March 17, 2021
Dawn Stehle
Deputy Director for Health & Medicaid
Arkansas Department of Human Services
112 West 8th Street, Slot S401
Little Rock, AR 72201-4608
Dear Ms. Stehle:
On February 12, 2021, the Centers for Medicare & Medicaid Services (CMS) sent you a letter
regarding the March 5, 2018 amendment to the section 1115 demonstration project “Arkansas
Works” (Project Number 11-W-00287/6). The letter advised that CMS would commence a
process of determining whether to withdraw the authorities previously approved in the Arkansas
Works demonstration that permit the state to require work and other community engagement
activities as a condition of Medicaid eligibility. It explained that in light of the ongoing
disruptions caused by the COVID-19 pandemic, Arkansas’s community engagement requirement
risks significant coverage losses and harm to beneficiaries. For the reasons discussed below,
CMS is now withdrawing approval of the community engagement requirement in the March 5,
2018 amendment to Arkansas Works, which is not currently in effect and which, in any event,
would expire by its terms on December 31, 2021.
Section 1115 of the Social Security Act (the Act) provides that the Secretary of Health and
Human Services (HHS) may approve any experimental, pilot, or demonstration project that, in
the judgment of the Secretary, is likely to assist in promoting the objectives of certain programs
under the Act. In so doing, the Secretary may waive Medicaid program requirements of section
1902 of the Act, and approve federal matching funds per section 1115(a)(2) for state spending on
costs not otherwise matchable under section 1903 of the Act, which permits federal matching
payments only for “medical assistance” and specified administrative expenses.
1
Under section
1115 authority, the Secretary can allow states to undertake projects to test changes in Medicaid
eligibility, benefits, delivery systems, and other areas across their Medicaid programs that the
Secretary determines are likely to promote the statutory objectives of Medicaid.
As stated in the above referenced letter sent on February 12, 2021, under section 1115 and its
implementing regulations, CMS has the authority and responsibility to maintain continued
oversight of demonstration projects in order to ensure that they are currently likely to assist in
promoting the objectives of Medicaid. CMS may withdraw waivers or expenditure authorities if
it “find[s] that [a] demonstration project is not likely to achieve the statutory purposes.” 42
C.F.R. § 431.420(d); see 42 U.S.C. § 1315(d)(2)(D).
1
42 U.S.C. § 1315.
Page 2
As the February 12, 2021 letter explained, the Arkansas Works community engagement
requirement is not in effect. Although implementation began in June 2018, it was halted by court
order in March 2019. Before that court ruling, per the state’s reporting, more than 18,000
beneficiaries lost coverage for non-compliance with the community engagement requirement.
2
The early evidence for Arkansas, especially considered in light of the COVID-19 pandemic and
its expected aftermath, makes clear that community engagement is infeasible. In addition,
implementation of the community engagement requirement is currently prohibited by the
Families First Coronavirus Response Act (FFCRA), Pub. L. No. 116-127, Div. F, § 6008(a) and
(b), 134 Stat. 208 (2020), which conditioned a state’s receipt of an increase in federal Medicaid
funding during the pandemic on the state’s maintenance of certain existing Medicaid parameters.
Arkansas has chosen to claim the 6.2 percentage point FFCRA Federal Medical Assistance
Percentage (FMAP) increase, and therefore, while it does so, must maintain the enrollment of
beneficiaries who were enrolled as of, or after, March 18, 2020.
The February 12, 2021 letter noted that, although the FFCRA’s bar on disenrolling such
beneficiaries will expire after the COVID-19 public health emergency ends, CMS still has
serious concerns about testing policies that create a risk of substantial loss of health care
coverage and harm to beneficiaries even after the expiration of the bar on disenrolling
beneficiaries. The COVID-19 pandemic has had a significant impact on the health of Medicaid
beneficiaries. Uncertainty regarding the current crisis and the pandemic’s aftermath, and the
potential impact on economic opportunities (including job skills training and other activities used
to satisfy community engagement requirements, i.e., work and other similar activities), and
access to transportation and affordable child care have greatly increased the risk that
implementation of the community engagement requirement approved in this demonstration will
result in substantial coverage loss. In addition, the uncertainty regarding the lingering health
consequences of COVID-19 infections further exacerbates the harms of coverage loss for
Medicaid beneficiaries.
Accordingly, the February 12, 2021 letter indicated that, taking into account the totality of
circumstances, CMS had preliminarily determined that allowing the community engagement
requirement to take effect in Arkansas would not promote the objectives of the Medicaid
program. Therefore, CMS provided the state notice that we were commencing a process of
determining whether to withdraw the authorities approved in the Arkansas Works demonstration
that permit the state to require work and other community engagement activities as a condition of
Medicaid eligibility. See Special Terms and Conditions ¶ 13. The letter explained that if CMS
ultimately determined to withdraw those authorities, it would “promptly notify the state in
writing of the determination and the reasons for the amendment and withdrawal, together with
the effective date, and afford the state an opportunity to request a hearing to challenge CMS’s
determination prior to the effective date.” Id. The February 12, 2021 letter indicated that, if the
state wished to submit to CMS any additional information that in the state’s view may warrant
not withdrawing those authorities, such information should be submitted to CMS within 30 days.
2
Arkansas Department of Human Services (DHS). (2018). Arkansas Works Section 1115 Demonstration Annual
Report. Retrieved from https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-
Topics/Waivers/1115/downloads/ar/Health-Care-Independence-Program-Private-Option/ar-works-annl-rpt-jan-dec-
2018.pdf.
Page 3
The additional information that Arkansas submitted did not assuage the concerns we raised in the
February 12, 2021 letter. The state did not dispute that the COVID-19 pandemic has had a
significant impact on the health of Medicaid beneficiaries and that there is uncertainty about the
lingering health effects of COVID-19. Nor did the state demonstrate that it has the infrastructure
in place—such as subsidies for job-skills training and transportation, for example—that may be
necessary to make compliance with the community engagement requirement feasible for
beneficiaries and prevent large-scale coverage losses, and it did not provide evidence that such
infrastructure would be in place in the aftermath of the pandemic. Indeed, as discussed below,
the state’s experience during the period in which the community engagement requirement was in
effect in Arkansas indicates that there was inadequate infrastructure in place even to make
beneficiaries aware of the requirement, and significant coverage loss occurred during that period.
The state also did not address how it would assure that all beneficiaries would successfully be
able to meet the requirement, understanding that the COVID-19 public health emergency will
potentially have long-term effects on economic activities and opportunities.
In light of these concerns, for the reasons set forth below, CMS has determined that, on balance,
the authorities that permit Arkansas to require work and community engagement as a condition
of eligibility are not likely to promote the objectives of the Medicaid statute. Therefore, we are
withdrawing the community engagement authorities that were added in the Secretary’s March 5,
2018 amendment approval for the Arkansas Works demonstration.
Background of Arkansas’s Demonstration
The Arkansas Works demonstration was originally approved by CMS as the “Arkansas Health
Care Independence Program (Private Option)” demonstration on September 27, 2013. It
provided certain new adult group Medicaid beneficiaries (beneficiaries authorized under
1902(a)(10)(a)(i)(VIII) of the Act) with premium assistance to purchase qualified health plan
(QHP) coverage through the Health Insurance Marketplace (the Marketplace). The current
Arkansas Works section 1115 demonstration project was approved by CMS on December 7,
2016 and continued the use of premium assistance to allow certain new adult group beneficiaries
to purchase QHP coverage offered through the individual market in the Marketplace. The 2016
Arkansas Works approval also created a mandatory employer sponsored insurance (ESI)
program for certain beneficiaries with an offer of ESI and instituted a monthly premium
requirement for beneficiaries with incomes over 100 percent of the federal poverty level, but did
not make premium payment a condition of eligibility.
On March 5, 2018, CMS approved an amendment to the demonstration that required, among
other things, non-exempt demonstration beneficiaries ages 19 to 49 to participate for a minimum
of 80 hours per month in work or work-related activities, such as employment, education, job
skills training, or community service. Additionally, beneficiaries were required to report
monthly on their compliance with, or exemption from, the community engagement requirement.
Three months of non-compliance with the requirement in a calendar year could result in the
beneficiary being disenrolled and locked out of coverage until the next plan year, which would
begin on January
1 of each year. The amendment exempted certain beneficiaries from the
community engagement requirement, including beneficiaries who are medically frail or
temporarily incapacitated, beneficiaries who are pregnant or within the 60-day post-partum
Page 4
period, full-time students, beneficiaries caring for an incapacitated person or living in a home
with a dependent child age 17 or younger, beneficiaries exempt from Supplemental Nutrition
Assistance Program (SNAP) or Transitional Employment Assistance Cash Assistance work
requirements, beneficiaries receiving unemployment benefits and beneficiaries participating in a
treatment program for alcohol or substance use disorders.
Early Experience from the Community Engagement Requirement in Arkansas
Early experience with the community engagement requirement in Arkansas indicated that such a
requirement risks rapid coverage loss.
Arkansas began implementing the community engagement requirement on June 1, 2018 for
demonstration beneficiaries ages 30 to 49 and on January 1, 2019 for demonstration beneficiaries
ages 19 to 29. The community engagement requirement was effective through March 27, 2019,
when the U.S. District Court for the District of Columbia vacated the Secretary’s approval of the
demonstration amendment that authorized this requirement. Before the court halted the
community engagement requirement, the state reported that from August 2018 through
December 2018, a total of 18,164 individuals were disenrolled from coverage for
“noncompliance with the work requirement.” During these five months, the monthly rate of
coverage loss as a percentage of those who were required to report work and community
engagement activities fluctuated between 20 and 47 percent.
3
Findings from a survey-based peer-reviewed study published in the New England Journal of
Medicine showed that the uninsured rate among low-income Arkansans ages 30 to 49 — the
group potentially subject to the community engagement requirement beginning in June 2018 —
rose from 10.5 percent in 2016 to 14.5 percent in 2018, after the community engagement
requirement took effect.
4
Furthermore, a follow-up study by the same researchers found that the
policy led to a significant drop in Medicaid or Marketplace coverage by 13.2 percentage points
and an increase in the uninsured rate of 7.1 percentage points among Arkansans ages 30 to 49,
relative to other age groups and states.
5
,
6
(The group of individuals aged 19 to 29 was one of the
comparison groups in this study because they were not subject to the community engagement
3
Arkansas Department of Human Services (DHS). (2018 & 2019). Arkansas Works Section 1115 Demonstration
Annual Reports. Retrieved from https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-
Topics/Waivers/1115/downloads/ar/Health-Care-Independence-Program-Private-Option/ar-works-annl-rpt-jan-dec-
2018.pdf; https://www.medicaid.gov/medicaid/section-1115-demonstrations/downloads/ar-works-annl-rpt-jan-dec-
2019.pdf.
4
The study compares changes in outcomes before and after implementation of the community engagement
requirement in Arkansas among individuals 30 to 49 years of age, as compared with Arkansans 19 to 29 years of age
and those 50 to 64 years of age (who were not subject to the requirement in 2018) and with adults in three
comparison states — Kentucky, Louisiana, and Texas.
5
Sommers, B. D., Chen, L., Blendon, R. J., Orav, E. J., & Epstein, A. M. (2020). Medicaid Work Requirements in
Arkansas: Two-Year Impacts on Coverage, Employment, and Affordability of Care. Health Affairs, 39(9), 1522-
1530. Retrieved from https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2020.00538
6
The target group comprised respondents 30 to 49 years of age in Arkansas. “Other ages” were the groups of
respondents 19 to 29 years of age and those 50 to 64 years of age. Kentucky, Louisiana, and Texas were the
comparison states.
Page 5
requirement until January 2019,
7
and therefore, were not subject to disenrollment from coverage
for failure to meet the community engagement requirement during 2018.) Similar increases in
uninsured rates were not observed for low-income Arkansans outside the 30 to 49 age range or
for low-income people aged 30 to 49 in other, similar states, where the community engagement
requirement did not apply.
8
,
9
,
10
In addition, based on the same research, Arkansans ages 30 to 49 reporting disenrollment from
Medicaid or Marketplace coverage at any point in the prior year experienced significantly higher
medical debt and financial barriers to care, compared to Arkansans ages 30 to 49 who maintained
that coverage. Specifically, 50 percent reported serious problems paying off medical bills; 56
percent delayed seeking health care because of cost; and 64 percent delayed taking medications
because of cost.
11
Evidence also indicates that those with chronic conditions were more likely to
lose coverage.
12
All these findings indicate the serious and potentially long-term implications of
the demonstration’s community engagement requirement in terms of lost coverage and forgone
health care among those who most need it, in sharp contrast to Arkansas’s continued argument
that the demonstration would lead to improved health among those subject to the requirements.
Despite state assurances in the demonstration’s Special Terms and Conditions that Arkansas
would provide the necessary outreach to Medicaid beneficiaries, a survey of beneficiaries subject
to the community engagement requirement conducted in November and December of 2018
found that 33 percent of the adults 30 to 49 years of age who had Medicaid or Marketplace
coverage had not heard anything about the requirement, while 44 percent of the adults 30 to 49
years of age who had Medicaid or Marketplace coverage or no insurance were unsure whether
the policy applied to them.
13
Other studies also found evidence of widespread beneficiary
7
Arkansas Department of Human Services (DHS). (2018). Arkansas Works Section 1115 Demonstration Annual
Report. Retrieved from https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-
Topics/Waivers/1115/downloads/ar/Health-Care-Independence-Program-Private-Option/ar-works-annl-rpt-jan-dec-
2018.pdf.
8
Sommers, B.D., Goldman, A.L., Blendon, R.J., Orav, E.J., & Epstein, A.M. (2019). Medicaid work
requirements—results from the first year in Arkansas. New England Journal of Medicine, 381(11), 1073-1082.
Retrieved from https://www.nejm.org/doi/full/10.1056/nejmsr1901772
9
Wagner, J., & Schubel, J. (2020). States’ Experiences Confirm Harmful Effects of Medicaid Work Requirements.
Center on Budget and Policy Priorities. Retrieved from https://www.cbpp.org/research/health/states-experiences-
confirm-harmful-effects-of-medicaid-work-requirements
10
Kentucky, like Arkansas, expanded Medicaid under the Affordable Care Act (ACA) in 2014 and planned to
introduce work requirements in 2018, but the requirements were blocked by a federal court before implementation.
Louisiana (expanded Medicaid in 2016) and Texas (has not expanded Medicaid) have not implemented a
community engagement demonstration. All four study states are in the Southern census region and have poverty
rates in the highest quartile of the United States.
11
Sommers, B.D., Chen, L., Blendon, R.J., Orav, E.J., & Epstein, A.M. (2020). Medicaid Work Requirements in
Arkansas: Two-Year Impacts on Coverage, Employment, and Affordability of Care. Health Affairs, 39(9), 1522-
1530. Retrieved from https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2020.00538
12
Chen, L. & Sommers, B.D. (2020). Work Requirements and Medicaid Disenrollment in Arkansas, Kentucky,
Louisiana, and Texas, 2018. American Journal of Public Health, 110, 1208-1210. DOI
https://doi.org/10.2105/AJPH.2020.305697
13
Sommers, B.D., Goldman, A.L., Blendon, R.J., Orav, E.J., & Epstein, A. M. (2019). Medicaid Work
Requirements—Results from the First Year in Arkansas. New England Journal of Medicine, 381(11), 1073-1082.
Retrieved from https://www.nejm.org/doi/full/10.1056/nejmsr1901772
Page 6
confusion and lack of awareness about the program requirements.
14
,
15
Policy awareness was
found to be lower among beneficiaries with less education.
16
Overall, outreach and education
efforts appear to have lacked the diversity of methods needed to successfully reach the target
audience, and the beneficiaries that were reached had difficulty understanding the complexity of
the information presented.
17
In addition to beneficiary confusion about the demonstration
requirement, there was evidence of additional barriers, such as lack of internet access that
prevented beneficiaries from reporting their compliance or qualification for an exemption when
the state initially required all such reporting to be done online.
18
This lack of knowledge, as well
as confusion, and practical barriers to monthly reporting exacerbated the administrative
challenges to maintaining coverage.
