Rebuilding Medicaid’s Infrastructure: The Technology and Workforce Demands of Work Requirements

This post is part of our ongoing series on Medicaid’s new eligibility requirements under the One Big Beautiful Bill Act (H.R.1). Here, we examine the nuts and bolts of implementation: how states are rebuilding IT systems, managing data integration, and preparing their workforce to handle an unprecedented compliance workload.

A Systems Overhaul Under Pressure

Implementing Medicaid work requirements is, fundamentally, a massive IT and process modernization project. States must modify their eligibility systems to incorporate new functionality: tracking enrollees’ work status, verifying exemptions, triggering notices for noncompliance, and documenting outcomes for federal reporting.

Nearly all states in KFF’s 2025 survey cited major IT system changes as their top implementation challenge. The core system requirements include:

• New data collection and reporting: Systems must collect and store information about beneficiaries’ work hours or participation in qualified activities. This may involve new interfaces for enrollees to report their hours (online portals, mobile apps, etc.) and backend databases to store this information. States like Arkansas developed custom online reporting portals for their waiver; other states may need to build or buy similar capabilities.
• Eligibility logic and business rules: Systems must be reprogrammed to assess whether applicants or enrollees meet the 80-hour monthly requirement, which is complicated. This includes retrospective checks (1–3 months prior to application) and ongoing compliance checks at least every six months. Aligning these look-back rules with renewal cycles adds complexity and risk; for example, one might have to enforce compliance for multiple months within a coverage period, not just a single month snapshot.
• Exemption identification: Systems must determine who is exempt, including parents of young children or those qualifying as “medically frail.” Implementing these nuanced definitions requires new data fields and algorithms. The medical frailty definition itself is multifaceted as it includes various conditions and circumstances, so states are seeking guidance on how to implement that consistently.
• Notices and workflow automation: When individuals are noncompliant, systems must generate a “notice of noncompliance,” offer a 30-day cure period, and, if unresolved, terminate coverage. Integrating these notices and timing into existing workflow (and ensuring they meet legal adequacy standards for due process) adds another layer of programming.

To support these functions, data integration is essential. States aim to reduce the reporting burden on enrollees by verifying work through existing data, e.g., employment wage databases, SNAP and TANF systems, unemployment insurance records, or education data. However, many Medicaid agencies report limited data-sharing infrastructure and legacy systems that hinder such interoperability.

Even states with integrated eligibility systems face challenges. SNAP and TANF work requirements differ in scope and age ranges, making full alignment difficult. Without careful coordination, inconsistent data rules could cause confusion for both clients and caseworkers.

Competing IT Demands

The work requirement project doesn’t exist in isolation. H.R.1 also mandates six-month renewals for expansion enrollees, restricts eligibility for certain immigrants, and limits retroactive coverage, all requiring parallel system changes. Meanwhile, many states are still modernizing eligibility systems or managing post-pandemic redeterminations.

As one state official summarized, Medicaid IT teams are now juggling “multiple, parallel tracks of redesign,” increasing the risk of errors, cost overruns, and schedule slippage. In short, this is the most demanding systems agenda in the program’s history.

The Human Infrastructure: Workforce and Capacity

Technology is only part of the story. Implementing work requirements will also strain the human infrastructure that supports Medicaid operations. Eligibility workers, call centers, and outreach teams face new administrative tasks and higher case volumes, and many states anticipate needing to hire or retrain staff (or contractor support) in key areas.

Workforce impacts include:

• Verification processing: For every person subject to the requirement, staff may need to handle documentation of work hours or exemptions. If automated data isn’t available or conclusive, workers will have to follow up with enrollees for proof (pay stubs, forms from employers, etc.). This is on top of regular eligibility duties. Many states foresee a big uptick in verification workload and subsequent case actions (approving good cause exceptions, initiating closures for non-compliance, etc.).
• Appeals and hearings: Each disenrollment for non-compliance could generate appeals as individuals contest that decision. States must ensure fair hearings are available. Additional legal staff or training may be necessary to manage the anticipated increase in appeals and hearings related to work requirement closures.
• Outreach and communications: Perhaps one of the most resource-intensive tasks will be educating Medicaid enrollees about the new rules. States plan outreach campaigns well before January 2027 to inform those in the expansion group of what they need to do. This means developing notices, websites, call scripts, and perhaps in-person informational sessions. As the go-live date nears, customer service call volumes are expected to spike with people asking questions or needing help reporting. Ensuring materials are clear and accessible (multiple languages, reading levels) is another challenge.
• Interagency coordination: Some states plan to involve other departments (e.g., workforce agencies for job training programs, SNAP agencies) in implementing the requirements. Training across departments may be needed so that everyone understands the policies consistently. For example, if a SNAP caseworker interacts with a client who is also on Medicaid, they should be aware of the Medicaid work rule and perhaps help collect verification that could satisfy both programs.

Many Medicaid agencies are already stretched thin. The unwinding of the pandemic continuous coverage provision in 2023–2024 created a massive workload as states redetermined eligibility for millions of enrollees, and some states are still catching up. With work requirements, states worry about staff capacity: not only hiring new people in time, but also not overloading existing employees. States recognize that their staff are balancing other major projects (like new IT system rollouts or policy changes) and adding this could reduce focus and timeliness in other areas. One potential consequence is that if staff have to divert attention to work requirement cases, processing for other Medicaid cases (those not subject to the requirements) could slow down, affecting overall program efficiency and customer service.

Along with reallocating staff and hiring new employees, training will be paramount; eligibility workers must quickly become experts in the new rules, which are more complex than traditional income eligibility criteria. Mistakes in applying the rules (for instance, misclassifying someone as non-compliant when they actually qualify for an exemption) could lead to erroneous coverage denials, which not only harm enrollees but could also expose states to federal penalties if error rates climb.

Leveraging Intelligent Automation

Many of these challenges point to the need for smarter, more connected systems. Intelligent automation—including AI-driven verification, document capture, and cross-agency data orchestration—can help reduce manual work while maintaining accuracy and accountability.

By ensuring every automated outcome is observable, explainable, and accountable, states can implement these requirements responsibly, protect eligible enrollees, and build a foundation for long-term administrative modernization.

How Infocap Can Help

If your agency is facing a “perfect storm” of concurrent Medicaid IT projects, eligibility changes, and new reporting requirements, you do not have to navigate it alone. Leveraging over ten years of hands-on experience supporting CMS eligibility modernization, Infocap helps state and local health agencies translate policy into concrete system requirements, streamline data integrations across programs, and prioritize enhancements that reduce manual work for staff and enrollees alike. Connect with Infocap to discuss how a targeted systems and data assessment can de-risk your Medicaid work requirement build and position your agency for sustainable modernization.