Generic Supporting Statement

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Generic Supporting Statement
Medicaid Community Engagement – 
Good Faith Effort Exemptions and Quarterly Reporting
CMS-10398 #100, OMB 0938-1148

Notes: This is a new collection of information request.

The contents of this Supporting Statement and the associated attachments have been reviewed to ensure that they are consistent with the Trump administration’s policies, goals, and objectives.

    A. Background
The Centers for Medicare & Medicaid Services (CMS) work in partnership with States to implement Medicaid and the Children’s Health Insurance Program (CHIP). Together these programs provide health coverage to millions of Americans. Medicaid and CHIP are based in Federal statute, associated regulations and policy guidance, and the approved State plan documents that serve as a contract between CMS and States about how Medicaid and CHIP will be operated in that State. CMS works collaboratively with States in the ongoing management of programs and policies.
Section 71119 of the Working Families Tax Cut (WFTC) legislation adds section 1902(xx) to the Social Security Act and requires States, as a condition of Medicaid eligibility for certain individuals, to establish and administer a “community engagement” requirement.
B. Description of Information Collection

In association with our June 3, 2026 (91 FR 33348) interim final rule with comment period (CMS-2454-IFC; RIN 0938-AV98) entitled, “Medicaid Program; Community Engagement Requirement for Certain Individuals” States must implement the community engagement requirement beginning January 1, 2027, although States may elect an earlier implementation date via a section 1115 demonstration or through a State plan amendment. Section 1902(xx)(11) of the Act authorizes the Secretary of Health and Human Services to provide States with a temporary “good faith effort” exemption from timely implementation and outlines criteria CMS must consider when evaluating whether a State has demonstrated a good faith effort toward implementation.
This collection of information covers the activities associated with 42 CFR 435.560. Under this regulation, States that are not able to meet the statutory effective date and seek additional time will be required to submit a good faith effort exemption request, in a form and cadence as specified by CMS. CMS will consider the following criteria when determining whether a State has demonstrated a good faith effort towards implementing the community engagement requirement. These criteria, which must be addressed in the State’s request, include: any actions taken by the State toward compliance with the requirements of implementing community engagement; any significant barriers to or challenges in meeting such requirements, including related to funding, design, development, procurement, or installation of necessary systems or resources; the State’s detailed plan and timeline for achieving full compliance with such requirements, including any milestones of such plan (as defined by the Secretary); and any exigent circumstances, such as an administrative or other emergency beyond the agency's control, impacting the State’s ability to implement the community engagement requirement, consistent with § 435.560. A good faith effort exemption shall expire no later than December 31, 2028, and may not be renewed beyond such date.

If CMS grants a good faith effort exemption, the State must submit quarterly progress reports that describe its progress toward meeting established milestones. In addition, the State must also identify any newly discovered risks or barriers, along with corresponding mitigation plans, along with additional information CMS requests specific to the State’s circumstances.

For burden estimation, CMS assumes quarterly reporting may continue for a maximum of 2 years.
C. Deviations from Generic Request
No deviations are requested.
D. Burden Hour Deduction

To derive average costs, we used data from the U.S. Bureau of Labor Statistics’ May 2025 National Occupational Employment and Wage Estimates for all salary estimates (https://www.bls.gov/oes/tables.htm). In this regard, the following table presents BLS’ mean hourly wage, our estimated cost of fringe benefits and other indirect costs (calculated at 100 percent of salary), and our adjusted hourly wage.

BLS’s wage estimates are updated annually. Current and historic wage figures can be found at the BLS address cited above. May 2025 is current as of the date of this collection of information request.

