On January 1, 2027, every state that expanded Medicaid will be required to enforce community engagement requirements for certain adult enrollees. This is not a waiver experiment. It is federal law, codified in Section 71119 of the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025.
If you run an FQHC in Maryland, this affects roughly 300,000 of your state's Medicaid enrollees. Estimates suggest 95,000 to 109,000 Marylanders could lose coverage — not because they are ineligible, but because they cannot navigate the reporting requirements.
We have already seen this movie. Arkansas tried it. Nebraska is living it right now. The data is clear on what happens and what you can do about it.
What Are the Medicaid Community Engagement Requirements?
Under HR 1, non-pregnant adults ages 19 to 64 in the Medicaid expansion population must demonstrate at least 80 hours per month of qualifying activities to maintain coverage. Qualifying activities include:
- Paid employment or self-employment
- Active job searching with documentation
- Job training or vocational education
- GED programs or workforce development courses
- Community service or volunteering
Individuals can also qualify by earning at least $580 per month (80 hours at federal minimum wage). Seasonal workers have a separate calculation.
Who Is Exempt?
The law carves out specific populations that must be exempt:
- Parents of dependent children age 13 or younger
- Pregnant women
- Individuals enrolled in Medicare
- People receiving SSI or SSDI
- Individuals classified as medically frail
That last category is critical for FQHCs. Patients with chronic conditions, mental health diagnoses, substance use disorders, or physical limitations can be designated medically frail by their provider. This does not require a disability determination. It requires documentation from a clinician — which means your providers are the gatekeepers of coverage protection for your most vulnerable patients.
What Happened in Arkansas: 18,000 People Lost Coverage
Arkansas implemented Medicaid work requirements in 2018 under an 1115 waiver. Within months, more than 18,000 people were disenrolled for noncompliance.
A study published in the New England Journal of Medicine found that the policy did not increase employment. The uninsured rate among affected adults jumped from 10.5% to 14.5% in two years. People lost coverage not because they were not working, but because they could not figure out the reporting system.
The problems were predictable:
- Confusing notices — enrollees did not understand what was required
- Online-only reporting — in a population with limited internet access
- Limited customer service — call centers could not handle the volume
- Exemption failures — people who qualified for exemptions did not know how to claim them or could not get provider documentation in time
Arkansas eventually scaled back the requirement. Georgia tried a modified version in 2023 and enrolled only 6,500 of the 25,000 expected in year one. Both states have since eliminated monthly reporting in favor of annual verification.
Nebraska: The Canary in the Coal Mine
Nebraska became the first state to implement work requirements under the OBBBA on May 1, 2026 — eight months ahead of the federal deadline. The early data should concern every FQHC leader:
- State officials estimate 20,000 to 40,000 individuals could lose coverage
- A KFF analysis found only about 65% of Nebraska Medicaid adults without dependent children currently work 80 or more hours per month
- The state announced it would not hire additional staff to support implementation
- The Nebraska Hospital Association warned that the requirements could disrupt care delivery across the state
Tracking began for members whose coverage periods end on or after July 31, 2026. The disenrollment wave is about to hit.
What This Means for Maryland FQHCs
Maryland has approximately 1.5 million people enrolled in Medicaid. The community engagement requirement targets the expansion population — roughly 300,000 adults. Based on the Arkansas and Nebraska experience, here is what you should expect:
1. Patient Volume Will Shift, Not Disappear
Disenrolled patients do not stop getting sick. They stop having coverage. That means your FQHC will see the same patients but with a different payer mix — more uninsured, more sliding fee scale, less Medicaid reimbursement. The Urban Institute projects Medicaid enrollment could decline by 4.9 to 10.1 million individuals nationally by 2028.
2. Revenue Will Take a Hit
Medicaid is the most predictable reimbursement foundation for most FQHCs. When expansion enrollees lose coverage, you lose PPS encounters. The patients still show up, but now you are absorbing the cost through your sliding fee program. Expect increased uncompensated care and rising bad debt.
3. Administrative Burden Will Spike
Your front desk, care coordinators, and outreach teams will be fielding questions about work requirements, exemptions, and reporting. If you are not ready with workflows and training by Q4 2026, you will be reacting instead of managing.
4. Medical Frailty Documentation Becomes a Clinical Priority
Many of your patients with chronic conditions — diabetes, hypertension, depression, substance use disorder — may qualify for the medically frail exemption. But someone has to document it. If your providers are not systematically screening for and documenting medical frailty, your patients will lose coverage that they are entitled to keep.
Seven Things Maryland FQHCs Should Do Before January 2027
1. Identify Your Exposed Population
Run your EHR data now. How many of your active patients are Medicaid expansion adults ages 19 to 64 without dependent children under 13? That is your at-risk cohort. Segment by chronic condition status — those with qualifying conditions need medical frailty documentation before the deadline.
2. Build a Medical Frailty Documentation Workflow
Create a standardized process for providers to identify and document medical frailty. This should be part of the annual visit workflow, not a separate initiative. Use your EHR to flag patients who likely qualify and prompt providers during encounters.
3. Train Your Front Line
Front desk staff, care coordinators, and community health workers need to understand the basics: who is affected, what the exemptions are, and where to send patients for help. Arkansas proved that confusion at the point of contact drives disenrollment.
4. Partner with Your MCOs
Maryland's HealthChoice managed care organizations will be implementing compliance tracking. Get ahead of this by establishing communication channels with your MCO partners now. Understand their verification processes and how your patients will be notified.
5. Prepare for Payer Mix Shift
Model the financial impact. If 10% of your Medicaid expansion patients lose coverage and shift to sliding fee, what does that do to your revenue? If it is 20%? Build contingency budgets now, not after the revenue drops.
6. Strengthen Your Sliding Fee Program
Revisit your sliding fee schedule, your financial screening processes, and your capacity to handle increased uninsured volume. Ensure your 330 grant application reflects the anticipated increase in uninsured patients.
7. Deploy Coverage Monitoring Technology
You cannot protect patients you cannot see. Automated coverage monitoring — tools that flag patients approaching renewal deadlines, track exemption status, and prioritize outreach by clinical and financial risk — is no longer optional. It is the difference between managing this transition and being overwhelmed by it.
CoverageGuard IQ: Built for Exactly This Moment
We built CoverageGuard IQ because we saw this coming. The tool monitors your patient panel for coverage changes, scores each patient by clinical criticality and revenue exposure, and generates a prioritized outreach queue so your team works the highest-risk patients first.
With community engagement requirements adding a new layer of churn, FQHCs need real-time visibility into who is at risk of losing coverage — before the disenrollment notice arrives.
Try the interactive prototype here.
Download the Free FQHC Medicaid Playbook
We compiled everything in this article — plus implementation checklists, medical frailty documentation templates, financial modeling worksheets, and staff training guides — into a free downloadable playbook for FQHC leaders preparing for January 2027.