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红领巾瓜报 Insights鈥攊ncluding briefs, webinars, and our podcast鈥攇ives you easy access to 红领巾瓜报鈥檚 deep expertise, helping you stay current on the latest healthcare trends and topics. Search for a topic of interest or browse the latest insights below.

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Blog

Rewriting the Playbook: State Budgeting in the Era of OBBBA

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As of October 22, 2025, all but two states鈥擭orth Carolina and Pennsylvania鈥攈ad enacted budgets covering fiscal year (FY) 2026, even as the federal landscape has shifted dramatically throughout the year. In particular, passage of the 2025 Budget Reconciliation Act (OBBBA) and the ongoing federal budget impasse are creating significant downstream pressures on state budgets and the programs they support.

A new report from  (红领巾瓜报IS) examines enacted state budgets. Of the 48 enacted budgets, 16 cover the 2025鈥�27 biennium, and three states鈥擪entucky, Virginia, and Wyoming鈥攁pproved budgets in 2024 for the FY 2024鈥�26 biennium.

The 红领巾瓜报IS report highlights state Medicaid funding priorities, initiatives states are pursuing to adapt to new federal Medicaid and other healthcare policy changes, and reforms to strengthen and ensure the sustainability of programs, particularly in states that expect a reduction in the federal share of their Medicaid program.

OBBBA鈥檚 Impact on State Budgets

Congress has yet to reach agreement on the federal fiscal year 2026 spending bills, and there are emerging signals of the challenges this impasse will create for states and federally funded public services. For example, this week the US Department of Agriculture鈥檚 Food and Nutrition Service notified every state that Supplemental Nutrition Assistance Program (SNAP) benefits will be withheld because of the funding lapse. This unprecedented situation puts immediate pressure on states and community organizations, which may need to intervene to fill gaps in essential services and benefits.

In addition to the funding impasse, OBBBA introduces major changes, particularly for the Medicaid program, including:

  • Medicaid Community Engagement/Work Requirements: All states must implement these requirements for certain Medicaid members by December 31, 2026, requiring rapid infrastructure and system changes.
  • Eligibility and Redetermination: States must conduct Medicaid eligibility redeterminations every six months for expansion populations, with new verification requirements and narrowed definitions for 鈥渜ualified鈥� immigrants. States will need to pressure test their systems for increased volume and may need additional capacity to prevent and minimize backlogs.
  • Cost Sharing: By 2028, states must apply a cost sharing requirement for Medicaid expansion adults with incomes above 100 percent of the federal poverty level, with some service exemptions. In 2026, states will need to begin efforts to ensure their systems can track this requirement.
  • Provider Taxes and Payments: Freezes on provider tax programs, phased reductions in allowable tax rates, and caps on state-directed payments will reduce flexibility and funding.

In addition, the Rural Health Transformation Program and new federal drug pricing initiatives present both opportunities, such as new funding streams, and risks, including administrative complexity and compliance expectations.

Given the scope of federal changes, states face urgent decisions. They must quickly assess and act on these opportunities, often without dedicated budget allocations.

These federal changes, combined with the budget impasse, are forcing many states to revisit approved budgets, adapt policies, and plan for new initiatives and revise programs that were already in effect鈥攐ften within short timelines and with limited resources.

State-Level Challenges and Adjustments

Notably, most states enacted their budgets before the passage of OBBBA. As a result, these budgets do not fully account for the new federal requirements, funding changes, and administrative expectations that OBBBA introduces. While many OBBBA provisions will not take effect for at least a year, states must now accelerate planning and make rapid adjustments to comply with new mandates. For example, states are expected to expediently and efficiently implement systems and policies to ensure compliance with OBBBA鈥檚 statutory requirements, particularly for the Medicaid program.

红领巾瓜报IS has examined state budgets that will guide states through the next fiscal year, while also watching closely how they respond to new demands during the first full state legislative cycle under OBBBA.

The 红领巾瓜报IS report describes a mix of budget conditions and actions. Many states continue to invest in ongoing healthcare priorities as well as new initiatives, including targeted rate increases for behavioral health, dental, and maternal health services. In addition, states are addressing inefficiencies in program administration broadly. In healthcare specifically, they are revisiting approaches to financing healthcare service delivery to drive more value from organizations, such as implementing alternative payment models in Medicaid programs, as well as considering tools to improve patient outcomes and consumer experiences.