Occupation Title
Occupation Code
Mean Hourly Wage ($/hr)
Fringe Benefits and Other Indirect Costs ($/hr)
Adjusted Hourly Wage ($/hr)
Business Operations Specialists  
13-1000
44.63
44.63
89.26
General and Operations Manager  
11-1021
64.87
64.87
129.74
As indicated, we are adjusting our employee hourly wage estimates by a factor of 100 percent. This is necessarily a rough adjustment, both because fringe benefits and other indirect costs vary significantly from employer to employer, and because methods of estimating these costs vary widely from study to study. Nonetheless, we believe that doubling the hourly wage to estimate total cost is a reasonably accurate estimation method.
Collection of Information Requirements and Associated Burden
We estimate that approximately 10 States will need to prepare and submit a good faith exemption request, which includes drafting a communication to CMS about the need for the request and compiling any supporting information to show the actions taken by the state to meet the requirement and the circumstances that have created barriers to timely implementation. We estimate that it will take approximately 24 hours at $89.26/hr for a Business Operations Specialist to develop the exemption request, which includes documenting the State’s efforts to date, challenges and barriers the State faces, and a work plan to document progress toward fully implementing the community engagement requirement. We also estimate that it will take 4 hours at $129.74/hr for General and Operations Managers to review and provide oversight prior to submission to CMS. 
In aggregate, we estimate a one-time burden of 280 hours (28 hr x 10 States) at a cost of $26,612 (10 states x [(24 hr x $89.26/hr) + (4 hr x $129.74/hr)]). Accounting for the Federal administrative match of 50 percent, the requirement will cost States $13,306 ($26,612 x 0.50). 
Good Faith Effort Exemption Requests
Requirement
No. Respondents
Total Responses
Frequency
Time per Response (hr)
Total Time (hr)
Wage ($/hr)
Total Cost ($)
Federal Cost ($)
State Share ($)
Good Faith Effort Exemption Request and Workplan
10 States
10
One-time
28
280
varies
26,612
13,306
13,306

Each good faith effort exemption request will be reviewed and adjudicated on its own merits.  For the purposes of this burden estimate we estimate that of the approximately 10 States that we expect to apply, we will approve approximately 2 States for a good faith exemption. The approved States will need to develop and submit quarterly reports, in a form and cadence as specified by CMS, to document their implementation progress. States will be eligible to submit quarterly reporting for a maximum of 2 years; for burden purposes, we assume both States will submit quarterly reports in the first year, but that only 1 State will require an ongoing exemption and will continue to submit quarterly reports in the second year. Although we estimate a total of 12 quarterly reports will be submitted overall ([2 States x 4 reports in year 1] + [1 State x 4 reports in year 2]), we are only scoring the burden for year 1 as that would be more accurate annualized figure as opposed to adding years 1 and 2 together. We estimate that each quarterly report will take approximately 12 hours at $89.26/hr for a Business Operations Specialist to prepare the report and 0.5 hours at $129.74/hr for a General and Operations Manager to review and provide oversight prior to submission to CMS.  
In aggregate, we estimate an annual burden of 100 hours (12.5 hr/report x 8 quarterly reports in year 1) at a cost of $14,796 (2 States x [(12 hr/report x 4 reports x $89.26/hr) + (6 hr/report x 4 reports x $129.74/hr)].  Accounting for the Federal administrative match of 50 percent, the requirement will cost States $7,398 ($14,796 x 0.50). 
Quarterly Reporting 
Requirement
No. Respondents
Total Responses
Frequency
Time per Response (hr)
Total Time (hr)
Wage ($/hr)
Total Cost ($)
Federal Match ($)
State Share ($)
Quarterly Reporting
2 States
8 (2 states x 4 reports/year 1)
Quarterly
12.5
100
Varies
14,796
7,398
7,398

Burden Summary

Requirement
No. Respondents
Total Responses
Frequency
Time per Response (hr)
Total Time (hr)
Wage ($/hr)
Total Cost ($)
Federal Cost ($)
State Share ($)
Good Faith Effort Exemption Request and Workplan
10 States
10
One-time
28
280
varies
26,612
13,306
13,306
Quarterly Reporting
2 States
8 (2 states x 4 reports/year 1)
Quarterly
12.5
100
varies
14,796
7,398
7,398
TOTAL
10 States
18
varies
Varies
380
varies
41,408
20,704
20,704

Collection of Information Instruments

n/a

F. Timeline

The changes in this 2026 collection of information request are associated with our Interim Final Rule with Comment Period (CMS-2454-IFC; RIN 0938-AV98) entitled, “Medicaid Program; Community Engagement Requirement for Certain Individuals.” The rule filed for public inspection on June 1, 2026, and published on June 3, 2026 (91 FR 33348). Comments must be received by July 31, 2026.

Under the statutory and implementation timeline, States must implement the community engagement requirement beginning January 1, 2027, although States may elect to implement the requirement earlier. The good faith effort exemption request must be submitted in a form and cadence as specified by CMS. A good faith effort exemption shall expire no later than December 31, 2028, and may not be renewed beyond such date. If an exemption is granted, quarterly reporting would be required for up to 2 years, as assumed for purposes of the burden estimation.