Operationalizing The Medical Frailty Exemption: A Step-by-Step Implementation Toolkit For States

Context

The enactment of H.R.1 introduces mandatory work reporting requirements for Medicaid expansion adults, while explicitly exempting individuals who are medically frail. The statute further requires states to attempt to verify medical frailty exemptions ex parte—using data already available to the state, where possible, without requiring information from individuals. 1 These requirements present significant challenges. States must align clinical definitions, programmatic eligibility, data architecture, and information technology (IT) systems to ensure that the most at-risk individuals can enroll in and maintain coverage.

This toolkit provides a structured roadmap for defining medical frailty, developing, and validating data-driven code lists, and integrating those requirements into state eligibility and enrollment workflows. It also describes how states should engage individuals with lived experience and community partners throughout design and operational planning. The toolkit draws from existing federal guidance, prior state experience implementing medical frailty definitions, and work assisting states in Medicaid program design and systems implementation.

The toolkit provides a step-by-step guide for how states can tackle the operationalization of medical frailty exemptions, while reducing burden on individuals and state administration and making accurate eligibility determinations.

Step 1. Establish a Cross-Division Governance Structure

Effective implementation of the medical frailty exemption requires coordination across multiple divisions within a state Medicaid agency and robust engagement with external partners. While most states have appropriately anchored the implementation of work reporting requirements within a state's Eligibility and Enrollment Division, defining and operationalizing medical frailty requires state agency subject matter expertise beyond the Eligibility team. A structured crossagency governance model ensures that clinical, eligibility, operational, and technical perspectives are aligned. States can ground their governance structures through collaboration with community partners and people with lived experience in Medicaid and with medical frailty. This will help ensure that policy decisions and implementation design will support consistent and compliant exemption determinations. Such engagement is also a core strategy for states to build and sustain trust, strengthen accountability, and mitigate coverage loss.²

The internal and external partners that should be engaged in designing and operationalizing medical frailty should include, at a minimum:

• Eligibility and Enrollment Division: Integrates medical frailty flags within the data verification hierarchy and eligibility workflows and oversees the development, in partnership with the clinical team, of the medical frailty screener at application and renewal. The team is responsible for ensuring compliance with the federal requirements, developing eligibility guidance, and training the eligibility and enrollment workforce. This team will also oversee the development of the work reporting requirement business rules, in partnership with the IT Systems Implementation Team.
• Medicaid Management Information System (MMIS)³ / Data Acquisition and Analytics Team: Design and develop data architecture, processes for data acquisition, ingestion, people matching, and analytics required to aggregate data sources and conduct analyses to support medical frailty designations.
• Clinical Policy Experts: Validate medical frailty definitions and identify state-specific programs that meet medical frailty definitions. These experts are also responsible for identifying data sources needed to develop medical frailty definitions and providing technical guidance on and validating the medical frailty screener and the development of code lists for data verification processes.
• Individuals with Lived Experience: Provide their expertise and validate the policy and implementation process design, support user testing, and inform development of consumer-facing materials. Individuals with lived experience include but aren't limited to the state's Medicaid Advisory Committee (MAC) and Beneficiary Advisory Council (BAC) advisory groups.
• Community Partners. External clinician experts in academic medicine, managed care plan Chief Medical Officers and care managers, advocacy organizations, communitybased provider organizations, and others who can provide their expertise and validate policy and implementation process design, support user testing, and inform development of consumer and provider-facing materials.
• Program Policy and Legal Teams: Ensure federal and state policy compliance and guide implementation, including intersections with other policy changes in process across the agency, and ensuring that necessary data sharing agreements are in place to acquire external data.
• Medicaid Managed Care Team: Engages with managed care plans and oversees the implementation of new requirements of managed care plans in supporting the identification of medical frailty.
• IT Systems Implementation Team (Agency and Contracted Vendors): Implements medical frailty policy and operational business rules. Responsible for integrating screening tools, exemption indicators, and data exchange capabilities into eligibility and enrollment systems to ensure accurate identification and tracking of medically frail individuals.
• Agency Overseeing the Supplemental Nutrition Assistance Program (SNAP): Ensures the sharing of information with the Medicaid agency of SNAP medical-related exemptions.
• Leadership from Health Data Utilities (HDUs)/Health Information Exchanges (HIEs)/All Payer Claims Databases (APCDs): Assist the state Medicaid Agency in understanding the potential for providing information on complex medical conditions or hospitalizations that could meet frailty conditions and coordinate with data exchange.

The cross-division agency team should meet regularly during design and testing phases, engaging people with lived experience in key meetings throughout the process, and transitioning to either monthly or quarterly meetings once the system is live.⁴ It will be especially critical to regularly engage with people with lived experience once the system goes live to ensure that it is working for applicants and enrollees, and for the state to spot and mitigate any unintended consequences that are negatively impacting people.

