CMS Releases Framework for Determining Medical Frailty for a Community Engagement Requirement Exception

On September 8^th, 2026, the Centers for Medicare and Medicaid Services (CMS) released additional guidance to help states implement one of the more challenging aspects of the Medicaid Community Engagement Requirement (CER) – determining whether an individual qualifies for the medical frailty exception.

Background on Medical Frailty and Community Engagement

Individuals who would otherwise be subject to the Medicaid CER may be eligible for an exception if they are determined to be “medically frail” under federal and state standards based on having one of the following conditions:

Are blind or disabled;
Have a substance use disorder (SUD);
Have a disabling mental disorder;
Have a physical, intellectual, or developmental disability that significantly impairs their ability to perform one or more activities of daily living; or
Have another serious or complex medical condition.

As we have previously reported, CMS’s Interim Final Rule (IFC), published this summer, established a two-part test for determining medical frailty. Under the rule, individuals who fall within one of the five specified categories are considered medically frail only if their physical or behavioral health condition significantly impairs their ability to comply with community engagement requirements. To support the first part of the test, the IFC directs states to develop a list of diseases, diagnoses, disorders, and other health conditions within those five categories that will be used to identify individuals who qualify as medically frail. CMS requires the list to be auditable, justifiable, and aligned with the federal definition of medical frailty and expects states to periodically review and update their lists based on the state’s experience applying the medical frailty exception. Importantly, states must establish a process that allows individuals whose conditions are not included on the state’s predefined list request an individual determination of medical frailty.

CMS’s New Guidance for States

As part of its guidance, CMS provided an example of a tiered framework that states may use when evaluating medical frailty determinations. The agency stressed that regardless of the approach used by states to determine medical frailty, the methodology must be able to both identify that an individual falls within one of the five categories and that the individual’s condition significantly impairs their ability to comply with community engagement requirements.

Tier 1 includes conditions for which available data, such as ICD-10 codes, are sufficient to demonstrate that an individual’s condition both falls within one of the five categories and significantly impairs their ability to meet community engagement requirements. Examples of conditions that could fall in this tier include malignant neoplasm (cancer) of the head of the pancreas, amyotrophic lateral sclerosis (ALS), end-stage renal disease (ESRD), and Human Immunodeficiency Virus (HIV) disease resulting in encephalopathy.
Tier 2 includes conditions that may indicate medical frailty but require additional information to assess whether the individual’s condition significantly impairs their ability to comply with community engagement requirements. This tier could encompass individuals with multiple chronic conditions coupled with significant service utilization patterns or repeated inpatient admissions related to serious or complex conditions. In identifying individuals within this category, states may need to consider measures of disease severity, functional status, and other indicators that reflect the extent of impairment or care needs.
Tier 3 applies when available information is insufficient to determine medical frailty based on Tier 1 or Tier 2 criteria alone. In these cases, states should conduct an individualized review and may request additional clinical documentation before making a determination, including health records, provider documentation, managed care plan care management information, and level of care or functional assessment data.

Since medical frailty determinations depend on whether an individual’s health condition significantly impairs their ability to comply with community engagement requirements, CMS encouraged states to leverage a wide range of administrative and clinical data to identify potentially medically frail individuals. Suggested sources include:

Fee-for-service claims data;
Managed care encounter data;
Health Information Exchanges (HIEs) and Electronic Medical Records (EHRs);
Health data utilities;
Workers’ compensation claims;
Short-term disability claims; and
All-payer claims databases.

CMS also recommended that states use the ICD-10 diagnosis codes in combination with functional and utilization-based indicators that may better capture the severity and impact of a condition. Examples include CPT and HCPCS procedure codes, National Drug Codes (NDCs), claims utilization patterns, place of service codes, and revenue codes. The guidance highlights several existing resources that states may use when developing their medical frailty methodologies, including:

Alternative Benefit Plan (ABP) medical frailty determinations;
The Chronic Conditions Data Warehouse;
HEDIS frailty and advanced illness criteria; and
Existing Section 1115 Demonstration Waivers focused on SUD and serious mental illness (SMI) populations.

CMS also encouraged states to engage clinicians, managed care organizations, data vendors, and other stakeholders through workgroups or other collaborative processes to help develop and finalize medical frailty identification criteria.

States will ultimately be required to submit their medical frailty identification methodologies and code lists to CMS. The agency has emphasized that it does not intend to formally approve or endorse individual state methodologies; rather, these submissions are intended to provide insight into state implementation strategies and support the development and dissemination of promising practices across the country.