States are using a variety of tools in their Medicaid budgets to manage these pressures, as well as implementing more general cost-reduction and efficiency measures, including:

  • Special Legislative Sessions.聽Some state legislatures, including Colorado鈥檚 and New Mexico鈥檚, have reconvened to address emerging gaps.
  • Hiring Freezes.聽Several states, including Alaska, Colorado, Maryland, Massachusetts, New Hampshire, and Washington, have announced hiring freezes, which could complicate OBBBA preparation efforts.
  • Pausing or Ending Planned Programs and Benefit Coverage.聽Oregon announced that it will end its juvenile justice Medicaid reentry program to conserve funding. North Carolina will not cover new weight-loss drugs because of its budget shortfall. The 红领巾瓜报IS report indicates that officials in other states also have signaled that they are planning for similar updates to their programs if required to address budget shortfalls.
  • Medicaid Provider Rate Updates.聽Colorado rolled back a planned Medicaid provider rate increase, while Idaho is decreasing all Medicaid provider rates by 4 percent.
  • Coalitions and Advisory Groups.聽Other states, including Rhode Island, are convening groups charged with analyzing how the federal cuts may affect their state programs and advising the legislature on feasible responses to the changed landscape.

What to Watch

Healthcare organizations are essential partners as states navigate the current federal budget uncertainty and implement OBBBA requirements. Given the challenges cited above, healthcare organizations should be prepared to collaborate and position to anticipate future needs as the exact components of the various policies are in development.

Recommendations for states and healthcare organizations include:

  • Do not delay planning.聽While federal policymakers are developing guidance and regulations, the OBBBA language provides significant information on what states need to do and initial expectations for reporting. States and their partners should be developing options and contingency plans to make expeditious decisions once details are available.
  • Monitor and anticipate state actions and develop responses that are ready to go if needed. For example, states may need to make rate reductions, limit enrollment for optional programs, and communicate with beneficiaries about new requirements. Partners should plan to adapt to these changes and assist providers and beneficiaries as needed.
  • Prepare for changes in workload.聽States will need to design, develop, implement, and report on new Medicaid eligibility and enrollment requirements. They will need a workforce that is trained and can read into the policies, systems, and related needs. States will expect their partners to collaborate on efficient approaches to meet workload demands.
  • Engage with state officials.聽States need thoughtful partners to manage and implement the forthcoming changes that will affect Medicaid partners and beneficiaries. Healthcare organizations should bring experience and data-informed ideas and input to facilitate state approaches and decision-making.

Connect with Us
With federal funding reductions and ongoing uncertainty at the national level, states need to pay heightened attention to the frontline of essential healthcare and human services, implementation of OBBBA, and means of addressing gaps left by federal delays. As we approach the 2026 election year鈥攚ith many governors up for reelection鈥攕tate budgets will serve as a blueprint for leadership and policy priorities in the next cycle.

红领巾瓜报 is on the frontlines, working with states and healthcare partners to navigate these complexities. 红领巾瓜报 has expertise, tools, and insights鈥攆rom budget contingency planning supports to analysis of public coverage program enrollment and market insights.

The full report is available to 红领巾瓜报IS subscribers. For questions contact聽our experts below.

Podcasts

No Wrong Door: Aligning Hospitals and Community Care for Sustainable Health

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In this episode of Vital Viewpoints on Healthcare, Robert Ross and Warren Brodine from 红领巾瓜报鈥檚 Delivery Systems practice explore how hospitals and community health centers can work together to strengthen access, improve health outcomes, and improve financial sustainability across the healthcare system. Drawing from decades of leadership in safety-net hospitals, FQHCs, and integrated care models, they discuss the real-world challenges of fragmented incentives, payer mix, and regulation and share bold ideas for building a truly interdependent and patient-centered delivery system.

