Medicaid Lets States Use Medical Frailty Tiers, Easing Some Work-Requirement Documentation Pressure

The Centers for Medicare and Medicaid Services this week released guidance allowing states to use a tier system to determine which Medicaid recipients are too ill to meet work requirements. The document gives states another option for defining “medical frailty” as they prepare to enforce rules requiring many working-age beneficiaries to work or volunteer at least 20 hours per week.

The change offers some relief to patient advocacy groups and medical associations that had warned the exemption process could become confusing and burdensome for patients and physicians. But it does not remove the core policy risk: if states build complex eligibility systems on a tight timeline, very sick people may still lose coverage in the process.

How the tier system works

Under H.R. 1, passed by Congress last year, states that expanded Medicaid must ensure working-age recipients are meeting the 20-hour-per-week requirement unless they are disabled, caring for young children, or have a serious health condition. The new guidance says states can still compile diagnostic-code lists indicating medical frailty, but they may also sort conditions into tiers based on how likely they are to impair someone’s ability to work.

People with conditions such as end-stage renal disease, ALS, or end-stage cancer would be placed in the highest tier. In that category, the diagnosis alone is considered serious enough to automatically prevent work or daily activities, so no additional paperwork is required.

Tier 2 conditions may indicate medical frailty but need more supporting information, such as billing for recent acute care or pharmacy codes for various medications. CMS said this tier could include people with multiple serious chronic conditions alongside high service utilization or repeated inpatient admissions for serious or complex conditions.

Many diagnoses could fall into different tiers depending on the specifics of the illness. CMS gave the example of a patient with vision loss from type 2 diabetes being classified as tier 1, while another patient with type 2 diabetes who is taking several medications and has possible peripheral neuropathy but no recent hospital admissions would be placed in tier 3.

Operational relief, but not simplicity

States are not required to use the tier structure. Even so, the added flexibility could matter because they are under pressure to have eligibility-check systems in place by Jan. 1. The American Medical Association said the approach could reduce the need for beneficiaries and physicians to submit extra documentation. The group had been seeking clarification on whether diagnostic codes alone could establish medical frailty for seriously ill patients.

Benjamin Sommers, a primary care provider and professor of medicine at Harvard University, called the guidance “somewhat more encouraging” because it allows states to use existing data to automatically exempt some people. He also said the framework remains fairly complicated and leaves little time for states to implement it well.

That timing matters because preliminary estimates from the Congressional Budget Office suggest over 7 million people will lose Medicaid coverage in coming years. Nebraska, Montana, and Arkansas have begun implementing work requirements early, though they have not released data on coverage losses so far. Iowa said it would start on Dec. 1, and all other expansion states are set to start Jan. 1.

What the guidance still leaves unresolved

Disease groups are already pushing for better placement within the tier system because moving up a level could mean less paperwork and a lower risk of losing insurance. #MEAction, which represents people with myalgic encephalomyelitis/chronic fatigue syndrome, as well as co-occurring conditions including long Covid and postural orthostatic tachycardia syndrome, has contacted dozens of state Medicaid directors and met with several.

Its concern is that people with little-understood conditions often struggle for years to secure formal diagnoses even when their health has clearly deteriorated. During the first year of work requirements, people can self-attest to their condition, but beginning in 2028 they will need documentation to keep the frailty exemption.

CMS is also still facing a legal challenge from two-dozen states arguing that work requirements, and the burden of proving medical frailty, are unlawful. That means the policy is moving forward on two tracks at once: operational rollout in the states and continuing legal scrutiny over whether the exemption structure itself is workable.