Health Groups Unhappy With Medicaid Work Requirement Interim Rule

CMS issued an interim final rule Monday outlining implementation rules for new Medicaid work requirements, and health organizations seemed none too happy with it.

“Most adults covered by Medicaid are already working, caregiving, or would not be subject to this policy due to illness or disability,” Jan Carney, MD, MPH, president of the American College of Physicians, said in a statement. “Research shows us that instituting work requirements will not meaningfully increase employment. [Work] requirements create a tangle of red tape that diverts resources away from patient care and worsens the administrative burden on physicians … Instituting work requirements for the program could lead to millions of individuals losing healthcare coverage, putting at risk their health, financial security, and lives.”

“The new restrictions link the definition of medical frailty to a person’s ability to work,” Lisa Lacasse, president of the American Cancer Society Cancer Action Network, said in a statement. “This would mean cancer patients and survivors who are suffering from debilitating side effects of the disease or treatment would have to officially prove they can’t work, in a process that is likely to be difficult and take a long time. Cancer patients who can still work — and many want to, for example, when they are well enough to work in between chemo rounds — will have to choose between losing their Medicaid coverage, working the required 80 hours per month, or giving up working altogether to qualify for an exemption.”

Definition of ‘Medically Frail’ at Issue

The work requirement — or community engagement requirement, as it is officially known — is part of H.R. 1, the reconciliation bill passed by Congress in July. Under the requirement, Medicaid recipients must demonstrate at least 80 hours of engagement per month in employment; participation in a work program, such as job training; enrollment in an educational program (at least half time); community service activities; or a combination of these activities. The requirements take effect Jan. 1, 2027; they apply only to the 40 states (and the District of Columbia) that expanded the Medicaid program under the Affordable Care Act.

Although there are exemptions in the law for those who are “medically frail” and therefore unable to work, critics say that CMS ignored the law’s requirements when writing the regulations. “The law is very clear that people who have special medical needs, including those with a serious or complex medical condition, are statutorily exempt from the community engagement requirement,” Carl Schmid, executive director of the HIV+Hepatitis Policy Institute, said in a statement. “People living with HIV have a lifelong serious and complex medical condition and have special medical needs — they cannot stay healthy without continuous access to lifesaving HIV treatment. Any gap will put them at risk of serious health consequences.”

“We are disappointed that the Trump administration ignored the law and, while they agree that HIV/AIDS and viral hepatitis are serious or complex medical conditions, they are proposing that states will have to determine for every individual if their health is impaired and that they can’t comply with the work requirement,” he continued. “This added requirement was not in the law and puts the health of people living with HIV and viral hepatitis at risk.”

No Blanket Exemptions

KFF, a health policy research organization, had similar comments. “Significantly, the rule adopts a restrictive definition of medical frailty that differs from states’ early expectations,” Jennifer Tolbert, MPH, deputy director of KFF’s Program on Medicaid and the Uninsured, wrote Tuesday in a post on the organization’s website. “States have been eagerly awaiting clarification on how to define medical frailty.”

Although early indications from CMS hinted that the federal definition might mirror an existing medical frailty definition and that states would be given flexibility to go beyond the federal definition, “on both counts, the rule adopted a more restrictive approach, first tying medical frailty specifically to the ability to comply with the community engagement requirement (i.e., the ability to work) and prohibiting states from adding categories of individuals to the medical frailty definition. To operationalize this definition, the rule requires states to develop lists of health conditions but prohibits them from categorically exempting people with those conditions without considering an individual’s ability to meet the community engagement requirement based on their health,” she said.

“For example, the rule does not allow states to exempt all people with cancer, HIV, Parkinson’s disease, or multiple sclerosis,” Tolbert wrote. “This significant change may pose challenges for states that had been moving forward with developing lists of diagnosis codes assuming a less restrictive definition and could make it more difficult for individuals to document medical frailty.”

Medicaid Health Plans of America (MHPA), which represents Medicaid managed care plans, expressed similar concerns. “The administration’s community engagement rules threaten coverage for the very people Congress intended to protect,” MHPA President and CEO Craig Kennedy, MPH, said in a statement. “By drastically narrowing who qualifies for a medical frailty exemption and requiring that individuals prove they are unable to work, not just that they have a serious medical condition, it is inevitable that medically frail individuals who Congress intended to exempt from community engagement requirements will lose coverage.”

Oz Praises Rule

CMS Administrator Mehmet Oz, MD, MBA, praised the new requirements at a White House press conference on Tuesday. “The work requirement was based on concepts that date back to when Bill Clinton was president” and aimed to reduce fraud in the Temporary Assistance for Needy Families program, he said.

“The Democratic administration said that ‘The fraud is getting so bad, the abuse is so big in these programs, we need to clean them up, we need to get people to try to work.’ It’s a path to prosperity,” Oz said.

“I hope you share this belief that we’re put on this earth with agency to change our future, change the country’s future, and make the planet a better place,” he said. “We’re put here to make a difference, but if you’re sitting at home, which is true for the millions of people who are able-bodied on Medicaid, on average you’re spending 6.1 hours watching television or just hanging around. That’s not why you’re here. So Congress very wisely said, ‘let’s get you back into the workforce,'” by requiring people to work.

Comments on the rule can be submitted here and are due by July 31.