Blog

On the Horizon: Contract Year 2027 Proposed Rule Will Provide Trump Administration First Opportunity to Reshape Medicare Advantage Program

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The Centers for Medicare & Medicaid Services (CMS) is preparing to release the proposed . Rather than incremental tweaks, this rulemaking cycle offers CMS officials the first full opportunity to advance the Trump Administration鈥檚 policy priorities. With sweeping reforms on the horizon, Medicare Advantage (MA) plans that begin aligning their operations now will be positioned to thrive in the new environment.

These reforms arrive at a pivotal juncture for MA. Enrollment, which has climbed steadily over the past decade, is projected to decline from 34.9 million in 2025 to 34 million in 2026 as financial and regulatory pressures prompt some issuers to narrow or exit select markets. Although CMS  stable average premiums and benefits next year, beneficiaries in areas with reduced competition may face fewer plan choices and marginally higher cost sharing. These market shifts are likely to influence the 2027 contract year rule.

In this article, 红领巾瓜报, Inc. (红领巾瓜报), Medicare experts delve into the key policy areas CMS is poised to address鈥攑rior authorization reforms, coding and risk adjustment oversight, Star Ratings realignment, and expanded program integrity efforts.

Prior Authorization and Utilization Management Reforms

CMS, across multiple administrations, has viewed prior authorization (PA) as both a cost-control lever and a potential barrier to care. In the contract year 2027 policy and technical rule, CMS officials will have their first unencumbered chance to cement electronic PA standards, enforce strict turnaround timelines, and limit plan鈥檚 use of internal coverage criteria. By mandating consistent rules across the MA landscape, CMS seeks to minimize provider frustration without sacrificing utilization management.

Risk Adjustment and Coding Oversight

MA coding practices leading to elevated MA risk scores have been the subject of bipartisan concern and heightened scrutiny as these have been found to inappropriately increase federal government payments to plans. In response, the 2027 rulemaking cycle provides an opportunity for CMS officials to develop more far-reaching reforms to the MA risk adjustment model and potentially explore more transformative models that move away from reliance on Medicare fee-for-service (FFS) data. Encounter-based risk adjustment or an 鈥渋nferred鈥� CMS-driven scoring approach could narrow payment gaps and deter upcoding.

Next Phase of Star Ratings

Star Ratings will likely see the most pronounced reset under CMS鈥檚 proposed changes. Moving away from purely process measures, CMS intends to elevate health outcomes鈥攕uch as fewer hospital admissions and improved functional status鈥攁nd sharpen its focus on 鈥渆xceptional care for all enrollees鈥� through the  (EHO4all) reward. This framework, announced under the calendar year 2026 rate notice, revised the Health Equity Index reward. In the 2027 proposed rule, CMS could call for retiring outdated measures in favor of streamlined reporting via health IT and patient-reported outcomes. CMS has also indicated it would consider other factors for this reward program.

Oversight and Program Integrity

This rulemaking cycle affords CMS officials an opportunity to expand the agency鈥檚 oversight toolkit. Advanced analytics and AI-driven audit selection will underpin fraud, waste, and abuse detection at greater scale. Potential areas of focus include enhancing efforts to promote accuracy in MA plan payments, addressing concerns with MA coding practices, and harnessing new technology to assist CMS in its oversight and auditing functions.

Charting the Path Forward

The contract year 2027 proposed rule represents the Trump administration鈥檚 first full-cycle effort to align Medicare Advantage with its priorities. By initiating PA automation, rigorous coding compliance, outcome-driven quality enhancements, and next-generation audit preparedness now, MA plans can turn regulatory challenges into competitive advantage. Stakeholders should monitor the Office of Management and Budget鈥檚 review timetable, submit focused comments during the rulemaking window, and leverage specialized modeling support to quantify impacts. The program鈥檚 future is outcome-centered and accountability-driven. Plans that embrace this vision today will lead the market tomorrow.

Preparing for the 2027 Contract Year for Medicare Part C and D

In addition to advancing the Trump Administration鈥檚 healthcare policy priorities, market shifts are likely to influence provisions included in the 2027 contract year proposed rule.

