On Thursday, July 17, the Centers for Medicare & Medicaid Services (CMS) issued new policy guidance announcing it will no longer approve or extend Medicaid demonstration waivers that fund workforce development initiatives. The change applies specifically to Section 1115 demonstration projects that support training, recruitment, and retention efforts for Medicaid providers across sectors, including home- and community-based services (HCBS), primary care, behavioral health, and dental care.

In its announcement, CMS stated that existing workforce initiatives in states such as California, Massachusetts, New York, North Carolina, and Vermont will be allowed to continue as currently authorized, but no new proposals will be approved, nor will existing Section 1115 expenditure authority for workforce initiatives be renewed at this time.

“CMS does not anticipate approving new state proposals for Section 1115 demonstration projects for workforce initiatives or extending existing Section 1115 demonstration expenditure authority for workforce initiatives at this time,” the agency stated.

Implications for Florida

The guidance has immediate implications for Florida, which currently has a waiver pending before CMS that includes workforce-related components. The state’s proposal sought funding for training and loan repayment programs aimed at strengthening the direct care workforce and improving access to Medicaid-funded home and community-based services.

Based on CMS’s new policy direction, this waiver — and others like it — appear unlikely to gain approval.

A Setback Amid a Workforce Crisis

The move comes at a time when states are grappling with unprecedented health care workforce shortages, particularly in home- and community-based settings. Providers across the country, including in Florida, have struggled to recruit and retain staff amid rising demand for services, wage competition from other sectors, and inadequate Medicaid reimbursement rates.

CMS’s decision to halt new workforce training initiatives removes a critical tool states had hoped to leverage to stabilize their provider networks and improve access to care.

What’s Next

While CMS will allow currently approved initiatives to proceed, this policy shift effectively closes the door on new federal support for workforce-focused Medicaid demonstrations — at least for now. HCAF will continue to monitor developments and advocate for sustainable, flexible funding solutions that support workforce development in the home care sector.