Building Trust Through Verification: How States Can Implement Medicaid Work Requirements Fairly and Efficiently

As states prepare to implement Medicaid community engagement requirements under H.R. 1 (2025), the focus is shifting toward technology, fairness, and program integrity. Beginning January 1, 2027, states must verify that certain adult Medicaid enrollees are participating in work or qualifying community activities, or are properly exempt, to maintain eligibility.

The challenge is clear: how can agencies meet federal mandates without creating barriers to coverage? The answer lies in a verification hierarchy, a structured, data-driven approach that allows states to automate verification, reduce administrative burden, and ensure compliance with compassion and efficiency.

What Is a Verification Hierarchy?

A verification hierarchy is a prioritized workflow that determines how states confirm whether Medicaid beneficiaries meet community engagement or work requirements. The system checks available data sources, like wage databases, SNAP/TANF records, or education enrollment systems, before requesting information from the member.

This “data-first verification model” mirrors the ex parte renewal process already used to confirm income eligibility. It ensures states make the most of existing data integrations while minimizing member paperwork and coverage disruption.

When designed effectively, a verification hierarchy helps states:

• Automate most eligibility checks

• Prevent wrongful terminations

• Reduce manual workload for staff

• Build trust through fair and transparent processes

In short, it transforms Medicaid work requirement verification from a compliance exercise into a modernized, people-centered process.

The Five-Tier Model for Verification Success

Every state will customize its hierarchy to align with its technology and policy framework, but most models include five core steps:

1. Categorical Exemptions
   Identify members automatically exempt from work requirements (e.g., pregnant women, caregivers, veterans, the medically frail, or individuals on SSI).

2. Hardship Exemptions
   Review short-term hardship categories such as residents in disaster areas or high-unemployment regions.

3. Cross-Program Exemptions
   Check other public assistance programs—like SNAP or TANF—to verify compliance or exemption through existing participation data.

4. Work Activity Verification
   Confirm work or community engagement hours using employment, payroll, education, or wage data from trusted databases and third-party verification systems.

5. Member Attestation
   Only when no data confirms compliance should states request documentation or self-attestation through an online portal, call center, or mail.

This hierarchical verification structure allows agencies to verify most cases automatically, minimizing the need for manual follow-up.

Best Practices for Medicaid Eligibility Verification

1. Verify at Enrollment and Renewal

Verification must occur at application and each renewal period, with optional mid-cycle checks for accuracy. Automation helps maintain compliance without adding administrative strain.

2. Use Data-Matching First

Federal law requires states to use reliable, available data sources before contacting the individual. Leveraging wage databases, education records, and SNAP/TANF systems enables seamless eligibility verification and reduces member burden.

3. Minimize Member Burden

Simplify processes by enabling electronic verification, multilingual communication, and flexible self-attestation options. This prevents unnecessary disenrollments and promotes health equity.

4. Maintain Notice and Fair Process

If members appear noncompliant, provide clear notice and at least 30 days to respond, with continued coverage during that grace period. Transparency and fairness must remain central to every system design.

Preparing IT Systems for Community Engagement Compliance

Effective implementation depends on modern Medicaid IT systems capable of connecting to multiple external data sources. To build readiness, state agencies should:

• Conduct policy and systems assessments to identify data gaps

• Develop business rules and APIs to support automated checks

• Strengthen data-sharing agreements with Labor and Education agencies

• Create real-time dashboards to monitor verification rates and workloads

By adopting a modular modernization approach, states can meet new requirements without fully replacing legacy eligibility systems, saving time and cost while boosting performance.

Action Plan for State Administrators

To ensure readiness for the 2027 deadline, states can follow a practical seven-step roadmap:

1. Assess Policy and Systems Readiness

2. Define Verification Rules and Logic

3. Enhance Data Integration and Sharing

4. Upgrade Eligibility Platforms for Automation

5. Implement Member Communication Strategies

6. Monitor Performance Metrics Continuously

7. Ensure Fairness and Accessibility for All Members

A visual “7-Step Implementation Checklist” can help stakeholders align cross-agency efforts.

Turning Compliance Into Opportunity

While Medicaid work requirements represent a significant administrative shift, they also offer an opportunity to modernize eligibility systems and strengthen public trust.

A well-structured verification hierarchy allows states to meet federal expectations while safeguarding coverage for those who qualify. The result is a data-driven, member-centered eligibility process that advances both efficiency and equity.

At CITIZ3N, we help states translate federal mandates into operational success. Our expertise in eligibility modernization, data integration, and verification automation supports state agencies in building compliant, sustainable, and people-first Medicaid systems.