红领巾瓜报 experts advise that issuers and other interested healthcare organizations consider the following potential proposals as well as the changes to help organizations prepare:

  • CMS might propose to tighten standards around minimum plan offerings per county, bolster network adequacy requirements, and enhance provider directory. transparency to safeguard beneficiary access as the program evolves.
  • Plans that accelerate PA digitization, embed real-time clinical decision support, and train providers on uniform criteria today will smooth their path when CMS announces the contract year 2027 final rule.
  • To stay ahead, plans should launch internal coding audits, fortify provider documentation support, and pilot encounter-level data collection now.
  • MA organizations must recalibrate quality programs toward these high-impact metrics, invest in digital platforms for real-time patient feedback, and forge care-management strategies that demonstrably lower acute events.

Connect with Us

红领巾瓜报 is closely monitoring the federal review timetable for this proposed rule. Our Medicare experts are working with healthcare organizations to prepare to submit targeted comments during the comment window, including applying specialized modeling support to quantify impacts.

The future of MA is outcome鈥恈entered and accountability鈥恉riven; plans that embrace this vision today will lead the market tomorrow. For details about the MA and Part D regulatory and market landscapes and approaches to position your organization for success, contact our featured experts聽below.

Blog

ACA Marketplaces at a Crossroads: New Data Reveals Who鈥檚 Covered and What鈥檚 at Stake

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As we approach the end of 2025, the Affordable Care Act (ACA) Marketplaces face a pivotal moment. Enhanced Advance Premium Tax Credits (APTCs), introduced under the American Rescue Plan Act (ARPA) and extended through the Inflation Reduction Act (IRA), have driven record-breaking enrollment, with 24 million individuals now covered through the Marketplaces. Without congressional action, these subsidies will expire on December 31, 2025.

This pending policy shift makes it more urgent than ever to understand who the Marketplace serves, what enrollees receive, and how future changes could affect affordability and access.

红领巾瓜报 and Wakely, an 红领巾瓜报 Company, have released a new Issue Brief that provides a comprehensive profile of Affordable Care Act Marketplace enrollees primarily based on claims data from nearly 6 million of the 24 million Marketplace enrollees. The brief answers key questions about Marketplace enrollees, including the types of health conditions they have and the types of services and prescription drugs they use.

The white paper is available on the 红领巾瓜报 website.

Blog

Wakely鈥檚 New Star Ratings Analysis: What鈥檚 Changing and What鈥檚 Holding Steady

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As Medicare Advantage and Part D plans prepare for the 2026 contract year, Wakely, an 红领巾瓜报 Company, has published two white papers that offer critical insights into the latest developments in the Centers for Medicare & Medicaid Services鈥� (CMS) Star Ratings program. These analyses follow CMS鈥檚 release of the final 2026 Star Ratings, which play a pivotal role in plan performance, member retention, and bonus payments.

Why It Matters

Star Ratings reflect plan quality, member experience, and regulatory compliance. With CMS continuing to refine its methodology and cut points, understanding the nuances of these changes is essential for plans looking to maintain or improve their ratings. Wakely鈥檚 white papers provide a clear, data-driven lens into what鈥檚 new, what鈥檚 stable, and what it means for the industry.

No Major Shifts in 2026 Ratings

In the paper, , Wakely experts report that the 2026 Star Ratings show no major systemic shifts in overall scores. Wakely鈥檚 analysis finds that:

  • Most plans maintained their previous ratings, with only modest movement across the board.
  • CMS鈥檚 methodology updates had minimal impact on overall scores, suggesting a period of relative stability.
  • The distribution of scores across contracts remains consistent with prior years, offering plans a chance to focus on incremental improvements rather than major overhauls.

A companion white paper, , explains the cut point adjustments that define how performance translates into Star Ratings. The analysis finds that several measures saw tightening of cut points, especially in areas like medication adherence and member experience. In addition, the paper indicates that early signals of quality improvement are emerging in certain domains, suggesting that plans are responding to CMS鈥檚 evolving expectations.

The paper offers guidance on how plans can strategically target measures most likely to influence future ratings.

Read the .

