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What Nebraska DHHS is actually doing
The Nebraska Department of Health and Human Services has been preparing an 1115 waiver amendment that would attach community engagement requirements to a portion of the expansion population, the group voters approved under Initiative 427 back in 2018. CMS under the current administration has signaled openness to these waivers again, after the Biden-era rescissions. Georgia is already running Pathways. Arkansas is queued up. Nebraska is in the same lane.
For operators running SUD and mental health programs under Heritage Health (the Medicaid managed care contract held by Nebraska Total Care, Healthy Blue, and Molina), the practical question is not whether the policy survives litigation. It is whether your front-desk and billing team can tell, on the date of service, that a patient lost coverage three weeks ago because they did not report 80 hours of qualifying activity to ACCESSNebraska.
Most cannot. That is the gap.
The exemption category is your real revenue protection
Here is the operator-side fact that gets buried in the policy debate: every work requirement waiver CMS has approved, including the Georgia Pathways program, carries a medically frail exemption and a SUD treatment exemption. In Arkansas Works, before the courts struck it down in 2019, roughly 18 percent of the population that lost coverage was later determined to have been exemption-eligible the whole time. They lost coverage because nobody documented the exemption into the state system.
If you run a Level 2.1 intensive outpatient program or a Level 3.1 clinically managed low-intensity residential program in Omaha or Lincoln, your active census is almost entirely exemption-eligible. Patients in active SUD treatment qualify. Patients with a serious mental illness diagnosis qualify. Patients in withdrawal management, which under the ASAM Criteria 4th Edition includes Level 3.7 Residential Detoxification, qualify on the medically frail track.
The dollars are real. A 60-bed residential program with an average Medicaid daily rate around $385 and an average length of stay of 28 days is looking at roughly $10,780 per admission at risk if a patient gets disenrolled mid-stay because nobody filed an exemption attestation. Multiply that across a year and you are talking about $400,000 to $700,000 in avoidable write-offs at a single mid-size facility.
Fix the eligibility verification workflow first
Most behavioral health operators in Nebraska check eligibility at admission and then again at discharge. That cadence will not survive work requirements. Georgia Pathways enrollees who miss a monthly reporting deadline can lose coverage within 30 to 60 days. If your average residential stay is 28 days, you can admit a covered patient and discharge an uncovered one without anyone noticing until the 835 comes back denied.
What operators should build now, before the waiver goes live:
- Weekly eligibility re-verification on every active Medicaid patient, not monthly. Run it through the Nebraska Medicaid eligibility portal or your clearinghouse 270/271 transaction.
- A flag in your EHR for any patient whose coverage status changes mid-episode, routed to a named person, not a shared inbox.
- A standing exemption documentation packet at intake: SUD diagnosis with DSM-5-TR code, ASAM level of care assignment, and a signed medically frail attestation when clinically appropriate.
- Direct communication channels with the three Heritage Health MCOs so you can escalate redetermination errors before they hit your AR.
Clean claim rate and days in AR will both move on this. A facility I worked with in a similar policy environment saw days in AR jump from 38 to 61 in the first quarter after a state policy change, entirely because of mid-episode eligibility loss they did not catch.
Heritage Health contracting and the parity angle
Your Heritage Health contracts with Nebraska Total Care, Healthy Blue, and Molina contain language about member eligibility changes, retroactive terminations, and continuity of care obligations. Most operators have not read these clauses in years. Pull them. The MCO is contractually required, in most cases, to honor authorizations for a defined period after eligibility loss, particularly for active SUD treatment episodes. That clause gives your billing team a real argument during a denial appeal.
Parity is the second pressure point. MHPAEA, enforced federally by CMS and the Department of Labor, and at the state level by the Nebraska Department of Insurance for commercial lines, requires that work requirement administrative burdens not fall harder on behavioral health enrollees than on medical-surgical enrollees. If Nebraska’s implementation requires SUD patients to navigate a more complex exemption process than diabetes patients, that is a parity question. The CMS 2024 parity rule final language gives operators a clearer record to point to during MCO contract disputes.
I would not file a parity complaint as a first move. I would put the parity citation in the appeal letter on every single denial tied to work requirement disenrollment. It changes the tone of the conversation with the MCO’s provider relations team.
What to do in the next 90 days
Operators who wait until Nebraska DHHS publishes a go-live date will be six months behind. The work to do now is unglamorous and entirely within your control.
- Audit your last 12 months of Medicaid denials and tag any that involved mid-episode eligibility loss. That is your baseline.
- Rewrite your intake packet so SUD diagnosis, ASAM level, and medically frail status are documented on day one and pushed into the state record, not just your EHR.
- Train your billing team on the 270/271 cadence and assign a named owner for weekly eligibility checks. Not a department. A person.
- Pull your three Heritage Health contracts and highlight the continuity of care, retroactive termination, and authorization honor language. Build an appeal template from it.
- Run a pro forma showing the revenue impact if 8 percent of your Medicaid census loses coverage mid-episode. Show it to your board now, not after it happens.
Nebraska is not Georgia, and the political timing may shift. But operators who build the eligibility and exemption infrastructure get a quieter benefit either way: cleaner claims, fewer write-offs, and a billing operation that does not panic the next time a state policy changes. The work is the work.
References
- Nebraska Department of Health and Human Services: Medicaid and Long-Term Care
- CMS: Section 1115 Medicaid Demonstrations
- KFF: Medicaid Work Requirements Current Status and Key Issues
- CMS: Mental Health Parity and Addiction Equity Act (MHPAEA)
- SAMHSA: Substance Use Treatment Resources
- ASAM: The ASAM Criteria, 4th Edition
- New England Journal of Medicine: Effects of Arkansas Medicaid Work Requirements