Overview
- A coalition of 25 states and the District of Columbia has filed federal suit challenging the Centers for Medicare & Medicaid Services’ June interim rule that implements national Medicaid community engagement requirements starting in 2027.
- The rule tightens the definition of who is “medically frail” by removing diagnosis-based automatic exemptions and requiring states to find a condition “significantly impairs” a person’s ability to meet the 80-hours-a-month engagement threshold.
- Plaintiffs say the rule violates federal law and the Administrative Procedure Act because it reverses earlier guidance, adds burdensome documentation steps, and forces states to build costly manual review processes.
- States and advocates warn the regulation’s verification plan, limited federal grants, and near-term operational deadlines for notices and IT changes risk large-scale paperwork-driven disenrollments like those seen in Arkansas in 2018.
- The lawsuit seeks a stay or injunction to block major provisions while the courts review the rule, a move that could delay or reshape implementation ahead of the program’s planned January 1, 2027 start and prompt more public comment and legal challenges.