红领巾瓜报 Weekly Roundup

October 15, 2025

On the Horizon: Contract Year 2027 Proposed Rule Will Provide Trump Administration First Opportunity to Reshape Medicare Advantage Program

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Blog

CMS Clarifies Grandfathering Rules for State Directed Payments

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The Centers for Medicare & Medicaid Services (CMS) last month issued a  to states providing preliminary guidance on  (SDPs), which outlines new federal payment limits, clarifies grandfathering provisions, and signals significant changes ahead for Medicaid financing and policy. The letter is part of CMS鈥檚 implementation of Section 71116 of the Budget Reconciliation Act of 2025 (, P.L. 119-21)鈥攖he portion of the legislation that focuses on curbing SDP spending and reinforcing program integrity.

Though CMS describes the guidance as preliminary, it is the view of 红领巾瓜报 (红领巾瓜报) experts鈥攊ncluding former state officials, actuaries, and policy strategists鈥攖hat it signals directionally new policy for Medicaid agencies, managed care organizations (MCOs), and providers. CMS is working on two proposed SDP-related regulations, which are in the final stages of federal review. The preliminary guidance and forthcoming rules will likely reflect long-standing concerns for several years, even over shifting congressional control and multiple presidential administrations.

This article addresses key clarifications in the letter; the impact of the preliminary guidance on states, MCOs, and providers; and how the directive may influence Medicaid budgets, financing strategies, and future policy reforms.

Guidance Clarifies Timeframes for SDPs

Grandfathering Limited to Specific Rating Periods

CMS will allow states to maintain SDP spending amounts, up to the average commercial rate ceiling, that were in place for state fiscal year (SFY) 2025, calendar year (CY) 2025, and SFY 2026 rating periods. Nonetheless, new or expanded SDPs above Medicare equivalent levels in expansion states and 110 percent of Medicare in non-expansion states鈥攅ven those based on legislation passed in 2025鈥攁re ineligible for grandfathering if they apply to rating periods starting after July 4, 2025. These grandfathered spending amounts will need to phase down with rating periods beginning on or after January 1, 2028.

Preliminary Grandfathering Determinations

CMS has begun notifying states whether a preprint is 鈥渓ikely eligible鈥� for grandfathering. Because these are preliminary determinations, states should prepare for further review and revisions.

Submission Cutoff Date Clarified

In response to confusion around the May 1, 2025, submission deadline, CMS clarified that July 4, 2025, is the cutoff for grandfathering eligibility, provided the state fully completed the preprint. States may have rushed to meet a July 4 submission deadline and may have left questions on the preprint unanswered. In these instances, it is possible鈥攊f not likely鈥攖hat CMS will consider the application incomplete and thus ineligible for grandfathering. Since this is a developing area with limited precedent, states may still seek clarification or reconsideration, though CMS has not yet issued definitive guidance or a formal process for resolving these situations.

No Increases Allowed Until 2028

States are prohibited from increasing the total dollar amount of grandfathered SDPs鈥攖he 鈥渆xpected spend鈥濃�攗ntil January 1, 2028. This restriction limits flexibility for states to expand their programs and may require that they reassess their SDP strategies. For example, using percentage-based calculations tied to average commercial rates, will no longer capture year-to-year growth because of utilization or acuity changes.

10 Percent Phasedown Unaddressed

CMS has yet to provide official guidance on the 10 percent phasedown of SDPs. Stakeholders remain in a holding pattern, awaiting a forthcoming proposed rule that will clarify how reductions will be calculated.

What It Means for States and Healthcare Organizations

SDPs have become a critical tool for states to stabilize provider networks through increased Medicaid reimbursement. This authority will be significantly limited, and states will need to reduce many existing programs. Medicaid enrollment losses resulting from other Medicaid policy changes, such as work requirements and minimum semiannual redetermination, will likely compound the strain on provider payments.

Providers and states need to start planning for these losses in revenue now. Strategic planning for SDP sustainability and close monitoring of upcoming CMS rulemaking is essential.

While the guidance imposes constraints, it also opens the door for policy innovation. For example, some states may use this moment to reform Medicaid financing, streamline supplemental payments, and reconfigure provider incentives to better reflect quality and access, advancing value-based care goals and achieving total cost of care savings through efficiency and aligned incentives.

