Recent federal changes under the Budget Reconciliation Act of 2025 require states to implement community engagement requirements – commonly referred to as “work requirements” – for Medicaid eligibility by the end of 2026, representing a major change in program administration for states. The shift entails significant system upgrades and operational changes, including requiring beneficiary redeterminations every six months rather than annually.

One of the most challenging aspects of this program change is the need to clearly define and accurately identify “medically frail” individuals who are exempt from these requirements. The term “medically frail” is a broad federal term, encompassing individuals with a wide range of conditions, including substance use disorders, serious mental illness, and serious or complex medical conditions. Because this exemption determines who is not subject to community engagement requirements, it is essential for states to be precise and consistent not only in how they interpret and define medically frail criteria within federal parameters, but also in how they operationalize these requirements to appropriately identify exempt individuals. States must translate the high-level statutory language and evolving guidance by the Centers for Medicare and Medicaid Services into specific definitions, rules, and algorithms. Medically frail determinations must be accurate, repeatable, and transparent, particularly as they will affect Medicaid eligibility outcomes. Achieving both the right definition and the right process is critical for successful implementation.

Drawing on our experience helping agencies implement community engagement requirements across multiple states and over a decade of proven success implementing medically frail determination processes, our subject-matter experts developed the Milliman Frailty Framework, a solution that incorporates claims data, risk adjustment, and policy considerations to assist states in identifying medically frail individuals. This paper:

• Discusses the various medically frail determination pathways that states have historically used
• Identifies key considerations for implementing medically frail determinations from lessons learned in the field
• Highlights the Milliman Frailty Framework to help states quickly implement an accurate, compliant solution