicable individual resides in a county or equivalent unit of local government in which the unemployment rate is at or above the lesser of—

(i) 8 percent; or

(ii) 1.5 times the national unemployment rate.

(4) The applicable individual, or the dependent of such individual, must travel outside of their community of residence for an extended period of time (which could be for part or all of a month or longer) to receive medical services necessary to treat a serious or complex medical condition, as defined at § 435.554(c)(5)(i)(E), that are not available within their community of residence.

(i) If the applicable individual does not travel with the dependent, then, during the month or months in which the dependent must travel, the applicable individual must demonstrate having taken leave from employment or having absented themselves from other community engagement activities for reasons related to the dependent's condition or travel, such as, but not limited to:

(A) Taking the dependent to local medical appointments related to or in preparation for the medical appointment that requires the travel;

(B) Conducting logistical activities relating to the travel;

(C) Maintaining primary responsibility for communicating with the dependent's medical providers.

(ii) [Reserved]

(e) Request from applicable individual not required. A State must not require an applicable individual, or an individual acting on behalf of the applicable individual, to make a request for the circumstances described in paragraphs (d)(2) and (3) of this section.

(f) Excluded individuals. A State must not apply paragraph (a) of this section to a specified excluded individual defined at § 435.554.

(a) A State must require applicable individuals, as defined at § 435.551, to demonstrate community engagement under § 435.552, or be deemed to demonstrate community engagement under § 435.553 or, if applicable, § 435.555, as a condition of eligibility for medical assistance. The State must require—

(1) For an applicable individual who files an application for medical assistance under a State plan, or a waiver of such plan, demonstration of community engagement for at least one, but not more than 3 consecutive months, as specified in the State plan, immediately preceding the month of application.

(2) For an applicable individual who is enrolled and receiving medical assistance under a State plan, or waiver of such plan, demonstration of community engagement for 1 or more ( printed page 33474) months, as specified in the State plan and subject to paragraph (b) of this section, whether or not consecutive—

(i) During the period between the effective date of such individual's most recent determination or redetermination at renewal, as applicable, and the date the individual's renewal is due, consistent with section 1902(e)(14)(L) of the Act and § 435.916, as applicable, if the State has not opted to conduct more frequent verifications of community engagement compliance under § 435.557(d);

(ii) During the period between the most recent demonstration of community engagement and the date the individual's next demonstration of community engagement is due, consistent with § 435.557(d), if the State has opted to conduct more frequent verifications of community engagement compliance as provided in § 435.557(d); or

(iii) During the period between the effective date of such individual's most recent determination or redetermination at renewal, as applicable, and the end of the month prior to the month in which the individual becomes an applicable individual as a result of a redetermination based on a change in circumstances in accordance with § 435.916(d).

(b) A State must not require an applicable individual to demonstrate community engagement for a period that exceeds the period specified in paragraph (a)(2)(i), (ii), or (iii) of this section, as applicable.

(c) A State may not apply the requirements in paragraph (a) of this section to a specified excluded individual defined at § 435.554.

(d) A State must inform applicants and beneficiaries of the State's eligibility determination consistent with §§ 435.917 and 435.918 and part 431, subpart E of this subchapter, which includes a clear statement of the basis of eligibility consistent with § 435.917(b)(1)(i), or a statement of the State's intended action and the specific reasons for the action consistent with § 431.210(a) and (b) of this subchapter, as applicable, which must specify whether the individual:

(1) Meets the criteria as a specified excluded individual as defined in § 435.554; or

(2) Is determined to be an applicable individual as defined at § 435.551, and whether the individual demonstrates community engagement under § 435.552 or is deemed to have demonstrated community engagement under § 435.553 or, if applicable, § 435.555, for the month(s) specified in accordance with paragraph (a) of this section.

(a) Definitions. For purposes of this section —

Period of enrollment means a continuous period of enrollment in coverage under the State plan or waiver without the individual being disenrolled, regardless of the number of consecutive eligibility periods, of redeterminations or renewals, or of transitions between eligibility groups.

Reliable information available to the State means, for purposes of verifying compliance, deemed compliance or exclusion from the community engagement requirement in accordance with §§ 435.550 through 435.563, information necessary for determining eligibility to which the agency has access or should have access including, but not limited to:

(i) Information from electronic data sources that the agency has determined to be effective consistent with paragraph (b)(1)(ii) of this section, as documented in the agency's verification plan in accordance with paragraph (b)(1)(iii) of this section;

(ii) Information from other State or local agencies;

(iii) Information related to community engagement from Federal agencies and other data sources provided through the electronic service established by the Secretary, in accordance with § 435.949;

(iv) Information in the State's eligibility system;

(v) Information in the individual's case record;

(vi) Payroll data;

(vii) Claim(s) relevant to the individual that have been adjudicated in the preceding 12 months, including those that have been paid, pended or denied; and

(viii) Encounter data, as relevant to the individual, for the preceding 12 months.

(b) Requirement to verify eligibility. The agency must establish processes to use reliable information available to the State to verify that an applicable individual has demonstrated community engagement in accordance with §§ 435.552 and 435.556, or was deemed to have demonstrated community engagement under § 435.553 or, if applicable, § 435.555, or that an individual is a specified excluded individual under § 435.554, before requesting additional information from the individual.

(1) The agency—

(i) Must identify data sources that provide reliable information relevant to verifying that that an applicable individual demonstrated or is deemed to have demonstrated community engagement or that an individual is a specified excluded individual.