19
Fortunately, evidence suggests that most of the Medicaid
coverage losses in 2018 were regained in 2019, and the overall uninsured rates returned to levels
seen before the community engagement requirement, after the court order vacating the approval
of the demonstration amendment that authorized the community engagement requirement.
20
Furthermore, there was no associated increase in employment or other community engagement
activities among low-income individuals subject to the community engagement requirement
either in the first year when the policy was still in effect or nine months after the policy was
blocked.
21
,
22
Instead, data suggest that nearly everyone who was targeted by the Arkansas Works
community engagement requirement (97 percent of the survey respondents 30 to 49 years of age
14
Musumeci, M., Rudowitz, R., & Lyons, B. (2018). Medicaid Work Requirements in Arkansas: Experience and
Perspectives of Enrollees. Kaiser Family Foundation. Retrieved from http://files.kff.org/attachment/Issue-Brief-
Medicaid-Work-Requirements-in-Arkansas-Experience-and-Perspectives-of-Enrollees
15
Hill, I., Burroughs, E. (2019). Lessons from Launching Medicaid Work Requirements in Arkansas. Retrieved
from
https://www.urban.org/sites/default/files/publication/101113/lessons_from_launching_medicaid_work_requirements
_in_arkansas_3.pdf
16
Greene, J. (2019). Medicaid Recipient Awareness of Work Requirements: Importance and Challenges. Health
Affairs Blog, December 10, 2019. DOI: 10.1377/hblog20191205.883142.
17
Musumeci, M., Rudowitz, R. & Lyons, B. (2018). Medicaid Work Requirements in Arkansas: Experience and
Perspectives of Enrollees. Kaiser Family Foundation. Retrieved from http://files.kff.org/attachment/Issue-Brief-
Medicaid-Work-Requirements-in-Arkansas-Experience-and-Perspectives-of-Enrollees
18
Musumeci, M., Rudowitz, R. & Lyons, B. (2018). Medicaid Work Requirements in Arkansas: Experience and
Perspectives of Enrollees. Kaiser Family Foundation. Retrieved from http://files.kff.org/attachment/Issue-Brief-
Medicaid-Work-Requirements-in-Arkansas-Experience-and-Perspectives-of-Enrollees
19
Sommers, B.D., Chen, L., Blendon, R.J., Orav, E.J., & Epstein, A.M. (2020). Medicaid Work Requirements in
Arkansas: Two-Year Impacts on Coverage, Employment, and Affordability of Care. Health Affairs, 39(9), 1522-
1530. Retrieved from https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2020.00538
20
Sommers, B.D., Chen, L., Blendon, R.J., Orav, E.J., & Epstein, A.M. (2020). Medicaid Work Requirements in
Arkansas: Two-Year Impacts on Coverage, Employment, and Affordability of Care. Health Affairs, 39(9), 1522-
1530. Retrieved from https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2020.00538
21
Sommers, B.D., Goldman, A.L., Blendon, R.J., Orav, E.J., & Epstein, A.M. (2019). Medicaid work
requirements—results from the first year in Arkansas. New England Journal of Medicine, 381(11), 1073-1082.
Retrieved from https://www.nejm.org/doi/full/10.1056/nejmsr1901772
22
Sommers, B.D., Chen, L., Blendon, R.J., Orav, E.J., & Epstein, A.M. (2020). Medicaid Work Requirements in
Arkansas: Two-Year Impacts on Coverage, Employment, and Affordability of Care. Health Affairs, 39(9), 1522-
1530. Retrieved from https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2020.00538
Page 7
in Arkansas in the Sommers et al. (2019) study) already met the requirement or was exempt from
it, so there was little margin for the program to increase work or community engagement.
23
Those outcomes are consistent with research indicating more generally that most Medicaid
beneficiaries are already working or are likely to be exempt from a potential community
engagement requirement.
24
,
25
,
26
,
27
For example, in a study published in 2018, researchers found
that nearly 80 percent of adults with Medicaid coverage live in families with a working adult,
and 6 in 10 are working themselves.
28
Similarly, a study published in 2017 found that, out of the
22 million adults covered by Medicaid nationwide (representing 58 percent of all adults covered
by Medicaid) who could be subject to a community engagement requirement designed like that
in Arkansas Works, 50 percent were already working, 14 percent were looking for work, and 36
percent were neither working nor looking for work.
29
For those beneficiaries not working or
looking for work, 29 percent indicated that they were caring for a family member, 17 percent
were in school, and 33 percent noted that they could not work because of a disability (despite
excluding from analysis those qualifying for Medicaid on the basis of disability, highlighting the
difficulty with disability determination), with the remainder citing layoff, retirement, or a
temporary health problem.
Thus, overall, prior to the pandemic, the available data indicated that the vast majority of the
population that would be targeted by a community engagement requirement, as in Arkansas’s
demonstration, were already meeting the potential terms of such a requirement or would qualify
for an exemption from it. This makes it challenging for the community engagement requirement
to produce any meaningful impact on employment outcomes by incentivizing behavioral changes
in a small fraction of beneficiaries, all the while risking substantial coverage losses among those
subject to the requirements.
In addition to Arkansas, New Hampshire and Michigan, the two other states where a community
engagement requirement as a condition of Medicaid eligibility was in effect, provide additional
23
Sommers, B.D., Goldman, A.L., Blendon, R.J., Orav, E.J., & Epstein, A.M. (2019). Medicaid work
requirements—results from the first year in Arkansas. New England Journal of Medicine, 381(11), 1073-1082.
Retrieved from https://www.nejm.org/doi/full/10.1056/nejmsr1901772
24
Garfield, R., Rudowitz, R. & Damico, A. (2018). Understanding the intersection of Medicaid and work.
Washington, D.C.: Kaiser Family Foundation. Retrieved from http://files.kff.org/attachment/Issue-Brief-
Understanding-the-Intersection-of-Medicaid-and-Work
25
Huberfeld, N. (2018). Can work be required in the Medicaid program? N Engl J Med;378:788-791. DOI:
10.1056/NEJMp1800549
26
Goldman, A.L., Woolhandler, S, Himmelstein, D.U., Bor, D.H. & McCormick, D. (2018). Analysis of work
requirement exemptions and Medicaid spending. JAMA Intern Med, 178:1549-1552.
DOI:10.1001/jamainternmed.2018.4194
27
Solomon, J. (2019). Medicaid Work Requirements Can’t Be Fixed: Unintended Consequences are Inevitable
Result. Center of Budget and Policy Priorities. Retrieved from https://www.cbpp.org/research/health/medicaid-
work-requirements-cant-be-fixed
28
Garfield, R., Rudowitz, R. & Damico, A. (2018). Understanding the intersection of Medicaid and work.
Washington, D.C.: Kaiser Family Foundation. Retrieved from http://files.kff.org/attachment/Issue-Brief-
Understanding-the-Intersection-of-Medicaid-and-Work
29
Leighton Ku, L & Brantley, E. (2017). Medicaid Work Requirements: Who’s At Risk? Health Affairs Blog.
Retrieved from https://www.healthaffairs.org/do/10.1377/hblog20170412.059575/full/
Page 8
early data on potential enrollment impacts that accords with the Arkansas experience.
30
In New
Hampshire, for instance, within the span of just over a month when the community engagement
requirement was in effect, almost 17,000 beneficiaries (about 40 percent of those subject to the
community engagement requirement, and representing one-third of the demonstration’s total
enrollment) were set to be suspended for non-compliance and lose Medicaid coverage.
31
,
32
,
33
In
Michigan, before the policy was vacated by the courts, 80,000 beneficiaries—representing nearly
33 percent of individuals subject to the community engagement requirement—were at risk of
suspension, if not loss of coverage, for failing to report compliance with the community
engagement requirement.
34
Similar to Arkansas, there was widespread evidence of confusion
and lack of awareness among beneficiaries in these other states.
35
Moreover, in all three states,
evidence suggests that even individuals who were working or those who had serious health
needs, and therefore should have been eligible for exemptions, lost coverage or were at risk of
losing coverage because of complicated administrative and paperwork requirements.
36
Additionally, consistent and stable employment is often out of reach for beneficiaries subject to
community engagement requirements. Many low-income beneficiaries face a challenging job
market, which often offers only unstable or low-paying jobs with unpredictable or irregular
hours, sometimes resulting in spells of unemployment, particularly in seasonal work.
37
,
38
,
39
,
40
30
Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services,
Washington, DC. (2021). Issue Brief No. HP-2021-03, Medicaid Demonstrations and Impacts on Health Coverage:
A Review of the Evidence. Retrieved from https://aspe.hhs.gov/pdf-report/medicaid-demonstrations-andimpacts.
31
Wagner, J., & Schubel, J. (2020). States' experiences confirming harmful effects of Medicaid work requirements.
Center on Budget and Policy Priorities. Retrieved from https://www.cbpp.org/research/health/states-experiences-
confirm-harmful-effects-of-medicaid-work-requirements
32
New Hampshire Department of Health and Human Services. (2019). DHHS Community Engagement Report:
June 2019. Retrieved from https://www.dhhs.nh.gov/medicaid/granite/documents/ga-ce-report-062019.pdf
33
Hill, I., Burroughs, E., & Adams, G. (2020). New Hampshire’s Experience with Medicaid Work Requirements:
New Strategies, Similar Results. Urban Institute. Retrieved from https://www.urban.org/research/publication/new-
hampshires-experiences-medicaid-work-requirements-new-strategies-similar-results
34
Wagner, J., & Schubel, J. (2020). States’ Experiences Confirm Harmful Effects of Medicaid Work Requirements.
Center on Budget and Policy Priorities. Retrieved from https://www.cbpp.org/research/health/states-experiences-
confirm-harmful-effects-of-medicaid-work-requirements
35
Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services,
Washington, DC. (2021). Issue Brief No. HP-2021-03, Medicaid Demonstrations and Impacts on Health Coverage:
A Review of the Evidence. Retrieved from https://aspe.hhs.gov/pdf-report/medicaid-demonstrations-andimpacts.
36
Wagner, J., & Schubel, J. (2020). States’ Experiences Confirm Harmful Effects of Medicaid Work Requirements.
Center on Budget and Policy Priorities. Retrieved from https://www.cbpp.org/research/health/states-experiences-
confirm-harmful-effects-of-medicaid-work-requirements
37
Butcher, K., Schanzenbach, D. (2018). Most Workers in Low-Wage Labor Market Work Substantial Hours, in
Volatile Jobs. Center on Budget and Policy Priorities. Retrieved from https://www.cbpp.org/research/poverty-and-
inequality/most-workers-in-low-wage-labor-market-work-substantial-hours-in
38
Center on Budget and Policy Priorities. (2020). Taking Away Medicaid for Not Meeting Work
Requirements Harms Low-Wage Workers. Retrieved from https://www.cbpp.org/research/health/taking-away-
medicaid-for-not-meeting-work-requirements-harms-low-wage-workers
39
Gangopadhyaya, A., Johnston, E., Kenney, G., Zuckerman, S. (2018). Kentucky Medicaid Work
Requirements: What Are the Coverage Risks for Working Enrollees? Urban Institute. Retrieved from
https://www.urban.org/sites/default/files/publication/98893/2001948_kentucky-medicaid-work-requirements-what-
are-the-coverage-risks-for-working-enrollees.pdf
40
New Hampshire Fiscal Policy Institute. (2019). Medicaid Work Requirements and Coverage Losses. Retrieved
from https://nhfpi.org/resource/medicaid-work-requirements-and-coverage-losses/
Page 9
The rigid monthly requirement for reporting 80 or more hours in general is also of concern for
low-income working adults who could be subject to a community engagement requirement. For
example, 46 percent of this group as well as 25 percent of those working as many as 1,000 hours
during a year (which would be sufficient for meeting the 80-hour monthly requirement) could be
at risk of losing coverage for one or more months because they would not meet the minimum in
every month.
41
Furthermore, research examining the outcomes of statutorily authorized work requirements in
other public assistance programs, such as Temporary Assistance for Needy Families (TANF) and
Supplemental Nutrition Assistance Program (SNAP) indicates that such requirements generally
have only modest and temporary effects on employment, failing to increase long-term
employment or reduce poverty.
42
,
43
,
44
Additionally, studies have found that imposing work
requirements in the SNAP program led to substantial reductions in enrollment, even after
controlling for changes in unemployment and poverty levels.
45
In fact, evidence suggests that
there were large and rapid caseload losses in selected areas after SNAP work requirements went
into effect, similar to the coverage losses that occurred when Arkansas began implementing the
community engagement requirement for beneficiaries of Arkansas Works ages 30 to 49.
Therefore, existing evidence from states that have implemented community engagement
requirements, evidence from other public programs with work requirements, and the overall
work patterns and job market opportunities for the low-income adults who would be subject to
such requirements highlight the potential ineffectiveness of community engagement
requirements at impacting employment outcomes for the target population. And while there are
variations in the design and implementation of community engagement requirements in each
state that has implemented such a requirement, as well as differences in employment and
economic opportunities, findings from the states that implemented community engagement
requirements point in the general direction of coverage losses among individuals subject to such
requirements.
Thus, CMS is not aware of any reason to expect that the community engagement requirement as
a condition of eligibility in Arkansas’s Medicaid demonstration project would have a different
41
Solomon, J. (2019). Medicaid Work Requirements Can’t Be Fixed: Unintended Consequences are Inevitable
Result. Center of Budget and Policy Priorities. Retrieved from https://www.cbpp.org/research/health/medicaid-
work-requirements-cant-be-fixed
42
Katch, H., Wagner, J. & Aron-Dine, A. (2018). Taking Medicaid Coverage Away From People Not Meeting
Work Requirements Will Reduce Low-Income Families’ Access to Care and Worsen Health Outcomes. Center on
Budget and Policy Priorities. Retrieved from https://www.cbpp.org/research/health/taking-medicaid-coverage-away-
from-people-not-meeting-work-requirements-will-reduce
43
Danziger, S.K., Danziger, S., Seefeldt, K.S. & Shaefer, H.L. (2016). From Welfare to a Work-Based Safety Net:
An Incomplete Transition. Journal of Policy Analysis & Management, 35(1), 231-238. DOI:
https://doi.org/10.1002/pam.21880
44
Pavetti, L. (2016). Work Requirements Don’t Cut Poverty, Evidence Shows. Center on Budget and Policy
Priorities. Retrieved from https://www.cbpp.org/research/poverty-and-inequality/work-requirements-dont-cut-
poverty-evidence-shows
45
Ku, L., Brantley, E. & Pillai, D. (2019). The Effects of SNAP Work Requirements in Reducing Participation and
Benefits From 2013 to 2017. American Journal of Public Health 109(10), 1446-1451. DOI:
https://doi.org/10.2105/AJPH.2019.305232. Retrieved from
https://ajph.aphapublications.org/doi/10.2105/AJPH.2019.305232
Page 10
outcome in the future than what was observed during the initial implementation of such a
requirement in Arkansas and other states. Arkansas’s experience with implementing the
Arkansas Works community engagement requirement between June 2018 and March 2019
shows rapid, significant coverage loss without an increase in employment or other community
engagement. Accordingly, there is risk that Arkansas’s demonstration project, as amended in
2018, will lead to coverage losses, a risk that is exacerbated by the ongoing COVID-19 public
health emergency and its likely aftermath.
Impact of COVID-19 and its Aftermath
The COVID-19 pandemic and the uncertainty surrounding the long-term effects on economic
activity and opportunities across the nation exacerbate the risks associated with tying a
community engagement requirement to Medicaid eligibility, making such requirements
infeasible under the current circumstances. There is a substantial risk that the COVID-19
pandemic and its aftermath will have a negative impact on economic opportunities for Medicaid
beneficiaries. If employment opportunities are limited, Medicaid beneficiaries may find it
difficult to obtain paid work in the aftermath of the COVID-19 pandemic.
46
,
47
As discussed above, prior to the pandemic, most Medicaid adults who did not face a barrier to
work were working.
48
However, one in three adult Medicaid beneficiaries was only working
part-time during the COVID-19 public health emergency due to fewer opportunities for full-time
employment and reduced availability of child care due to the public health emergency and its
related economic effects.
