Judge strikes CMS rule on medically frail Medicaid work requirements

The CMS rule and the lawsuit

Starting in January 2027, the One Big Beautiful Bill Act will introduce new work requirements for many adults between the ages of 19 and 64 who receive Medicaid expansion coverage. To keep their coverage, these individuals will be required to work or perform community service for at least 80 hours a month, or attend school at least half-time.

Congress included an exemption for people who are considered medically frail. However, the Centers for Medicare & Medicaid Services (CMS) issued an interim final rule in June that added a specific condition to this exemption. It stated that a person only qualifies if their physical, mental, or behavioral health condition significantly impairs their ability to comply with the community engagement requirement.

This specific addition sparked a legal challenge from 25 states and the District of Columbia. They argued that the government was overstepping its bounds by creating such a narrow definition for frailty. As reported by Medical Economics, a federal judge in Boston eventually stepped in to decide the matter on October 29.

The court's specific ruling

U.S. District Judge Richard Stearns ruled that the added standard regarding 'significant impairment' was beyond the powers of CMS and contrary to the law. By striking down this specific definition, the court sided with the states and the District of Columbia. The ruling effectively prevents the government from using that specific test to disqualify people from the medically frail exemption.

While the judge struck down the impairment standard, he did not strike down all of the CMS rules. He upheld the provision that allows states to verify a person's frailty using only claims and encounter data from the previous 12 months. He also upheld the limit that allows for only one self-attestation per continuous enrollment period.

The judge noted that the states' objections to these two specific provisions were unconvincing. This means that while the definition of frailty remains broader than CMS wanted, the government still maintains a specific timeframe and method for verifying those claims. The permanent injunction covers the suing states, but reports indicate the vacatur of the definition applies nationwide.

Medical community reactions

The debate over who is qualified to determine a person's ability to work has drawn criticism from healthcare professionals. Some physicians have argued that they are not specifically trained to make these types of determinations for policy purposes. One physician from Tucson, Arizona, noted that doctors are not trained to decide whether someone is able to work.

The concerns raised by the medical community often center on the complexity of chronic conditions. Because many illnesses can fluctuate, a patient might have some good weeks and some bad weeks. This variability makes it difficult to apply a static rule to determine whether someone is permanently impaired or capable of meeting a monthly hour requirement.

The ruling provides some relief to these concerns by preventing a rigid, government-mandated impairment test. By keeping the definition of 'medically frail' broader, the court allows for more flexibility in how states and individuals approach the exemption. However, the underlying work requirements remain in place for the general population starting in 2027.

What happens next

The most immediate impact of this ruling is the removal of the 'significant impairment' hurdle for Medicaid enrollees. States and the federal government will now have to navigate the work requirements without using the specific standard that the judge struck down. The rest of the work requirements, including the 80-hour monthly commitment, are still scheduled to take effect in January 2027.

Moving forward, the focus will likely shift to how states implement the 12-month lookback period and the self-attestation limits that the judge upheld. These mechanisms will be the primary tools for verifying who qualifies for the exemption. The legal battle over the specific wording of the frailty definition is over, but the administrative rollout of the bill remains a key area to watch.

The court's decision serves as a check on the agency's power to add specific conditions to existing laws. It ensures that the exemption for the medically frail remains as broad as the original legislation intended. For residents in the affected states, this means the path to maintaining Medicaid coverage while being medically frail remains slightly more accessible than the CMS rule would have allowed.