(ii) May determine that establishing a connection to or process to obtain information from a data source would not be effective, but the agency must consider such factors as the administrative costs associated with establishing and using the data match compared with the administrative costs associated with relying on documentation and the impact on program integrity in terms of the potential for ineligible individuals to be enrolled and for eligible individuals to be denied coverage.

(iii) Must document in its verification plan under § 435.945(j) its policies and procedures for verifying compliance with the community engagement requirement under this subpart, including an identification of the electronic data sources that the agency uses consistent with paragraph (b)(1)(i) of this section.

(iv) Must request and use information from the data sources identified and documented in its verification plan consistent with paragraphs (b)(1)(i) and (iii) of this section.

(2) Except with respect to verifying an individual is a specified excluded individual on the basis of being medically frail or otherwise having special medical needs as defined at § 435.554(c)(5), subject to paragraph (g)(1) of this section, when there is no reliable information available to the State or the reliable information available to the State is not reasonably compatible with the information provided by or on behalf of the individual, the agency must seek additional information from the individual to verify the individual has demonstrated or is deemed to have demonstrated community engagement or that the individual is a specified excluded individual, in accordance with the following rules:

(i) Before January 1, 2028, the agency may require documentation or accept other information as provided in § 435.952(c) when there is no reliable information available to the State or the reliable information is not reasonably compatible with the information provided by or on behalf of the individual.

(ii) Beginning on January 1, 2028, when there is no reliable information available to the State or the reliable information is not reasonably compatible with the information provided by or on behalf of the individual, the agency must require documentation whenever documentation is reasonably available. ( printed page 33475)

(iii) The agency must:

(A) Accept information other than documentation to verify an individual's eligibility when there is no reasonably available documentation; and

(B) May not deny or terminate eligibility solely because the individual is unable to produce documentation where none exists or is reasonably available but may establish criteria for requiring the individual to provide specific information considered sufficient to verify the individual's eligibility in the absence of reasonably available documentation.

(3) The agency must comply with the requirements at §§ 435.558 and 435.952(d) and provide individuals with the opportunity to furnish information and documentation required to verify that the individual has demonstrated community engagement or is deemed to have demonstrated community engagement in accordance with §§ 435.552 and 435.556, or § 435.553 or, if applicable, § 435.555, or is a specified excluded individual as defined at § 435.554, before terminating or denying eligibility based on reliable information available to the State.

(4) The agency must accept information and documentation related to the community engagement requirement under this subpart from the individuals and via the modalities specified at § 435.907(a).

(c) Verification at application and renewal. The State must verify that an applicable individual has demonstrated or is deemed to have demonstrated community engagement for the period specified at § 435.556.

(1) Requirement to check all reliable information available to the State. The State may not limit the reliable information available to the State that is checked to specific activities or other means of demonstrating community engagement under § 435.552, or to specific means of being deemed to have demonstrated community engagement under § 435.553 or, if applicable, § 435.555, or to specific specified excluded individual statuses under § 435.554, but must continue to check reliable information available to the State until the agency verifies whether an individual who appears to be an applicable individual has demonstrated community engagement, is deemed to have demonstrated community engagement, or is not an applicable individual because they are a specified excluded individual.

(i) The agency must attempt to verify the individual's specified excluded individual status or that the individual demonstrated community engagement or was deemed to have demonstrated community engagement using all reliable information available to the State for all relevant months before requesting additional information from the individual.

(A) Only after checking all reliable information available to the State without successfully verifying compliance, deemed compliance, or specified excluded individual status may the agency request additional information from the individual and initiate the noncompliance procedures under § 435.558, as appropriate.

(B) An individual must not be required to provide documentation or other additional information unless information needed by the agency could not be verified using reliable information available to the State, including when there is no reliable information available to the State or the reliable information is not reasonably compatible with the information provided by or on behalf of the individual.

(ii) The agency is not required to continue checking reliable information available to the State after the agency verifies compliance, deemed compliance, or status as a specified excluded individual, unless the agency has information indicating an individual whom the agency verified demonstrated or is deemed to have demonstrated community engagement may qualify as a specified excluded individual, as described in paragraph (c)(2) of this section.

(2) Requirement to apply exclusions. The agency must determine that an individual is a specified excluded individual whenever the agency has sufficient information to determine the individual qualifies as such, regardless of whether the individual also demonstrates community engagement in accordance with §§ 435.552 and 435.556 or meets the criteria for an exception under § 435.553 or, if applicable, § 435.555.

(3) Requirement to enroll eligible individuals and verify potential exclusion post-enrollment. If the agency has sufficient information to verify an individual meets or is deemed to meet the community engagement requirement and has information that suggests, but needs more information to verify that the individual is a specified excluded individual, the agency must enroll the individual promptly using the verified information and attempt to verify eligibility for the exclusion post-enrollment or, if the individual is already enrolled, following the redetermination of eligibility.

(d) State option to conduct more frequent verifications. States may verify that an applicable individual has met the requirement to demonstrate community engagement more frequently than each regularly scheduled redetermination, consistent with § 435.556(a)(2)(ii).

(1) States electing to verify that an applicable individual has met the requirement to demonstrate community engagement between regularly scheduled redeterminations must comply with the requirements of this subpart to verify, consistent with this section, that an applicable individual met the requirement to demonstrate community engagement in accordance with §§ 435.552 and 435.556 or was deemed to have demonstrated community engagement under § 435.553 or, if applicable, § 435.555.

