The Centers for Medicare and Medicaid Services released new guidance this week permitting states to implement a tier-based system for identifying Medicaid recipients who are too ill to meet the 20-hour-per-week work requirement established under H.R. 1, passed by Congress the previous year. The guidance aims to streamline the process by allowing states to use existing diagnostic and claims data rather than requiring patients to submit additional documentation to prove medical frailty.
Under the new framework, conditions are classified into three tiers based on severity and the documentation required. Tier 1 encompasses the most serious diagnoses, such as end-stage renal disease, ALS, and end-stage cancer, which automatically exempt patients without additional paperwork. Tier 2 conditions indicate medical frailty but necessitate supplementary data such as recent acute care billing or pharmacy records, potentially including individuals with multiple chronic conditions and high service utilization. Tier 3 conditions undergo individual case-by-case review. The guidance notes that the same diagnosis may fall into different tiers depending on the patient’s specific circumstances and medical history.
Medical organizations have responded favorably to the approach, with the American Medical Association stating that the data-driven methodology could reduce documentation burdens on patients and physicians. However, experts including Harvard University’s Benjamin Sommers cautioned that the approach remains complicated and states may struggle to implement it correctly before the Jan. 1 deadline for establishing eligibility systems. Disease advocacy groups have begun engaging with state Medicaid directors to advocate for favorable tier placements for their conditions, recognizing that higher tier classification could significantly reduce paperwork and coverage loss risk.
Several states have already begun implementing work requirements early, including Nebraska, Montana, and Arkansas, though data on coverage losses have not been released. Iowa announced a Dec. 1 start date, while other expansion states are scheduled to commence Jan. 1. The policy continues to face legal challenges from two dozen states questioning the lawfulness of work requirements and medical frailty documentation standards. Preliminary estimates from the Congressional Budget Office suggest over 7 million people may lose Medicaid coverage in coming years under these requirements.
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