Medicaid Work Requirements Are Coming. Here's What FQHCs Should Do Before January.

Medicaid Work Requirements Are Coming. Here's What FQHCs Should Do Before January.

On June 1, CMS published the Interim Final Rule on Medicaid community engagement requirements, setting the standards states must follow to enforce what are widely called work requirements. The rule was required under the One Big Beautiful Bill Act, signed last July. Most states have a hard deadline of January 1, 2027. A few are already enforcing earlier.

For health centers, this is worth getting ahead of now rather than waiting until fall. Work requirements will change who comes through your door with coverage, shift patients into your sliding fee scale, and add new demands on care coordination staff. The organizations that work through the operational details now will be better positioned when January arrives.

What the rule actually requires

Non-pregnant adults ages 19 to 64 in the Medicaid expansion population must complete at least 80 hours per month of qualifying activities — employment, job training, community service, or at least half-time educational enrollment — to maintain eligibility.

Exemptions exist for caregivers, people with qualifying medical conditions, and several other categories. But applying for an exemption means navigating state eligibility systems that are already under significant strain. Health policy researchers have flagged a consistent concern: many enrollees who are working and fully eligible will still lose coverage because the administrative burden of proving compliance is too high. Some of that burden will land with your care coordination team.

States are required to conduct outreach to affected members between June 30 and August 31. Enrollees who don't comply or successfully apply for an exemption after that window risk disenrollment.

The comment period closes July 31

The public comment period for the Interim Final Rule closes July 31, 2026. FQHCs and state Primary Care Associations can formally weigh in on implementation standards, exemption accessibility, and the risk of administrative disenrollment among eligible patients. It is worth a conversation with your PCA before that deadline.

CMS Fact Sheet: https://www.cms.gov/newsroom/fact-sheets/medicaid-community-engagement-requirement-certain-individuals-interim-final-rule-comment-period-cms

Why this hits health centers hard

Medicaid accounts for roughly 43% of health center revenue nationally. Federal grant funding held essentially flat between 2019 and 2023, while operating costs climbed more than 25% over the same period. A lot of health centers are already running on thin or negative margins.

Work requirements will not simply reduce your Medicaid-covered patient count. They will move some of those patients into your self-pay and uninsured categories, meaning more sliding fee scale visits and less revenue to cover the same volume of services. This comes on top of a 4.9% drop in ACA Marketplace enrollment in 2026 following the expiration of enhanced premium tax credits — so coverage losses are arriving from more than one direction at once.

Read more: https://kffhealthnews.org/health-industry/community-health-centers-government-shutdown-state-cuts-funding-risks/

Key dates

June 1, 2026 — CMS Interim Final Rule published; comment period opens
June 30 – August 31, 2026 — States required to conduct member outreach
July 31, 2026 — Public comment period closes
October 1, 2026 — State progress reporting to CMS begins
January 1, 2027 — Work requirements go live in most states

Note: Nebraska began enforcing May 1. Montana targets July 1. Iowa goes December 1. Know your state's timeline.

State-by-state tracker: https://www.kff.org/medicaid/an-early-look-at-policy-decisions-as-states-get-ready-to-implement-work-requirements/

Seven things to do now

1. Map your Medicaid expansion patient panel. Pull a report of patients ages 19 to 64 enrolled in the expansion population. Knowing the size and demographics of that group is the starting point for everything else.
2. Train front desk and care coordination staff on exemption categories. Many patients will qualify — caregivers, those with medical conditions, and others — but only if someone helps them navigate the process. Your team is often the most trusted point of contact they have.
3. Submit public comments before July 31. Work with your state PCA to file formal comments, particularly around documentation burden, exemption accessibility, and the risk of losing eligible patients through administrative complexity.
4. Know your state's exact timeline. Enforcement dates vary. If you're near a state line or serve a mobile patient population, the variation matters more than you might expect.
5. Build a documentation workflow before January. Patients will need to submit proof of qualifying activities monthly. Design a process now, whether that's a handout, a patient portal workflow, or a referral pathway, so your team isn't creating it under pressure.
6. Partner with local workforce and social service agencies. Patients who aren't currently working or enrolled in school will need pathways to qualifying activities. Building those referral relationships now means you can connect patients before they lose coverage rather than after.
7. Model your uncompensated care exposure. Even a modest shift in your Medicaid-to-uninsured ratio will put pressure on your sliding fee scale and operating margins. Run a scenario or two so your board and finance team understand the range before it shows up in the numbers.