(2) For beneficiaries who were determined to be applicable individuals at their last determination or redetermination of eligibility, the agency must check all reliable information available to the State to determine if the individual newly qualifies as a specified excluded individual prior to assessing compliance or deemed compliance with the community engagement requirement each time the state conducts a more frequent verification.

(3) If the individual continues to be an applicable individual, the agency must attempt to verify that the individual demonstrated community engagement in accordance with §§ 435.552 and 435.556, or was deemed to have demonstrated community engagement, under § 435.553 or, if applicable, § 435.555, using all reliable information available to the State for all relevant months, before requesting additional information and documentation from the individual consistent with this section and initiating the noncompliance procedures under § 435.558.

(4) The agency may not reverify the specified excluded status of an individual between regularly scheduled redeterminations if the individual was determined to be a specified excluded individual at their last determination or redetermination of eligibility or during a more frequent verification of community engagement under this section unless the agency has information indicating the individual's specified excluded individual status has changed.

(e) Requirement to use the electronic service established by the Secretary. The agency must obtain information regarding compliance with or exception or exclusion from the community engagement requirement through the electronic data service established by ( printed page 33476) the Secretary to the extent the information is available through such service, consistent with §§ 435.945 and 435.949, except as provided for in § 435.945(k) and paragraph (e)(2) of this section.

(1) If information from a new data source becomes available through the electronic data service established by the Secretary that contains reliable information relevant to verifying the community engagement requirement in this subpart, the State must establish a connection though such service, or establish a direct connection to or implement an alternative data source or mechanism if approved for flexibility under § 435.945(k), to obtain such information from that data source as soon as practicable, but no later than 12 months after information from the data source first becomes available through the service established by the Secretary.

(2) For the purposes of verifying compliance or deemed compliance with, or exclusion from, the community engagement requirement, the Secretary may determine a waiver as described in § 435.945(k) is not required for the State to establish a direct connection or use an alternative mechanism to access information available from a Federal data source that is accessible through the service established by the Secretary, if the Secretary determines that such direct connection or alternative mechanism is likely to satisfy the criteria in § 435.945(k). In the event the State does not access the Federal data source through the service established by the Secretary and the Secretary determines that a waiver as described in § 435.945(k) is not necessary, the State must establish a direct connection or alternative mechanism within the timeframe specified in paragraph (e)(1) of this section.

(f) Verification of medical frailty and privacy requirements for certain populations. (1) The agency must attempt to verify that an individual is a specified excluded individual on the basis that the individual is medically frail or otherwise has special medical needs as defined at § 435.554(c)(5) using reliable information available to the State, including claim(s) relevant to the individual that have been adjudicated in the preceding 12 months, including those that have been paid, pended or denied, and encounter data, as relevant to the individual.

(i) Before January 1, 2028, when there is no reliable information available to the State or the reliable information is not reasonably compatible with the information provided by or on behalf of the individual, the agency may require documentation or accept a statement or other information under penalty of perjury that provides sufficient information, as determined by the State, to verify an applicant or beneficiary is medically frail or otherwise has special medical needs, each time the State verifies an individual's medical frailty.

(ii) Beginning on January 1, 2028, the agency may accept a statement or other information provided under penalty of perjury that provides sufficient information, as determined by the State, to verify qualification for the exclusion only once during the beneficiary's period of enrollment defined at paragraph (a) of this section when there is no reliable information available to the State or the reliable information available to the State is not reasonably compatible with the information provided by or on behalf of the individual.

(A) At the individual's first regularly scheduled redetermination after such status was determined using the individual's statement provided under penalty of perjury or other information as described in this paragraph (f)(1)(ii), the agency must verify that the individual is medically frail or otherwise has special medical needs using reliable information available to the State, or, if reliable information available to the State is not sufficient for verification, using documentation submitted by or on behalf of the individual.

(2) States that elect to provide an optional exception for short-term hardships under § 435.555 must—

(i) Attempt to use reliable information available to the State before seeking additional information from the individual to verify whether, for part or all of a month for which an applicable individual is required to demonstrate community engagement, the applicable individual received care specified at § 435.555(d)(1) or the applicable individual or their dependent had to travel outside of their community of residence for an extended period of time to receive medical services specified at § 435.555(d)(4).

(ii) Apply an automatic short-term hardship exception to applicable individuals if, for part or all of a month for which such applicable individuals are required to demonstrate community engagement, the individuals reside in a county or equivalent unit of local government in which there exists an emergency or disaster as specified at § 435.555(d)(2) or for which the Secretary has approved an unemployment-based short-term hardship exception as specified at § 435.555(d)(3), without requesting any additional information from such applicable individuals.

(a) Provision of notice of noncompliance. If a State is unable to verify that an applicable individual has met the requirement to demonstrate community engagement under §§ 435.552 and 435.556, or is deemed compliant under § 435.553 or, if applicable, § 435.555, as specified in paragraph (b) of this section, the State must:

(1) Provide such individual with the notice of noncompliance described in paragraph (c) of this section;

(2) Provide such individual with a period of 30 calendar days beginning on the date on which such notice of noncompliance is received by the individual consistent with paragraph (c)(4) of this section, to make a satisfactory showing to the agency—

(i) Of compliance with such requirement (including, as applicable, by showing that such medically frail or otherwise has special medical needs using reliable information available to the State, or, if reliable information available to the State is not sufficient for vertification, using documentation submitted by or on behalf of the individual.

