E. Specified Excluded Individuals

Section 1902(xx)(9)(A)(ii) of the Act lists nine categories of individuals meeting the definition of a “specified excluded individual.” These individuals are excluded from the definition of “applicable individual” at section 1902(xx)(9)(A)(i) of the Act; therefore, for the nine categories of specified excluded individuals, community engagement is not a condition of eligibility, and such individuals do not need to demonstrate community engagement to qualify for the State plan adult group or for eligibility under an applicable section 1115 demonstration. New § 435.554 implements the statutory definition of specified excluded individuals, as further discussed in this section. If a State determines someone to be a specified excluded individual at application, renewal, or, if elected by the State, at the time of a more frequent verification of community engagement compliance, it must not determine whether that person met the community engagement requirement during the applicable community engagement review period (see section II.H.1. of this IFC for more information). Similarly, while States must deem an applicable individual compliant with the community engagement requirement for a month if during any part of that month that person was a specified excluded individual, this deeming requirement does not apply if a State has already determined that the person is a specified excluded individual at application, renewal, or at the time of a more frequent verification, because only an applicable individual must ( printed page 33365) demonstrate community engagement. Therefore, States must not deem specified excluded individuals compliant with the community engagement requirement. We explain the distinction between mandatory exceptions and specified excluded individuals in more detail in section II.F. of this IFC.

Several groups of specified excluded individuals are, by definition, not usually eligible under the State plan adult group, described at section 1902(a)(10)(A)(i)(VIII) of the Act, and many may be eligible through a separate eligibility group (for example, the pregnant women group, described at § 435.116) for which community engagement does not apply. However, these exclusions are necessary for individuals who may be eligible to enroll or are enrolled in the State plan adult group or an applicable section 1115 demonstration, as described in section II.B. of this IFC, but still meet the exclusion criteria.

New § 435.554 implements and interprets section 1902(xx)(9)(A)(ii) of the Act. We intend to apply existing Medicaid definitions where possible to align with existing eligibility systems and structures. Where terms used to describe specified excluded individuals do not have precedent in Medicaid, or our interpretation of the statutory language differs from existing Medicaid definitions, we establish definitions through this IFC. Section II.I.7. of this IFC addresses verification requirements regarding specified excluded individuals.