The Centers for Medicare and Medicaid Services this week issued guidance enabling states to implement a tiered approach for identifying Medicaid recipients who are too ill to meet new work requirements. Under legislation passed by Congress, states that expanded Medicaid must ensure working-age recipients work or volunteer at least 20 hours per week, with exemptions available for disabled individuals, caregivers for young children, and those with serious health conditions.
The tiered system allows states to categorize diagnoses based on the likelihood they impair work capacity. Tier 1 conditions, such as end-stage renal disease, ALS, and end-stage cancer, automatically qualify individuals for exemption without additional documentation. Tier 2 conditions may indicate medical frailty but require supplementary data such as recent acute care billing or pharmacy records showing high medication use and 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 individual patient circumstances, using type 2 diabetes as an example where vision loss would qualify as tier 1, while another patient with multiple medications and possible complications but no recent hospitalizations would be tier 3.
Medical organizations and patient advocacy groups have responded cautiously to the guidance. The American Medical Association stated the data-driven approach could reduce documentation burdens on patients and physicians, addressing long-standing concerns about whether diagnostic codes alone could substantiate medical frailty claims. However, Harvard professor Benjamin Sommers noted the system remains complicated with limited time for states to implement properly, and preliminary Congressional Budget Office estimates suggest over 7 million people could lose Medicaid coverage in coming years.
Disease advocacy groups are actively lobbying for favorable tier placement for their communities, noting that higher tier classifications reduce paperwork and coverage loss risk. Groups representing patients with myalgic encephalomyelitis and related conditions have begun outreach to state Medicaid directors. Some states, including Nebraska, Montana, and Arkansas, have already begun implementing work requirements, while others are scheduled to start implementation by January 1. A legal challenge from multiple states questioning the constitutionality of work requirements remains pending.
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