(B) If an enrollee declares specified excluded individual status on the basis of being medically frail or otherwise having special medical needs after having sought such status on or after January 1, 2028, on the basis of a statement provided under penalty of perjury or other information described in this paragraph (f)(1)(ii) during the same period of enrollment defined at paragraph (a) of this section, the agency must verify that status using reliable information available to the State, or, if reliable information available to the State is not sufficient for verification, using documentation submitted by or on behalf of the individual.

(iii) After verifying an individual's specified excluded individual status on the basis of being medically frail or otherwise having special medical needs using reliable information available to the State or documentation submitted by or on behalf of the individual, the agency must reverify this status at least every 12 months.

(2) The agency must comply with all applicable Federal privacy requirements including section 1902(a)(7) of the Act; part 431, subpart F of this subchapter; the Health Insurance Portability and Accountability Act of 1996 ( 42 U.S.C. 1320d et seq. ); part 2 of this title; and any other applicable Federal privacy laws when accessing, storing, and ( printed page 33477) handling data obtained to verify that an individual is medically frail or otherwise has special medical needs or is participating in a drug addiction or alcoholic treatment and rehabilitation program.

(g) Verification of mandatory and optional exceptions. (1) States must comply with the requirements in paragraph (b)(2) of this section when verifying qualification for a mandatory exception under § 435.553 except that if the individual provided information on an application, renewal or other State form, or when reporting a change in circumstances in accordance with paragraph (b)(4) of this section indicating they qualify for an exception and there is no reliable information available to the State, the State may elect the option under section 1902(xx)(3)(A) of the Act not to seek further information from the applicable individual demonstrated or should be deemed to have demonstrated community engagement under § 435.553 or, if applicable, § 435.555, for each month required under the State plan); or

(ii) That such requirement does not apply to such individual on the basis that such individual does not meet the definition of applicable individual under § 435.551, including by meeting the criteria for one or more of the categories of a specified excluded individual as defined at § 435.554.

(3) Continue to furnish Medicaid for an enrolled beneficiary until the individual is determined ineligible consistent with § 435.930(b).

(b) Defining “unable to verify” community engagement. The agency is considered to be unable to verify that an applicable individual is compliant with the requirement to demonstrate community engagement as follows:

(1) At application, the agency is unable to verify compliance with community engagement when it does not have sufficient information after reviewing the information provided by the individual at application and the reliable information available to the State to determine that the individual has demonstrated or is deemed to have demonstrated community engagement for the number of months required under the State plan.

(2) As part of a renewal under section 1902(e)(14)(L) of the Act and § 435.916, the agency is unable to verify compliance with community engagement when it does not have sufficient information to determine that the individual has demonstrated or is deemed to have demonstrated community engagement for the number of months required under the State plan, after—

(i) Reliable information available to the State accessed at renewal consistent with § 435.916(a)(2) are not sufficient to verify compliance with the community engagement requirement; or

(ii) The renewal form provided to the beneficiary in accordance with § 435.916(a)(3) for those whose eligibility cannot be renewed based on reliable information under § 435.916(a)(2) is not returned or the information returned on the renewal form is not sufficient to verify compliance with community engagement.

(3) If applicable, as part of the more frequent verification of compliance under § 435.557(d), the agency is unable to verify compliance with the community engagement requirement when it does not have sufficient information to determine that the individual has demonstrated or is deemed to have demonstrated community engagement for the number of months required under the State plan after—

(i) Accessing reliable information in accordance with § 435.557(d) and information is not sufficient; or

(ii) Accessing reliable information in accordance with § 435.557(d) and following the State's procedures under § 435.952(d) to request information from the individual, when the requested information is not returned or the information returned is not sufficient.

(c) Content and form of noncompliance notice. A notice of noncompliance—

(1) Must include clear statements containing the following information—

(i) How to make a satisfactory showing of compliance with the community engagement requirement, including:

(A) Which month(s) will be assessed by the State in accordance with § 435.556(a);

(B) How to show the individual demonstrated community engagement under § 435.552; and

(C) How to show the individual should be deemed to have demonstrated community engagement as specified at § 435.553 or, if applicable, § 435.555;

(ii) How to make a satisfactory showing that the community engagement requirement does not apply to the individual on the basis that the individual does not meet the definition of an applicable individual at § 435.551, including because the individual meets the criteria for one or more of the categories of a specified excluded individual under § 435.554;

(iii) The deadline for providing the information under paragraph (c)(1)(i) or (ii) of this section to the State;

(iv) A description of how the information under paragraph (c)(1)(i) or (ii) of this section may be submitted to the State through any of the modalities described in § 435.907(a);

(v) A description of the consequences of noncompliance with the community engagement requirement and failure to respond to the notice of noncompliance for Medicaid eligibility and eligibility for advance payments of the premium tax credit (APTC) and the premium tax credit (PTC) used to pay for coverage through a Health Insurance Exchange;

(vi) How such individual may reapply for medical assistance under the State plan (or a waiver of such plan) if the individual's application is denied or the individual is disenrolled from coverage under the State plan or waiver, as applicable; and

(vii) For States that have elected to provide the short-term hardship exception under § 435.555, the information about short-term hardship events described in § 435.555(c).

(2) Must be provided in a manner consistent with § 435.905(b).

(3) Must, if provided in electronic format, comply with § 435.918(b).

(4) Is considered to be received 5 days after the date on the notice, unless the applicant or beneficiary shows that he or she did not receive the notice within the 5-day period.

