70-63000-26-EM092_63000 HCA_Approved Emergeny Procurement_FY27-003_Windlark_8.31.2026.pdf.PDF

2022 Emergency Form

STATE OF NEW MEXICO

EMERGENCY DETERMINATION FORM

STATE OF NEW MEXICO

EMERGENCY DETERMINATION FORM

The emergency procurement method (NMSA 1978, Section 13-1-127) may only be used when the service, construction or item of tangible personal property procured:

1. is needed immediately to:

a. control a serious threat to public health, welfare, safety or property caused by a flood, fire, epidemic, riot, act of terrorism, equipment failure or similar event; or

b. plan or prepare for the response to a serious threat to public health, welfare, safety or property caused by a flood, fire, epidemic, riot, act of terrorism, equipment failure or similar event; and

2. cannot be acquired through normal procurement methods.

a. The agency entering into an emergency procurement should employ a competitive process to the extent practicable under circumstances.

The purchase or lease of heavy road equipment is not allowed under the emergency procurement statute.

The state purchasing agent or a central purchasing office that makes an emergency procurement shall outline its determination of the basis for the procurement and its selection of the contractor in writing and include the writing in the procurement file.

Promptly thereafter, notice of the procurement shall be posted as required by statute.

I. Name of Agency: New Mexico Health Care Authority

Agency Chief Procurement Officer: Andrea Sisneros

Telephone Number: 505-479-1369. Andrea.Sisneros2@hca.nm.gov

II. Name of Contractor: Windlark Studios, Inc.

Address of Contractor: 6 Centerpointe Drive, Suite 420, Lake Oswego, OR 97035

Amount of prospective contract: $500,000

Term of prospective contract: 08/25/26 through 11/25/26, not to exceed 90 days from start

III. Thoroughly list the services (scope of work), construction or items of tangible personal property being procured:

The contractor will provide short-term, rapid-response multilingual communications

Docusign Envelope ID: 7C060A48-1C65-8924-833F-7175B6789D15

Mark Melhoff Highlight

Mark Melhoff Highlight

Highlight support to address immediate public education needs arising from H.R. 1-related Medicaid work requirement and noncitizen eligibility changes. This second emergency procurement is narrowly limited to new and materially changed implementation obligations that arose after the initial Windlark Studios emergency procurement, including the June 1, 2026 CMS Interim Final Rule and the newly established state-funded coverage program described in Section IV.

Services are limited to plain-language, HCA-branded materials necessary to explain: (1) the revised medical frailty exemption standard and related work-requirement compliance and reporting obligations; and (2) the Oct. 1, 2026 loss of federal Medicaid eligibility for certain noncitizens and the transition to the new state-funded coverage program for affected members. The purpose is to reduce customer confusion, support timely action and prevent avoidable loss or disruption of health coverage. Work is restricted to expedited development and production of essential digital and customer-support materials, including time-sensitive web content, core creative assets, FAQs and scripts. All services will be performed within the authorized emergency period and budget, not to exceed 90 days. Any services needed after this period will transition to a competitively procured contract in accordance with the New Mexico Procurement Code.

IV. Provide an explanation for the justification of the procurement including a description of the emergency condition(s) requiring use of emergency procurement and the practicable competition utilized in compliance with NMSA 1978, Section 13-1-127.

New or changed circumstances since the initial Windlark emergency procurement.

On June 1, 2026, the Centers for Medicare & Medicaid Services (CMS) issued an Interim Final Rule with Comment Period, “Medicaid Program: Community Engagement Requirement for Certain Individuals” (published June 3, 2026; effective July 31, 2026), implementing the Medicaid work requirement provisions of H.R. 1 (the One Big Beautiful Bill Act). This rule was not final and its substantive content was not known at the time of the initial Windlark emergency procurement. The rule adopted a definition of the statutory “medically frail” exemption that is materially narrower and more complex than the statutory language and than states, including New Mexico, had anticipated: a qualifying medical condition alone is not sufficient for exemption, and states must separately verify that the condition impairs the individual’s functional capacity to meet the work/community engagement requirement. States must also develop and maintain an auditable, regularly updated list of qualifying conditions and a process for individuals to request an exemption determination. This substantially increased complexity requires new public-facing explanatory content that could not have been developed prior to the rule's issuance.

In addition, the Interim Final Rule and related federal guidance require state Medicaid agencies to conduct direct member outreach between June 30 and August 31, 2026, by mail and at least one additional channel (telephone, text, website, or other electronic means), explaining work-requirement compliance obligations, the exemption criteria (including the revised medical frailty standard), consequences of non-compliance, and reporting instructions. This outreach mandate, tied to the narrower exemption definition released on June 1, 2026, is a new, specific, federally-driven obligation that arose after the initial emergency procurement and could not reasonably have been addressed through a standard procurement timeline given the rule's effective date of July 31, 2026.

A second, separately time-sensitive circumstance has also arisen since the initial emergency procurement. Beginning October 1, 2026, federal H.R. 1 changes to Medicaid non-citizen eligibility take effect, and certain lawfully present immigrants who are currently enrolled in Medicaid will lose full-benefit federal Medicaid coverage. In response, the New Mexico Legislature and Health Care Authority are establishing a new, state-funded health coverage program for non-citizens who lose federal Medicaid eligibility under this change. Because this state-funded coverage program is newly created and did not exist at the time of the initial Windlark emergency procurement, HCA must rapidly develop and distribute new public-facing materials explaining eligibility for the state program, how affected members transition from federal Medicaid to state-funded coverage, and what action, if any, members must take before their federal coverage ends on October 1, 2026. The compressed timeline between the establishment of the state program and its October 1, 2026 effective date does not allow sufficient time to complete a standard competitive procurement for this communications work.

