A federal judge in Boston ruled on Oct. 29 that the Centers for Medicare & Medicaid Services (CMS) went beyond the law when it narrowed who counts as "medically frail" under the Medicaid work requirements that start Jan. 1, 2027. The decision came in a lawsuit brought in June by 25 states and the District of Columbia.

U.S. District Judge Richard G. Stearns struck the extra test CMS had added, but he left other parts of the agency's rule in place, and the start date does not move.

What the court decided

Under the 2025 federal budget law (H.R. 1), people who are "medically frail" are exempt from the new requirement to work, study or volunteer at least 80 hours a month. The law says that group must include five kinds of people: those who are blind or disabled; those with a substance use disorder; those with a disabling mental disorder; those with a physical, intellectual or developmental disability that significantly impairs one or more activities of daily living; and those with a serious or complex medical condition.

CMS's interim final rule, published in the Federal Register on June 3, 2026, added a further condition. A person had to fall into one of those groups and also have a condition that "significantly impairs the individual's ability to comply" with the work requirement.

Judge Stearns held that added condition was contrary to the statute. In his 16-page memorandum and order (Massachusetts et al. v. Oz, No. 1:26-cv-12962), he:

  • vacated the "ability to comply" language and permanently barred its enforcement;
  • upheld the rule's 12-month lookback, which means states can't accept proof of medical frailty more than a year old;
  • upheld the limit of one self-attestation per enrollment period; and
  • gave the plaintiff states a six-month stay of enforcement on medically frail determinations, to cover errors or delays while they change their verification systems.

The judge wrote that the stay "has no impact" on the Jan. 1, 2027, implementation date set by Congress. A footnote notes the states told the court at an Oct. 22 hearing that they were not asking to push that date back.

Stateline reported that CMS, the U.S. Department of Health and Human Services and the White House did not respond to its requests for comment in time for publication.

The state angle

The attorneys general of Connecticut, New York, Arizona and Oregon each announced the ruling the same day. New York's office described the coalition as New York plus 24 other states and D.C.

According to Stateline, states had planned to use Medicaid's traditional medically frail categories, which don't require an agency to judge whether a person can work. The ruling means the plaintiff states won't have to rebuild their eligibility systems around the narrower test.

The ruling doesn't settle every question. The 12-month lookback and the one-attestation limit still apply, and the six-month enforcement stay covers the states that sued. Providers everywhere should watch for guidance from their own Medicaid agency.

What this means for providers and DSPs

The work requirements apply to adults covered through Medicaid expansion. Some people that provider agencies support, including people with mental health conditions, substance use disorders or disabilities that haven't led to a formal disability determination, may be in that group rather than in the disability-based coverage that usually pays for HCBS.

For those people, the medically frail exemption is the main protection against losing coverage over paperwork. A few practical points:

  • Documentation still matters. Because the 12-month lookback stands, proof of a qualifying condition has to be recent. Diagnoses, evaluations and individual support plans that show how a condition affects daily living may help people and their families answer state requests.
  • Self-attestation is limited. A person can attest only once per enrollment period, so a missed or incomplete response can't simply be redone with another form.
  • Watch your state's notices. States are still setting up verification ahead of Jan. 1. Supports coordinators and frontline staff are often the first to see a renewal letter, and helping people open and answer mail on time can prevent a gap in coverage.

The federal government could appeal. Direct Support News will follow any appeal and new CMS guidance.