Advocacy and Legal Update

Washington Update
by Artemis Policy Group

CMS Releases Rule on Medicaid Work Requirements

On June 1, 2026, the US Centers for Medicare and Medicaid Services (CMS) released its long-awaited interim final rule implementing the “community engagement” requirements (also known as work requirements) that Congress adopted as part of the One Big Beautiful Bill Act of 2025 (OBBBA). This is one of the biggest changes in the OBBBA and stakeholders have been looking for this rule to provide the nitty-gritty details on how work requirements would be operationalized. A high-level summary of the rule is available here.

Background and New Policy on Medical Frailty

As previously reported, OBBBA requires adults applying for or already covered under Medicaid expansion (just one of many Medicaid eligibility pathways) to engage in 80 hours/month of community engagement (CE) activities: work, school, jobs training, volunteering, etc. The law also provides a number of exclusions and exceptions to the work requirements, including an exclusion for people deemed “medically frail,” a category that encompasses those with “serious or complex medical conditions.” During debates and passage of OBBBA, members of Congress said this language would protect medically vulnerable individuals against potentially devastating coverage losses stemming from the new policy.

In the months since OBBBA’s passage, Hemophilia Alliance and partners have advocated with CMS and state Medicaid programs that bleeding disorders are serious or complex medical conditions within the meaning of the statute. Over that same period, CMS held months of informal discussions with states about how they can operationalize the medical frailty exclusion – e.g., through adoption of lists of ICD-10 codes for serious or complex conditions (early-implementation states like Nebraska Medicaid have followed this strategy).

Unfortunately, CMS chose to pivot and go beyond the law to lay out a much narrower interpretation of “medical frailty.” According to the rule, states have to undertake a two-part inquiry to determine who is entitled to an exclusion:

1. Does the person have a serious or complex medical condition (CMS mentions hemophilia and sickle cell disease as possible examples)? States are encouraged to develop ICD-10 code lists of such conditions, so our initial outreach was still useful. AND ALSO
2. Does the condition impact the individual’s ability to work?

By adding a second prong to the medical frailty standard (i.e., inability to work), the rule hugely complicates the task for states to verify who is eligible for the medical frailty exclusion, as well as for providers who may be forced to evaluate whether patients are physically able to work. The overall impact of CMS’s new rule is a greatly increased risk of coverage loss for people with bleeding disorders and other serious health issues. (Most of the Medicaid coverage losses from policies like this come from red tape rather than enrollees’ failure to satisfy the underlying requirements.) We expect that there will be lawsuits challenging the rule for being inconsistent with the text of the law.

Impact for HTCs

We were hoping that people with bleeding disorders would be categorically excluded under “medical frailty” to avoid having to jump through all of the paperwork hoops. This is now much less likely. More HTC patients will have to go through the steps to demonstrate that they are meeting the CE requirements (working, going to school, etc). Some HTC patients may seek documentation from their providers that they are unable to engage in CE activities. Other HTC patients will qualify under other exclusions, such as being parents or caregivers.

As the rule currently stands, HTCs will have more work to support patients navigating CE requirements, and more of our patients might lose coverage. The Hemophilia Alliance will continue our advocacy on the federal and state levels to try to change the policy to reduce unnecessary red tape. Over the next few months, Hemophilia Alliance will also continue to provide policy updates and educational materials to help HTCs and their patients prepare for the coming changes. Stay tuned for further updates and a webinar this summer.