Steps taken toward a competitive procurement since the initial emergency procurement.

Since the initial emergency procurement, HCA has been evaluating its longer-term communications and outreach needs, defining the services that may be required beyond the emergency period and identifying sustainable funding for a competitive procurement. HCA has also began developing the scope of work on April, 2026;

identified the appropriate procurement method and requested funding for ongoing outreach. These actions were intended to move continuing communications services into a standard competitive procurement.

A competitive procurement was not completed before the current emergency needs arose because the scope could not be finalized until HCA had sufficient federal implementation detail and a defined state response. The June 1, 2026 CMS Interim Final Rule materially changed the medical frailty exemption and imposed a compressed federal outreach schedule. The subsequent establishment of a state-funded coverage program for noncitizens created an additional communications need tied to the Oct. 1, 2026 coverage change. Those developments required HCA to revise and expand the anticipated scope while funding and procurement planning were still underway. HCA is now using this 90-day emergency period only as a limited bridge and commits to initiate and complete an appropriate competitive procurement during this period for any services needed thereafter.

Why these services cannot presently be acquired through normal procurement methods.

A standard competitive procurement, through an RFP or equivalent process, requires approximately three to six months for solicitation, evaluation and award. The federally mandated member outreach window of June 30 through Aug. 31, 2026, combined with the July 31, 2026 effective date of the CMS Interim Final Rule, did not provide sufficient time to complete a standard procurement before HCA was required to communicate the new work-requirement and exemption rules. The need continues beyond Aug. 31 because HCA must rapidly translate the new federal requirements into customer-facing materials and prepare affected members for implementation, including reporting and exemption processes.

Separately, certain noncitizens will lose federal Medicaid eligibility beginning Oct. 1, 2026, and HCA must communicate the newly established state-funded coverage option before that transition occurs. The short period between finalizing the state response and the Oct. 1 coverage change likewise does not allow HCA to complete a competitive procurement before essential customer communications must be developed and distributed.

A communications gap could directly affect more than 200,000 Medicaid members subject to new work requirements. Without timely, plain-language outreach, members may not understand their reporting obligations, know that they may qualify for an exemption such as medical frailty, or know what documentation or action is required. A separate group of members affected by the Oct. 1 noncitizen eligibility change also needs timely information about the state-funded coverage program and the transition process.

Delaying this work until completion of a standard procurement creates a significant risk of avoidable coverage loss, disruption or customer confusion.

Emergency procurement is therefore the only procurement mechanism available to meet these immediate, time-sensitive communication needs without creating a harmful gap while HCA completes the competitive procurement for continuing services.

Although conducted under emergency authority, HCA is employing competition to the maximum extent practicable under the circumstances by narrowly limiting the scope, duration and value of the procurement to the immediate emergency need. Windlark has demonstrated the capacity to begin work immediately and deliver multilingual, HCA-branded, time-sensitive communications within the compressed federal and state implementation timelines.The procurement will not exceed 90 days. It is not intended to establish a continuing noncompetitive relationship with the contractor. Any services required after the emergency period will be provided through an appropriate competitive procurement in accordance with the New Mexico Procurement Code.

V. Describe what measures are being taken to minimize the duration and effect of this particular emergency procurement.

This emergency procurement is limited to a term not to exceed 90 days and is structured solely as a bridge to competitive procurement. Its scope is narrowly limited to deliverables necessary to address the new CMS Interim Final Rule, associated work-requirement and exemption communications, and the Oct. 1, 2026 noncitizen coverage transition described in Section IV.

During this 90-day period, HCA commits to initiate and complete an appropriate competitive procurement for any continuing communications services. HCA will use the following milestones, subject to the procurement method approved by the agency CPO:

• Within 30 days of the emergency contract start: finalize the longer-term scope of work, funding source and procurement strategy.

• Within 45 days: initiate the competitive procurement and complete all agency actions necessary to issue or conduct the approved competitive process.

• Before expiration of the 90-day emergency period: complete the competitive procurement and transition any continuing services to the resulting competitively procured contract.

HCA's Chief Procurement Officer will track these milestones. The emergency scope will not be expanded to cover routine or longer-term communications work that can be acquired through normal procurement methods.

VI. Describe what measures the Agency will take in the future to prevent/mitigate use of an emergency procurement under similar circumstances.

To prevent additional successive emergency procurements for substantially similar communications services, HCA will incorporate anticipated Medicaid and SNAP communications needs into its longer-term procurement planning and will complete the competitive procurement described in Section V during this 90-day bridge period. HCA will:

• Maintain a defined, competitively procured vehicle for continuing communications and outreach services needed after the emergency period.

• Identify funding and procurement requirements before the emergency contract expires.

• Use the agency CPO to track procurement milestones and elevate delays that could jeopardize timely completion.

• Limit emergency contracting to genuinely new and unforeseeable circumstances that meet the requirements of NMSA 1978, Section 13-1-127, rather than using emergency authority for continuation of routine services.

• Plan future federal implementation communications as early as practicable when proposed rules, statutory deadlines or other federal actions signal a likely need for outreach.

HCA does not intend to seek a third successive emergency procurement to continue the services covered by this determination. Any continuing need after the 90-day period will be addressed through the competitive procurement completed during this bridge period.

These are scheduled, trackable commitments, and HCA will report status on each to DFA upon request.

Certified by: Date: _______________

Agency Chief Procurement Officer

8/24/2026

Agency Approval by: Date: ______________

Cabinet Secretary/Governmental Entity Head or Designee

8/25/2026

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