(d) State responsibilities in the event of no satisfactory showing. If no satisfactory showing is made after the 30-calendar day period consistent with paragraph (a)(2) of this section, the State must—

(1) Consider all other bases of eligibility for medical assistance under the State plan (or waiver of such plan) in accordance with §§ 435.911 and 435.916(f) prior to denying coverage at application or determining that an individual is ineligible;

(2) For individuals determined ineligible under the State plan (or waiver of such plan) after considering all bases of eligibility, as applicable:

(i) Deny such individual's application and provide written notice and fair hearing rights consistent with §§ 435.917 and 435.918 and part 431, subpart E of this subchapter;

(ii) Disenroll such beneficiary not later than the end of the month following the month in which the 30-calendar day period under paragraph (a)(2) of this section ends and after the provision of advance written notice and fair hearing rights consistent with §§ 435.917 through 435.918 and part 431, subpart E of this subchapter prior to the disenrollment;

(iii) Include in the clear statement of the specific reasons supporting the ( printed page 33478) intended action under § 431.210(b) of this subchapter that the individual failed to:

(A) Make a satisfactory showing of compliance with the community engagement requirement under § 435.552, including by meeting the criteria for an exception to be deemed as having demonstrated community engagement under § 435.553 or, if applicable, § 435.555, for the month(s) specified in accordance with § 435.556(a); and

(B) Make a satisfactory showing that the community engagement requirement does not apply to the individual on the basis that the individual does not meet the definition of applicable individual at § 435.551, including failure to demonstrate the individual meets the criteria for one or more of the categories of a specified excluded individual under § 435.554; and

(iv) Determine the individual's or beneficiary's potential eligibility for other insurance affordability programs in accordance with § 435.1200(e).

(e) Prohibition on restrictions to re-applying for coverage. An agency must not impose any restriction on an applicable individual's ability to re-apply for coverage or their ability to receive coverage if determined eligible upon reapplication based on a prior denial of eligibility or disenrollment for noncompliance under this section.

(f) Reconsideration period. A State must reconsider eligibility consistent with § 435.916(a)(3)(iii), if an individual, who was enrolled with eligibility based on MAGI, was disenrolled for failure to submit information requested in a notice of noncompliance and submits the information during the reconsideration period described in § 435.916(a)(3)(iii).

(a) Unless granted an exemption under § 435.560, the agency must require applicable individuals, as defined at § 435.551, to comply with the requirement to demonstrate community engagement under §§ 435.552 and 435.556, or be deemed to have demonstrated community engagement under § 435.553 or, if applicable, § 435.555, as a condition of eligibility for medical assistance furnished on or after January 1, 2027.

(b) The agency may elect to implement §§ 435.550 through 435.563 before January 1, 2027, under the State plan or a demonstration project under section 1115 of the Act.

(c) For a beneficiary who is enrolled as of the State's implementation date, the agency must verify compliance with the community engagement requirement at the applicable individual's first renewal initiated on or after the implementation date.

(a) General. CMS temporarily may exempt a State from the requirement to implement §§ 435.550 through 435.559 and 435.561 through 435.563 in accordance with § 435.559 if—

(1) A State submits a request that includes information on all of the criteria specified in paragraph (b) of this section; and

(2) CMS determines that, based on the information submitted, the State is demonstrating a good faith effort to comply with the implementing the requirements of §§ 435.550 through 435.559 and 435.561 through 435.563.

(b) Criteria for good faith effort determination. CMS will consider the following criteria when determining whether a State is demonstrating a good faith effort:

(1) Any actions taken by the State toward implementing the community engagement requirement;

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

(3) The State's detailed plan and timeline and milestones for fully implementing the community engagements requirement; and

(4) Any exigent circumstances, such as an administrative or other emergency beyond the agency's control, impacting the State's ability to implement the community engagement requirement consistent with § 435.559.

(c) Duration of exemption. An exemption granted under paragraph (a) of this section shall expire no later than December 31, 2028, and may not be renewed beyond such date.

(1) CMS will approve initial good faith effort exemptions for a period not to exceed 6 months.

(2) CMS may grant one or more extensions of an exemption if the State continues to demonstrate a good faith effort toward full implementation of §§ 435.550 through 435.559 and 435.561 through 435.563.

(3) The length of any extension granted under paragraph (c)(2) of this section shall be determined by CMS based on its assessment of the State's progress and review of an updated implementation timeline and additional information submitted by the State in accordance with paragraph (d) of this section.

(4) CMS may terminate an exemption granted under paragraph (a) of this section prior to the expiration date of such exemption, if CMS determines that the State has—

(i) Failed to comply with the reporting requirements described in paragraph (d) of this section; or

(ii) Based on the information provided pursuant to paragraph (d) of this section, failed to make a continued good faith effort toward implementing §§ 435.550 through 435.559 and 435.561 through 435.563.

(d) Reporting requirements. A State granted an exemption under paragraph (a) of this section must submit to CMS—

(1) A quarterly report on the State's status in achieving the milestones toward fully implementing §§ 435.550 through 435.562 and 435.564 through 435.563; and

(2) Information on specific risks or newly identified barriers or challenges to fully implementing the community engagement requirement, including the State's plan to mitigate such risks, barriers, or challenges and any additional details as requested in a form and cadence as specified by CMS.