49
Job and income loss have also been more acute among the low-income population, those who
have the least wherewithal to withstand economic shocks and are disproportionately enrolled in
Medicaid.
50
Fifty-two percent of lower income adults (annual income below $37,500) live in
46
Garfield, R., Rudowitz, R., Guth, M., Orgera, K. & Hinton, E. (2021). Work Among Medicaid Adults:
Implications of Economic Downturn and Work Requirements. Kaiser Family Foundation. Retrieved from
https://www.kff.org/report-section/work-among-medicaid-adults-implications-of-economic-downturn-and-work-
requirements-issue-brief/.
47
Gangopadhyaya, A. & Garrett, B. (2020). Unemployment, Health Insurance, and the COVID-19 Recession.
Urban Institute. Retrieved from https://www.urban.org/sites/default/files/publication/101946/unemployment-health-
insurance-and-the-covid-19-recession_1.pdf
48
Garfield, R., Rudowitz, R., Guth, M., Orgera, K. & Hinton, E. (2021). Work Among Medicaid Adults:
Implications of Economic Downturn and Work Requirements. Kaiser Family Foundation. Retrieved from
https://www.kff.org/report-section/work-among-medicaid-adults-implications-of-economic-downturn-and-work-
requirements-issue-brief/
49
Garfield, R., Rudowitz, R., Guth, M., Orgera, K. & Hinton, E. (2021). Work Among Medicaid Adults:
Implications of Economic Downturn and Work Requirements. Kaiser Family Foundation. Retrieved from
https://www.kff.org/report-section/work-among-medicaid-adults-implications-of-economic-downturn-and-work-
requirements-issue-brief/
50
Despard, M., Weiss-Grinstein, M., Chun, Y. & Roll, S. (2020). COVID-19 Job and Income Loss Leading to More
Hunger and Financial Hardship. Brookings Institution. Retrieved from https://www.brookings.edu/blog/up-
front/2020/07/13/covid-19-job-and-income-loss-leading-to-more-hunger-and-financial-hardship/
Page 11
households where someone has lost a job or taken a pay cut due to the pandemic.
51
And,
understandably, households with a job or income loss were two-to-three times more likely to
experience economic hardship than those who did not experience such a loss.
52
,
53
Fifty-nine
percent of lower-income adults said they worry every day or almost every day about paying their
bills.
54
There is also racial and ethnic disparity in the likelihood of reporting hardships; for
example, compared to White households, Black households reported significantly higher chances
of putting off filling prescriptions and difficulties making housing and other bill payments. Also,
Hispanic households were more likely to experience food insecurity compared to White
households.
55
,
56
The pandemic may also exacerbate existing disparities, such as low-income individuals’ lack of
access to computers and reliable internet. For example, 29 percent of adults in households with
annual incomes below $30,000 did not own a smartphone, and 44 percent did not have home
broadband services in 2019.
57
Moreover, fewer than 8 percent of Americans with earnings
below the 25
th
percentile have the capabilities to work remotely.
58
These disparities will result in
fewer opportunities for beneficiaries to satisfy a community engagement requirement,
particularly as more jobs have shifted to telework or “work from home” during the public health
51
Parker, K., Horowitz, J.M., & Brown, A. (2020). About Half of Lower-Income Americans Report Household Job
or Wage Loss Due to COVID-19. Pew Research Center. Retrieved from https://www.pewresearch.org/social-
trends/2020/04/21/about-half-of-lower-income-americans-report-household-job-or-wage-loss-due-to-covid-19/
52
Despard, M., Weiss-Grinstein, M., Chun, Y. & Roll, S. (2020). COVID-19 Job and Income Loss Leading to More
Hunger and Financial Hardship. Brookings Institution. Retrieved from https://www.brookings.edu/blog/up-
front/2020/07/13/covid-19-job-and-income-loss-leading-to-more-hunger-and-financial-hardship/
53
Gangopadhyaya, A. & Garrett, B. (2020). Unemployment, Health Insurance, and the COVID-19 Recession. Urban
Institute. Retrieved from https://www.urban.org/sites/default/files/publication/101946/unemployment-health-
insurance-and-the-covid-19-recession_1.pdf
54
Parker, K., Horowitz, J.M., & Brown, A. (2020). About Half of Lower-Income Americans Report Household Job
or Wage Loss Due to COVID-19. Pew Research Center. Retrieved from https://www.pewresearch.org/social-
trends/2020/04/21/about-half-of-lower-income-americans-report-household-job-or-wage-loss-due-to-covid-19/
55
Despard, M., Weiss-Grinstein, M., Chun, Y. & Roll, S. (2020). COVID-19 Job and Income Loss Leading to More
Hunger and Financial Hardship. Brookings Institution. Retrieved from https://www.brookings.edu/blog/up-
front/2020/07/13/covid-19-job-and-income-loss-leading-to-more-hunger-and-financial-hardship/
56
Gangopadhyaya, A. & Garrett, B. (2020). Unemployment, Health Insurance, and the COVID-19 Recession.
Urban Institute. Retrieved from https://www.urban.org/sites/default/files/publication/101946/unemployment-health-
insurance-and-the-covid-19-recession_1.pdf
57
Anderson, M. & Kumar, M. (2019). Digital Divide Persists Even as Lower-Income Americans Make Gains in
Tech Adoption. Pew Research Center. Retrieved from https://www.pewresearch.org/fact-tank/2019/05/07/digital-
divide-persists-even-as-lower-income-americans-make-gains-in-tech-adoption/
58
Maani, N., Galea, S. (2020). COVID-19 and Underinvestment in the Health of the US Population. The Milbank
Quarterly. Retrieved from https://www.milbank.org/quarterly/articles/covid-19-and-underinvestment-in-the-health-
of-the-us-population/
Page 12
emergency, thereby increasing the risk that implementation of the community engagement
requirement approved in this demonstration will result in unintended coverage loss.
59
,
60
The impact of the COVID-19 public health emergency on the economy has been significant, and,
importantly, experience with previous recessions suggest the impact is likely to persist for an
extended period of time. While the unemployment rate has declined from 14.8 percent in April
2020 to 6.2 percent in February 2021, the labor force participation rate has shown no
improvement since June 2020 and remains 1.9 percentage points below pre-pandemic levels.
Evidence shows that losing a job can have significant long term effects on an individual’s future
earnings. Studies have found that workers who lose their jobs in mass layoffs still earn 20
percent less than similar workers who kept their jobs, 15 to 20 years after the layoff,
61
and the
impacts are greater for individuals who lose their jobs during a recession. On average, men lost
2.8 years of pre-layoff earnings when the mass layoff occurred in a time when the unemployment
rate was above eight percent.
62
Further, workers who enter the labor market during a recession
face long-term consequences for their earnings.
63
Also, nonwhites and individuals with lower
educational attainment have experienced larger and more persistent earning losses than other
groups who enter the labor market during recessions.
64
These layoffs can also impact an
individual’s mortality risk. For example, workers experienced mortality rates that were 50-100
percent higher than expected in the year after a layoff occurred, and 20 years later, mortality
rates remained 10-15 percent higher for these individuals.
65
Furthermore, displaced workers
have lower levels of healthcare utilization, and healthcare coverage losses and lack of care
continuity could play a role in long-term effects on mortality rates.
66
59
Garfield, R., Rudowitz, R., Guth, M., Orgera, K. & Hinton, E. (2021). Work Among Medicaid Adults:
Implications of Economic Downturn and Work Requirements. Kaiser Family Foundation. Retrieved from
https://www.kff.org/report-section/work-among-medicaid-adults-implications-of-economic-downturn-and-work-
requirements-issue-brief/
60
Gangopadhyaya, A. & Garrett, B. (2020). Unemployment, Health Insurance, and the COVID-19 Recession.
Urban Institute. Retrieved from https://www.urban.org/sites/default/files/publication/101946/unemployment-health-
insurance-and-the-covid-19-recession_1.pdf
61
Schwandt, H. & von Wachter, T.M. (2018). Unlucky Cohorts: Estimating the Long-term Effects of Entering the
Labor Market in a Recession in Large Cross-sectional Data Sets. NBER Working Paper 25141. Retrieved from
https://www.nber.org/papers/w25141
62
Davis, S.J. & von Wachter, T. (2011). Recessions and the Costs of Job Loss. Brookings Papers on Economic
Activity. Retrieved from https://www.brookings.edu/wp-content/uploads/2011/09/2011b_bpea_davis.pdf
63
Schwandt, H. & von Wachter, T.M. (2018). Unlucky Cohorts: Estimating the Long-term Effects of Entering the
Labor Market in a Recession in Large Cross-sectional Data Sets. NBER Working Paper 25141. Retrieved from
https://www.nber.org/papers/w25141
64
Schwandt, H. & von Wachter, T.M. (2018). Unlucky Cohorts: Estimating the Long-term Effects of Entering the
Labor Market in a Recession in Large Cross-sectional Data Sets. NBER Working Paper 25141. Retrieved from
https://www.nber.org/papers/w25141
65
Sullivan, D. & von Wachter, T. (2009). Job Displacement and Mortality: An Analysis Using Administrative Data.
Quarterly Journal of Economics. Retrieved from
http://www.econ.ucla.edu/tvwachter/papers/sullivan_vonwachter_qje.pdf
66
Schaller, J., Stevens, A. (2015). Short-Run Effects of Job Loss on Health Conditions, Health Insurance, and
Health Care Utilization. Journal of Health Economics, 43, 190-203. DOI: 0.1016/j.jhealeco.2015.07.003. Retrieved
from https://www.sciencedirect.com/science/article/pii/S0167629615000788
Page 13
The pandemic could also bring long-term changes in the labor market, as levels of remote work
are likely to remain higher than pre-pandemic levels, reducing the need for support staff and
service industry workers in many cities. The disproportionate level of disruption in certain
sectors also presents a significant concern about potential inequities in the economic recovery, as
declines in employment have been much higher for Black and Hispanic women and in certain
low-wage service sectors, such as hospitality and leisure, while certain sectors, such as financial
services, have seen virtually no change.
67
In April 2020, the estimated unemployment rates
(including individuals who were employed but absent from work and those not in the workforce
but who wanted employment) for Black and Hispanic populations were as high as 32 and 31
percent, respectively, compared 24 percent for White populations.
68
Hispanic populations
specifically are more likely to be affected due to their disproportionate representation in
industries such as hospitality and construction, which have been most affected by the pandemic-
related layoffs.
69
,
70
,
71
As discussed below, Arkansas has not provided assurances that state-subsidized infrastructure is
in place to ensure that barriers to compliance will not result in significant coverage losses. In
addition, the approval of the amendment’s community engagement requirement is not currently
in effect and expires by its terms on December 31, 2021, which would not afford sufficient time
to obtain reliable data regarding the effect of that demonstration in any event.
Given the short- and long-term negative consequences from the loss of timely access to
necessary healthcare, the potential for coverage loss would be particularly harmful in the
aftermath of the pandemic. During the pandemic, individuals have delayed or postponed seeking
care, either due to concerns with out-of-pocket expenses, or to avoid risk of contact with infected
individuals in healthcare settings. For example, one study showed that screenings for breast,
colon, prostate, and lung cancers were between 56 and 85 percent lower in April 2020 than in the
previous year.
72
Results of another survey-based study show that 40 percent of respondents
canceled upcoming appointments due to the pandemic, and another 12 percent reported they
needed care but did not schedule or receive services. These pandemic-related delays in seeking
67
Rouse, C. (2021). The Employment Situation in February. Retrieved from https://www.whitehouse.gov/briefing-
room/blog/2021/03/05/the-employment-situation-in-february/
68
Fairlie, R., Couch, K. & Xu, H. (2020). The Impacts of COVID-19 on Minority Unemployment: First Evidence
from April 2020 CPS Microdata. National Bureau of Economic Research. Retrieved from
https://www.nber.org/system/files/working_papers/w27246/w27246.pdf
69
Garfield, R., Rudowitz, R., Guth, M., Orgera, K. & Hinton, E. (2021). Work Among Medicaid Adults:
Implications of Economic Downturn and Work Requirements. Kaiser Family Foundation. Retrieved from
https://www.kff.org/report-section/work-among-medicaid-adults-implications-of-economic-downturn-and-work-
requirements-issue-brief/
70
Industries like health care and transportation have been less affected by the pandemic, and that has provided some
cushion for black workers. See Despard et al. (2020).
71
Krogstad, J.M., Gonzalez-Barrera, A. & Noe-Bustamante, L. (2020). U.S. Latinos among hardest hit by pay cuts,
job losses due to coronavirus. Pew Research Center. Retrieved from https://www.pewresearch.org/fact-
tank/2020/04/03/u-s-latinos-among-hardest-hit-by-pay-cuts-job-losses-due-to-coronavirus/
72
Patt, D., Gordan, L., Diaz, M., Okon, T., Grady, L., Harmison, M., Markward, N., Sullivan, M., Peng, J., Zhau, A.
(2020). Impact of COVID-19 on Cancer Care: How the Pandemic Is Delaying Cancer Diagnosis and Treatment for
American Seniors. JCO Clinical Cancer Informatics, 4, 1059-1071. DOI: 10.1200/CCI.20.00134. Retrieved from
https://ascopubs.org/doi/full/10.1200/CCI.20.00134
Page 14
care are estimated to increase annual healthcare costs by a range of $30 to $65
billion.
73
Moreover, unmet need in healthcare may lead to substantial increases in subsequent
mortality and morbidity.
74
In addition, the uncertainty regarding the lingering health
consequences of COVID-19 infections further exacerbates the harms of any potential coverage
loss for Medicaid beneficiaries.
Furthermore, as reported, the pandemic has had a disparate effect on the physical and mental
health of Medicaid beneficiaries.
Racial minorities and people living in low-income households
are more likely to work in industries that are considered “essential services,” which have
remained open during the pandemic.
75
Additionally, occupations with more frequent exposure to
COVID-19 infections, and that require close proximity to others (such as personal care aides and
bus drivers) employ Black individuals at higher rates than Whites.
76
As a result, Black people
may be at higher risk of contracting COVID-19 through their employment. The pandemic’s
mental health impact also has been pronounced among populations experiencing
disproportionately high rates of COVID-19 cases and deaths. Specifically, Black and Hispanic
adults have been more likely than White adults to report symptoms of anxiety and/or depressive
disorder during the pandemic.
77
Evidence Submitted by Arkansas
On March 12, 2021, Arkansas submitted a response to CMS’s letter of February 12, 2021. As
noted above, the February 12 letter informed Arkansas that we had preliminarily determined that
allowing the community engagement requirement to take effect in Arkansas would not promote
the objectives of the Medicaid program. The February 12 letter explained that in light of the
COVID-19 public health emergency, Arkansas’s community engagement requirement risks
significant unintended coverage losses at a time when losing access to health care coverage
would cause substantial harm to beneficiaries.
Arkansas’ response does not assuage the concerns raised we raised in the February 12, 2021
letter. In its response, Arkansas requested that CMS reconsider withdrawing authority for the
community engagement requirement and requested an additional ninety days to “review [its]
enrollment data in the time periods prior to the implementation of the community engagement
requirement until the administration of it ceased due to litigation.” It argued that such an
extension is necessary to perform data matches for the more than 18,000 beneficiaries who were
73
McKinsey & Company (2020). Understanding the Hidden Costs of COVID-19’s Potential on U.S. Healthcare.