Step 2. Define Medical Frailty

H.R.1 statute provides that medically frail exemptions from work reporting requirements extend to individuals who have special medical needs and include those: (1) with a substance-use disorder (SUD); (2) with a disabling mental disorder; (3) with a physical, intellectual or developmental disability that significantly impairs their ability to perform one or more activities of daily living; (4) with a serious or complex medical condition; or (5) who are blind or disabled (as defined in section 1614 of the Social Security Act).⁵ It is an open question whether the Centers for Medicare & Medicaid Services (CMS) will provide definitions that are more granular than what is in the federal statute in sub-regulatory guidance and/or the forthcoming interim final rule that must be released by June 2026. In the meantime, CMS has communicated publicly that it will generally rely on existing federal guidance and regulations for definitions.⁶ Considering CMS' public statements and tight implementation timeframes, states could reasonably assume that they will have flexibility to define medical frailty as they determine appropriate, within minimum federal standards. State Health and Value Strategies (SHVS) recently released a toolkit that: (1) describes the factors that states may want to consider when developing definitions; and (2) provides examples of potential state definitions. This toolkit could serve as a jumping off point for developing state-specific definitions.

States can begin the development of a medical frailty definition by first reviewing how medical frailty has been previously defined by other states that have used these criteria when operationalizing their Alternative Benefit Plans (ABP) for their expansion adults.⁷ Existing ABP definitions, which were used to identify individuals eligible for a more robust benefit package than what was offered through the ABP, provide a framework for linking clinical conditions and service needs to medical frailty criteria. Because the purpose of defining medical frailty for the ABP is different than the purpose of defining medical frailty exemptions from work reporting requirements, the ABP definitions should serve as a jumping off point for states and should be considered the floor and not the ceiling. Further, it is also important to note there are some variations in the definitions—an important example: the ABP medical frailty subcategory of a SUD diagnosis is more restrictive than H.R.1's work reporting requirements subcategory for SUD.

States can also engage individuals with lived experience and community partners in the development of medical frailty definitions including through strategies like creating a subcommittee of their BAC; hosting focus groups with key stakeholder organizations; conducting key informant interviews; establishing a specific working group that includes a broad range of stakeholders; and creating a subcommittee of the MAC. It will be important to engage community partners with expertise in groups who typically face barriers to healthcare as these groups will be most vulnerable to losing access to Medicaid. Community partners could include clinicians with expertise in behavioral health, chronic and complex medical conditions, state disease-specific advocacy organizations, and disability rights and other advocates. These partners can provide critical insights on whether all medical frailty conditions have been accurately identified and defined.

Translating statutory medical frailty categories into definitions is a critical step to supporting the development of a medical frailty screener for the application and renewal forms as well as the business rules for identifying medically frail individuals as described in Step 10 below.

Key Players: Eligibility and Enrollment Division, Individuals with Lived Experience, Community Partners, Program Policy and Legal Teams.

Step 3. Identify Medicaid Programs Where Eligibility Aligns with Medical Frailty Definitions

States may begin by conducting a crosswalk of existing Medicaid programs and services to identify those with eligibility criteria that align with the medical frailty exemptions under the work reporting requirements. For example, expansion adults enrolled in certain specialized programs—such as behavioral health managed care plans, home- and community-based services waivers, programs for individuals with intellectual and developmental disabilities, or other types of programs may meet the same clinical or functional criteria used to define medical frailty.

By mapping these programs' eligibility standards to the medical frailty definition, states can automate exemptions for participants already known to qualify. This approach reduces administrative burden, promotes consistency in applying exemptions, and ensures that individuals with complex health needs are appropriately exempted from work reporting requirements.

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Footnotes

1. Specifically, H.R.1 requires, "[f]or the purposes of verifying that...an individual is a specified excluded individual..., the State shall, in accordance with standards established by the Secretary, establish processes and use reliable information available to the Sate (such as payroll data or payments or encounter data under this title for individuals and data on payments to such individuals for the provision of services covered under this title) without requiring, where possible, the applicable individual to submit additional information."

2. Tekisha Dwan Everette, Dashni Sathasivam, and Karen Siegel, Health Equity Solutions, "Transformational Community Engagement to Advance Health Equity," State Health and Value Strategies, (January 2023).

3. For the purposes of this toolkit, MMIS is used as the catch-all phrase for the data system that holds feefor-service claims and/or managed care encounter data. Some states may use a different named system.

4. Not included here are two additional important processes to work with: (1) the Advance Planning Document team to develop federal funding requests; and (2) the Procurement and Contracting unit for hiring new vendors and executing data acquisition, as needed.

5. The terms used in this document are those from the statutory language of H.R.1.

6. As communicated by Caprice Knapp on September 11, 2025. See the Kaiser Family Foundation (KFF) article, "How Will States Implement Medicaid Work Requirements?" (September 11, 2025).

7. KFF, "Key State Policy Choices About Medical Frailty Determinations for Medicaid Expansion Adults," (June 26, 2019).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.