3. Requesting Additional Information From Applicants and Beneficiaries To Verify Compliance With, and Exceptions and Exclusions From, the Community Engagement Requirement

At § 435.557(b)(2) and (3), we describe the State's obligations when the State is unable to verify an applicant's or beneficiary's compliance or deemed compliance with the community engagement requirement or status as a specified excluded individual using reliable information available to the State. In general, 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 the individual, the State must seek additional information from the individual to verify compliance or deemed compliance with the community engagement requirement or the individual's status as a specified excluded individual. In this section, we describe the requirements States must implement by January 1, 2028, and the options for States leading up to that date.

Community engagement is an entirely new factor of eligibility, and as such, States must consider criteria that were not previously applicable to Medicaid eligibility and establish new policies and procedures for verifying whether an individual meets those criteria. In addition, there are myriad ways in which an applicant or beneficiary may be excluded from or meet or be deemed to meet the community engagement requirement. Thus, States do not need to establish policies and procedures for verifying one piece of information as is the case for some other factors of eligibility (for example, income), but rather for all the ways in which an individual may qualify as a specified excluded individual, demonstrate community engagement, or be deemed to demonstrate community engagement, most of which do not currently exist in the context of Medicaid eligibility. As such, we have detailed sources of reliable information available to the State that States must use in verifying compliance or deemed compliance with the community engagement requirement or an individual's specified excluded individual status. However, we recognize there will be instances in which there is no reliable information available to the State. We anticipate that, for the new community engagement criteria, there will generally be documentation reasonably available for individuals to verify their compliance or deemed compliance or status as a specified excluded individual. Examples of reasonably available documentation include paystubs to verify work hours or income, a document from a community service organization that demonstrates the number of hours an individual volunteered, transcripts or class schedules as proof of half-time enrollment in an educational program, a document from VA showing disability status and approval notices from SNAP or TANF, to name a few. Accordingly, we expect that seeking documentation to verify eligibility generally should impose minimal burden while also furthering our goal of ensuring only eligible individuals are determined eligible and/or remain enrolled.

Thus, beginning on January 1, 2028, 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 State must generally require documentation to verify that an individual demonstrated community engagement, is deemed to have demonstrated community engagement, or is a specified excluded individual, if such documentation is reasonably available. We implement this requirement at § 435.557(b)(2)(ii). However, there will be circumstances in which no documentation exists, or documentation is not reasonably available. For example, an individual who lives with and provides regular assistance to their disabled parents may qualify for an exclusion on the basis of being a family caregiver. Because of the personal nature of this type of assistance, it often occurs outside of an employer/employee or other contractual relationship. As such, an individual is unlikely to have documentation to provide that demonstrates qualification for the exclusion. Individuals may also experience exceptional circumstances that prevent them from accessing or result in the loss of documentation, such as a housefire or flood.

States may not deny or terminate eligibility based on reliable information available to the State without first providing the individual with the opportunity to dispute the information available to the State and furnish information to verify their eligibility. Thus, as implemented at § 435.557(b)(2)(iii), States must accept other information when no documentation is reasonably available to verify that an individual demonstrated community engagement, is deemed to have demonstrated community engagement or is a specified excluded individual. States must determine what information is considered sufficient to verify a given activity or other basis for demonstrating community engagement or exception or exclusion when such cannot be verified using reliable information available to the State and documentation is not reasonably available. States should document their policies regarding what documentation is required and what information is sufficient in the absence of reasonably available documentation in policy manuals, standard operating procedures, or other relevant documents internal to the State for training and audit purposes.

While most States require documentation for other factors of eligibility when there is no reliable information available to the State or the information is not reasonably compatible with the information provided by or on behalf of the individual, we recognize that some States may need to make system and process changes to implement these documentation requirements for community engagement. Accordingly, as provided in § 435.557(b)(2)(i), States may require documentation or accept other information (even if documentation is reasonably available) to verify an individual's compliance or deemed compliance with the community engagement requirement or status as a specified excluded individual through December 31, 2027.

Finally, there are two exceptions to the policies described in this section. The first exception applies to verifying an individual's specified excluded individual status on the basis of being medically frail or otherwise having special medical needs and the second exception applies to mandatory exceptions. Refer to section II.I.7.e. of this IFC for further information about verifying medical frailty and section II.I.8. of this IFC for further information about verifying mandatory exceptions.