CMS Position on Native American Exemptions from State Medicaid Work Requirements Complicates AZ Waiver Request

A 2015 AZ law requires AHCCCS to annually ask the CMS for permission to require work (or work training) and income reporting for “able bodied adults” and a 5-year lifetime limit on AHCCCS eligibility.  The work requirement waiver requests turned in during the Obama Administration were denied, but the new administrator CMS has publicly said (and written) that they're receptive to proposals from states to require work or community engagement for people who want to receive Medicaid.

Late last year AHCCCS submitted their annual official waiver request asking permission to implement the following requirements for certain adults receiving Medicaid services including a requirement to become employed, actively seek employment, attend school, or partake in Employment Support and Development activities (with exceptions) and a requirement to bi-annually verify compliance with the requirements and any changes in family income.  CMS has not yet ruled on the AZ request.

One of the exempted groups in the waiver request is American Indians.  Starting Friday (when HB 2228 takes effect) the exemption of tribal members won’t just be an administrative decision, but one required by Arizona law.  That’s because HB 2228 requires AHCCCS to exempt tribal members from their work requirement waiver requests.  Here’s the exact statutory language:

36-2903.09.  Waivers; annual submittal; definitions

B.  SUBSECTION A OF THIS SECTION DOES NOT INCLUDE OR APPLY TO AMERICAN INDIANS OR ALASKA NATIVES WHO ARE ELIGIBLE FOR SERVICES UNDER THIS ARTICLE, THROUGH THE INDIAN HEALTH SERVICE OR THROUGH A TRIBAL OR URBAN INDIAN HEALTH PROGRAM PURSUANT TO THE INDIAN SELF-DETERMINATION AND EDUCATION ASSISTANCE ACT AND THE INDIAN HEALTH CARE IMPROVEMENT ACT.

However, a letter signed by CMS official Brian Neale suggests that CMS won’t be approving waiver requests that exempt tribal members.  In a letter to tribal members he writes, regarding exempting tribal members from state Medicaid eligibility work requirements “… Unfortunately, we are constrained by statute and are concerned that requiring states to exempt AI/ANs from work and community engagement requirements could raise civil rights issues.”

In a nutshell, (beginning Friday) Arizona law will require AHCCCS to exempt American Indians from their directed work requirement waiver request (they have already administratively elected to do so).  CMS is on record saying that they're constrained by statute and have civil rights concerns about allowing states to exempt American Indians from work requirement and reporting waivers. 

It stands to follow that CMS may very well deny Arizona’s request to exempt tribal members from work and reporting requirements despite our new law (36-2903.09 (B)). If that happens, there will surely be a legal review to determine exactly the intent of 36-2903.09 (B)