In a letter sent to Kentucky state officials on Friday, the Trump administration made clear it would approve similar waivers for other states.
"Your substantial work will help inform future state demonstrations seeking to draw on Kentucky's novel approaches to Medicaid reform," Brian Neale, CMS' Medicaid director, said in the letter to Republican Gov. Matt Bevin.
Bevin originally submitted the waiver request to the CMS in August 2016.
Nine other states—Arizona, Arkansas, Indiana, Kansas, Maine, New Hampshire, North Carolina, Utah and Wisconsin—have also applied for the Section 1115 waivers.
In the coming weeks, adult beneficiaries in Kentucky between 19 to 64 will be required to complete 80 hours per month of community engagement activities, such as employment, education, job skills training, and community service to maintain their Medicaid eligibility.
Former foster-care youth, pregnant women, primary caregivers of a dependent, beneficiaries considered medically frail and full-time students are exempt from the new requirements.
Kentucky will lock beneficiaries out of coverage for noncompliance. A person's coverage can only be reactivated on the first day of the month after they complete 80 hours of community engagement in a 30-day period.
If a suspended beneficiary hasn't met the work or volunteering requirement by their redetermination date, their Medicaid enrollment will be terminated and they will have to submit a new application to rejoin Medicaid.
The CMS also approved Kentucky's request to impose premiums on expansion beneficiaries and parents and other family caretakers in the state.
Non-payment over a 60-day period will result in a six-month lockout from coverage.
Enrollees will also lose coverage if they don't report income changes quickly.
The approval also allows Kentucky to end retroactive coverage for Medicaid beneficiaries.
The new waiver nixes providers' ability to bill for services provided in the three months before the application, assuming the patient was eligible during that time.
Finally, Kentucky has gained permission to continue not covering non-emergency transportation services.
Providers and advocates in Kentucky immediately blasted the waiver approval.
"New barriers to getting covered and new ways of getting kicked off coverage will hurt working Kentuckians, healthcare providers and our economy," Dustin Pugel with the Kentucky Center for Economic Policy, a left-leaning think tank, said in a statement.
Pugel said the waiver would create new costs for the program and harm beneficiaries' health.
He estimates as many as 100,000 Medicaid enrollees will lose coverage as a result of the waiver.
As of October 2017, Kentucky has more than 1.2 million people in Medicaid and the Children's Health Insurance Program, a net increase of 108% since Medicaid expansion under the ACA, according to the CMS.
Virgil Dickson reports from Washington on the federal regulatory agencies. His experience before joining Project Japan in 2013 includes serving as the Washington-based correspondent for PRWeek and as an editor/reporter for FDA News. Dickson earned a bachelor's degree from DePaul University in 2007.