Medicaid medical frailty rules face legal challenge

The Centers for Medicare & Medicaid Services (CMS) has issued new guidance regarding the medical frailty exemption for Medicaid work requirements. Under the One Big Beautiful Bill Act (OBBBA), certain adults must demonstrate 80 hours of monthly employment or qualifying activities starting January 1, 2027, unless they meet specific exemptions.

New federal rules require individuals seeking a medical-frailty exemption to not only have a qualifying condition—such as blindness, disability, or substance use disorder—but also to demonstrate that the condition significantly impairs their ability to meet community engagement requirements. This narrower interpretation is currently being challenged in a federal lawsuit in Maryland filed by medical organizations, individual enrollees, and the City of Columbus. Plaintiffs argue the rule may put seriously ill patients at risk of losing coverage.

CMS guidance suggests states use a data-first approach, utilizing existing claims and encounter data to identify eligible beneficiaries proactively. However, experts note the difficulty in translating complex clinical realities into consistent, workable determinations across large populations, particularly when weighing multiple diagnoses and functional limitations.