Retrieved from https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/understanding-
the-hidden-costs-of-covid-19s-potential-impact-on-us-healthcare#
74
Chen, J. & McGeorge, R. (2020). Spillover Effects Of The COVID-19 Pandemic Could Drive Long-Term Health
Consequences For Non-COVID-19 Patients. Health Affairs Blog, DOI: 10.1377/hblog20201020.566558. Retrieved
from https://www.healthaffairs.org/do/10.1377/hblog20201020.566558/full/
75
Raifman, M.A., & Raifman, J.R. (2020). Disparities in the Population at Risk of Severe Illness From COVID-19
by Race/Ethnicity and Income. American Journal of Preventive Medicine, 59(1), 137–139.
https://doi.org/10.1016/j.amepre.2020.04.003
76
Hawkins, D. (2020). Differential Occupational Risk for COVID‐19 and Other Infection Exposure According to
Race and Ethnicity. American Journal of Industrial Medicine, 63(9):817-820. DOI: 10.1002/ajim.23145
77
Panchal, N., Kamal, R., Cox, C. & Garfield, R. (2021). The Implications of COVID-19 for Mental Health and
Substance Use. Kaiser Family Foundation. Retrieved from https://www.kff.org/coronavirus-covid-19/issue-
brief/the-implications-of-covid-19-for-mental-health-and-substance-use/
Page 15
disenrolled during the project’s first five months to determine how many of those disenrollments
are attributable to the community engagement requirement. The state did not dispute that the
COVID-19 pandemic has had a significant impact on the health of Medicaid beneficiaries and
that there is uncertainty about the lingering health effects of COVID-19. Nor did the state
dispute the pandemic’s likely impact on economic opportunities for beneficiaries. There is
significant uncertainty as to whether there will be employment opportunities for those
beneficiaries who are not already working or exempt from the requirements, even once the
public health emergency has ended. Moreover, although beneficiaries can satisfy the
requirements through certain unpaid activities, Arkansas did not demonstrate that it has the
infrastructure in place—such as subsidies for job-skills training, transportation, and child care—
that may be necessary to make compliance with the community engagement requirements
feasible for beneficiaries and prevent large-scale coverage losses.
Indeed, there is serious doubt that the necessary infrastructure was in place when the community
engagement requirement was first implemented, as noted above. The state itself reported that
from August 2018 through December 2018, a total of 18,164 individuals were disenrolled from
coverage for failing to report the required number of hours or a qualifying exemption. Although
Arkansas’ March 12, 2021 letter suggests that this coverage loss was not attributable to the
community engagement requirement, that claim is inconsistent with the state’s contemporaneous
report that it disenrolled those 18,164 individuals because they failed to report the required
number of hours or a qualifying exemption.
78
Moreover, most of the Medicaid coverage losses
in 2018 were regained in 2019, after the court order vacating the approval of the amendment to
Arkansas Works that authorized the community engagement requirement.
The state’s procedural objections are not well taken for the reasons set out in CMS’s separate
letter of February 12, 2021, indicating that CMS was rescinding the January 4, 2021 letters to
which Arkansas refers.
Withdrawal of Community Engagement Requirement in the March 5, 2018 Amendment to
the Arkansas Works Demonstration
Based on the foregoing, and pursuant to our obligation under section 1115 of the Act to review
demonstration projects and ensure they remain likely to promote the objectives of Medicaid,
CMS has determined that, on balance, the amendment approval authorizing Arkansas to
implement a community engagement requirement as a condition of eligibility is not likely to
promote the objectives of the Medicaid program. At a minimum, in light of the significant risks
and uncertainties described above about the adverse effects of the pandemic and its aftermath,
the information available to CMS does not provide an adequate basis to support an affirmative
judgment that the community engagement requirement is likely to assist in promoting the
objectives of Medicaid. Accordingly, pursuant to its authority and responsibility under
applicable statutes and regulations to maintain ongoing oversight of whether demonstration
projects are currently likely to promote those objectives, CMS is hereby withdrawing its
approval of that portion of the March 5, 2018 amendment that permits the state to require work
and community engagement as a condition of eligibility under the Arkansas Works
78
The Center for Budget and Policy Priorities. (2019). Research Note: Medicaid Enrollment Decline among Adults
and Children Too Large to be Explained by Declining Employment.
Page 16
demonstration. The provisions of CMS’s letter approving the March 5, 2018 amendment and the
corresponding provisions of the waivers and Special Terms and Conditions that authorize the
community engagement requirement are withdrawn.
The withdrawal of these authorities is effective on the date that is thirty days after the date of this
letter, unless the state timely appeals, as discussed below. The waivers, expenditure authorities,
and Special Terms and Conditions reflecting this change are attached to this letter and will
govern the Arkansas Works demonstration from the effective date of the withdrawal of the
community engagement authorities until the demonstration expires on December 31, 2021.
As indicated in CMS’s February 12, 2021 letter, CMS is also reviewing the other authorities that
CMS previously approved in the Arkansas Works demonstration. That review remains ongoing.
The state and CMS will work together to update the evaluation design, as needed, to reflect all
the key policies that are implemented during the approval period. The current established
timeline for the interim and summative evaluation reports will remain in effect. CMS looks
forward to continuing to work with the state on the evaluation design, interim and summative
evaluation reports.
Procedure to Appeal This Decision
In accordance with Special Terms and Conditions 13 and 42 C.F.R. § 430.3, the state may
request a hearing to challenge CMS’s determination prior to the above-referenced effective date
by appealing this decision to the Departmental Appeals Board (DAB or Board), following the
procedures set forth at 45 C.F.R. part 16. This decision shall be the final decision of the
Department unless, within 30 calendar days after the state receives this decision, the state
delivers or mails (the state should use registered or certified mail to establish the date) a written
notice of appeal to the DAB.
A notice of appeal may be submitted to the DAB by mail, by facsimile (fax) if under 10 pages, or
electronically using the DAB’s electronic filing system (DAB E-File). Submissions are
considered made on the date they are postmarked, sent by certified or registered mail, deposited
with a commercial mail delivery service, faxed (where permitted), or successfully submitted via
DAB E-File. The Board will notify the state of further procedures. If the state faxes its notice of
appeal (permitted only if the notice of appeal is under 10 pages), you should use the Appellate
Division’s fax number, (202) 565-0238.
To use DAB E-File to submit your notice of appeal, the state’s Medicaid Director or
representative must first become a registered user by clicking "Register" at the bottom of the
DAB E-File homepage, https://dab/efile.hhs.gov/; entering the information requested on the
"Register New Account" form; and clicking the "Register Account" button. Once registered, the
state’s Medicaid Director or representative should login to DAB E-File using the e-mail address
and password provided during registration; click "File New Appeal" on the menu; click the
"Appellate" button; and provide and upload the requested information and documents on the
"File New Appeal-Appellate Division" form. Detailed instructions can be found on the DAB E-
File homepage.
Page 17
Due to the COVID-19 public health emergency, the DAB is experiencing delays in processing
documents received by mail. To avoid delay, the DAB strongly encourages the filing of
materials through the DAB E-File system. However, should the state so choose, written requests
for appeal should be delivered or mailed to U.S. Department of Health and Human Services,
Departmental Appeals Board MS 6127, Appellate Division, 330 Independence Ave., S.W.,
Cohen Building Room G-644, Washington, DC 20201. Refer to 45 C.F.R. Part 16 for
procedures of the Departmental Appeals Board.
The state must attach to the appeal request, a copy of this decision, note its intention to appeal
the decision, a statement that there is no dollar amount in dispute but that the state disputes
CMS’s withdrawal of certain section 1115 demonstration authorities, and a brief statement of
why the decision is wrong. The Board will notify the state of further procedures. If the state
chooses to appeal this decision, a copy of the notice of appeal should be mailed or delivered (the
state should use registered or certified mail to establish the date) to Judith Cash, Acting Deputy
Director, Center for Medicaid and CHIP Services at 7500 Security Blvd, Baltimore, MD 21244.
If you have any questions, please contact Judith Cash at (410) 786-9686.
Sincerely,
Elizabeth Richter
Acting Administrator
Page 1 of 37
Arkansas Works
Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
CENTERS FOR MEDICARE AND MEDICAID SERVICES
EXPENDITURE AUTHORITY
NUMBER: 11-W-00287/6
TITLE: Arkansas Works Section 1115 Demonstration
AWARDEE: Arkansas Department of Human Services
Under the authority of section 1115(a)(2) of the Social Security Act (the Act), expenditures made
by the state for the items identified below, which are not otherwise included as expenditure under
section 1903 shall, for the period of this demonstration be regarded as expenditures under the
state’s Title XIX plan but are further limited by the special terms and conditions (STCs) for the
Arkansas Works Section 1115 demonstration.
As discussed in the Centers for Medicare & Medicaid Services’ (CMS) approval letter, the
Secretary of Health and Human Services has determined that the Arkansas Works section 1115
demonstration, including the granting of the waiver and expenditure authorities described below,
is likely to assist in promoting the objectives of title XIX of the Social Security Act.
The following expenditure authorities shall enable Arkansas to implement the Arkansas Works
section 1115 demonstration:
1. Premium Assistance and Cost Sharing Reduction Payments. Expenditures for part or
all of the cost of private insurance premiums in the individual market, and for payments to
reduce cost sharing under such coverage for certain beneficiaries as described in these
STCs.
Requirements Not Applicable to the Expenditure Authority:
1.
Cost Effectiveness
Section 1902(a)(4) and
42 CFR 435.1015(a)(4)
To the extent necessary to permit the state to offer, with respect to beneficiaries through
qualified health plans, premium assistance and cost sharing reduction payments that are
determined to be cost effective using state developed tests of cost effectiveness that differ
from otherwise permissible tests for cost effectiveness as described in these STCs.
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Arkansas Works
Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
CENTERS FOR MEDICARE & MEDICAID SERVICES
WAIVER LIST
NUMBER: 11-W-00287/6
TITLE: Arkansas Works Section 1115 Demonstration
AWARDEE: Arkansas Department of Human Services
All requirements of the Medicaid program expressed in law, regulation, and policy statement, not
expressly waived or identified as not applicable in accompanying expenditure authorities, shall
apply to the demonstration project effective March 5, 2018 through December 31, 2021. In
addition, these waivers may only be implemented consistent with the approved Special Terms
and Conditions (STCs).
Under the authority of section 1115(a)(1) of the Social Security Act (the Act), the following
waivers of state plan requirements contained in section 1902 of the Act are granted for the
Arkansas Works Section 1115 demonstration, subject to the STCs.
1.
Freedom of Choice
Section 1902(a)(23)(A)
To the extent necessary to enable Arkansas to limit beneficiaries’ freedom of choice among
providers to the providers participating in the network of the beneficiary’s Qualified Health Plan.
No waiver of freedom of choice is authorized for family planning providers.
2.
Payment to Providers
Section 1902(a)(13) and Section
1902(a)(30)
To the extent necessary to permit Arkansas to provide for payment to providers equal to the
market-based rates determined by the Qualified Health Plan.
3.
Prior Authorization
Section 1902(a)(54) insofar as it
incorporates Section 1927(d)(5)
To permit Arkansas to require that requests for prior authorization for drugs be addressed within
72 hours, and for expedited review in exigent circumstances within 24 hours, rather than 24
hours for all circumstances as is currently required in their state policy. A 72- hour supply of the
requested medication will be provided in the event of an emergency.
4.
Premiums
Section 1902(a)(14) insofar as it
incorporates Sections 1916 and
1916A
To the extent necessary to enable Arkansas to collect monthly premium payments, for
beneficiaries with incomes above 100 up to and including 133 percent of the federal poverty
level (FPL) as described in these STCs.
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Arkansas Works
Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
5.
Comparability
Section 1902(a)(10)(B)
To the extent necessary to enable the state to impose targeted cost sharing on beneficiaries as
described in these STCs.
6.
Retroactive Eligibility
Section 1902(a)(34)
To enable the state to not provide beneficiaries in table 1 retroactive eligibility but for 30 days
prior to the date of the application for coverage under the demonstration.
Page 4 of 37
Arkansas Works
Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
CENTERS FOR MEDICARE AND MEDICAID SERVICES
SPECIAL TERMS AND CONDITIONS
NUMBER: 11-W-00287/6
TITLE: Arkansas Works
AWARDEE: Arkansas Department of Human Services
I. PREFACE
The following are the amended Special Terms and Conditions (STCs) for the Arkansas Works
section 1115(a) Medicaid demonstration (hereinafter demonstration) to enable the Arkansas
Department of Human Services (state) to operate this demonstration. The Centers for Medicare
& Medicaid Services (CMS) has granted waivers of requirements under section 1902(a) of the
Social Security Act (Act), and expenditure authorities authorizing federal matching of
demonstration costs that are not otherwise matchable, and which are separately enumerated.
These STCs set forth in detail the nature, character, and extent of federal involvement in the
demonstration and the state’s obligations to CMS during the life of the demonstration.
Enrollment into the demonstration is statewide and is approved through December 31, 2021.
The STCs have been arranged into the following subject areas:
I. Preface
II. Program Description and Objectives
III. General Program Requirements
IV. Arkansas Works Program Populations Affected
V. Arkansas Works Premium Assistance Enrollment
VI. Premium Assistance Delivery System
VII. Benefits
VIII. Premiums & Cost Sharing
IX. Appeals
X. General Reporting Requirements
XI. General Financial Requirements
XII. Monitoring Budget Neutrality
XIII. Evaluation
XIV. Monitoring
Attachments
II. PROGRAM DESCRIPTION AND OBJECTIVES
Under the Arkansas Works demonstration, the state has been providing premium assistance to
support the purchase by beneficiaries eligible under the new adult group under the state plan of
coverage from qualified health plans (QHPs) offered in the individual market through the
Marketplace. Enrollment activities for the new adult population began on October 1, 2013 for
QHPs with eligibility effective January 1, 2014. Beginning in 2014, individuals eligible for
coverage under the new adult group are described at Section 1902(a)(10)(A)(i)(VIII) of the
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Arkansas Works
Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
Social Security Act and are further specified in the state plan (collectively Arkansas Works
beneficiaries). Arkansas Works beneficiaries receive a state plan Alternative Benefit Plan
(“ABP”).
Effective January 1, 2017, Arkansas Works beneficiaries with incomes above 100 percent of the
FPL are charged monthly premium payments. The state will eliminate its ESI premium
assistance program under the demonstration. All Arkansas Works beneficiaries who were
enrolled in ESI premium assistance and who remain eligible for Arkansas Works will transition
to QHP coverage.
Over the demonstration period, the state seeks to demonstrate several demonstration goals. The
state’s goals will inform the state’s evaluation design hypotheses, subject to CMS approval, as
described in these STCs. The state’s goals include, and are not limited to the following:
• Providing continuity of coverage for individuals,
• Improving access to providers,
• Improving continuity of care across the continuum of coverage,
• Requiring beneficiaries to pay a monthly premium to promote more efficient use of
health care services, and
• Furthering quality improvement and delivery system reform initiatives that are successful
across population groups.
Arkansas proposes that the demonstration will provide integrated coverage for low-income
Arkansans, leveraging the efficiencies and experience of the private market to improve
continuity, access, and quality for Arkansas Works beneficiaries that should ultimately result in
lowering the rate of growth in premiums across population groups. The state proposes that the
demonstration will also drive structural health care system reform and more competitive
premium pricing for all individuals purchasing coverage through the Marketplace by at least
doubling the size of the population enrolling in QHPs offered through the Marketplace.
The state proposes to demonstrate the following key features:
Continuity of coverage and care - The demonstration will allow qualifying households to stay
enrolled in the same plan regardless of whether their coverage is subsidized through Medicaid, or
Advanced Premium Tax Credits/Cost Sharing Reductions (APTC/CSRs).
Support equalization of provider reimbursement and improve provider access - The
demonstration will support equalization of provider reimbursement across payers, toward the end
of expanding provider access and eliminating the need for providers to cross-subsidize. Arkansas
Medicaid provides rates of reimbursement lower than Medicare or commercial payers, causing
some providers to forego participation in the program and others to “cross subsidize” their
Medicaid patients by charging more to private insurers.
Integration, efficiency, quality improvement and delivery system reform - Arkansas is
proposing taking an integrated and market-based approach to covering uninsured Arkansans. It is
anticipated that QHPs will bring the experience of successful private sector models that can
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Arkansas Works
Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
improve access to high quality services and lead delivery system reform. One of the benefits of
this demonstration should be to gain a better understanding of how the private sector uses
incentives to engage individuals in healthy behaviors.
III. GENERAL PROGRAM REQUIREMENTS
1. Compliance with Federal Non-Discrimination Statutes. The state must comply with
all applicable federal statutes relating to non-discrimination. These include, but are not
limited to, the Americans with Disabilities Act of 1990, Title VI of the Civil Rights Act
of 1964, section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act
of 1975.