Connect with Us

红领巾瓜报 is uniquely positioned to support states, MCOs, and providers as they navigate the evolving landscape of Medicaid SDPs. Our team includes former state Medicaid directors, actuaries, and policy strategists with deep expertise in designing sustainable financing arrangements and guiding public engagement processes. We bring robust modeling capabilities to clients seeking to assess the financial impact of CMS鈥檚 new restrictions, including the 10 percent phasedown and interactions with provider tax limitations. Our experts are actively engaged with CMS and understand how to translate federal guidance into actionable strategies that align with state goals and operational realities.

Whether revising preprint submissions, evaluating quality frameworks, or rethinking provider incentives, 红领巾瓜报 delivers the technical and policy insight needed to move forward with confidence.

For questions about the federal guidance and considerations for your organization, contact our experts below.

Helping a Medicare Advantage Plan Identify Gaps in Part D Benefit Quality

Helping a Medicare Advantage Plan Identify Gaps in Part D Benefit Quality

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THE CLIENT

The client for this project is a health plan that provides both traditional Medicare Advantage (MA) plans and those that address chronic conditions and social determinants of health, to reduce healthcare disparities among historically underserved populations in the central and eastern United States. Their plans integrate Medicare Part A and Part B benefits with Part D prescription drug coverage, along with providing robust extra benefits.

BACKGROUND

MA Plans are assuming bigger risk in their Part D benefit spending than in previous years due to recent changes in MA rules. Audits of the program, a requirement to participate in MA, will mean that there are increased compliance and operational risks in how plans go about serving their members with the Part D benefit. As the regulatory environment changes, guarantees in pharmacy benefit manager (PBM) contracts need solidifying, and will require rigorous oversight by the plans to reduce risk. MA plans need to ensure alignment and collaboration across their organizations and with vendors to optimize initiatives in quality and Stars. It is also important to establish alignment and engagement early within the yearly bid cycle. T he client engaged 红领巾瓜报 due to our diverse expertise in Part D plans including operations, PBM and vendor oversight, health plan leadership, Stars and quality programs, financial and actuarial analysis, and compliance.

APPROACH

红领巾瓜报 performed an assessment to analyze and measure the effectiveness of Part D operations, including a comprehensive review of the plan鈥檚 Part D benefit, and identified gaps in Part D policies, procedures and staffing. The effort also documented operational efficiencies, quality improvement recommendations and opportunities for the client to increase their Part D Star ratings. 红领巾瓜报 identified areas of improvement and provided actionable insights to guide future decisions. The assessment utilized a combination of data, documents and interviews to cover various dimensions such as performance, compliance, effective oversight, and collaboration.

RESULTS

The final report recommended a series of organizational changes and quality improvements to enable the client to optimize their Part D operations. Recommendations were made in the following areas:

  • Policies and procedures: Identified gaps in the client鈥檚 internal policies and procedures, and provided recommendations to cure the deficiencies, including the development of desk-level guides.
  • Comprehensive oversight: Identified oversight gaps in vendor management and provided recommendations to improve.
  • Part D strategic leadership & proposed new staffing model: 红领巾瓜报 drafted a best-in-class organization and staffing plan that permits the client to scale up with a delineated staffing structure designed to ensure optimal oversight of Part D quality.
  • Collaboration: Identified gaps in PBM contracts and provided recommendations for negotiating and bolstering account management. The new plan also recommends expanding the Part D team鈥檚 role and involvement with provider engagement teams in order to increase overall CAHPS results to improve Star ratings.
  • Financial/actuarial analysis: Identified changing regulatory reporting (Direct and Indirect Remuneration) and capturing required information related to Manufacturer Discount Program (MDP) and Medicare Prescription Payment Plan (M3P).

HOW 红领巾瓜报 CAN HELP YOUR ORGANIZATION

If your organization wants to undertake a similar review of your Part D organization, we encourage you to engage with your teams to review and prioritize findings and recommendations to build out best practices and best in class plan operations. 红领巾瓜报 can help you develop a plan and guide you through the processes, identify issues that might not otherwise be identified internally, and provide recommendations for ways to optimize your efforts. Our team brings together expertise in Medicare Advantage, Part D, pharmacy, quality and accreditation programs, on the ground leadership experience in health plans, financial and actuarial expertise, with in-depth insider knowledge from our work in states across the country. Contact us to learn more about how 红领巾瓜报 can help.

