Guest Author: Jess Kahn, Partner, McKinsey & Company
Introduction
HR1 introduces new requirements for Community Engagement (CE) among some Medicaid populations, establishing obligations for beneficiaries to demonstrate work or community participation as a condition of continued eligibility. The legislation also recognizes that many individuals should be exempt from CE due to factors such as medical frailty, age, or caregiving responsibilities.
The success of HR1 implementation will depend not only on fair and accurate determination of who is subject to CE but also on the ability of states to minimize administrative burden for beneficiaries and eligibility workers alike. Traditional methods—requiring applicants to produce paper documentation or self-attest to exemptions—may introduce delays, inequities, and costly appeals.
And while some states will choose to rely on self-attestation for determining exemption, they may also choose to leverage electronic data sources already held within state and partner systems. Among the most promising are health data utilities (HDUs)—locally-governed, public-private resources that provide a source of truth for robust clinical and non-clinical claims data. HDUs are similar to health information exchanges (HIEs) but have a broader, more advanced purview toward building healthy communities. By tapping into this infrastructure, states can move toward automatic, data-driven exemption determinations that reduce errors and improve efficiency and member experience.
The Role of Health Data Utilities
HIEs were originally established to promote secure data sharing among health systems, providers, and public programs. Over the past decade, they have become critical partners to Medicaid agencies, and in the past few years have begun to leverage their collective experience to build their roles as HDUs in areas such as:
- Care management: Providing real-time hospital encounter alerts and comprehensive patient histories to identify high-need members.
- Eligibility and enrollment support: Using HIE data to streamline renewals and confirm disability or clinical status.
- Quality and program integrity: Supplying data to track performance, identify gaps in care, and monitor provider reporting.
Several features make HDUs and HIEs particularly well suited to support HR1 CE exemption processes. The following describe HIE features, but all HIE features are also germane to HDUs.
1. Trusted infrastructure – HDUs already comply with federal and state privacy rules, manage security protocols, and maintain governance structures inclusive of payers and providers.
2. Accurate identity matching – Through Enterprise Master Patient Indexes (EMPIs), HIEs can link disparate records, ensuring that eligibility determinations are made using the correct individual’s data.
3. Interoperability and speed – Modern HIEs support Application Programming Interfaces (APIs) and web services that can be integrated into Medicaid eligibility systems. This enables real-time or near-real-time verification without placing the burden on applicants.
By incorporating HIE feeds into CE workflows, states can automatically flag individuals who qualify for exemptions—such as those with chronic conditions, repeated hospitalizations, or other markers of medical frailty—before notices or redeterminations are even generated.
To illustrate how these features translate into practice, it is useful to look at state examples where HIEs are already integrated into Medicaid eligibility and care management processes. These cases demonstrate the practical value of HIEs in reducing administrative burden and ensuring accurate determinations.
Maryland: the Chesapeake Regional Information System for our Patients (CRISP)
The Chesapeake Regional Information System for our Patients (CRISP), Maryland’s statewide HIE, has built one of the most mature partnerships with its state Medicaid agency. CRISP shares real-time data on hospital and emergency department encounters with both Medicaid and managed care organizations.
This infrastructure has allowed Maryland to quickly identify Medicaid enrollees who may require care management or intervention. In the context of HR1, the same system could support automatic exemptions. For example, an enrollee with repeated inpatient admissions or diagnosis codes consistent with severe chronic illness could be flagged as meeting the medical frailty exemption, sparing both the individual and the caseworker from redundant documentation requests.
Arizona & Colorado: Contexture’s HIE Integration
Contexture offers another compelling example in both Arizona and Colorado. In Arizona, the state’s Medicaid program (Arizona Health Care Cost Containment System, or AHCCCS) regularly conducts eligibility reviews for its Arizona Long Term Care Services (ALTCS) program. In Colorado, the state’s Medicaid program (the Colorado Department HCPF) regularly conducts eligibility reviews for its developmentally disabled. These programs serve populations that overlap substantially with those who qualify for exemptions under HR1.
In recent years, Arizona and Colorado Medicaid agencies have partnered with their statewide HIE to incorporate clinical data directly into the eligibility determination process. By accessing diagnosis codes, functional status indicators, and provider notes through the HIE portal or via sharing of consolidated care summaries, AHCCCS and HCPF can more efficiently confirm an applicant’s disability status or medical frailty without requiring a paper trail of physician forms.
This model illustrates how HIE integration can reduce processing times, minimize administrative costs, and decrease beneficiary burden. Under HR1, these same mechanisms could be expanded to automatically exempt Aged, Blind and Disabled (ABD) beneficiaries (and others with serious health conditions) from CE requirements. Instead of forcing vulnerable individuals to navigate additional paperwork, the state could rely on secure HIE feeds to verify status on the back end.
New York: SHIN-NY and the NYHER 1115 Waiver
The Statewide Health Information Network for New York (SHIN-NY) is serving as the interoperability backbone for the state’s New York Health Equity Reform (NYHER) 1115 waiver. NYHER seeks to transform Medicaid by integrating health, behavioral health, and social care services, with a particular focus on identifying and addressing health-related social needs (HRSNs) through standardized screenings and referrals.
In this model, SHIN-NY provides the network through which screening data, clinical information, and referral outcomes move securely among providers, community-based organizations, and state administrators. The HIE infrastructure enables clinicians and navigators to share patient needs in real time and supports administrators in tracking referrals and outcomes across programs.
Conclusion
HR1’s Community Engagement requirements present states with both a challenge and an opportunity. On the one hand, they introduce new layers of eligibility determination that could increase workload and risk disenrollment of eligible individuals. On the other hand, they create a clear policy rationale to modernize how states use data to support eligibility decisions.
HIEs are uniquely positioned to meet this moment. Their established infrastructure, ability to integrate across providers, and history of supporting Medicaid operations make them natural partners in implementing exemption determinations for CE.
As states prepare for HR1 implementation, they should view HIEs not as ancillary partners but as core infrastructure for a modernized eligibility system. Strategic investment in HIE integration today will not only smooth the path for CE exemptions but also strengthen Medicaid’s long-term capacity to deliver efficient, member-centered services.
Jess Kahn is Partner at McKinsey & Company. She specializes in state Medicaid and human services programs, public sector data, and technology, and has over 30 years of experience in national, state, and local healthcare programs in government, not-for-profit, and corporate settings, including 23 years in civil service.