2. Compliance with Medicaid and Children’s Health Insurance Program (CHIP) Law,
Regulation, and Policy. All requirements of the Medicaid program and CHIP, expressed
in law, regulation, and policy statement, not expressly waived or identified as not
applicable in the waiver and expenditure authority documents (of which these terms and
conditions are part), apply to the demonstration.
3. Changes in Medicaid and CHIP Law, Regulation, and Policy. The state must, within
the timeframes specified in law, regulation, or policy statement, come into compliance
with any changes in federal law, regulation, or policy affecting the Medicaid or CHIP
program that occur during this demonstration approval period, unless the provision being
changed is expressly waived or identified as not applicable. In addition, CMS reserves
the right to amend the STCs to reflect such changes and/or changes without requiring the
state to submit an amendment to the demonstration under STC 7. CMS will notify the
state 30 days in advance of the expected approval date of the amended STCs to provide
the state with additional notice of the changes.
4. Impact on Demonstration of Changes in Federal Law, Regulation, and Policy.
a. To the extent that a change in federal law, regulation, or policy requires either a
reduction or an increase in federal financial participation (FFP) for expenditures
made under this demonstration, the state must adopt, subject to CMS approval, a
modified budget neutrality agreement as well as a modified allotment neutrality
worksheet for the demonstration as necessary to comply with such change. The
modified budget neutrality agreement will be effective upon the implementation
of the change.
b. If mandated changes in the federal law require state legislation, the changes must
take effect on the day such state legislation becomes effective, or on the last day
such legislation was required to be in effect under the law.
5. State Plan Amendments. If the eligibility of a population eligible through the Medicaid
or CHIP state plan is affected by a change to the demonstration, a conforming
amendment to the appropriate state plan may be required, except as otherwise noted in
these STCs. In all such instances the Medicaid state plan governs.
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Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
Should the state amend the state plan to make any changes to eligibility for this
population, upon submission of the state plan amendment, the state must notify CMS
demonstration staff in writing of the pending state plan amendment, and request a
corresponding technical correction to the demonstration.
6. Changes Subject to the Amendment Process. If not otherwise specified in these STCs,
changes related to demonstration features including eligibility, enrollment, benefits,
beneficiary rights, delivery systems, cost sharing, sources of non-federal share of
funding, budget neutrality, and other comparable program elements must be submitted to
CMS as amendments to the demonstration. All amendment requests are subject to
approval at the discretion of the Secretary in accordance with section 1115 of the Act.
The state must not implement changes to these elements without prior approval by CMS
either through an approved amendment to the Medicaid state plan and/or amendment to
the demonstration. Amendments to the demonstration are not retroactive and FFP will not
be available for changes to the demonstration that have not been approved through the
amendment process set forth in STC 7 below.
7. Amendment Process. Requests to amend the demonstration must be submitted to CMS
for approval no later than 120 days prior to the planned date of implementation of the
change and may not be implemented until approved. CMS reserves the right to deny or
delay approval of a demonstration amendment based on non-compliance with these
STCs, including but not limited to failure by the state to submit required reports and other
deliverables in a timely fashion according to the deadlines specified herein. Amendment
requests must include, but are not limited to, the following:
a. An explanation of the public process used by the state, consistent with the
requirements of STC 15, prior to submission of the requested amendment;
b. A data analysis worksheet which identifies the specific “with waiver” impact of
the proposed amendment on the current budget neutrality agreement. Such
analysis shall include current total computable “with waiver” and “without
waiver” status on both a summary and detailed level through the current approval
period using the most recent actual expenditures, as well as summary and detailed
projections of the change in the “with waiver” expenditure total as a result of the
proposed amendment, which isolates (by Eligibility Group) the impact of the
amendment;
c. An up-to-date CHIP allotment neutrality worksheet, if necessary;
d. A detailed description of the amendment, including impact on beneficiaries, with
sufficient supporting documentation; and
e. A description of how the evaluation design will be modified to incorporate the
amendment provisions.
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Arkansas Works
Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
8. Extension of the Demonstration. States that intend to request demonstration extensions
under sections 1115(e) or 1115(f) are advised to observe the timelines contained in those
statutes. Otherwise, no later than 12 months prior to the expiration date of the
demonstration, the governor or chief executive officer of the state must submit to CMS
either a demonstration extension request that meets federal requirements at 42 CFR
431.412(c) or a transition and phase-out plan consistent with the requirements of STC 9.
a. Compliance with Transparency Requirements at 42 CFR Section 431.412.
b. As part of the demonstration extension requests the state must provide
documentation of compliance with the transparency requirements 42 CFR Section
431.412 and the public notice and tribal consultation requirements outlined in
STC 15.
9. Demonstration Phase Out. The state may only suspend or terminate this demonstration
in whole, or in part, consistent with the following requirements.
a. Notification of Suspension or Termination. The state must promptly notify
CMS in writing of the reason(s) for the suspension or termination, together with
the effective date and a transition and phase-out plan. The state must submit its
notification letter and a draft plan to CMS no less than six (6) months before the
effective date of the demonstration’s suspension or termination. Prior to
submitting the draft plan to CMS, the state must publish on its website the draft
transition and phase-out plan for a 30-day public comment period. In addition, the
state must conduct tribal consultation in accordance with its approved tribal
consultation state plan Amendment, if applicable. Once the 30-day public
comment period has ended, the state must provide a summary of each public
comment received, the state’s response to the comment and how the state
incorporated the received comment into the revised plan.
b. Prior CMS Approval. The state must obtain CMS approval of the transition and
phase-out plan prior to the implementation of the phase-out activities.
Implementation of activities must be no sooner than 14 calendar days after CMS
approval of the plan.
c. Transition and Phase-out Plan Requirements. The state must include, at a
minimum, in its plan the process by which it will notify affected beneficiaries, the
content of said notices (including information on the beneficiary’s appeal rights),
the process by which the state will conduct administrative reviews of Medicaid
eligibility prior to the termination of the program for the affected beneficiaries,
and ensure ongoing coverage for those beneficiaries determined eligible, as well
as any community outreach activities including community resources that are
available.
d. Phase-out Procedures. The state must comply with all notice requirements found
in 42 CFR Sections 431.206, 431.210, and 431.213. In addition, the state must
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Arkansas Works
Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
assure all appeal and hearing rights afforded to demonstration participants as
outlined in 42 CFR Sections 431.220 and 431.221. If a demonstration participant
is entitled to requests a hearing before the date of action, the state must maintain
benefits as required in 42 CFR Section 431.230. In addition, the state must
conduct administrative renewals for all affected beneficiaries in order to
determine if they qualify for Medicaid eligibility under a different eligibility
category. 42 CFR Section 435.916.
e. Exemption from Public Notice Procedures 42 CFR Section 431.416(g). CMS
may expedite the federal and state public notice requirements in the event it
determines that the objectives of title XIX and XXI would be served or under
circumstances described in 42 CFR Section 431.416(g).
f. Federal Financial Participation (FFP). If the demonstration is terminated or any
relevant waivers suspended by the state, FFP shall be limited to normal closeout
costs associated with terminating the demonstration including services, continued
benefits as a result of participant’s appeals and administrative costs of
disenrolling participants.
10. Pre-Approved Transition and Phase Out Plan. The state may elect to submit a draft
transition and phase-out plan for review and approval at any time, including prior to
when a date of termination has been identified. Once the transition and phase-out plan
has been approved, implementation of the plan may be delayed indefinitely at the option
of the state.
11. Federal Financial Participation (FFP). If the project is terminated or any relevant
waivers suspended by the State, FFP shall be limited to normal closeout costs associated
with terminating the demonstration including services and administrative costs of
disenrolling beneficiaries.
12. Expiring Demonstration Authority. For demonstration authority that expires prior to
the demonstration’s expiration date, the State must submit a transition plan to CMS no
later than six months prior to the applicable demonstration authority’s expiration date,
consistent with the following requirements:
a. Expiration Requirements. The State must include, at a minimum, in its
demonstration expiration plan the process by which it will notify affected
beneficiaries, the content of said notices (including information on the
beneficiary’s appeal rights), the process by which the State will conduct
administrative reviews of Medicaid eligibility for the affected beneficiaries, and
ensure ongoing coverage for eligible individuals, as well as any community
outreach activities.
b. Expiration Procedures. The State must comply with all notice requirements
found in 42 CFR Sections 431.206, 431.210 and 431.213. In addition, the State
must assure all appeal and hearing rights afforded to demonstration beneficiaries
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Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
as outlined in 42 CFR Sections 431.220 and 431.221. If a demonstration
beneficiary requests a hearing before the date of action, the State must maintain
benefits as required in 42 CFR Section 431.230. In addition, the State must
conduct administrative renewals for all affected beneficiaries in order to
determine if they qualify for Medicaid eligibility under a different eligibility
category as discussed in October 1, 2010, State Health Official Letter #10-008.
c. Federal Public Notice. CMS will conduct a 30-day federal public comment
period consistent with the process outlined in 42 CFR Section 431.416 in order to
solicit public input on the State’s demonstration expiration plan. CMS will
consider comments received during the 30-day period during its review and
approval of the State’s demonstration expiration plan. The State must obtain CMS
approval of the demonstration expiration plan prior to the implementation of the
expiration activities. Implementation of expiration activities must be no sooner
than 14 days after CMS approval of the plan. d. Federal Financial Participation
(FFP): FFP shall be limited to normal closeout costs associated with the
expiration of the demonstration including services and administrative costs of
disenrolling beneficiaries.
13. Withdrawal of Demonstration Authority. CMS reserves the right to amend and
withdraw waivers or expenditure authorities at any time it determines that continuing the
waivers or expenditure authorities would no longer be in the public interest or promote
the objectives of Title XIX, including if federal monitoring of data indicates features of
this demonstration may not adequately incentivize beneficiary participation or are
unlikely to result in improved health outcomes, or that other demonstration features are
not operating as intended. CMS will promptly notify the State in writing of the
determination and the reasons for the amendment and withdrawal, together with the
effective date, and afford the State an opportunity to request a hearing to challenge CMS’
determination prior to the effective date. If a waiver or expenditure authority is
withdrawn or amended, FFP is limited to normal closeout costs associated with
terminating the waiver or expenditure authority, including services and administrative
costs of disenrolling beneficiaries.
14. Adequacy of Infrastructure. The State must ensure the availability of adequate
resources for implementation and monitoring of the demonstration, including education,
outreach, and enrollment; maintaining eligibility systems; compliance with cost sharing
requirements; and reporting on financial and other demonstration components.
15. Public Notice, Tribal Consultation, and Consultation with Interested Parties. The
State must comply with the State Notice Procedures set forth in 59 Fed. Reg. 49249
(September 27, 1994). The State must also comply with the tribal consultation
requirements in section 1902(a)(73) of the Act as amended by section 5006(e) of the
American Recovery and Reinvestment Act (ARRA) of 2009, the implementing
regulations for the Review and Approval Process for Section 1115 demonstrations at 42
CFR Section 431.408, and the tribal consultation requirements contained in the State’s
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Arkansas Works
Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
approved state plan, when any program changes to the demonstration are proposed by the
State.
a. In States with federally recognized Indian tribes consultation must be conducted
in accordance with the consultation process outlined in the July 17, 2001 letter or
the consultation process in the State’s approved Medicaid state plan if that process
is specifically applicable to consulting with tribal governments on waivers (42
CFR Section 431.408(b)(2)).
b. In States with federally recognized Indian tribes, Indian health programs, and/or
Urban Indian organizations, the State is required to submit evidence to CMS
regarding the solicitation of advice from these entities prior to submission of any
demonstration proposal, amendment and/or renewal of this demonstration (42
CFR Section 431.408(b)(3)).
c. The State must also comply with the Public Notice Procedures set forth in 42 CFR
Section 447.205 for changes in statewide methods and standards for setting
payment rates.
16. Federal Financial Participation (FFP). No federal matching for administrative or
service expenditures for this demonstration will take effect until the effective date
identified in the demonstration approval letter.
17. Common Rule Exemption. The state shall ensure that the only involvement of human
subjects in research activities that may be authorized and/or required by this
demonstration is for projects which are conducted by or subject to the approval of CMS,
and that are designed to study, evaluate, or otherwise examine the Medicaid or CHIP
program – including procedures for obtaining Medicaid or CHIP benefits or services,
possible changes in or alternatives to Medicaid or CHIP programs and procedures, or
possible changes in methods or levels of payment for Medicaid benefits or services. The
Secretary has determined that this demonstration as represented in these approved STCs
meets the requirements for exemption from the human subject research provisions of the
Common Rule set forth in 45 CFR 46.101(b)(5).
IV. ARKANSAS WORKS PROGRAM POPULATIONS AFFECTED
The State will use this demonstration to ensure coverage for Arkansas Works eligible
beneficiaries provided primarily through QHPs offered in the individual market instead of the
fee-for-service delivery system that serves the traditional Medicaid population. The State will
provide premium assistance to aid Arkansas Works beneficiaries in enrolling in coverage
through QHPs in the Marketplace.
18. Populations Affected by the Arkansas Works Demonstration. Except as described in
STCs 19 and 20, the Arkansas Works demonstration affects adults aged 19 through 64
eligible under the state plan under 1902(a)(10)(A)(i)(VIII) of the Act, 42 CFR Section
435.119. Eligibility and coverage for Arkansas Works beneficiaries is subject to all
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Arkansas Works
Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
applicable Medicaid laws and regulations in accordance with the Medicaid state plan,
except as expressly waived in this demonstration and as described in these STCs. Any
Medicaid state plan amendments to this eligibility group, including the conversion to a
modified adjusted gross income (MAGI) standard on January 1, 2014, will apply to this
demonstration.
Table 1. Eligibility Groups
Medicaid State Plan
Mandatory Groups
Federal Poverty Level
Funding Stream
Expenditure and
Eligibility Group
Reporting
New Adult Group
This group includes
adults up to and
including 133 percent
of the FPL who meet
the other criteria
specified in Section
1902(a)(
10)(A)(i)(VIlI) of the
Social Security Act
Title XIX
MEG - 1
19. Medically Frail Individuals. Arkansas has instituted a process to determine whether a
beneficiary is medically frail. The process is described in the Alternative Benefit state
plan. Beneficiaries excluded from enrolling in QHPs through the Arkansas Works as a
result of a determination of medical frailty as that term is defined above will have the
option of receiving direct coverage through the state of either the same ABP offered to
the beneficiaries or an ABP that includes all benefits otherwise available under the
approved Medicaid state plan (the standard Medicaid benefit package). Direct coverage
will be provided through a fee- for- service (FFS) system.
20. American Indian/Alaska Native Individuals. Beneficiaries identified as American
Indian or Alaskan Native (AI/AN) will not be required to enroll in QHPs in this
demonstration, but can choose to opt into a QHP. New applicants will be subject to
provisions of STC 21 and coverage will begin 30 days prior to the date an application is
submitted for coverage. Beneficiaries who are AI/AN and who have not opted into a
QHP will receive the ABP through a fee for service (FFS) system. An AI/AN beneficiary
will be able to access covered benefits through Indian Health Service (IHS), Tribal or
Urban Indian Organization (collectively, I/T/U) facilities funded through the IHS. Under
the Indian Health Care Improvement Act (IHCIA), I/T/U facilities are entitled to payment
notwithstanding network restrictions.
21. Retroactive Eligibility. The state will provide coverage effective 30 days prior to the
date of submitting an application for coverage for beneficiaries in table 1.
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Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
V. ARKANSAS WORKS PREMIUM ASSISTANCE ENROLLMENT
22. Arkansas Works. For Arkansas Works beneficiaries, except as noted in STCs 19 and 20,
enrollment in a QHP is a condition of receiving benefits.