Blog

Turning HR 1 Medicaid Work Requirements into Workforce Development Opportunities: Lessons from 红领巾瓜报鈥檚 Recent Webinar

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As State Medicaid Agencies prepare for the operational and policy shifts introduced by HR 1鈥檚 Medicaid Work Requirements, the stakes could not be higher. While the intent of these provisions is to encourage workforce participation, their real-world implementation risks leaving behind those who already face systemic barriers鈥攑articularly rural communities, people of color, and individuals with chronic conditions.

In a recent 红领巾瓜报 webinar, 鈥�Work That Works: Creating Sustainable Employment Pathways for Medicaid-Enrolled Communities,鈥� Shannon Joseph, Senior Consultant and Workforce Development expert at 红领巾瓜报 (红领巾瓜报), and Dr. Alicia Johnson, Managing Principal and strategic advisor on Medicaid transformation at 红领巾瓜报, led a dynamic conversation for state leaders and Medicaid stakeholders. Their core message was clear: with thoughtful design, states can transform work requirements from punitive compliance metrics into powerful tools for workforce development and economic mobility.

The Policy Landscape: HR 1 and State Readiness

HR 1 establishes new federal standards that require states to verify that certain Medicaid enrollees are meeting minimum work or community engagement hours as a condition of continued coverage. While exemptions exist for specific populations, the administrative lift, data infrastructure, and interagency coordination needed to operationalize these requirements are significant.

Historically, states that have experimented with work requirements, such as Arkansas, Kentucky, and New Hampshire, have seen coverage losses not because beneficiaries were unwilling to comply, but because systems were unprepared to support them. Barriers such as limited broadband access, low literacy rates, unstable employment markets, and health disparities disproportionately impacted rural residents and people of color.

Key Challenge #1: Avoiding Disproportionate Impact on Vulnerable Communities

One of the most pressing concerns is that work requirements may exacerbate disproportionate access. In rural communities, jobs that meet hour thresholds are often scarce, transportation options are limited, and childcare access is inconsistent. For people of color, historic and systemic barriers to employment persist, from lack of work credentials, to lack of tailored workforce programs. For individuals with chronic conditions or disabilities not formally classified as exempt, participation can be difficult or intermittent.

Dr. Johnson emphasized the importance of a community-based approach that leverages local resources and local social safety nets to increase participation and outcomes but developing targeted strategies that address the varying needs of the Medicaid community.

鈥淲e cannot simply apply a one-size-fits-all model. States must design implementation strategies that close population health gaps and overcome the social structural gaps in their systems, not widen them. Social Determinants of Health are not just passive background factors; they actively shape people’s ability to achieve and maintain good health and life outcomes.鈥�

Best Practice: Conduct community-level impact assessments prior to implementation to identify geographic, demographic, and health-related disparities. Use this data to tailor outreach, exemptions, and workforce partnerships accordingly.

Key Challenge #2: Shifting from Compliance to Workforce Integration

Too often, states have approached work requirements as a compliance exercise鈥攖racking hours, verifying exemptions, and ensuring federal reporting鈥攚ithout connecting to broader workforce development ecosystems. This narrow focus misses the opportunity to align Medicaid with labor, education, and economic development systems.

Shannon Joseph pointed to states like Louisiana, where cross-agency partnerships have begun to link Medicaid beneficiaries to workforce boards, training programs, and supportive services, 鈥淭he most successful models are those where Medicaid is not working alone. When states braid resources and align objectives, work requirements can become a springboard for meaningful employment.鈥�

Best Practice: Develop formal MOUs between Medicaid agencies, state workforce boards, Departments of Labor, and community colleges to share data, coordinate referrals, and leverage federal funding streams like SNAP E&T and WIOA.

Key Challenge #3: Building Administrative Infrastructure and Data Systems

Another central theme of the webinar was the need for robust data infrastructure. Many states lack integrated eligibility systems capable of tracking employment hours, exemptions, and participation across multiple programs. Without this integration, states risk errors, delays, and unnecessary disenrollments.

