New Jersey Calls on CMS to Simplify Medicaid Community Engagement Requirements to Protect Health Coverage

Department Urges Federal Government to Reduce Administrative Burden and Prevent Eligible Residents from Losing Coverage

August 17, 2026

(TRENTON) - The New Jersey Department of Human Services has submitted comments to the Centers for Medicare & Medicaid Services (CMS) urging changes to the federal interim final rule implementing new Medicaid community engagement requirements imposed under H.R. 1.

The Department's comments identify significant operational and administrative challenges that could unnecessarily jeopardize health coverage for eligible New Jerseyans and create substantial implementation burdens for states.

The Division of Medical Assistance and Health Services (DMAHS), which administers NJ FamilyCare, encourages CMS to adopt policies that are practical to administer, minimize unnecessary paperwork, and protect access to health care for eligible residents.

“I’ve advocated for repeal of the law that imposes these community engagement requirements, but we will follow the law and New Jersey is committed to implementing federal requirements with fidelity while doing everything possible to ensure eligible residents maintain the health coverage they depend on,” Human Services Commissioner Stephen Cha said. “Our comments reflect months of careful analysis by our policy, operations, and technology teams. We are asking CMS to provide states with the flexibility and clarity needed to implement these requirements in a way that minimizes unnecessary administrative barriers and helps eligible people stay connected to care.”

The comments identify several areas where DMAHS urges CMS to change the regulations by:

·         Following the law and eliminating the requirement that individuals with serious medical conditions, mental illness, and/or substance use disorder provide extensive documentation about how their condition impacts their ability to work;

·         Reducing documentation requirements that could create unnecessary barriers for eligible members;

·         Streamlining eligibility and renewal processes to improve the member experience and reduce administrative complexity;

·         Providing additional guidance and implementation time for states to make required technology and operational changes; and

·         Clarifying federal requirements that remain ambiguous and difficult for states to administer consistently.

The Department noted that, with more than 540,000 New Jersey Medicaid expansion adults would be subject to the new community engagement requirements beginning January 1, clear federal guidance and workable implementation policies are critical to avoiding unnecessary coverage losses.

“Implementing these requirements requires significant changes to eligibility systems, business processes, staff training, and member communications,” Deputy Commissioner for Health Services Valerie Mielke said. “Our recommendations focus on creating an implementation framework that is operationally feasible while ensuring that eligible individuals are not denied or lose coverage because of unnecessary administrative complexity.”

The Department’s comments also highlight the importance of allowing states sufficient time to build, test, and validate new eligibility systems before implementation deadlines take effect.

“New Jersey has worked proactively to prepare for these changes, but, in order to minimize disruptions to members’ care, the federal government should rapidly clarify ambiguous provisions in the rule, and eliminate burdensome requirements that go beyond the intent of the law,” DMAHS Assistant Commissioner Gregory Woods said. “This will reduce administrative costs for states and more importantly reduce the number of eligible members who lose access to Medicaid, despite remaining eligible.”

The Department submitted the comments as part of the federal public comment process for the interim final rule implementing Medicaid community engagement requirements established under federal law.

In addition to the submitted comments, New Jersey Attorney General Jennifer Davenport is co-leading a coalition of 24 attorneys general and two governors in suing the Trump Administration to challenge its unlawful interim final rule implementing new Medicaid community engagement requirements.

Visit here for information about federal policy changes to NJ FamilyCare and how members can prepare.