Collateral damage: Medicaid work rules threaten nursing homes even if patients keep coverage
- Craig Jennings
- Jul 5
- 3 min read
Half the country’s top state attorneys are suing over new Medicaid requirements, arguing that added work requirements for some “medically frail” beneficiaries could lead to lost coverage for people who need it most.
It’s a fraught issue, with states moving quickly to change their verification strategies and ensure individuals covered either work, go to school or meet quickly narrowing exceptions.
One key issue unknown, however, is how the new rules — requiring a disability to “significantly impair” a person’s ability to work for an exemption — will affect nursing home residents.
The new Centers for Medicare & Medicaid Services rules apply to folks ages 19-64, so not core long-stay residents. But in a shifting nursing home landscape, plenty of younger patients with serious behavioral health diagnoses, substance use disorders and even cancer may find themselves in need of long-term care.
Most state long-term care executives I spoke with last month at the American Health Care Association’s Congressional Briefing were watching the issue with concern, but not outright worry.
Clearly, there are many questions to be asked and some time left for clarification, too. Medicaid beneficiaries can attest to their exemption status next year. It’s in 2028 that provider advocates I spoke with think any real holes in the government’s strategy will be revealed.
Among the variables that could trip up very sick long-term residents and the facilities that care for them is whether staff will be able to help residents with serious disabilities to apply for an exemption, and whether there will be any major impact on Medicaid-covered assisted living residents in waiver states.
In their lawsuit filed last week, states argued that the rule “creates new requirements that constrain who is exempt due to their medically frail status and force medically frail individuals in need of healthcare to jump through unnecessary administrative hoops to get and retain life-saving healthcare coverage.”
One issue already apparent is that states had expected CMS to be more generous with its medical frailty definition, possibly exempting all people with certain diagnoses such as dementia, HIV, cancer or heart disease. But the rule explicitly blocks states from doing that.
Nebraska already enacted its work rules and linked some diagnoses to frailty exemptions, and Nebraska Health Care Association’s Jalene Carpenter said she would be keeping a close eye on how the state might react to further elucidation from CMS.
But the biggest concern might just be the addition of exemption applications or work verifications — especially without broad exemptions — to what is already sure to be a Medicaid system backlog with so many new rules.
Association leaders largely echoed the thoughts of New Hampshire CEO Brendan Williams, who said he wasn’t “particularly concerned,” given that the bill enacting work requirement policies says states can provide short-term hardship exemptions for nursing home stays.
It’s the state-level work of changing all the rules, enforcing them and processing them timely that’s got him more worried about how Medicaid-covered residents and the nursing homes that provide them care might fare.
“Long-term care Medicaid applications are already taking forever to be approved, and now we will have this circus of new expansion population verifications and redeterminations,” he told me last month. “Work requirements are a transparent attempt to discourage and punish expansion participation, which will inexorably place a burden upon hospitals unable to turn away … those going without primary
care. For states like mine soon to see hospital tax revenue reductions, that’s a double whammy, and only a fool would think long-term care funding will not be collaterally damaged by all this.”
Kimberly Marselas is senior editor of McKnight’s Long-Term Care News.
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