Judge voids part of Trump Medicaid rule that narrowed 'medically frail' exemption

A federal judge in Boston ruled Thursday that the Trump administration went beyond what Congress authorized when it narrowed the definition of "medically frail" Medicaid recipients, striking down a key piece of a rule meant to enforce new work requirements for the program's expansion population while leaving two other contested restrictions intact.

U.S. District Judge Richard G. Stearns issued the ruling in a 16-page opinion deciding cross-motions for summary judgment in a lawsuit brought by a coalition of 26 states and the District of Columbia against the Centers for Medicare & Medicaid Services, its administrator Mehmet Oz, Health and Human Services Secretary Robert F. Kennedy Jr. and HHS itself. The case, Commonwealth of Massachusetts et al. v. Oz et al., was filed in June in the U.S. District Court for the District of Massachusetts.

What the rule required

At issue is an interim final rule CMS published in the Federal Register in June to implement a new Medicaid "community engagement" requirement created by the tax and spending law enacted last year as Public Law 119-21, commonly known as the One Big Beautiful Bill Act. Under that law, most adults who qualify for Medicaid through the Affordable Care Act's expansion population must, starting Jan. 1, 2027, log at least 80 hours a month of work, community service or coursework to keep their coverage, as a CMS fact sheet on the rule lays out.

Congress wrote several exemptions into the statute, including for people who are "medically frail," a term it defined to include five categories: people who are blind or disabled, who have a substance use disorder, who have a disabling mental disorder, who have a developmental disability that significantly impairs daily activities, or who have a serious or complex medical condition. CMS's rule added a further condition on top of those five categories, requiring an individual to also separately show that their condition "significantly impairs" their ability to comply with the work requirement itself before they could qualify as medically frail.

The 26 states — led by Massachusetts, California and New Jersey, which announced the lawsuit in June — argued that extra layer illegally narrowed a benefit Congress had defined categorically. CMS countered that the agency had discretion to define "medically frail" as it saw fit.

The ruling, provision by provision

Stearns agreed with the states on the central claim. He wrote that because Congress used the word "including" when listing the five categories, it set "a definitional floor" the agency lacked authority to narrow, making the added requirement unlawful.

"Congress clearly knew how to qualify classifications and did so where it wished."

Because he found that provision unlawful on those grounds, Stearns did not need to separately rule on the states' argument that it was also "arbitrary and capricious," or reach a third claim that the rule violated the Constitution's Spending Clause.

The states did not win across the board. Two other contested pieces of the rule survive:

• A requirement that states only accept medical records or claims data from the 12 months before an application when verifying frailty.
• A limit allowing only one self-attestation of frailty per continuous period of Medicaid enrollment.

Stearns ruled CMS had offered "a non-frivolous rationale" for both, noting the agency's stated concern that older records might not reflect a person's current condition and that it wanted to discourage people from avoiding documentation. He found the states' objections to those two provisions fell short of the arbitrary-and-capricious standard.

Who is affected

The ruling reaches the verification systems of all 26 plaintiff jurisdictions — including Massachusetts, California, New Jersey, New York, Illinois, Pennsylvania and the District of Columbia — and, because the remedy vacates the disputed text from the rule itself rather than simply barring its enforcement against these plaintiffs, it affects how CMS can apply that provision nationwide. Medicaid enrollees nationally who are blind or disabled, have a substance use disorder, a disabling mental disorder, a significantly impairing developmental disability or a serious or complex medical condition no longer have to additionally prove their condition impairs their ability to work in order to claim the medically frail exemption.

State Medicaid agencies, which are racing to build new eligibility-verification systems before the Jan. 1, 2027, deadline, are also directly affected; Stearns found they had shown the kind of irreparable harm — the cost and disruption of reworking those systems — that justified a permanent injunction once he reached the merits, even though he had rejected a similar argument at the preliminary-injunction stage in July.

Reaction

HHS and CMS had not responded to a request for comment by the time the Associated Press reported the ruling Thursday afternoon. The Massachusetts attorney general's office, which co-led the coalition, had not issued a statement reacting to the decision as of Thursday evening.

During briefing, the government had urged Stearns to remand the frailty-definition issue back to the agency rather than vacate it outright, which would have let CMS try again to justify or rewrite the provision. Stearns rejected that approach, writing that vacating the offending language was simpler and gave both sides "the clarity needed to comply" with the January deadline.

What's next

Stearns gave the states a six-month stay of enforcement on any individual frailty determination, intended to give state agencies time to adjust their verification processes without being out of compliance in the interim. He was explicit, however, that neither that stay nor his ruling pushes back the Jan. 1, 2027, start date for the broader work requirement, which he noted was set by Congress and which "the court in any event would be powerless to grant" an extension on.

The ruling leaves CMS free to appeal to the U.S. Court of Appeals for the 1st Circuit. It also leaves intact the 12-month lookback and one-attestation-per-enrollment-period rules the states had hoped to overturn, meaning the broader fight over how burdensome Medicaid's new work-requirement paperwork can be is not fully resolved — only the "medically frail" definition itself.