Medicaid will let states use ‘tiers’ to determine medical frailty

CMS released guidance this week allowing states to use a “tier system” to determine which Medicaid recipients are too ill to work or volunteer at least 20 hours per week. The decision was discussed internally with state Medicaid leaders in recent days and made public through a document earlier this week. It came as a small relief to patient advocacy groups and some medical associations that had criticized “medical frailty” exemptions as confusing and potentially burdensome for patients and medical providers.

Benjamin Sommers, a primary care provider and professor of medicine at Harvard University, called the new guidance “somewhat more encouraging” because it allows states to use existing data to automatically exempt people. But he said it is still a fairly complicated approach and there is not much time for states to get this right, and he remains worried that very sick people will get caught in red tape and lose their health insurance. Preliminary Congressional Budget Office estimates suggest over 7 million people will lose Medicaid coverage in coming years. Under H.R. 1, passed by Congress last year, states that expanded Medicaid must ensure all working-age recipients meet the 20-hour-per-week requirement unless they are disabled, caring for young children, or have a serious health condition. Chronically ill people and their advocates have expressed deep concern over how they are supposed to prove they are too sick to work.

The guidance means that, in addition to compiling lists of diagnostic codes that might indicate “medical frailty,” states can tier diagnoses based on how likely they are to impair someone’s ability to work. People with conditions such as end-stage renal disease, ALS, or end-stage cancer would be in the highest tier, meaning their diagnosis is so serious it automatically prevents them from working or conducting daily activities, with no additional paperwork needed. Tier 2 conditions may indicate medical frailty but require additional data, such as billing for recent acute care or pharmacy codes for various medications; the document said this tier could include individuals with multiple serious chronic conditions in conjunction with high service utilization or repeated inpatient admissions for serious or complex conditions. Tier 3 illnesses would undergo case-by-case review.

CMS said many diagnoses could fall into different tiers depending on the specifics of the patient’s illness. For example, someone with vision loss from type 2 diabetes would be classified as tier 1, while another patient with type 2 diabetes who is on several medications and has possible peripheral neuropathy but no recent hospital admissions would be tier 3. States are not required to use the tier structure, but they are under pressure to establish an eligibility-check system by Jan. 1.