23. Notices. Arkansas Works beneficiaries will receive a notice or notices from Arkansas
Medicaid or its designee advising them of the following:
a. QHP Plan Selection. The notice will include information regarding how Arkansas
Works beneficiaries can select a QHP and information on the State’s auto-
assignment process in the event that the beneficiary does not select a plan.
b. State Premiums and Cost-Sharing. The notice will include information about the
beneficiary’s premium and cost-sharing obligations, if any, as well as the
quarterly cap on premiums and cost-sharing.
c. Access to Services until QHP Enrollment is Effective. The notice will include the
Medicaid client identification number (CIN) and information on how
beneficiaries can use the CIN number to access services until their QHP
enrollment is effective.
d. Wrapped Benefits. The notice will also include information on how beneficiaries
can access wrapped benefits. The notice will include specific information
regarding services that are covered directly through fee-for-service Medicaid and
what phone numbers to call or websites to visit to access wrapped services.
e. Appeals. The notice will also include information regarding the grievance and
appeals process.
f. Identification of Medically Frail. The notice will include information describing
how Arkansas Works beneficiaries who believe they are medically frail can
request a determination of whether they are exempt from the ABP. The notice will
also include alternative benefit plan options.
g. Timely and adequate notice concerning adverse actions. The notice must give
beneficiaries timely and adequate notice of proposed action to terminate,
discontinue, or suspend their eligibility or to reduce or discontinue services they
may receive under Medicaid in accordance with 42 CFR 435.919.
24. QHP Selection. The QHPs in which Arkansas Works beneficiaries enroll are certified
through the Arkansas Insurance Department’s QHP certification process. The QHPs
available for selection by the beneficiary are determined by the Medicaid agency.
25. Auto-assignment. In the event that an beneficiary is determined eligible for coverage
through the Arkansas Works QHP premium assistance program, but does not select a
plan, the State will auto-assign the beneficiary to one of the available QHPs in the
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Amended: March 17, 2021
beneficiary’s rating area. Beneficiaries who are auto-assigned will be notified of their
assignment, and the effective date of QHP enrollment, and will be given a thirty-day
period from the date of enrollment to request enrollment in another plan.
26. Distribution of Members Auto-assigned. Arkansas Works QHP auto-assignments will
be distributed among QHP issuers in good standing with the Arkansas Insurance
Department offering certified silver-level QHPs certified by the Arkansas Insurance
Department.
27. Changes to Auto-assignment Methodology. The state will advise CMS prior to
implementing a change to the auto-assignment methodology.
28. Disenrollment. Beneficiaries may be disenrolled from the demonstration if they are
determined to be medically frail after they were previously determined eligible.
VI. PREMIUM ASSISTANCE DELIVERY SYSTEM
29. Memorandum of Understanding for QHP Premium Assistance. The Arkansas
Department of Human Services and the Arkansas Insurance Department have entered
into a memorandum of understanding (MOU) with each QHP that enrolls beneficiaries.
Areas to be addressed in the MOU include, but are not limited to:
a. Enrollment of beneficiaries in populations covered by the demonstration;
b. Payment of premiums and cost-sharing reductions, including the process for
collecting and tracking beneficiary premiums;
c. Reporting and data requirements necessary to monitor and evaluate the Arkansas
Works including those referenced in STC 74, ensuring beneficiary access to
EPSDT and other covered benefits through the QHP;
d. Requirement for QHPs to provide, consistent with federal and state laws, claims
and other data as requested to support state and federal evaluations, including any
corresponding state arrangements needed to disclose and share data, as required
by 42 CFR 431.420(f)(2), to CMS or CMS’ evaluation contractors.
e. Noticing requirements; and
f. Audit rights.
30. Qualified Health Plans. The State will use premium assistance to support the purchase
of coverage for Arkansas Works beneficiaries through Marketplace QHPs.
31. Choice of QHPs. Each Arkansas Works beneficiary required to enroll in a QHP will
have the option to choose between at least two silver plans covering only Essential Health
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Amended: March 17, 2021
Benefits that are offered in the individual market through the Marketplace. The State will
pay the full cost of QHP premiums.
a. Arkansas Works beneficiaries will be able to choose from at least two silver plans
covering only Essential Health Benefits that are in each rating area of the State.
b. Arkansas Works beneficiaries will be permitted to choose among all silver plans
covering only Essential Health Benefits that are offered in their geographic area
and that meet the purchasing guidelines established by the State in that year, and
thus all Arkansas Works beneficiaries will have a choice of at least two QHPs.
c. The State will comply with Essential Community Provider network requirements,
as part of the QHP certification process.
d. Arkansas Works beneficiaries will have access to the same networks as other
beneficiaries enrolling in QHPs through the individual Marketplace.
32. Coverage Prior to Enrollment in a QHP. The State will provide coverage through fee-
for-service Medicaid from the date a beneficiary is determined eligible until the
beneficiary’s enrollment in the QHP becomes effective.
a. For beneficiaries who enroll in a QHP (whether by selecting the QHP or through
auto-assignment) between the first and fifteenth day of a month, QHP coverage
will become effective as of the first day of the month following QHP enrollment.
b. For beneficiaries who enroll in a QHP (whether by selecting the QHP or through
auto-assignment) between the sixteenth and last day of a month, QHP coverage
will become effective as of the first day of the second month following QHP
selection (or auto-assignment).
33. Family Planning. If family planning services are accessed at a facility that the QHP
considers to be an out-of-network provider, the State’s fee-for-service Medicaid program
will cover those services.
34. NEMT. Non-emergency medical transport services will be provided through the State’s
fee-for-service Medicaid program. See STC 41 for further discussion of non-emergency
medical transport services.
VII. BENEFITS
35. Arkansas Works Benefits. Beneficiaries affected by this demonstration will receive
benefits as set forth in section 1905(y)(2)(B) of the Act and codified at 42 CFR Section
433.204(a)(2). These benefits are described in the Medicaid state plan.
36. Alternative Benefit Plan. The benefits provided under an alternative benefit plan for the
new adult group are reflected in the State ABP state plan.
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37. Medicaid Wrap Benefits. The State will provide through its fee-for-service system
wrap-around benefits that are required for the ABP but not covered by QHPs. These
benefits include non-emergency transportation and Early Periodic Screening Diagnosis
and Treatment (EPSDT) services for beneficiaries participating in the demonstration who
are under age 21.
38. Access to Wrap Around Benefits. In addition to receiving an insurance card from the
applicable QHP issuer, Arkansas Works beneficiaries will have a Medicaid CIN through
which providers may bill Medicaid for wrap-around benefits. The notice containing the
CIN will include information about which services Arkansas Works beneficiaries may
receive through fee-for-service Medicaid and how to access those services. This
information is also posted on Arkansas Department of Human Service’s Medicaid
website and will be provided through information at the Department of Human Service’s
call centers and through QHP issuers.
39. Early and Periodic Screening, Diagnosis, and Treatment (EPSDT). The State must
fulfill its responsibilities for coverage, outreach, and assistance with respect to EPSDT
services that are described in the requirements of sections 1905(a)(4)(b) (services),
1902(a)(43) (administrative requirements), and 1905(r) (definitions).
40. Access to Federally Qualified Health Centers and Rural Health Centers. Arkansas
Works beneficiaries will have access to at least one QHP in each service area that
contracts with at least one FQHC and RHC.
41. Access to Non-Emergency Medical Transportation. The state will establish prior
authorization for NEMT in the ABP. Beneficiaries served by IHS or Tribal facilities and
medically frail beneficiaries will be exempt from such requirements.
42. Incentive Benefits. To the extent an amendment is approved by CMS, Arkansas will
offer an additional benefit not otherwise provided under the Alternative Benefit Plan for
Arkansas Works beneficiaries who make timely premium payments (if above 100 percent
FPL) and engage with a primary care provider (PCP). Arkansas Works beneficiaries with
incomes at or below 100 percent FPL and others who are exempt from premiums will be
eligible for an incentive benefit at the time the amendment is approved.
VIII. PREMIUMS & COST SHARING
43. Premiums & Cost Sharing. Cost sharing for Arkansas Works beneficiaries must be in
compliance with federal requirements that are set forth in statute, regulation and policies,
including exemptions from cost-sharing set forth in 42 CFR Section 447.56(a).
44. Premiums & Cost Sharing Parameters for the Arkansas Works Program. With the
approval of this demonstration:
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a. Beneficiaries up to and including 100 percent of the FPL will have no cost
sharing.
b. Beneficiaries above 100 percent of the FPL will have cost sharing consistent with
Medicaid requirements.
c. Beneficiaries above 100 percent of the FPL will be required to pay monthly
premiums of up to 2 percent of household income.
d. Premiums and cost-sharing will be subject to an aggregate cap of no more than 5
percent of family monthly or quarterly income.
e. Cost sharing limitations described in 42 CFR 447.56(a) will be applied to all
program beneficiaries.
f. Copayment and coinsurance amounts will be consistent with federal requirements
regarding Medicaid cost sharing and with the state’s approved state plan;
premium, copayment, and coinsurance amounts are listed in Attachment B.
45. Payment Process for Payment of Cost Sharing Reduction to QHPs. Agreements with
QHP issuers may provide for advance monthly cost-sharing reduction (CSR) payments to
cover the costs associated with the reduced cost sharing for Arkansas Works
beneficiaries. Such payments will be subject to reconciliation at the conclusion of the
benefit year based on actual expenditures by the QHP for cost sharing reduction. If a
QHP issuer’s actuary determines during the benefit year that the estimated advance CSR
payments are significantly different than the CSR payments the QHP issuer will be
entitled to during reconciliation, the QHP issuer may ask Arkansas’ Department of
Human Services to adjust the advance payments. Arkansas’ reconciliation process will
follow 45 CFR Section 156.430 to the extent applicable.
46. Grace Period/Debt Collection. Arkansas Works beneficiaries will have two months
from the date of the payment invoice to make the required monthly premium
contribution. Arkansas and/or its vendor may attempt to collect unpaid premiums and the
related debt from beneficiaries, but may not report the debt to credit reporting agencies,
place a lien on an individual’s home, refer the case to debt collectors, file a lawsuit, or
seek a court order to seize a portion of the individual’s earnings for beneficiaries at any
income level. The state and/or its vendor may not “sell” the debt for collection by a third
party.
IX. APPEALS
47. Beneficiary safeguards of appeal rights will be provided by the State, including fair
hearing rights. No waiver will be granted related to appeals. The State must ensure
compliance with all federal and State requirements related to beneficiary appeal rights.
Pursuant to the Intergovernmental Cooperation Act of 1968, the State has submitted a
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state plan amendment delegating certain responsibilities to the Arkansas Insurance
Department.
X. GENERAL REPORTING REQUIREMENTS
48. Deferral for Failure to Submit Timely Demonstration Deliverables. The state agrees
that CMS may issue deferrals in the amount of $5,000,000 (federal share) per deliverable
when items required by these STCs (e.g., required data elements, analyses, reports,
design documents, presentations, and other items specified in these STCs (hereafter
singly or collectively referred to as “deliverable(s)”) are not submitted timely to CMS or
are found to not be consistent with the requirements approved by CMS.
a. Thirty (30) days after the deliverable was due, CMS will issue a written
notification to the state providing advance notification of a pending deferral for
late or non-compliant submissions of required deliverables.
b. For each deliverable, the state may submit a written request for an extension in
which to submit the required deliverable. Extension requests that extend beyond
the fiscal quarter in which the deliverable was due must include a Corrective
Action Plan (CAP).
i. CMS may decline the extension request.
ii. Should CMS agree in writing to the state’s request, a corresponding
extension of the deferral process described below can be provided.
iii. If the state’s request for an extension includes a CAP, CMS may
agree to or further negotiate the CAP as an interim step before
applying the deferral.
c. The deferral would be issued against the next quarterly expenditure report
following the written deferral notification.
d. When the state submits the overdue deliverable(s) that are accepted by CMS, the
deferral(s) will be released.
e. As the purpose of a section 1115 demonstration is to test new methods of
operation or service delivery, a state’s failure to submit all required reports,
evaluations and other deliverables may preclude a state from renewing a
demonstration or obtaining a new demonstration.
f. CMS will consider with the state an alternative set of operational steps for
implementing the intended deferral to align the process with the state’s existing
deferral process, for example the structure of the state request for an extension,
what quarter the deferral applies to, and how the deferral is released.
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49. Post Award Forum. Pursuant to 42 CFR 431.420(c), within six months of the
demonstration’s implementation, and annually thereafter, the state shall afford the public
with an opportunity to provide meaningful comment on the progress of the
demonstration. At least 30 days prior to the date of the planned public forum, the state
must publish the date, time and location of the forum in a prominent location on its
website. Pursuant to 42 CFR 431.420(c),the state must include a summary of the
comments in the Quarterly Report associated with the quarter in which the forum was
held, as well as in its compiled Annual Report.
50. Electronic Submission of Reports. The state shall submit all required plans and reports
using the process stipulated by CMS, if applicable.
51. Compliance with Federal Systems Innovation. As federal systems continue to evolve
and incorporate 1115 demonstration reporting and analytics, the state will work with
CMS to:
a. Revise the reporting templates and submission processes to accommodate timely
compliance with the requirements of the new systems;
b. Ensure all 1115, T-MSIS, and other data elements that have been agreed to are
provided; and
c. Submit the monitoring reports and evaluation reports to the appropriate system as
directed by CMS.
XI. GENERAL FINANCIAL REQUIREMENTS
This project is approved for Title XIX expenditures applicable to services rendered during the
demonstration period. This section describes the general financial requirements for these
expenditures.
52. Quarterly Expenditure Reports. The State must provide quarterly Title XIX
expenditure reports using Form CMS-64, to separately report total Title XIX
expenditures for services provided through this demonstration under section 1115
authority. CMS shall provide Title XIX FFP for allowable demonstration expenditures,
only as long as they do not exceed the pre-defined limits on the costs incurred, as
specified in section XII of the STCs.
53. Reporting Expenditures under the Demonstration. The following describes the
reporting of expenditures subject to the budget neutrality agreement:
a. Tracking Expenditures. In order to track expenditures under this demonstration,
the State will report demonstration expenditures through the Medicaid and State
Children’s Health Insurance Program Budget and Expenditure System
(MBES/CBES), following routine CMS-64 reporting instructions outlined in
section 2500 and Section 2115 of the SMM. All demonstration expenditures
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subject to the budget neutrality limit must be reported each quarter on separate
forms CMS-64.9 Waiver and/or 64.9P Waiver, identified by the demonstration
project number assigned by CMS (including the project number extension, which
indicates the DY in which services were rendered or for which capitation
payments were made). For monitoring purposes, and consistent with annual CSR
reconciliation, cost settlements must be recorded on the appropriate prior period
adjustment schedules (forms CMS-64.9 Waiver) for the summary line 10B, in lieu
of lines 9 or l0C. For any other cost settlements (i.e., those not attributable to this
demonstration), the adjustments should be reported on lines 9 or 10C, as
instructed in the SMM. The term, “expenditures subject to the budget neutrality
limit,” is defined below in STC 67.
b. Cost Settlements. For monitoring purposes, and consistent with annual CSR
reconciliation, cost settlements attributable to the demonstration must be recorded
on the appropriate prior period adjustment schedules (forms CMS-64.9P Waiver)
for the summary sheet sine 10B, in lieu of lines 9 or 10C. For any cost settlement
not attributable to this demonstration, the adjustments should be reported as
otherwise instructed in the SMM.
c. Premium and Cost Sharing Contributions. Premiums and other applicable cost
sharing contributions from beneficiaries that are collected by the state from
beneficiaries under the demonstration must be reported to CMS each quarter on
Form CMS-64 summary sheet line 9.D, columns A and B. In order to assure that
these collections are properly credited to the demonstration, premium and cost-
sharing collections (both total computable and federal share) should also be
reported separately by DY on the form CMS-64 narrative. In the calculation of
expenditures subject to the budget neutrality expenditure limit, premium
collections applicable to demonstration populations will be offset against
expenditures. These section 1115 premium collections will be included as a
manual adjustment (decrease) to the demonstration’s actual expenditures on a
quarterly basis.
d. Pharmacy Rebates. Pharmacy rebates are not considered here as this program is
not eligible.
e. Use of Waiver Forms for Medicaid. For each DY, separate Forms CMS-64.9
Waiver and/or 64.9P Waiver shall be submitted reporting expenditures for
individuals enrolled in the demonstration, subject to the budget neutrality limit
(Section XII of these STCs). The State must complete separate waiver forms for
the following eligibility groups/waiver names:
i. MEG 1 - “New Adult Group”
f. The first Demonstration Year (DY1) will begin on January 1, 2014. Subsequent
DYs will be defined as follows:
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Table 2Demonstration Populations
Demonstration
Year 1 (DY1)
January 1, 2014
12 months
Demonstration
Year 2 (DY2)
January 1, 2015
12 months
Demonstration
Year 3 (DY3)
January 1, 2016
12 months
Demonstration
Year 4 (DY4)
January 1, 2017
12 months
Demonstration
Year 5 (DY5)
January 1, 2018
12 months
Demonstration
Year 6 (DY6)
January 1, 2019
12 months
Demonstration
Year 7 (DY7)
January 1, 2020
12 months
Demonstration
Year 8 (DY8)
January 1, 2021
12 months
54. Administrative Costs. Administrative costs will not be included in the budget neutrality
limit, but the State must separately track and report additional administrative costs that
are directly attributable to the demonstration, using Forms CMS-64.10 Waiver and/or
64.10P Waiver, with waiver name Local Administration Costs (“ADM”).
