4. Good Faith Effort Exemption

As described in section II.K.1. and 2. of this IFC and § 435.559, 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)(A) of the Act provides the Secretary of HHS with the authority to grant States a temporary good faith effort exemption from compliance with timely implementation of the community engagement requirement. Section 1902(xx)(11)(B) of the Act outlines the process for determining whether a State has demonstrated a good faith effort towards compliance with timely implementation, including the criteria that must be considered in the evaluation. Section 1902(xx)(11)(C) of the Act describes the duration of the good faith effort exemption, if granted, along with conditions that may warrant early termination. Section 1902(xx)(11)(D) of the Act includes reporting requirements associated with ( printed page 33418) an approved good faith effort exemption.

This section of this IFC discusses how a State may request a good faith effort exemption, the criteria by which CMS will evaluate such requests, and the duration and reporting requirements of such exemptions, if granted. New § 435.560 implements and interprets section 1902(xx)(11) of the Act.