DPHHS’s update on work requirements raises more red flags

On Monday, March 9, the Department of Public Health and Human Services (DPHHS) provided an update to lawmakers on their upcoming plans to fast track the community engagement, or work reporting, requirements for Montanans enrolled on Medicaid expansion. Most Montanans on expanded Medicaid are already working or face a barrier to work, such as a disability or caregiving responsibilities. Analyses show these types of reporting requirements often result in kicking eligible people off health coverage due to procedural errors and insufficient customer services supports. H.R. 1 will require all states to implement harmful work reporting requirements, effective January 1, 2027. But DPHHS Director Charlie Brereton has said Montana will be an “early adopter,” imposing requirements on the nearly 77,000 Montanans on expanded Medicaid starting July 1, 2026. These new reporting requirements put the health care coverage of thousands of eligible Montanans at risk due to bureaucratic red tape.

Despite the overwhelming public comment from providers, advocates, and enrollees asking the Department to slow down, Director Brereton is barreling ahead with his plan to implement requirements six months earlier than necessary. The Department also provided some new information that raised red flags.

(Want an overview of what the requirements will be and what the state can do to mitigate the harm? Check out our earlier blogs here and here.)

1. DPHHS is not conducting the four months of notice to enrollees as required in federal law. H.R. 1 requires states to conduct outreach to enrollees subject to work requirements. For Montana, that outreach must begin at least four months before the requirements go into effect. For a July 1 timeline, that outreach should have started March 1. DPHHS acknowledged that it has not yet begun that outreach and is aiming to send enrollees notification by March 31, leaving just three months of time for the state to provide information for those impacted by these changes. This is deeply concerning and is in direct conflict with what is required under H.R. 1.

   
   

2. DPHHS says it plans to implement the six-month redetermination early, but this is not allowed. H.R. 1 will require states to redetermine Medicaid expansion eligibility every six months, effective January 1, 2027. DPHHS stated that it would “pull forward” individuals who have their 12-month renewals early next year, and these individuals would be subject to redetermination and the community engagement requirements in the fall of 2026. This is not allowed under current Medicaid law. In fact, CMS issued guidance, confirming that the earliest states can begin a six-month cycle is January 1, 2027. 

   
   

3. DPHHS outreach plans, which appear to include outreach to traditional Medicaid enrollees, could create confusion for those NOT subject to the community engagement requirements.  DPHHS’s slides set out the timeline for notification and seems to indicate that this outreach will include both the Medicaid expansion population (who are subject to community engagement requirements) and some or all of those on traditional Medicaid (who are not subject). While DPHHS did not provide additional clarity on this point, it raises significant concerns about who may receive notification and could create confusion on who must meet these requirements and who does not.

   
   

4. DPHHS provided little detail on the state’s timeline to submit its plan to the federal agency or the timeline for state rulemaking. To implement these changes, the state will need to submit a Medicaid State Plan Amendment (SPA) to the federal Centers for Medicare and Medicaid Services (CMS). DPHHS stated it was working on the SPA now, but it provided little information on the timeline. The state confirmed that it will also need to do rulemaking, to provide more detail on the exemptions and compliance process, but the exact timing of that was unclear. The fact that the federal CMS has not yet provided its own guidance to states on the work requirements is yet another complication in Montana’s effort to fast track these requirements.   

   
   

5. DPHHS will implement a “hold harmless” period without disenrollment for the first three months, but the details are fuzzy. DPHHS stated that for renewals and new applications taking place in July, August, and September, these individuals would receive an “informational notice/warning” of noncompliance but would not be subject to disenrollment or application denial. This is a positive step, to protect coverage for the first few months while systems are starting up.

   
   

   Starting in October, enrollees who are out of compliance and not exempt would be subject to the disenrollment procedure. The slides set out the timeline, but it isn’t clear when an enrollee might expect to receive notification of noncompliance, when the 30-day clock to respond starts, or when the 10-day advance notice/fair hearing would take place.

   
   

6. Despite a lot of requests from stakeholders, there is little information about provider outreach/coordination. The slides indicate DPHHS will do a training for community partners, but otherwise, there is not a lot of information on how DPHHS intends to coordinate with providers and stakeholders who are working directly with enrollees. Communication and coordination with providers and community partners is essential to ensure Montana Medicaid enrollees have the information they need to protect their health care coverage.

DPHHS’s implementation plans are problematic, and these updates continue to raise red flags about how the state will proceed with these new federal requirements and the risk of coverage loss for thousands of Montanans. It is imperative that the state provide clarity in its plans, comply with federal guidance, and communicate with enrollees and providers.