H.R. 6254 — Medicaid Staffing Flexibility and Protection Act of 2025

This section permits states, at their option, to contract with another state or local agency or a contractor to conduct Medicaid eligibility determinations (amending section 1902(a)(5) of the Social Security Act), provided the contract does not create incentives to delay such determinations or deny eligibility to otherwise eligible individuals. The section similarly permits states to contract out Medicaid fair hearings (amending section 1902(a)(3)), with the same prohibition on incentives to delay hearings or deny eligibility to otherwise eligible individuals.

This section prohibits a state from using the flexibility provided under section 2 unless the contractor selected to conduct Medicaid eligibility determinations or redeterminations has no direct or indirect financial relationship with any Medicaid managed care organization (MCO)—including the network providers affiliated with such organization—that contracts with the state to provide services to Medicaid enrollees.