February 17, 2026 • 5 Min Read

Analysts estimate ~18.5 million adults could be impacted nationally (depending on exemptions and state design). Yet states’ approaches will vary (including how often members must report), and early experience shows that administrative complexity can drive coverage loss for eligible members due to paperwork rather than true ineligibility.

To operate these requirements at scale without harming members or overwhelming operations, payers need workflow automation with AI-enabled document intelligence, data matching, and risk-based outreach—built for auditability, fairness, and human oversight.

What’s Changed

A new national clock. CMS issued state guidance on December 8, 2025, describing community engagement requirements as a “serious undertaking” that will require policy, operational, and system changes.  

Volume and variability. Work-reporting requirements are expected to apply broadly to Medicaid expansion adults starting 2027, but implementation details (exemptions, verification cadence, data sources, and member communications) will differ significantly by state.  

Operational risk is the headline risk. Prior implementations and pilots show the biggest failure mode isn’t fraud—it’s process: missing documentation, unclear notices, system gaps, and follow-up delays that cause eligible members to lose coverage.  

Industry Implications

For payers

Manual verification workflows drive:

• Higher administrative cost per case (labor, mail, call volume, rework)
• Longer cycle times (backlogs, missed deadlines, inconsistent decisions)
• Greater compliance exposure (incomplete audit trails, weak controls, higher error rates)
• Member churn driven by paperwork (avoidable disenrollment and reinstatement loops)

For providers

Providers often become the “paperwork backstop” for exemptions and documentation—pulling time away from patient care and increasing friction across networks.

For members

The greatest harm is procedural loss of coverage—members losing access because the system fails to capture or process compliance/exemptions correctly, not because eligibility changed.

The AI Opportunity

Verification at this scale requires automation that is embedded directly into eligibility and compliance workflows, not bolted on afterward.

With AI-enabled operations, payers can:

• Reduce “paperwork fallout” by proactively identifying members at risk and triggering targeted outreach before deadlines
• Automate document intake and classification (exemptions, attestations, supporting materials) using NLP/document intelligence
• Improve data matching across state portals, workforce/earnings data sources, and payer eligibility systems to reduce manual handling
• Prioritize human review for edge cases, appeals, and exceptions—while routine cases flow straight-through
• Strengthen audit readiness with reproducible decision logic, timestamps, and standardized evidence packaging

The AI-Driven Verification Framework

An effective verification model is built on five integrated layers. Orchestration (Workflow + Controls) manages case creation, deadlines, notices, escalations, and SLAs while standardizing evidence and decision checkpoints for audit readiness. Data (Matching + Validation) resolves identity, deduplicates records, and applies configurable state-specific rules and exemptions to reduce rework and errors. Document Intelligence (NLP/OCR + Routing) classifies documents, extracts key fields, routes work to the right queues, and flags missing items with “next-best actions.” Risk + Outreach (Prevention) identifies members likely to miss requirements and triggers targeted, omnichannel outreach and assisted completion to reduce procedural disenrollment. Governance + Machine Learning Operations (MLOps) (Fairness + Auditability) monitors performance and bias, maintains explainability and audit trails, and enforces human review for edge cases and appeals.

Risks of Inaction

If verification remains manual, costs will increase as accuracy and consistency decline. Operational teams will face growing backlogs, and member call volume will rise as people seek help navigating complex requirements and documentation requests. Procedural disenrollment will accelerate—driving avoidable churn, reinstatement work, and downstream disruption in care continuity. 

At the same time, audit and compliance exposure will expand as evidence packages remain inconsistent, decision logic varies by reviewer, and documentation becomes harder to reproduce under scrutiny. Providers will also feel the burden more acutely as administrative requests spill into clinical workflows, increasing abrasion across networks and pulling attention away from patient care. 

The systemic risk is straightforward: when administrative processes collapse under volume, everyone loses—especially members who depend on stable access to care. 

Next Steps

AI is no longer a “nice to have” for Medicaid community engagement/work-reporting readiness. It is the most practical path to operating these requirements at scale while protecting member coverage and strengthening compliance. 

RGP helps payers embed AI into verification workflows—aligning policy design, operating model, data integration, and governance—so plans can reduce procedural disenrollment risk, ease administrative burden, and build audit-ready controls. 

Partner with RGP to make verification work—not just for compliance, but for the people it’s meant to serve. Contact one of our experts today to learn more.