(a) Outreach. The agency must provide notice, in a manner and frequency described in this section, of the requirement to demonstrate community engagement under this subpart to individuals who are—

(1) Eligible to enroll or are enrolled under § 435.119; or

(2) Otherwise eligible to enroll or are enrolled in a demonstration project under section 1115(a)(2) of the Act that provides coverage equivalent to minimum essential coverage requirements as defined under § 435.4, and are—

(i) At least 19 and under 65 years of age;

(ii) Not pregnant;

(iii) Not entitled to or enrolled for benefits under part A of title XVIII or enrolled for benefits under part B of title XVIII; and

(iv) Not otherwise eligible to enroll under the State plan.

(b) Frequency of outreach. The agency must notify individuals described in paragraph (a) of this section of the requirement to demonstrate community engagement—

(1) Three months plus the number of months specified by the State under § 435.556(a)(1)—

(i) Prior to January 1, 2027, or, if applicable, prior to the State's earlier implementation date as elected by the state under § 435.559(b); or

(ii) For States that later elect to implement the eligibility group described at § 435.119, or a section 1115 ( printed page 33479) demonstration project described in paragraph (a)(2) of this section, prior to the effective date of such eligibility expansion;

(2) Upon enrollment, during the period of time between the initial outreach notice and implementation of the community engagement requirement described in paragraph (b)(1) of this section; and

(3) Periodically as follows—

(i) When such individual is determined or redetermined eligible at application, at renewal described at section 1902(e)(14)(L) of the Act and § 435.916, or based on a change in circumstances;

(ii) When the State elects the short-term hardship exception under § 435.555(a);

(iii) On each occasion on which a short-term hardship exception relating to an event described in § 435.555(d)(2) becomes available to applicable individuals or the State effectuates the short-term hardship event described in § 435.555(d)(3);

(iv) When the State reduces a beneficiary's eligibility and sends the advance notice described in § 431.211 of this subchapter for:

(A) The deselection of the short-term hardship exception under § 435.555(a);

(B) The anticipated expiration of a short-term hardship event described in § 435.555(d)(2) and (3); and

(C) The loss of a beneficiary's status as a specified excluded individual under § 435.554; and

(v) Upon request by CMS, if State-reported monitoring data under § 435.562 or other information indicate a need for increased outreach or a potential compliance issue with §§ 435.550 through 435.562, consistent with § 435.562(e)(2).

(c) Content of outreach notice. The notice required under paragraph (a) of this section must be provided in a manner consistent with § 435.905(b) and include information on—

(1) How to comply with the requirement to demonstrate community engagement under 1902(xx) of the Act, including—

(i) An explanation of the exceptions to such requirement under § 435.553, including short-term hardship exceptions under § 435.555, if elected by the State;

(ii) Who is an applicable individual as defined at § 435.551, including an explanation of exclusions from such definition under § 435.554;

(iii) The number of months an applicable individual is required to demonstrate community engagement at renewal under § 435.556(a)(2)(i); and

(iv) How often the State will verify compliance with the community engagement requirement between renewals if the State elects to conduct more frequent verifications consistent with § 435.556(a)(2)(ii);

(2) The consequences of noncompliance with the community engagement requirement on Medicaid eligibility and eligibility for advance payments of the premium tax credit (APTC) and the premium tax credit (PTC) used to pay for coverage through a Health Insurance Exchange; and

(3) How to report to the State any change in the individual's status that could result in the individual qualifying or no longer qualifying—

(i) For an exception under § 435.553;

(ii) For a short-term hardship exception under § 435.555, if elected by the State; or

(iii) As a specified excluded individual under § 435.554.

(d) Modalities for delivering outreach notice. The notice must be provided to the individual—

(1) By regular mail, or, if elected by the individual, in an electronic format consistent with § 435.918; and

(2) In one or more of the following additional modalities:

(i) The individual's electronic account;

(ii) Telephone;

(iii) Text message; or

(iv) Other commonly available electronic means.

(e) Coordination of outreach and other notices. The agency may—

(1) Provide the outreach notice described in this section with an eligibility determination notice described in § 435.917 or other communication from the agency to the individual.

(2) Utilize managed care organizations (MCOs), prepaid inpatient health plans (PIHPs), prepaid ambulatory health plans (PAHPs), primary care case managers (PCCMs), and PCCM entities, as defined at § 438.2 of this subchapter, to notify their enrollees of the requirement to demonstrate community engagement consistent with this section through one or more of the modalities described in paragraph (d)(2) of this section.

(a) Basis. This section implements section 1902(a)(6) and (a)(75) of the Act.

(b) Definitions. As used in this section—

(1) Timely means that all data for required data elements are submitted according to the cadence and not later than the deadline specified by CMS.

(2) Complete means that all data for required data elements are reported.

(3) Sufficient quality means that all data for required data elements are reported in a form and manner that adheres to specifications prescribed by CMS.

(c) Reporting requirement. For data about activities described in §§ 435.550 through 435.563 occurring on or after the State's implementation date under § 435.559, each State must submit to CMS the required data for the data elements described in paragraph (d) of this section to monitor enrollment, retention, and eligibility processes. Such data must be timely, complete, and of sufficient quality.

(d) Required data elements. States must submit data for the following categories for individuals who apply for and are receiving medical assistance, including individuals subject to the requirements of §§ 435.550 through 435.563:

(1) Enrollment totals of individuals receiving medical assistance.

(2) Application and renewal processing and timeliness, including information, if relevant, about pending applications and renewals that exceed the timeliness standards.

(3) Outcomes of determinations and redeterminations of eligibility.

