Lawsuit targets ‘medically frail’ Medicaid work requirement exemption

A new lawsuit is challenging how the Trump administration plans to exempt medically frail people from Medicaid work requirements.

Medicaid enrollees, alongside several major health care advocacy organizations and the city of Columbus, Ohio, said the administration’s final rule implementing work requirements is not what Congress intended.

They argue the rule narrowly defines who qualifies for the law’s medical frailty exclusion, putting people with serious physical and mental health conditions at risk of losing Medicaid because of new reporting and verification requirements, even though Congress categorically excluded medically frail people from the requirements.

The coalition is asking a federal court in Maryland to vacate the rule, alleging it’s “arbitrary and capricious and contrary to law.” The suit also alleges violations of the Administrative Procedure Act, the law governing how regulations are issued.

The rule, issued in July, is meant to guide 42 states and the District of Columbia in carrying out the work rules implemented by the One Big Beautiful Bill Act. GOP lawmakers and administration officials have described the policy as a way to combat waste, fraud and abuse in the Medicaid program.

The work requirements are set to take effect in January. Beneficiaries who are part of the Medicaid expansion population must work or volunteer at least 80 hours per month, attend school at least part time or participate in job training.

Expansion states are responsible for ensuring working-age recipients are meeting the requirement unless they are disabled, caring for young children, or have a serious health condition.

The rule implicitly links the definition of medical frailty to a person’s ability to work. To qualify for an exemption, a person must demonstrate that their condition prevented them from meeting the work requirement.

However, chronically ill people and advocates have expressed concern over how they’re supposed to prove they are too sick to work.

The Centers for Medicare and Medicaid Services recently issued new guidance allowing states to use a “tier system” to reduce administrative burden.

The tiered system would be established based on available diagnostic coding and data sets. So instead of merely setting up a list of certain diagnoses that could qualify a person for an exemption, states can also put the conditions into tiers.

For instance, Tier 1 would mean a diagnosis alone is enough to show that a person won’t be able to meet the work requirement. A Tier 2 condition could mean an individual is medically frail but additional information is needed to determine if the condition is serious enough to prevent the person from working.

“Congress created the medical frailty exclusion to protect people with serious health needs, but the administration’s rule turns that protection into yet another obstacle people must overcome,” Jane Perkins, litigation director at the National Health Law Program, which is representing some of the plaintiffs, along with legal advocacy group Democracy Forward.

“The statute exempts the medically frail from work requirements and does not authorize CMS to re-introduce it through the backdoor with the new rule. This rule puts access to care and, in some cases, people’s lives at risk,” Perkins said.

The lawsuit is the latest attempt to challenge the work requirements. In June, about two dozen states sued the Trump administration over the “medically frail” definition. A federal judge in July denied the states’ request to block the rule while the lawsuit is agued.