New federal guidance detailing how states must apply stringent Medicaid eligibility rules is doing little to assuage widespread concerns about how the impending changes will impact individuals with developmental and physical disabilities.
The comprehensive 33-page document released this month by the Centers for Medicare and Medicaid Services outlines the procedures states should follow to evaluate exemptions to forthcoming Medicaid work requirements based on what the agency defines as “medical frailty.”
Most states across the country are facing a hard deadline to implement what are officially known as “community engagement” requirements for many Medicaid beneficiaries by the start of next year. Under these strict new rules, beneficiaries will be legally required to prove that they are actively working, volunteering, or participating in educational programs for at least 80 hours per month in order to maintain their healthcare coverage.
These massive structural changes to the safety-net program were enacted as part of a broad 2025 legislative package known as the One Big Beautiful Bill Act, which included nearly $1 trillion in sweeping cuts to Medicaid funding nationwide.
The federal law does include specific protective language allowing individuals who are deemed “medically frail” or who have “special medical needs”—including individuals with physical, intellectual, or developmental disabilities—to be formally exempt from the mandatory work requirements. Furthermore, the statute extends these exemptions to parents, legal guardians, caretaker relatives, and dedicated family caregivers who look after loved ones with significant disabilities.
However, subsequent regulations issued by CMS in June established much stricter standards for who ultimately qualifies for these statutory exemptions than many healthcare advocates and policy experts had anticipated. Under that specific rule, people living with physical, intellectual, or developmental disabilities will qualify for the “medical frailty” exemption only if their underlying medical condition “significantly impairs” their day-to-day ability to perform at least one activity of daily living, commonly referred to as an ADL. These essential activities include critical tasks such as bathing, dressing, walking, toileting, eating, or getting in and out of bed or a chair.
The newly released guidance provides additional operational details on how states should go about implementing this “medical frailty” exclusion, doubling down on the strict requirement that an individual’s clinical condition must directly and severely impact their ability to secure or maintain employment or other community engagement activities.
“An individual in one of the five categories is considered medically frail only if the individual’s physical, mental, or other behavioral health condition significantly impairs the individual’s ability to comply with the community engagement requirement,” the federal guidance explicitly states.
Disability rights advocates and legal experts have repeatedly warned that this narrow standard goes far beyond what Congress originally intended when drafting the legislation, creating a serious threat to healthcare coverage for vulnerable populations with severe medical conditions and disabilities.
“This updated guidance from CMS does attempt to provide more clarity, but doesn’t undo the overreach of the initial proposed final rule that is causing confusion for states, families and people with disabilities,” said Nicole Jorwic, chief program officer at Caring Across Generations. “Congress wrote a broad, clinically grounded definition of medical frailty into law specifically to protect people with serious conditions and disabilities. What we’re seeing now is the administration narrowing that definition through sub-regulatory guidance, without the transparency or accountability of formal rulemaking.”
Within the new guidance, CMS outlines several methods for states to verify medical eligibility. The agency suggests that states should first attempt to verify “medical frailty” automatically by leveraging administrative information they already possess from the previous 12 months of healthcare claims data. In scenarios where states are unable to make a determination using existing data, officials may permit beneficiaries to provide a one-time self-declaration. Following any initial approval, states are required to re-verify an individual’s “medical frailty” status every 12 months using “reliable information or documentation.”
As one potential operational pathway, CMS notes that states can utilize a tiered evaluation approach. Under this flexible model, a state evaluation process might begin by checking an administrative list of predefined medical conditions that automatically qualify an individual for an exemption by their very clinical definition. If a condition is not immediately found, the state would then consider a secondary list of conditions that “may indicate an individual is medically frail” if supported and confirmed with additional information. Finally, in instances where there is still insufficient information to make a fair judgment based on the first two tiers, a manual review process would be triggered.
CMS also stated that states are permitted to consider alternative data-driven approaches tailored to their local administrative systems.
While some policymakers view administrative flexibility as a positive step, advocacy groups have raised serious questions about the reliability and equity of these proposed verification mechanisms. Kim Musheno, senior director of Medicaid policy at The Arc of the United States, noted that while it is positive that CMS is instructing states to utilize information they already possess, relying exclusively on medical claims data from the previous year may prove entirely insufficient.
“A claims record doesn’t always show how a disability affects someone’s daily life. That’s especially concerning for people with intellectual and developmental disabilities whose disabilities may be lifelong but aren’t reflected in recent medical claims,” Musheno explained. “If the state’s data aren’t enough, the burden can shift back to the person to track down medical records or provider documentation.”
Musheno also expressed deep concern over the fact that CMS made its suggested tiered evaluation framework completely optional. By leaving the framework optional, the federal agency is giving individual states significant latitude to develop their own independent approaches, criteria, and lists of qualifying medical conditions.
“Two people with the same disability could face very different processes and potentially different outcomes, simply because they live in different states,” she said.
The growing anxieties surrounding the potential loss of necessary health coverage for individuals with disabilities and chronic health conditions have already triggered significant legal battles. More than 70 organizations joined together this month to file an amicus brief in an ongoing federal lawsuit brought by a coalition of officials from 25 states and Washington, D.C., who are actively challenging the validity of the CMS rules.
“Congress excluded medically frail people from the work requirements,” said Jane Perkins, litigation director at the National Health Law Program, which filed the amicus brief alongside prominent organizations including the American Association of People with Disabilities, the Autistic Self Advocacy Network, and Easterseals, among many others. “They should not have to repeatedly prove that they are unable to meet the work requirements.”
Legal and advocacy groups emphasize that the stakes extend far beyond basic health insurance cards. Barbara Merrill, CEO of the American Network of Community Options and Resources, known as ANCOR, which also signed onto the amicus brief, warned that the broader infrastructure supporting people with disabilities is now facing severe jeopardy.
“The new Medicaid work requirements will interrupt access to community-based services for people with disabilities and threaten the fragile network of community providers,” Merrill said. “The increased Medicaid coverage losses that will result from narrowing the medical frailty exemption will ultimately reduce access to services for people who truly need them and harm community providers who will continue to deliver support without receiving payment for their services.”
CMS did not immediately respond to requests for comment regarding the release of the new guidance or the mounting legal challenges from states and advocacy organizations.