(4) Population counts of individuals subject to and their compliance with the requirements of §§ 435.550 through 435.563, including their manner of compliance.

(5) Any other data specified by CMS to monitor State implementation of §§ 435.550 through 435.563.

(e) Corrective action and additional outreach notices. The agency may be subject to corrective action under section 1904 of the Act, additional data collection, or a requirement to send additional outreach notices under § 435.561(b)(3)(v), when—

(1) Reported data are not timely, complete, or of sufficient quality; or

(2) Reported data or other available information indicate a failure to comply substantially with §§ 435.550 through 435.562, or determination and/or redetermination outcomes indicate a need for increased outreach.

(a) CMS will not approve a section 1115 demonstration project that waives, in whole or in part, the community engagement provisions of section 1902(xx) of the Act.

(b) A State implementing the community engagement provisions of section 1902(xx) of the Act through section 1115 demonstration authority must ensure compliance with each of the requirements of section 1902(xx) of the Act. ( printed page 33480)

8. Section 435.907 is amended by—

a. Removing paragraph (c)(4); and

b. Revising paragraph (d).

The revision reads as follows:

(d) Prohibition on requiring in-person interviews. The agency may not require an in-person interview as part of the application process for a determination of eligibility using MAGI-based income. This paragraph (d) sunsets on October 1, 2034. CMS will follow applicable rulemaking procedures to ensure that policy governing in-person interviews are implemented and effective on October 1, 2034, replacing the policy scheduled to sunset on that date for the period until October 1, 2034.

9. Section 435.911 is amended by revising paragraph (c) introductory text and adding paragraph (c)(4) to read as follows:

(c) For each individual who has submitted an application described in § 435.907 or whose eligibility is being renewed in accordance with § 435.916 and who meets the non-financial requirements for eligibility (or for whom the agency is providing a reasonable opportunity to verify citizenship or immigration status in accordance with § 435.956(b)), the State Medicaid agency must comply with the following—

(4) The provisions of this paragraph (c) sunset on October 1, 2034. CMS will follow applicable rulemaking procedures to ensure that policy governing determinations of eligibility are implemented and effective on October 1, 2034, replacing the policy scheduled to sunset on that date for the period until October 1, 2034.

10. Section 435.912 is revised to read as follows:

(a) For purposes of this section—

(1) Timeliness standards refer to the maximum period of time in which every applicant is entitled to a determination of eligibility, subject to the exceptions in paragraph (e) of this section.

(2) Performance standards are overall standards for determining eligibility in an efficient and timely manner across a pool of applicants, and include standards for accuracy and consumer satisfaction, but do not include standards for an individual applicant's determination of eligibility.

(b) Consistent with guidance issued by the Secretary, the agency must establish in its State plan timeliness and performance standards for promptly and without undue delay—

(1) Determining eligibility for Medicaid for individuals who submit applications to the single State agency or its designee.

(2) Determining potential eligibility for, and transferring individuals' electronic accounts to, other insurance affordability programs pursuant to § 435.1200(e).

(3) Determining eligibility for Medicaid for individuals whose accounts are transferred from other insurance affordability programs, including at initial application as well as at a regularly-scheduled renewal or due to a change in circumstances.

(c)(1) The timeliness and performance standards adopted by the agency under paragraph (b) of this section must cover the period from the date of application or transfer from another insurance affordability program to the date the agency notifies the applicant of its decision or the date the agency transfers the individual to another insurance affordability program in accordance with § 435.1200(e) and must comply with the requirements of paragraph (c)(2) of this section, subject to additional guidance issued by the Secretary to promote accountability and consistency of high quality consumer experience among States and between insurance affordability programs.

(2) Timeliness and performance standards included in the State plan must account for—

(i) The capabilities and cost of generally available systems and technologies;

(ii) The general availability of electronic data matching and ease of connections to electronic sources of authoritative information to determine and verify eligibility;

(iii) The demonstrated performance and timeliness experience of State Medicaid, CHIP and other insurance affordability programs, as reflected in data reported to the Secretary or otherwise available; and

(iv) The needs of applicants, including applicant preferences for mode of application (such as through an internet website, telephone, mail, in-person, or other commonly available electronic means), as well as the relative complexity of adjudicating the eligibility determination based on household, income or other relevant information.

(3) Except as provided in paragraph (e) of this section, the determination of eligibility for any applicant may not exceed—

(i) 90 days for applicants who apply for Medicaid on the basis of disability; and

(ii) 45 days for all other applicants.

(d) The agency must inform applicants of the timeliness standards adopted in accordance with this section.

(e) The agency must determine eligibility within the standards except in unusual circumstances, for example—

(1) When the agency cannot reach a decision because the applicant or an examining physician delays or fails to take a required action; or

(2) When there is an administrative or other emergency beyond the agency's control.

(3) When the agency is unable to meet the standards for applicants who are provided a notice of noncompliance to demonstrate community engagement due to the 30-calendar day period that States must provide for the individual to respond to such notice at § 435.558.

(f) The agency must document the reasons for delay in the applicant's case record.

(g) The agency must not use the time standards—

(1) As a waiting period before determining eligibility; or

(2) As a reason for denying eligibility (because it has not determined eligibility within the time standards).

(h) The provisions of this section sunset on October 1, 2034. CMS will follow applicable rulemaking procedures to ensure that policies governing timeliness standards for Medicaid eligibility are implemented and effective on October 1, 2034, replacing the policies scheduled to sunset on that date.

