Federal Medical Frailty Rules Raise New Questions About H.R. 1 Implementation, Putting Coverage at Risk for Thousands of Montanans

The Centers for Medicare & Medicaid Services (CMS) released rules on June 1, 2026, providing guidance on implementing H.R. 1’s community engagement requirements for adults enrolled in or applying for Medicaid Expansion. The 387-page document adds clarity but also imposes significant constraints and complicates determinations of exemptions and exclusions, particularly regarding medical frailty. H.R. 1 expressly exempted enrollees who face serious health issues from the 80-hour community engagement requirement. However, the rules tie this exemption, called medical frailty, to an individual’s ability to work, adding a cumbersome administrative burden for both enrollees and state eligibility workers.  The release of these rules one month before Montana’s planned implementation date undermines the state’s ability to account for:

·       Administrative burdens on health care providers;

·       Availability of claims data;

·       Health care system capacity;

·       The time needed to build administrative processes; and

·       The staff expertise required to make these determinations.

Here is an overview of how the rules will require states to handle medical frailty.

First, under CMS rules, individuals seeking the medical frailty exclusion must prove they are unable to work due to a health condition. The rules specify that proof can be a combination of medical claims data, a self-declaration, or documentation from a health care provider. H.R. 1 requires the Department of Public Health and Human Services (DPHHS) to first use available data to determine whether someone is in compliance or excluded. However, CMS rules go beyond the language of H.R. 1 and state that data alone is insufficient to determine whether someone is excluded from the community engagement requirements.

Providers will bear much of the administrative burden of creating the documentation people need to keep their Medicaid coverage. However, DPHHS has stated in community engagement informational webinars that providers will not be able to submit documentation on behalf of enrollees. So, providers must create the documentation, send it to or print it for patients, and patients will then have to submit that documentation to DPHHS. Combining this with renewal schedules shifting from a 12-month to a 6-month schedule will make it difficult for providers to know who needs what documentation and when. This is likely to cause lapses in coverage and treatment, making it harder for people to manage their health conditions and keep up with treatment and medications.

Secondly, CMS further restricts documentation by limiting the age of claims to under 12 months. And, in 2028, CMS only allows those applying for Medicaid for the first time to claim their exemption without third-party verification (not allowing self-attestation at renewal). If someone is continuously enrolled, they must have current medical claims and documentation from a provider stating they are unable to work due to their health condition.

The Montana Legislature has acknowledged the state’s limited capacity for behavioral health treatment.  Thus, CMS’s more stringent rules for documenting medical frailty may risk the loss of health care coverage. Many health conditions that could limit a person’s ability to work, such as developmental disabilities, that do not necessarily require regular medical care. Therefore, they would not generate claims data for renewal every six months or have claims within 12 months of the renewal.

Lastly, CMS will require states to develop lists of billing codes for claims to begin determining whether someone is medically frail. This administrative process will involve creating algorithms and analyzing complex data that is not currently integrated with DPHHS enrollment systems. This places unnecessary discretion in the hands of eligibility staff with no medical training. DPHHS is adding staff to support eligibility processing in response to the administrative burden of implementing H.R. 1. Client Service Coordinators are not required to have any medical training or background, according to job postings on the State of Montana Jobs webpage. The CMS rules require staff to go beyond a concrete list of facts to determine Medicaid Expansion eligibility. Instead, the rules require DPHHS staff without medical degrees to make medical decisions, including determining whether someone is too sick to work.

CMS proposed rules were released just one month before the DPHHS implementation date. The rules are complicated and do not provide a cohesive process to states. Instead, they further complicate eligibility for Medicaid expansion. This timeline raises red flags that early implementation will harm some of the most underserved populations in Montana, including those battling complex health conditions such as cancer, substance use disorders, and people with disabilities. When H.R. 1 passed, federal lawmakers defended their support for the bill by promising that those with serious health conditions and disabilities would be protected. The CMS rules contradict that promise and will inevitably result in greater loss of coverage than was intended by the original law.

H.R. 1 implementation will have far-reaching impacts across Montana's Medicaid programs and healthcare system. The increased administrative burden will affect customer service and could create challenges not only for Medicaid Expansion enrollees, but also for people enrolled in traditional Medicaid and Health Montana Kids. To date, DPHHS has provided limited information about implementation plans. The state has the time and opportunity to ensure implementation is working as intended.

Before any Medicaid Expansion disenrollments begin, DPHHS should complete a robust systems testing period and publicly report performance data demonstrating that eligibility systems, exclusion determinations, renewals, notices, and customer service functions are operating effectively. Congress and CMS provided an 18-month implementation timeline because these changes are complex. DPHHS should use that time to get implementation right before risking coverage losses for thousands of Montanans. Montanans should not lose health coverage because the state moved forward before its systems were fully tested and ready.