55. Claiming Period. All claims for expenditures subject to the budget neutrality limit
(including any cost settlements resulting from annual reconciliation) must be made within
2 years after the calendar quarter in which the State made the expenditures. Furthermore,
all claims for services during the demonstration period (including any cost settlements)
must be made within 2 years after the conclusion or termination of the demonstration.
During the latter 2-year period, the State must continue to identify separately net
expenditures related to dates of service during the operation of the section 1115
demonstration on the Form CMS-64 and Form CMS-21 in order to properly account for
these expenditures in determining budget neutrality.
56. Reporting Member Months. The following describes the reporting of member months
for demonstration populations:
a. For the purpose of calculating the budget neutrality expenditure cap and for other
purposes, the State must provide to CMS, as part of the quarterly report required
under STC 82, the actual number of eligible member months for the
demonstration populations defined in STC 18. The State must submit a statement
accompanying the quarterly report, which certifies the accuracy of this
information. To permit full recognition of “in-process” eligibility, reported counts
of member months may be subject to revisions after the end of each quarter.
Member month counts may be revised retrospectively as needed.
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b. The term “eligible member months” refers to the number of months in which
persons are eligible to receive services. For example, a person who is eligible for
three months contributes three eligible member months to the total. Two
individuals who are eligible for two months each contribute two eligible member
months to the total, for a total of four eligible member months.
57. Standard Medicaid Funding Process. The standard Medicaid funding process must be
used during the demonstration. The State must estimate matchable demonstration
expenditures (total computable and federal share) subject to the budget neutrality
expenditure cap and separately report these expenditures by quarter for each federal fiscal
year on the Form CMS-37 for both the Medical Assistance Payments (MAP) and State
and Local Administration Costs (ADM). CMS will make federal funds available based
upon the State’s estimate, as approved by CMS. Within 30 days after the end of each
quarter, the State must submit the Form CMS-64 quarterly Medicaid expenditure report,
showing Medicaid expenditures made in the quarter just ended. The CMS will reconcile
expenditures reported on the Form CMS-64 quarterly with federal funding previously
made available to the State, and include the reconciling adjustment in the finalization of
the grant award to the State.
58. Extent of FFP for the Demonstration. Subject to CMS approval of the source(s) of the
non-federal share of funding, CMS will provide FFP at the applicable federal matching
rate for the demonstration as a whole as outlined below, subject to the limits described in
STC 59:
a. Administrative costs, including those associated with the administration of the
demonstration.
b. Net expenditures and prior period adjustments of the Medicaid program that are
paid in accordance with the approved State plan.
c. Medical Assistance expenditures made under section 1115 demonstration
authority, including those made in conjunction with the demonstration, net of
enrollment fees, cost sharing, pharmacy rebates, and all other types of third party
liability or CMS payment adjustments.
59. Sources of Non-Federal Share. The State must certify that the matching non-federal
share of funds for the demonstration is state/local monies. The State further certifies that
such funds shall not be used as the match for any other federal grant or contract, except as
permitted by law. All sources of non-federal funding must be compliant with section
1903(w) of the Act and applicable regulations. In addition, all sources of the non-federal
share of funding are subject to CMS approval.
a. CMS may review the sources of the non-federal share of funding for the
demonstration at any time. The State agrees that all funding sources deemed
unacceptable by CMS shall be addressed within the time frames set by CMS.
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b. Any amendments that impact the financial status of the program shall require the
State to provide information to CMS regarding all sources of the non-federal
share of funding.
c. The State assures that all health care-related taxes comport with section 1903(w)
of the Act and all other applicable federal statutory and regulatory provisions, as
well as the approved Medicaid State plan.
60. State Certification of Funding Conditions. The State must certify that the following
conditions for non-federal share of demonstration expenditures are met:
a. Units of government, including governmentally operated health care providers,
may certify that State or local tax dollars have been expended as the non-federal
share of funds under the demonstration.
b. To the extent the State utilizes certified public expenditures (CPEs) as the funding
mechanism for Title XIX (or under section 1115 authority) payments, CMS must
approve a cost reimbursement methodology. This methodology must include a
detailed explanation of the process by which the State would identify those costs
eligible under Title XIX (or under section 1115 authority) for purposes of
certifying public expenditures.
c. To the extent the State utilizes CPEs as the funding mechanism to claim federal
match for payments under the demonstration, governmental entities to which
general revenue funds are appropriated must certify to the State the amount of
such tax revenue (State or local) used to satisfy demonstration expenditures. The
entities that incurred the cost must also provide cost documentation to support the
State’s claim for federal match.
d. The State may use intergovernmental transfers to the extent that such funds are
derived from State or local tax revenues and are transferred by units of
government within the State. Any transfers from governmentally operated health
care providers must be made in an amount not to exceed the non-federal share of
Title XIX payments.
e. Under all circumstances, health care providers must retain 100 percent of the
reimbursement amounts claimed by the State as demonstration expenditures.
Moreover, no pre-arranged agreements (contractual or otherwise) may exist
between the health care providers and the State and/or local government to return
and/or redirect any portion of the Medicaid payments. This confirmation of
Medicaid payment retention is made with the understanding that payments that
are the normal operating expenses of conducting business (such as payments
related to taxes - including health care provider-related taxes - fees, and business
relationships with governments that are unrelated to Medicaid and in which there
is no connection to Medicaid payments) are not considered returning and/or
redirecting a Medicaid payment.
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XII. MONITORING BUDGET NEUTRALITY FOR THE DEMONSTRATION
61. Limit on Title XIX Funding. The State shall be subject to a limit on the amount of
federal Title XIX funding that the State may receive on selected Medicaid expenditures
during the period of approval of the demonstration. The limit is determined by using the
per capita cost method described in STC 62, and budget neutrality expenditure limits are
set on a yearly basis with a cumulative budget neutrality expenditure limit for the length
of the entire demonstration. The data supplied by the State to CMS to set the annual caps
is subject to review and audit, and if found to be inaccurate, will result in a modified
budget neutrality expenditure limit. CMS’ assessment of the State’s compliance with
these annual limits will be done using the Schedule C report from the CMS-64.
62. Risk. The State will be at risk for the per capita cost (as determined by the method
described below) for demonstration populations as defined in STC 64, but not at risk for
the number of beneficiaries in the demonstration population. By providing FFP without
regard to enrollment in the demonstration populations, CMS will not place the State at
risk for changing economic conditions that impact enrollment levels. However, by
placing the State at risk for the per capita costs of current eligibles, CMS assures that the
demonstration expenditures do not exceed the levels that would have been realized had
there been no demonstration.
63. Calculation of the Budget Neutrality Limit. For the purpose of calculating the overall
budget neutrality limit for the demonstration, separate annual budget limits will be
calculated for each DY on a total computable basis, as described in STC 64 below. The
annual limits will then be added together to obtain a budget neutrality limit for the entire
demonstration period. The federal share of this limit will represent the maximum amount
of FFP that the State may receive during the demonstration period for the types of
demonstration expenditures described below. The federal share will be calculated by
multiplying the total computable budget neutrality limit by the Composite Federal Share,
which is defined in STC 65 below.
64. Demonstration Populations Used to Calculate the Budget Neutrality Limit. For each
DY, separate annual budget limits of demonstration service expenditures will be
calculated as the product of the trended monthly per person cost times the actual number
of eligible/member months as reported to CMS by the State under the guidelines set forth
in STC 73. The trend rates and per capita cost estimates for each Mandatory Enrollment
Group (MEG) for each year of the demonstration are listed in the table below.
Table 3 Per Capita Cost Estimate
MEG
TREND
DY 4 -
PMPM
DY 5 -
PMPM
DY 6 -
PMPM
DY 7 -
PMPM
DY 8 -
PMPM
New Adult
Group
4.7%
$570.50
$597.32
$625.39
$654.79
$685.56
a. If the State’s experience of the take up rate for the new adult group and other
factors that affect the costs of this population indicates that the PMPM limit
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described above in paragraph (a) may underestimate the actual costs of medical
assistance for the new adult group, the State may submit an adjustment to
paragraph (a), along with detailed expenditure data to justify this, for CMS review
without submitting an amendment pursuant to STC 7. Adjustments to the PMPM
limit for a demonstration year must be submitted to CMS by no later than October
1 of the demonstration year for which the adjustment would take effect.
b. The budget neutrality cap is calculated by taking the PMPM cost projection for
the above group in each DY, times the number of eligible member months for that
group and DY, and adding the products together across DYs. The federal share of
the budget neutrality cap is obtained by multiplying total computable budget
neutrality cap by the federal share.
c. The State will not be allowed to obtain budget neutrality “savings” from this
population.
65. Composite Federal Share Ratio. The Composite Federal Share is the ratio calculated by
dividing the sum total of federal financial participation (FFP) received by the State on
actual demonstration expenditures during the approval period, as reported through the
MBES/CBES and summarized on Schedule C (with consideration of additional allowable
demonstration offsets such as, but not limited to, premium collections) by total
computable demonstration expenditures for the same period as reported on the same
forms. Should the demonstration be terminated prior to the end of the extension approval
period (see STC 9), the Composite Federal Share will be determined based on actual
expenditures for the period in which the demonstration was active. For the purpose of
interim monitoring of budget neutrality, a reasonable estimate of Composite Federal
Share may be developed and used through the same process or through an alternative
mutually agreed upon method.
66. Future Adjustments to the Budget Neutrality Expenditure Limit. CMS reserves the
right to adjust the budget neutrality expenditure limit to be consistent with enforcement
of impermissible provider payments, health care related taxes, new federal statutes, or
policy interpretations implemented through letters, memoranda, or regulations with
respect to the provision of services covered under the demonstration.
67. Enforcement of Budget Neutrality. CMS shall enforce budget neutrality over the life of
the demonstration rather than on an annual basis. However, if the State’s expenditures
exceed the calculated cumulative budget neutrality expenditure cap by the percentage
identified below for any of the demonstration years, the State must submit a corrective
action plan to CMS for approval. The State will subsequently implement the approved
corrective action plan.
Table 4 Cap Thresholds
Year
Cumulative target
definition
Percentage
DY 4
Cumulative budget
neutrality limit plus:
0%
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DY 5
Cumulative budget
neutrality limit plus:
0%
DY 6
Cumulative budget
neutrality limit plus:
0%
DY 7
Cumulative budget
neutrality limit plus:
0%
DY 8
Cumulative budget
neutrality limit plus:
0%
68. Exceeding Budget Neutrality. If at the end of the demonstration period the cumulative
budget neutrality limit has been exceeded, the excess federal funds will be returned to
CMS. If the demonstration is terminated prior to the end of the budget neutrality
agreement, an evaluation of this provision will be based on the time elapsed through the
termination date.
69. Impermissible DSH, Taxes or Donations. The CMS reserves the right to adjust the budget
neutrality expenditure limit in order to be consistent with enforcement of impermissible
provider payments, health care related taxes, new federal statutes, or with policy
interpretations implemented through letters, memoranda, or regulations. CMS reserves
the right to make adjustments to the budget neutrality expenditure limit if CMS
determines that any health care-related tax that was in effect during the base year, or
provider-related donation that occurred during the base year, is in violation of the
provider donation and health care related tax provisions of Section 1903(w) of the Act.
Adjustments to the budget neutrality agreement will reflect the phase-out of
impermissible provider payments by law or regulation, where applicable.
XIII. EVALUATION
70. Evaluation Design and Implementation. The State shall submit a draft evaluation
design for Arkansas Works to CMS no later than 120 days after the award of the
demonstration amendment. Such revisions to the evaluation design and the STCs shall
not affect previously established timelines for report submission for the Health Care
Independence Program. The state must submit a final evaluation design within 60 days
after receipt of CMS’ comments. Upon CMS approval of the evaluation design, the state
must implement the evaluation design and submit their evaluation implementation
progress in each of the quarterly and annual progress reports, including the rapid cycle
assessments as outlined in the Monitoring Section of these STCs. The final evaluation
design will be included as an attachment to the STCs. Per 42 CFR 431.424(c), the state
will publish the approved evaluation design within 30 days of CMS approval.
71. Evaluation Budget. A budget for the evaluation shall be provided with the evaluation
design. It will include the total estimated cost, as well as a breakdown of estimated staff,
administrative and other costs for all aspects of the evaluation such as any survey and
measurement development, quantitative and qualitative data collection and cleaning,
analyses, and reports generation. A justification of the costs may be required by CMS if
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the estimates provided do not appear to sufficiently cover the costs of the design or if
CMS finds that the design is not sufficiently developed.
72. Cost-effectiveness. While not the only purpose of the evaluation, the core purpose of the
evaluation is to support a determination as to whether the preponderance of the evidence
about the costs and effectiveness of the Arkansas Works Demonstration using premium
assistance when considered in its totality demonstrates cost effectiveness taking into
account both initial and longer term costs and other impacts such as improvements in
service delivery and health outcomes.
a. The evaluation will explore and explain through developed evidence the
effectiveness of the demonstration for each hypothesis, including total costs in
accordance with the evaluation design as approved by CMS.
b. Included in the evaluation will be examinations using a robust set of measures of
provider access and clinical quality measures under the Arkansas Works
demonstration compared to what would have happened for a comparable
population in Medicaid fee-for-service.
c. The State will compare total costs under the Arkansas Works demonstration to
costs of what would have happened under a traditional Medicaid expansion. This
will include an evaluation of provider rates, healthcare utilization and associated
costs, and administrative expenses over time.
d. The State will compare changes in access and quality to associated changes in
costs within the Arkansas Works. To the extent possible, component contributions
to changes in access and quality and their associated levels of investment in
Arkansas will be determined and compared to improvement efforts undertaken in
other delivery systems.
73. Evaluation Requirements. The demonstration evaluation will meet the prevailing
standards of scientific and academic rigor, as appropriate and feasible for each aspect of
the evaluation, including standards for the evaluation design, conduct, and interpretation
and reporting of findings. The demonstration evaluation will use the best available data;
use controls and adjustments for and reporting of the limitations of data and their effects
on results; and discuss the generalizability of results.
The State shall acquire an independent entity to conduct the evaluation. The evaluation
design shall discuss the State’s process for obtaining an independent entity to conduct the
evaluation, including a description of the qualifications the entity must possess, how the
State will assure no conflict of interest, and a budget for evaluation activities.
74. Evaluation Design. The Evaluation Design shall include the following core components
to be approved by CMS:
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Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
a. Research questions and hypotheses: This includes a statement of the specific
research questions and testable hypotheses that address the goals of the
demonstration. At a minimum, the research questions shall address the goals of
improving access, reducing churning, improving quality of care thereby leading to
enhanced health outcomes, and lowering costs. The research questions will have
appropriate comparison groups and may be studied in a time series. The analyses
of these research questions will provide the basis for a robust assessment of cost
effectiveness.
