Model Medicaid community engagement drug and alcohol treatment exclusion

[daphnehanse11]

Summary

The June 1, 2026 CMS interim final rule excludes people participating in qualifying drug addiction or alcoholic treatment and rehabilitation programs from Medicaid community engagement applicability. PolicyEngine does not currently have a Medicaid community engagement treatment-program exclusion.

Sources

• CMS fact sheet: https://www.cms.gov/newsroom/fact-sheets/medicaid-community-engagement-requirement-certain-individuals-interim-final-rule-comment-period-cms
• IFC text: https://public-inspection.federalregister.gov/2026-11094.pdf
• Current variable: policyengine_us/variables/gov/hhs/medicaid/eligibility/medicaid_work_requirement_eligible.py

Policy Details

Under 42 CFR 435.554(c)(8), a specified excluded individual includes someone participating in a drug addiction or alcoholic treatment and rehabilitation program as defined in section 3(h) of the Food and Nutrition Act. States may establish a minimum time commitment consistent with appropriate clinical guidelines.

Proposed Modeling Work

Add an input or derived variable for participation in a qualifying drug addiction or alcoholic treatment and rehabilitation program for Medicaid community engagement. Consider a state parameter for any minimum time commitment if state-specific implementation details become available.

Acceptance Criteria

• A qualifying treatment-program participant is excluded from the Medicaid community engagement requirement.
• A non-participant remains subject to the requirement unless another pathway or exclusion applies.
• Tests cover treatment participant and non-participant cases.
• If minimum time commitment is not modeled, document the limitation.