By Jaymie Baxley
Congress included an exemption in last year’s federal Medicaid work requirement law for people who are “medically frail” — a category that encompasses people with serious or complex medical conditions like cancer, Parkinson’s disease, cystic fibrosis and other illnesses that can make it difficult to maintain employment. The provision was intended to ensure that some of the nation’s sickest Medicaid beneficiaries would not lose their health coverage because they could not meet an 80-hour monthly work requirement.
But North Carolina Attorney General Jeff Jackson argues the federal government has narrowed that protection beyond what Congress intended.
Last month, Jackson joined attorneys general from 23 other states and the governors of Kentucky and Pennsylvania in a lawsuit challenging new guidance issued by the Centers for Medicare and Medicaid Services. The suit contends that the agency unlawfully imposed a stricter test for determining who qualifies as medically frail, requiring applicants to demonstrate not only that they have a serious medical condition, but also that the condition substantially limits their ability to satisfy the work requirement. The states argue that Congress never authorized that additional hurdle.
The lawsuit also argues that CMS changed course after months of telling states it planned to rely on the broader definition established in existing Medicaid regulations. Based on that understanding, North Carolina and other states had already begun redesigning eligibility systems, training staff and developing procedures to identify medically frail enrollees before the agency issued its final guidance on June 1.
State officials say the revised definition will create more paperwork for patients, physicians and county social services departments that administer Medicaid eligibility. They also warn it could cause eligible beneficiaries to lose coverage while they try to navigate the new requirements — an outcome the lawsuit says Congress sought to avoid.
Jackson is asking a federal court to block the new definition while the lawsuit proceeds and allow states to keep implementing the Medicaid work requirement under the broader interpretation they had spent months preparing to use.
NC Health News recently spoke with Jackson about why he believes the federal guidance is unlawful, what it could mean for North Carolina patients and county agencies, and what happens next. His comments have been edited for length and clarity.
What is the biggest practical difference between the congressional definition and the CMS definition of medical frailty? How might someone qualify under one but not the other?
Jeff Jackson: Nobody really knows. The bottom line here is that CMS basically created a new test with a higher bar that is harsher for this population, but they gave us no details on how to implement it.
At a minimum, this is going to require the creation of a whole new bureaucracy. There will be a mountain of new red tape, at the end of which the outcome will still be fundamentally unpredictable.
We know that this would involve a lot more paperwork, more trips to the doctor and a lot more work for doctors. But it’s not even really clear how our sickest people can pass their test, which is part of the concern.
CMS had been telling states that it was going to stick with the original definition of medical frailty approved by Congress. Had North Carolina built out a process based on that understanding when the agency reversed course?
Jeff Jackson: Yes, and what CMS just did, if it’s allowed to stand, will mean the waste of millions of dollars in taxpayer money, simply because they waited until the very last minute to change their mind and give us a new test.
It was absolutely a rug pull from them after they led the entire country to believe that we were going to implement the test that Congress provided.
So, to be clear, there was nothing preventing CMS from providing that information before June 1?
Jeff Jackson: There was nothing stopping them from telling us at an earlier date, and frankly, nothing stopping them from not leading us all to believe that they were just going to do what Congress said.
Supporters of the work requirement say it will help reduce fraud and waste in Medicaid. How would you respond to someone who sees the more stringent definition of medical frailty as a fraud prevention measure?
Jeff Jackson: I would say that it’s my job to go after Medicaid fraud, and we do it every day. We’ve returned millions of dollars to the taxpayer this year from that effort.
This is about CMS disregarding the specific protection that Congress put into the law for our most vulnerable population.
The work of determining whether people meet this new requirement will largely fall on North Carolina’s county DSS offices, many of which are already short staffed. How will those offices be affected if the definition stands?
Jeff Jackson: Folks just don’t appreciate the eruption of red tape that is going to occur if this new rule from CMS is allowed to stand. The downstream consequences of that will impact doctors and patients, but it will also hit county administration really hard in a way that ultimately costs a lot of taxpayer money.
Where does the lawsuit go from here?
Jeff Jackson: What happens next is we’re requesting a preliminary injunction. We know the lawsuit is going to take months to resolve, but we want to bring some certainty both to the fiscal side and to these families and patients with serious illnesses.
We’re basically asking the court to treat this as an emergency and to hit pause on the new CMS rule while the underlying lawsuit plays out.
If the court grants that relief, what would change for NC DHHS and county DSS offices? Would implementation of the work requirement simply continue under the original, less restrictive definition?
Jeff Jackson: I believe that it would revert back to what they were doing before. Ultimately, that’s a question for DHHS, as far as how they interpret what Congress said. But I believe it would just revert back.
What is your message to North Carolinians who are medically frail and depend on Medicaid?
Jeff Jackson: We are hearing a lot from people with very serious illnesses who are really scared. What I’m telling them is, I understand why you feel that way, but I want you to let me handle this for you.
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