Federal Court Ruling Affects Arizona’s Implementation of Medicaid Work Requirements
A federal judge has ruled against a portion of the Centers for Medicare & Medicaid Services’ (CMS) guidance implementing Medicaid work requirements under H.R. 1, delivering a partial victory to Arizona and other states challenging the federal policy.
Court Rejects CMS’ Narrowed ‘Medically Frail’ Standard
The lawsuit, Massachusetts v. Oz, challenged CMS’ narrowed definition of individuals considered “medically frail” and therefore exempt from the new community engagement requirements.
Under the federal guidance, individuals with qualifying medical conditions would also have been required to demonstrate that their conditions significantly impaired their ability to meet the work requirements. The court rejected that additional standard, finding that CMS had imposed a restriction beyond what Congress authorized.
What the Ruling Does Not Change
- The ruling does not invalidate H.R. 1’s underlying work requirements.
- The court upheld other challenged provisions concerning the use of claims data and self-attestation when determining eligibility for exemptions.
What the Ruling Means for Arizona
The decision has implications for Arizona as the Arizona Health Care Cost Containment System (AHCCCS) prepares to implement the federal requirements beginning January 1, 2027.
The ruling removes the more restrictive federal standard for determining medical frailty, potentially reducing documentation and administrative burdens for patients, physicians, and the state. However, affected Medicaid expansion enrollees will still need to meet applicable community engagement requirements or qualify for an exemption.
