New Medicaid Guidance on Medical Frailty Exclusions and New ARC Resource on Medicaid Work Requirements

On September 8, CMS released new guidance for states on the medical frailty exclusion from the new Medicaid work and community engagement requirements.

As you know, individuals who are medically frail, including those with a serious or complex medical condition, disabling mental disorder, substance use disorder, significant disability, or who are blind or meet the Social Security Act disability standard, are excluded from these requirements under statute. In June, CMS issued an interim final rule requiring states not only to confirm that an excluded medically frail individual has a qualifying condition, but also that the condition significantly impairs the individual’s ability to comply with the work requirements.

Importantly, CMS confirms in the guidance that states may use diagnosis codes, as well as combinations of claims, utilization, pharmacy, DME, service, and other clinical data, to identify individuals as medically frail through an ex parte review. The guidance also offers an optional three-tiered verification framework:

• Tier 1 conditions are those from which the state can confirm that the individual’s ability to comply with the community engagement requirement is significantly impaired based on ICD-10 code data.
• Tier 2 consists of conditions that may indicate, based on ICD-10 code data, that an individual is medically frail but additional information is needed to determine if the condition significantly impairs the individual’s ability to comply with community engagement. States may use multiple data points, such as additional diagnosis and utilization data, and methodologies to identify individuals for the exclusion during ex parte review.
• Tier 3 means there is insufficient or no information or data to assess medical frailty based on Tier 1 / Tier 2 criteria alone, which should trigger a manual individualized review process where additional documentation may be required. Additional documentation may include, but is not limited to:
  • Health records such as medical history, treatment records, progress notes, discharge paperwork, medication lists, and lab or other diagnostic test results;
  • Provider documentation or certification;
  • Managed care plan care management information; and/or
  • Level of care or functional assessment information that is not in a state’s administrative data.

The practical effect of this guidance will depend heavily on state implementation decisions, including whether to adopt this framework, which conditions are placed in each tier, what data combinations are considered sufficient, and what documentation is required when an individual is not identified through an ex parte process. Federation staff may wish to engage state Medicaid agencies as these methodologies are developed to encourage broad use of available data, minimize reliance on physician certifications, and ensure accessible processes for individuals who are not identified automatically.

Work Requirements for MaineCare Expansion Adults

Additional AMA Resources

• Advocacy Roadmap: Hardship Exemptions from Medicaid Work Requirements, which identifies policy options for designing accessible hardship exemptions and minimizing avoidable coverage losses.
• Patient Guide to the New Medicaid Work and Community Engagement Rules, a patient-facing overview of the new requirements, exclusions, and steps individuals may need to take to maintain coverage.
• AMA Comments on the June 3 Interim Final Rule, which urge CMS to withdraw the new impairment standard, maximize automatic and ex parte determinations, minimize documentation burdens on physicians and patients, and adopt additional safeguards against inappropriate disenrollment.