CONNECTED RCM · REGULATORY INTELLIGENCE BRIEF
Medicaid Work Requirements
Before & After OBBBA
Before & After OBBBA
The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, mandates the largest structural change to Medicaid eligibility in the program’s history — effective January 1, 2027. Here is what changed, and what it means for RCM operations.
PUB. LAW 119-21
SIGNED JUL 4, 2025
EFF. JAN. 1, 2027
DENIAL PREVENTION · FQHC
7.5M
Projected Coverage Losses by 2034
CBO
$326B
Federal Savings Over 10 Years
CBO VIA KFF
80 hrs
Monthly Threshold, Expansion Adults 19–64
OBBBA §7119
5.3M
Coverage Losses from Work Requirements
RAND / CBO
PRE-OBBBA
Before
POST-OBBBA · EFF. JAN. 1, 2027
After
01 · WORK REQUIREMENTS
Federal Policy
No federal mandate. States could only test work requirements via Section 1115 waivers. The Biden administration revoked all 13 approved waivers. Only Georgia maintained requirements through a court-defended waiver.
NO FEDERAL MANDATE
Federal Policy
Mandatory federal standard. All expansion states must require able-bodied adults ages 19–64 to demonstrate 80 hours/month of qualifying activity. States cannot waive this requirement — even via Section 1115.
MANDATORY · ALL EXPANSION STATES
02 · QUALIFYING ACTIVITY TYPES
Defined by State Waiver
Each state with a waiver defined its own activity types. No uniform federal standard existed. Activity definitions varied significantly across the 13 approved waiver states.
Federally Enumerated
Paid employment, approved work programs (including SNAP), community service, or half-time enrollment in career, technical, or higher education. Alternatively, earning $580/month or more satisfies the threshold.
03 · ELIGIBILITY REDETERMINATION FREQUENCY
Annual (12 Months)
States were prohibited from redetermining Medicaid eligibility for ACA expansion enrollees more than once every 12 months. The COVID-era continuous enrollment pause delayed redeterminations further through 2023.
ANNUAL RENEWAL
Every 6 Months
Effective January 1, 2027, expansion adults must undergo eligibility redetermination every six months. States may verify compliance more frequently. The 6-month cycle is expected to result in administrative coverage losses for eligible enrollees who miss renewal deadlines.
SEMI-ANNUAL RENEWAL
04 · BENEFICIARY COST SHARING
Minimal / None for Expansion
Medicaid expansion enrollees at or above 100% FPL faced limited cost-sharing obligations. No visit-level copayments were required for the expansion population under standard Medicaid rules.
Up to $35 per Service (eff. Oct. 1, 2028)
States must impose cost-sharing up to $35 per service on expansion adults with incomes 100–138% FPL. Total cost-sharing may not exceed 5% of family income. FQHC services are explicitly exempt from this requirement.
FQHCs EXEMPT
05 · STATE WAIVER AUTHORITY
Section 1115 Discretionary
States could apply for Section 1115 waivers to implement experimental programs. CMS reviewed waivers on a case-by-case basis. Approval was discretionary and politically variable across administrations.
DISCRETIONARY WAIVERS
Early Implementation Only
States may use Section 1115 waivers to implement requirements before the Jan. 1, 2027 deadline only. Waivers cannot waive any part of the requirement itself. There is no opt-out path for states.
NO OPT-OUT PATH
Implementation Timeline
JUL 4, 2025
OBBBA signed into law (P.L. 119-21)
JUN 1, 2026
CMS interim final rule on work requirements due
JUN–AUG 2026
Required state beneficiary outreach window
OCT 1, 2026
Noncitizen Medicaid restrictions take effect
JAN 1, 2027
Work requirements & semi-annual redeterminations take effect
OCT 1, 2028
$35 per-service cost-sharing cap takes effect
FQHC-SPECIFIC RCM IMPACT
What This Means for Safety-Net Billing Operations
Eligibility Verification
Semi-annual redeterminations will increase coverage gaps. Real-time eligibility checks must become a standard pre-service workflow — not a periodic audit function.
Payer Mix Shift
CBO projects 5.3M coverage losses from work requirements. Anticipate a measurable shift toward self-pay and sliding-scale encounters, increasing uncompensated care exposure.
Cost-Share Exemption
OBBBA explicitly exempts FQHC services from the $35/visit cost-sharing requirement. This preserves access at point of service and protects FQHC revenue from copayment-related denials.
Denial Pattern Risk
Enrollment churn is a predictable denial driver. Expect increases in “not eligible on date of service” denials as patients lose and regain coverage in short cycles.
Noncitizen Populations
OBBBA narrows Medicaid eligibility for noncitizens effective Oct. 1, 2026. FQHCs serving immigrant communities will absorb direct access and billing impacts.
Rural Health Program
OBBBA creates a $50B Rural Health Transformation Program (2026–2030). FQHCs qualify as rural health facilities and may offset some Medicaid revenue reductions.
KEY FQHC PROTECTION
FQHC services are explicitly exempted from the new expansion adult cost-sharing requirements under OBBBA. However, this protection does not shield FQHCs from upstream enrollment losses. Denial prevention planning should treat coverage disruption as a structural, recurring event — not an isolated billing error.
Who Is Exempt from Work Requirements
✓
Parents and caretakers of dependent children age 13 or younger
✓
Individuals who are pregnant or in the postpartum period
✓
Individuals determined to be medically frail or with serious medical conditions
✓
Individuals in inpatient care or requiring travel for complex outpatient care
✓
Individuals in areas of high unemployment or affected by a natural disaster
✓
States may exempt individuals for “good cause” in four additional defined categories
PUBLISHED BY
Connected RCM
SOURCES
CBO (H.R. 1 Cost Estimates, 2025) · KFF — Work Requirement Provisions in 2025 Federal Budget Reconciliation Law · RAND Health · Georgetown Center for Children and Families · ASTHO One Big Beautiful Bill Law Summary · Feldesman Tucker (FQHC Analysis) · OBBBA §7119 (Pub. Law 119-21)
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