11. Section 435.916 is revised to read as follows:

(a) Renewal of individuals whose Medicaid eligibility is based on modified adjusted gross income methods (MAGI). (1) Except as provided in paragraph (d) of this section, the eligibility of Medicaid beneficiaries whose financial eligibility is determined using MAGI-based income must be renewed once every 12 months, and no more frequently than once every 12 months.

(2) Renewal on basis of information available to agency. The agency must make a redetermination of eligibility without requiring information from the individual if able to do so based on reliable information contained in the individual's account or other more ( printed page 33481) current information available to the agency, including but not limited to information accessed through any data bases accessed by the agency under §§ 435.948, 435.949, and 435.956. If the agency is able to renew eligibility based on such information, the agency must, consistent with the requirements of this subpart and part 431, subpart E of this subchapter, and notify the individual—

(i) Of the eligibility determination, and basis; and

(ii) That the individual must inform the agency, through any of the modes permitted for submission of applications under § 435.907(a), if any of the information contained in such notice is inaccurate, but that the individual is not required to sign and return such notice if all information provided on such notice is accurate.

(3) Use of a pre-populated renewal form. If the agency cannot renew eligibility in accordance with paragraph (a)(2) of this section, the agency must—

(i) Provide the individual with—

(A) A renewal form containing information, as specified by the Secretary, available to the agency that is needed to renew eligibility.

(B) At least 30 days from the date of the renewal form to respond and provide any necessary information through any of the modes of submission specified in § 435.907(a), and to sign the renewal form in a manner consistent with § 435.907(f);

(C) Notice of the agency's decision concerning the renewal of eligibility in accordance with part 431, subpart E of this subchapter;

(ii) Verify any information provided by the beneficiary in accordance with §§ 435.945 through 435.956;

(iii) Reconsider in a timely manner the eligibility of an individual who is terminated for failure to submit the renewal form or necessary information, if the individual subsequently submits the renewal form within 90 days after the date of termination, or a longer period elected by the State, without requiring a new application; and

(iv) Not require an individual to complete an in-person interview as part of the renewal process.

(b) Redetermination of individuals whose Medicaid eligibility is determined on a basis other than modified adjusted gross income. The agency must redetermine the eligibility of Medicaid beneficiaries excepted from modified adjusted gross income under § 435.603(j), or circumstances that may change, at least every 12 months. The agency must make a redetermination of eligibility in accordance with the provisions of paragraph (a)(2) of this section, if sufficient information is available to do so. The agency may adopt the procedures described at paragraph (a)(3) of this section for individuals whose eligibility cannot be renewed in accordance with paragraph (a)(2) of this section.

(1) The agency may consider blindness as continuing until the reviewing physician under § 435.531 determines that a beneficiary's vision has improved beyond the definition of blindness contained in the plan; and

(2) The agency may consider disability as continuing until the review team, under § 435.541, determines that a beneficiary's disability no longer meets the definition of disability contained in the plan.

(c) Procedures for reporting changes. The agency must have procedures designed to ensure that beneficiaries make timely and accurate reports of any change in circumstances that may affect their eligibility and that such changes may be reported through any of the modes for submission of applications described in § 435.907(a).

(d) Agency action on information about changes. (1) Consistent with the requirements of § 435.952, the agency must promptly redetermine eligibility between regular renewals of eligibility described in paragraphs (b) and (c) of this section whenever it receives information about a change in a beneficiary's circumstances that may affect eligibility.

(i) For renewals of Medicaid beneficiaries whose financial eligibility is determined using MAGI-based income, the agency must limit any requests for additional information from the individual to information relating to such change in circumstance.

(ii) If the agency has enough information available to it to renew eligibility with respect to all eligibility criteria, the agency may begin a new 12-month renewal period under paragraph (a) or (b) of this section.

(2) If the agency has information about anticipated changes in a beneficiary's circumstances that may affect his or her eligibility, it must redetermine eligibility at the appropriate time based on such changes.

(e) Information requests. The agency may request from beneficiaries only the information needed to renew eligibility. Requests for non-applicant information must be conducted in accordance with § 435.907(e).

(f) Consideration for other bases of eligibility and other insurance affordability programs. Determination of ineligibility and transmission of data pertaining to individuals no longer eligible for Medicaid.

(1) Prior to making a determination of ineligibility, the agency must consider all bases of eligibility, consistent with § 435.911.

(2) For individuals determined ineligible for Medicaid, the agency must determine potential eligibility for other insurance affordability programs and comply with the procedures set forth in § 435.1200(e).

(g) Renewal form and notice format. Any renewal form or notice must be accessible to persons who are limited English proficient and persons with disabilities, consistent with § 435.905(b).

(h) Sunset date. The provisions of this section sunset on October 1, 2034. CMS will follow applicable rulemaking procedures to ensure that policies governing the periodic renewals of Medicaid eligibility and redeterminations based on changes in circumstances are implemented and effective on October 1, 2034, replacing the policies scheduled to sunset on that date.

12. Section 435.919 is removed.

13. Section 435.945 is amended in paragraph (j) by removing the phrase “provisions set forth in §§ 435.940 through 435.956 of this subpart” and adding in its place “provisions set forth in § 435.557 and §§ 435.940 through 435.956”.

14. Section 435.1200 is amended in paragraph (e)(1) introductory text by removing the phrase “(regarding regularly-scheduled renewals of eligibility) or § 435.919 (regarding changes in circumstances)”.