The following are among the hypotheses to be considered in development of the
evaluation design and will be included in the design as appropriate. Additional
hypotheses relative to the new and revised components of the demonstration will
also be included in the state’s evaluation design.
i. Premium Assistance beneficiaries will have equal or better access to
care, including primary care and specialty physician networks and
services.
ii. Premium Assistance beneficiaries will have equal or better access to
preventive care services.
iii. Premium Assistance beneficiaries will have lower non-emergent
use of emergency room services.
iv. Premium Assistance beneficiaries will have fewer gaps in insurance
coverage.
v. Premium Assistance beneficiaries will maintain continuous access
to the same health plans, and will maintain continuous access to
providers.
vi. Premium Assistance beneficiaries, including those who become
eligible for Exchange Marketplace coverage, will have fewer gaps
in plan enrollment, improved continuity of care, and resultant lower
administrative costs.
vii. Premium Assistance beneficiaries will have lower rates of
potentially preventable emergency department and hospital
admissions.
viii. Premium assistance beneficiaries will report equal or better
satisfaction in the care provided.
ix. Premium Assistance beneficiaries who are young adults eligible for
EPSDT benefits will have at least as satisfactory and appropriate
access to these benefits.
x. Premium Assistance beneficiaries will have appropriate access to
non-emergency transportation.
xi. Premium Assistance will reduce overall premium costs in the
Exchange Marketplace and will increase quality of care.
xii. The cost for covering Premium Assistance beneficiaries will be
comparable to what the costs would have been for covering the
same expansion group in Arkansas Medicaid fee-for-service in
accordance with STC 72 on determining cost effectiveness and
other requirements in the evaluation design as approved by CMS.
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xiii. Incentive benefits offered to Arkansas Works beneficiaries will
increase primary care utilization.
These hypotheses should be addressed in the demonstration reporting described in STC
82 and 83 with regard to progress towards the expected outcomes.
b. Data: This discussion shall include:
i. A description of the data, including a definition/description of the
sources and the baseline values for metrics/measures;
ii. Method of data collection;
iii. Frequency and timing of data collection.
The following shall be considered and included as appropriate:
i. Medicaid encounters and claims data;
ii. Enrollment data; and
iii. Consumer and provider surveys
c. Study Design: The design will include a description of the quantitative and
qualitative study design, including a rationale for the methodologies selected. The
discussion will include a proposed baseline and approach to comparison;
examples to be considered as appropriate include the definition of control and/or
comparison groups or within-subjects design, use of propensity score matching
and difference in differences design to adjust for differences in comparison
populations over time. To the extent possible, the former will address how the
effects of the demonstration will be isolated from those other changes occurring in
the state at the same time through the use of comparison or control groups to
identify the impact of significant aspects of the demonstration. The discussion
will include approach to benchmarking, and should consider applicability of
national and state standards. The application of sensitivity analyses as appropriate
shall be considered
d. Study Population: This includes a clear description of the populations impacted
by each hypothesis, as well as the comparison population, if applicable. The
discussion may include the sampling methodology for the selected population, as
well as support that a statistically reliable sample size is available.
e. Access, Service Delivery Improvement, Health Outcome, Satisfaction and
Cost Measures: This includes identification, for each hypothesis, of quantitative
and/or qualitative process and/or outcome measures that adequately assess the
effectiveness of the demonstration. Nationally recognized measures may be used
where appropriate. Measures will be clearly stated and described, with the
numerator and dominator clearly defined. To the extent possible, the State may
incorporate comparisons to national data and/or measure sets. A broad set of
performance metrics may be selected from nationally recognized metrics, for
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Amended: March 17, 2021
example from sets developed by the Center for Medicare and Medicaid
Innovation, for meaningful use under HIT, and from the Medicaid Core Adult
sets. Among considerations in selecting the metrics shall be opportunities
identified by the State for improving quality of care and health outcomes, and
controlling cost of care.
f. Assurances Needed to Obtain Data: The design report will discuss the State’s
arrangements to assure needed data to support the evaluation design are available.
g. Data Analysis: This includes a detailed discussion of the method of data
evaluation, including appropriate statistical methods that will allow for the effects
of the demonstration to be isolated from other initiatives occurring in the State.
The level of analysis may be at the beneficiary, provider, and program level, as
appropriate, and shall include population stratifications, for further depth.
Sensitivity analyses may be used when appropriate. Qualitative analysis methods
may also be described, if applicable.
h. Timeline: This includes a timeline for evaluation-related milestones, including
those related to procurement of an outside contractor, and the deliverables
outlined in this section. Pursuant to 42 CFR 431.424(c)(v), this timeline should
also include the date by which the final summative evaluation report is due.
i. Evaluator: This includes a discussion of the State’s process for obtaining an
independent entity to conduct the evaluation, including a description of the
qualifications that the selected entity must possess; how the state will assure no
conflict of interest, and a budget for evaluation activities.
j. State additions: The state may provide to CMS any other information pertinent to
the state’s research on the policy operations of the demonstration operations. The
state and CMS may discuss the scope of information necessary to clarify what is
pertinent to the state’s research.
75. Interim Evaluation Report. The state must submit a draft Interim Evaluation Report
one year prior to this renewal period ending December 31, 2021. The Interim Evaluation
Report shall include the same core components as identified in STC 74 for the
Summative Evaluation Report and should be in accordance with the CMS approved
evaluation design. The State shall submit the final Interim Evaluation Report within 30
days after receipt of CMS’ comments. The state will submit an Interim Evaluation Report
for the completed years of the demonstration, and for each subsequent renewal or
extension of the demonstration, as outlined in 42 CFR 431.412(c)(2)(vi). When
submitting an application for renewal, the Interim Evaluation Report should be posted to
the state’s website with the application for public comment. Also refer to Attachment C
for additional information on the Interim Evaluation Report.
a. The Interim Evaluation Report will discuss evaluation progress and present
findings to date as per the approved Evaluation Design.
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b. For demonstration authority that expires prior to the overall demonstration’s
expiration date, the Interim Evaluation Report must include an evaluation of the
authority as approved by CMS.
c. If the state is seeking to renew or extend the demonstration, the draft Interim
Evaluation Report is due when the application for renewal is submitted. If the
state made changes to the demonstration, the research questions, hypotheses and
how the design was adapted should be included. If the state is not requesting a
renewal for a demonstration, an Interim Evaluation report is due one (1) year prior
to the end of the demonstration. For demonstration phase outs prior to the
expiration of the approval period, the draft Interim Evaluation Report is due to
CMS on the date that will be specified in the notice of termination or suspension.
d. The state will submit the final Interim Evaluation Report sixty (60) days after
receiving CMS comments on the draft Interim Evaluation Report and post the
document to the state’s website.
e. The Interim Evaluation Report must comply with Attachment B of these STCs.
76. Summative Evaluation Reports.
a. The state shall provide the summative evaluation reports described below to
capture the different demonstration periods.
i. The state shall provide a Summative Evaluation Report for the
Arkansas Private Option demonstration period September 27, 2013
through December 31, 2016. This Summative Evaluation Report is
due July 1, 2018, i.e., eighteen months following the date by which
the demonstration would have ended except for this extension.
ii. The state shall submit a draft summative evaluation report for the
Arkansas Works demonstration period starting January 1, 2017
through December 31, 2021. The draft summative evaluation report
must be submitted within 18 months of the end of the approved
period (December 31, 2021). The summative evaluation report
must include the information in the approved evaluation design.
a. Unless otherwise agreed upon in writing by CMS, the state
shall submit the final summative evaluation report within
60 days of receiving comments from CMS on the draft.
b. The final summative evaluation report must be posted to
the state’s Medicaid website within 30 days of approval by
CMS.
b. The Summative Evaluation Report shall include the following core components:
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Amended: March 17, 2021
i. Executive Summary. This includes a concise summary of the goals
of the demonstration; the evaluation questions and hypotheses
tested; and key findings including whether the evaluators find the
demonstration to be budget neutral and cost effective, and policy
implications.
ii. Demonstration Description. This includes a description of the
demonstration programmatic goals and strategies, particularly how
they relate to budget neutrality and cost effectiveness.
iii. Study Design. This includes a discussion of the evaluation design
employed including research questions and hypotheses; type of
study design; impacted populations and stakeholders; data sources;
and data collection; analysis techniques, including controls or
adjustments for differences in comparison groups, controls for other
interventions in the State and any sensitivity analyses, and
limitations of the study.
iv. Discussion of Findings and Conclusions. This includes a summary
of the key findings and outcomes, particularly a discussion of cost
effectiveness, as well as implementation successes, challenges, and
lessons learned.
v. Policy Implications. This includes an interpretation of the
conclusions; the impact of the demonstration within the health
delivery system in the State; the implications for State and Federal
health policy; and the potential for successful demonstration
strategies to be replicated in other State Medicaid programs.
vi. Interactions with Other State Initiatives. This includes a
discussion of this demonstration within an overall Medicaid context
and long range planning, and includes interrelations of the
demonstration with other aspects of the State’s Medicaid program,
and interactions with other Medicaid waivers, the SIM award and
other federal awards affecting service delivery, health outcomes and
the cost of care under Medicaid.
77. State Presentations for CMS. The State will present to and participate in a discussion
with CMS on the final design plan, post approval, in conjunction with STC 74. The State
will present on its interim evaluation in conjunction with STC 75. The State will present
on its summative evaluation in conjunction with STC 76.
78. Public Access. The State shall post the final documents (e.g. Quarterly Reports, Annual
Reports, Final Report, approved Evaluation Design, Interim Evaluation Report, and
Summative Evaluation Report) on the State Medicaid website within 30 days of approval
by CMS.
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Amended: March 17, 2021
79. Additional Publications and Presentations. For a period of 24 months following CMS
approval of the Summative Evaluation Report, CMS will be notified prior to the public
release or presentation of these reports and related journal articles, by the State,
contractor or any other third party. Prior to release of these reports, articles and other
documents, CMS will be provided a copy including press materials. CMS will be given
30 days to review and comment on journal articles before they are released. CMS may
choose to decline to comment or review some or all of these notifications and reviews.
80. Cooperation with Federal Evaluators. Should CMS undertake an evaluation of the
demonstration or any component of the demonstration, the state shall cooperate timely
and fully with CMS and its contractors. This includes, but is not limited to, submitting
any required data to CMS or the contractor in a timely manner. Failure to cooperate with
federal evaluators in a timely manner, including but not limited to entering into data use
agreements covering data that the state is legally permitted to share, providing a technical
point of contact, providing data dictionaries and record layouts of any data under control
of the state that the state is legally permitted to share, and/or disclosing data may result in
CMS requiring the state to cease drawing down federal funds until satisfactory
cooperation, until the amount of federal funds not drawn down would exceed $5,000,000.
XIV. MONITORING
81. Monitoring Calls. CMS will convene periodic conference calls with the state. The
purpose of these calls is to discuss any significant actual or anticipated developments
affecting the demonstration. CMS will provide updates on any amendments or concept
papers under review, as well as federal policies and issues that may affect any aspect of
the demonstration. The state and CMS will jointly develop the agenda for the calls.
Areas to be addressed include, but are not limited to:
a. Transition and implementation activities;
b. Stakeholder concerns;
c. QHP operations and performance;
d. Enrollment;
e. Cost sharing;
f. Quality of care;
g. Beneficiary access,
h. Benefit package and wrap around benefits;
i. Audits;
j. Lawsuits;
k. Financial reporting and budget neutrality issues;
l. Progress on evaluation activities and contracts;
m. Related legislative developments in the state; and
n. Any demonstration changes or amendments the state is considering.
82. Quarterly Reports. The state must submit three Quarterly Reports and one compiled
Annual Report each DY.
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Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
a. The state will submit the reports following the format established by CMS. All
Quarterly Reports and associated data must be submitted through the designated
electronic system(s). The Quarterly Reports are due no later than 60 days
following the end of each demonstration quarter, and the compiled Annual Report
is due no later than 90 days following the end of the DY.
b. The reports shall provide sufficient information for CMS to understand
implementation progress of the demonstration, including the reports documenting
key operational and other challenges, underlying causes of challenges, how
challenges are being addressed, as well as key achievements and to what
conditions and efforts successes can be attributed.
c. Monitoring and performance metric reporting templates are subject to review and
approval by CMS. Where possible, information will be provided in a structured
manner that can support federal tracking and analysis.
d. The Quarterly Report must include all required elements and should not direct
readers to links outside the report, except if listed in a Reference/Bibliography
section. The reports shall provide sufficient information for CMS to understand
implementation progress and operational issues associated with the demonstration
and whether there has been progress toward the goals of the demonstration.
i. Operational Updates - The reports shall provide sufficient
information to document key operational and other challenges,
underlying causes of challenges, how challenges are being
addressed, as well as key achievements and to what conditions and
efforts successes can be attributed. The discussion should also
include any lawsuits or legal actions; unusual or unanticipated
trends; legislative updates; and descriptions of any public forums
held.
ii. Performance Metrics - Progress on any required monitoring and
performance metrics must be included in writing in the Quarterly
and Annual Reports. Information in the reports will follow the
framework provided by CMS and be provided in a structured
manner that supports federal tracking and analysis.
iii. Budget Neutrality and Financial Reporting Requirements - The
state must provide an updated budget neutrality workbook with
every Quarterly and Annual Report that meets all the reporting
requirements for monitoring budget neutrality set forth in the
General Financial Requirements section of these STCs, including
the submission of corrected budget neutrality data upon request. In
addition, the state must report quarterly expenditures associated
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with the populations affected by this demonstration on the Form
CMS-64.
iv. Evaluation Activities and Interim Findings. The state shall
include a summary of the progress of evaluation activities,
including key milestones accomplished, as well as challenges
encountered and how they were addressed. The state shall specify
for CMS approval a set of performance and outcome metrics and
network adequacy, including their specifications, reporting cycles,
level of reporting (e.g., the state, health plan and provider level, and
segmentation by population) to support rapid cycle assessment in
trends for monitoring and evaluation of the demonstration.
e. The Annual Report must include all items included in the preceding three
quarterly reports, which must be summarized to reflect the operation/activities
throughout the whole DY. All items included in the quarterly report pursuant to
STC 86 must be summarized to reflect the operation/activities throughout the DY.
In addition, the annual report must, at should include the requirements outlined
below.
i. Total annual expenditures for the demonstration population for each
DY, with administrative costs reported separately;
ii. Total contributions, withdrawals, balances, and credits; and,
iii. Yearly unduplicated enrollment reports for demonstration
beneficiaries for each DY (beneficiaries include all individuals
enrolled in the demonstration) that include the member months, as
required to evaluate compliance with the budget neutrality
agreement.
83. Final Report. Within 120 days after the expiration of the demonstration, the state must
submit a draft Close Out Report to CMS for comments.
a. The draft report must comply with the most current guidance from CMS.
b. The state will present to and participate in a discussion with CMS on the Close-
Out report.
c. The state must take into consideration CMS’ comments for incorporation into the
final Close Out Report.
d. The final Close Out Report is due to CMS no later than thirty (30) days after
receipt of CMS’ comments.
e. A delay in submitting the draft or final version of the Close Out Report may
subject the state to penalties described in STC 6.
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ATTACHMENT A
Copayment Amounts
1
General Service Description
Cost Sharing for
Beneficiaries with
Incomes >100%
FPL
Behavioral Health - Inpatient
$60
Behavioral Health - Outpatient
$4
Behavioral Health -
Professional
$4
Durable Medical Equipment
$4
Emergency Room Services
-
FQHC
$8
Inpatient
$60
Lab and Radiology
-
Skilled Nursing Facility
$20
Other
$4
Other Medical Professionals
$4
Outpatient Facility
-
Primary Care Physician
$8
Specialty Physician
$10
Pharmacy - Generics
$4
Pharmacy - Preferred Brand
Drugs
$4
Pharmacy - Non-Preferred
Brand Drugs, including
specialty drugs
$8
No copayments for individuals at or below 100% FPL.
1
Beneficiaries with incomes above 100% FPL will also be required to pay monthly premiums of up to 2 percent of
household income.
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Approval Period: March 5, 2018 through December 31, 2021
Amended: March 17, 2021
ATTACHMENT B
Preparing the Interim and Summative Evaluation Reports
