WASHINGTON — The Centers for Medicare and Medicaid Services this week released guidance for states allowing them to use a “tier system” to determine which Medicaid recipients are too ill to work or volunteer at least 20 hours per week.
The decision, discussed internally with state Medicaid leaders in recent days, was made public via a document earlier this week. It came as a small relief to patient advocacy groups and some medical associations that had criticized “medical frailty” exemptions as confusing and potentially burdensome for patients and medical providers.
The new guidance is “somewhat more encouraging,” said Benjamin Sommers, a primary care provider and professor of medicine at Harvard University, because it allows states to use existing data to automatically exempt people.
“At the same time, it’s still a fairly complicated approach, and there’s just not much time for states to get this right,” he said. Sommers remains worried that very sick people will get caught in red tape and lose their health insurance. Preliminary estimates from the Congressional Budget Office suggest over 7 million people will lose Medicaid coverage in coming years.
Under H.R. 1, passed by Congress last year, states that expanded their Medicaid program must ensure all 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. However, chronically ill people and their advocates have expressed deep concern over how they’re supposed to prove they are too sick to work.
The guidance this week means that, in addition to compiling lists of diagnostic codes that might indicate “medical frailty,” states can tier diagnoses 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, for example, would be in the highest tier. This designation means their diagnosis is so serious it automatically prevents them from working or conducting daily activities, and no additional paperwork is needed.
Tier 2 conditions may indicate medical frailty but require additional data, such as billing for recent acute care, or pharmacy codes for various medications. “This tier could include individuals with multiple serious chronic conditions in conjunction with high service utilization or repeated inpatient admissions for serious or complex conditions,” the document said.
Tier 3 illnesses would undergo case-by-case review.
Many diagnoses could fall into different tiers depending on the specifics of the patient’s illness, CMS said. For example, someone with vision loss from type 2 diabetes would be classified as tier 1. Another patient with type 2 diabetes, who is on several medications and has possible peripheral neuropathy but no recent hospital admissions, would be tier 3.
States aren’t required to use the tier structure, but given the pressure they are under to establish an eligibility-check system by Jan. 1, more flexibility could be helpful.
“This data-driven approach could reduce the need for beneficiaries and physicians to submit additional documentation,” the American Medical Association said in a national advocacy update. The group has been calling on CMS to clarify whether diagnostic codes alone could show medical frailty for seriously ill patients. (If not, doctors would’ve had to do more documentation, which many say is unrealistic.)
Now, disease groups are lobbying for better placement in the tier structure. Moving up a rung could mean less paperwork for patients, and a lower risk of losing coverage.
#MEAction, a group that represents people with the debilitating condition of myalgic encephalomyelitis/chronic fatigue syndrome, or ME/CFS — along with co-occurring conditions, such as long Covid and postural orthostatic tachycardia syndrome, or POTS — is among those working to climb tiers. The group reached out to dozens of state Medicaid directors, and has met with several, to explain the unique challenges of its community.
People with little-understood conditions, such as ME or long Covid, often struggle for years to get a diagnosis despite experiencing clear and significant declines in their health. That might be OK for the first year of work requirements, during which people can self-attest to their condition, but as of 2028, they will need documentation to keep the frailty exemption.
“We’re looking at two cliffs,” #MEAction Campaigns Director Ben HusuBorger told STAT.
Nebraska, Montana, and Arkansas have begun implementing work requirements early, though they have not released data on how many people have lost coverage so far.
Iowa said it would start implementation on Dec. 1. All other expansion states are set to start Jan. 1.
CMS is still facing a legal challenge from two-dozen states alleging work requirements, and the burden of proving “medical frailty,” are unlawful.
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