CMS deserves credit that this RFI’s framing does not fully capture: when a state brings forward a genuinely different approach, CMS has shown it can engage with it seriously, fund its planning through the APD process, and give it room to develop. Minnesota’s MES Modernization Strategy is a direct example: an approach that departed substantially from conventional patterns, which CMS engaged with and supported through planning and funding authorization. CMS has also shown it can convert pilots into policy: the outcome-based certification approach that became Streamlined Modular Certification grew out of exactly this pattern of testing an alternative before generalizing it. That flexibility is value-add, and the standards program should be designed to preserve and extend it.
A formal flexibility mechanism already exists and is almost never used. Under 45 CFR 95.627, a state may apply for a waiver of any requirement in Subpart F by presenting an alternative approach, and the approval standard, in paragraph (b), reads as if it were written for Horizon 3 work: the Secretary may grant the waiver if the alternative approach safeguards the state and federal interest and keeps the state in substantial compliance with the rest of the chapter. That is not a checklist, it is a judgment call in the state's favor. Paragraph (c) sets out what the state's request itself has to show to make that case: that the requirement is unnecessary, that it diminishes the state's ability to meet program requirements, or that the alternative leads to more efficient, economical, and effective administration. The reason states do not use it sits in paragraph (e): when a waiver is disapproved, the entire APD is disapproved, and that disapproval is final and not subject to administrative appeal. The innovation pathway exists, but requesting it bets the state's entire funding approval on the answer. No rational state official takes that bet, so the mechanism sits unused while states either conform or innovate informally.
The practical recommendations follow directly. Make 45 CFR 95.627 the recognized front door for Horizon 3 alternative approaches, and de-risk it: sever waiver disapproval from APD disapproval so a state can ask the question without wagering its funding, commit to a review service level, and publish approved waivers so each state’s successful alternative becomes every state’s known option. The best mechanism for continuous state feedback (question SA-6) follows the same logic: less through comment periods on draft documents, more through CMS participation in the delivery work where standards meet reality, with the waiver record itself becoming a running map of where the current requirements pinch.