红领巾瓜报 highlighted the value of interoperable data systems and FHIR-based architecture that allow Medicaid agencies to exchange information with workforce agencies in real time. Digital equity must also be part of the conversation, especially in rural areas where broadband access remains a challenge.

Best Practice: Prioritize system modernization investments and interoperability pilots to build the technical backbone for equitable and efficient implementation such as the one in Georgia launched for the Pathways program.

Key Challenge #4: Partnering with Communities for Culturally Responsive Implementation

Dr. Johnson underscored that states cannot achieve equitable implementation from the statehouse alone. Partnerships with community-based organizations (CBOs), faith institutions, and local employers are critical to reaching populations who may be distrustful of government systems or unaware of new requirements.

Community partners are trusted messengers. They can bridge gaps in communication, help with navigation, and ensure that people understand both their obligations and opportunities,
– Dr. Alicia Johnson

Best Practice: Create local implementation collaboratives that include Medicaid staff, CBOs, workforce entities, and providers to co-design outreach and support strategies tailored to community needs.

Key Challenge #5: Aligning Metrics with Meaningful Outcomes

Finally, both speakers cautioned against relying solely on compliance metrics (e.g., hours reported, exemptions processed) to evaluate success. Instead, states should track workforce and health outcomes, such as employment stability, income growth, retention in coverage, and health status improvements. Shannon Joseph noted, 鈥淚f our only measure of success is whether someone uploads their work hours, we鈥檝e missed the point. The goal should be sustainable pathways to economic mobility and improved health.鈥�

Best Practice: Develop a multi-dimensional performance dashboard that blends compliance data with workforce outcomes, health equity indicators, and beneficiary experience measures.

Solutions & Strategies for States: A Roadmap

Drawing from the discussion, 红领巾瓜报 outlined a set of strategic recommendations for state Medicaid agencies:

  1. Conduct Equity Impact Assessments: Identify populations at risk of adverse impacts and tailor exemptions and support services accordingly.
  2. Align with Workforce Systems: Establish data-sharing agreements and coordinated referral pathways with workforce boards and community colleges.
  3. Invest in Data Modernization: Build interoperable systems to reduce administrative burden and ensure real-time verification.
  4. Engage Trusted Community Partners: Leverage CBOs and local institutions for outreach, navigation, and culturally responsive engagement.
  5. Shift Metrics to Outcomes: Measure employment stability, economic mobility, and health outcomes鈥攏ot just compliance.
  6. Pilot, Learn, Scale: Start with targeted pilots in high-need communities, evaluate rigorously, and scale strategies that work.

红领巾瓜报鈥檚 Role: Strategic Partner to States Developing Public/Private Partnerships to Build Genuine Pipelines of Work

红领巾瓜报 has deep expertise helping states design, implement, and evaluate Medicaid work requirement policies in ways that are operationally sound, legally defensible, and Medicaid Member-centered. Our team has supported states in:

  • Conducting 1115 waiver design and evaluation,
  • Integrating Medicaid and workforce systems,
  • Designing targeted outreach strategies for rural and underserved populations,
  • Implementing digital modernization projects, and
  • Developing performance dashboards that focus on outcomes.

红领巾瓜报 brings both policy acumen and on-the-ground implementation experience, enabling states to navigate complex regulatory landscapes while advancing population health and real-world outcomes.

Learn More & Partner with 红领巾瓜报

If you missed the live webinar, you can watch the replay here.

You might also be interested in attending the 红领巾瓜报 National conference, .in New Orleans October 14-16, for our session on Making Medicaid Work Requirements Work, where we will draw on lessons from states like Georgia.  Panelists will explore what to watch for in program design, including strategies to support workforce readiness, reduce administrative burden, and maintain access to care.  Speakers include:

  • Tonya Moore, Associate Principal, 红领巾瓜报
  •  Chief Health Policy Officer, Georgia Department of Community Health
  •  Medicaid Reforms Project Director, Utah Department of Health and Human Services
  • Moderated by , Managing Principal, 红领巾瓜报

Online registration closes October 10, but if you act now, you can use the code FLASH25 for up to $475 off the standard registration fee for the full conference. 

For more information about how 红领巾瓜报 can support your state in strategic planning, operational design, impact analysis, and workforce integration, please contact our experts below.

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