e. Individuals Who Are Medically Frail or Otherwise Have Special Medical Needs

The statute establishes a specified excluded individual status for individuals who are medically frail or otherwise have special medical needs in section 1902(xx)(9)(A)(ii)(V) of the Act. Section 435.554(c)(5)(i) defines medical frailty to include an individual: who is blind or disabled (as defined in section 1614 of the Act); with an SUD, with a disabling mental disorder; with a physical, intellectual, or developmental disability that significantly impairs their ability to perform one or more ADL; or with a serious or complex medical condition (which is defined at § 435.554(c)(5)(i)(E)). We are further defining a medically frail individual at § 435.554(c)(5)(i) as an individual whose physical, mental, or other behavioral health condition significantly impairs the individual's ability to comply with the community engagement requirement in this subpart. Accordingly, when determining whether an individual qualifies as a specified excluded individual on the basis of being medically frail or having other special medical needs, the State must verify both the presence of a condition or diagnosis that meets the criteria described at § 435.554(c)(5)(i)(A) through (E) and that the condition or diagnosis significantly impairs the individual's ability to comply with the community engagement requirement.

In accordance with requirements in section 1902(xx)(5) of the Act, States must, where possible, verify medical frailty or other special medical needs on an ex parte basis using reliable information available to the State without requiring the individual to submit additional information. To comply with this requirement, at § 435.557(f)(1), we provide that the State must attempt to verify that an individual is a specified excluded individual on the basis that the individual is medically frail or has other special medical needs as defined at § 435.554(c)(5) using reliable information available to the State, including adjudicated claims or encounter data, as relevant to the individual, from the preceding 12 months. States may not consider information older than 12 months when verifying medical frailty or other special medical needs, because older information may not reflect the individual's current condition.

States must identify individuals who are medically frail or who otherwise have special medical needs and exclude them from the community engagement requirement. States should consider incorporating plain language screening questions in Medicaid applications and other program applications and forms for use at application and renewal to identify individuals who may be medically frail or otherwise have special medical needs, including to identify beneficiaries who were previously applicable individuals and who may newly qualify for an exclusion on the basis of medical frailty or otherwise having other special medical needs. The questions should be as concise as reasonably possible and presented in plain language. If an individual is identified as potentially medically frail or otherwise having other special medical needs based on the initial screening questions, the State must attempt to verify medical frailty using reliable information available to the State prior to seeking documentation or other information from the individual to determine whether the individual is a specified excluded individual on this basis, as specified in § 435.557(f).

Information gathered by States to verify medical frailty or otherwise ( printed page 33406) having special medical needs should include multiple domains to be effective in identifying individuals who meet this exclusion, including their condition(s), utilization of services (for example, inpatient hospital services, intensive outpatient services, SUD services, etc.), and their level of impairment (for example, need for assistance with one or more ADLs, etc.). We have also reviewed examples of State processes for identifying individuals who are medically frail or otherwise have special medical needs through algorithms using administrative claims data that assign acuity scores to individuals, which potentially could be used to make a determination of medical frailty or otherwise having special medical needs (for example, a score over a specified threshold could be used to determine an individual is medically frail). States may use an approach that relies on lists of qualifying diagnosis codes combined with utilization data and other factors, such as severity of conditions, to determine medical frailty or otherwise having other special medical needs. However, in some cases, reliable claims information may not be available to the State for individuals who are medically frail or otherwise have other special medical needs, particularly in cases where an individual recently obtained a diagnosis and medical services, but the claims data are lagging. For this reason, the absence of adjudicated claims or encounter data altogether, as well as the absence of particular claims or types of claims in available adjudicated claims data, may not be used to determine ineligibility for the exclusion based on medical frailty or other special medical needs. For example, an individual may not be determined not to be medically frail only because their condition or utilization relates to one or more non-listed diagnosis codes. States must provide an individual with the opportunity to provide documentation or other information demonstrating medical frailty or otherwise having other special medical needs status when the State is unable to verify the excluded status using information available to the State, as provided in § 435.557(f).

Some individuals may not identify themselves as having a condition that could qualify them as a specified excluded individual on this basis for several reasons, even upon completing a screener, but their status as medically frail or otherwise having special medical needs may be apparent based on other documentation or information provided by the individual. States may accept provider documentation from many types of practitioners, including physicians, nurse practitioners, physician assistants, psychologists, counselors and therapists, clinical social workers, and other practitioners credentialed by the State, that are qualified to determine that an individual's condition qualifies them as medically frail or having other special medical needs under State scope of practice laws. We note that States' lists of practitioners qualified to determine that an individual's condition qualifies them as medically frail or having other special medical needs must be shared with us upon request as part of our oversight and data monitoring activities.

We recognize that for individuals who are newly applying for Medicaid, and for enrolled beneficiaries who are newly attesting to specified excluded individual status based on medical frailty or otherwise having special medical needs, there may not be reliable information available to the State. This may be especially true if the individual has not received medical services due to prior lack of health coverage, or for enrolled beneficiaries, because the condition is new and the individual has not yet received medical care for the new condition. For beneficiaries who have received medical care, the services received may not yet be reflected in reliable information available to the State due to claims lag. For such individuals, the State would not have reliable information, such as adjudicated claims or encounter data from the last 12 months, to verify that an individual qualifies as a specified excluded individual on this basis.

At § 435.557(f)(1)(ii), we explain the verification requirements when no reliable information is available to the State to verify medical frailty, or when the reliable information available is not reasonably compatible with the information provided by or on behalf of the individual. Beginning on January 1, 2028, States may only use a statement or other information provided under penalty of perjury one time during an individual's period of enrollment,) to verify eligibility as a specified excluded individual on the basis of medical frailty or having other special medical needs. We define an individual's period of enrollment defined at § 435.557(a) as a continuous period of enrollment in coverage under the State plan or waiver without the individual being disenrolled, regardless of the number of consecutive eligibility periods, of redeterminations or renewals, or of transitions between eligibility groups). Once a statement or other information provided under penalty of perjury has been used on or after January 1, 2028, to verify eligibility for an exclusion based on being medically frail or having other special medical needs, at the next regularly scheduled renewal, in the absence of available information, the State must require the individual provide documentation demonstrating the individual's current medical frailty status.

For example, if the State accepts a statement provided under penalty of perjury to verify a new applicant is medically frail because there is no reliable information available to the State in February 2028, the State must verify that person's medical frailty status using reliable information available to the State or documentation submitted by or on behalf of the individual when renewing their eligibility in August. If the individual remains continuously enrolled and later declares medical frailty status on another basis, the State may not accept the individual's statement or other information of provided under penalty of perjury as verification that the individual is medically frail since the individual's prior status was verified using a statement provided under penalty of perjury. To verify the individual's medical frailty status on this new basis, the State must use reliable information available to the State or documentation submitted by or on behalf of the individual.

We believe that requiring verification of medical frailty to confirm an individual's specified excluded status using data or other documentation after the State has verified that exclusion using a statement or other information provided under penalty of perjury (such as a screening tool) will motivate individuals to access care. Requiring States to verify an individual's medically frail status using reliable information available to the State or, beginning on January 1, 2028, documentation after the State has verified that exclusion using a statement or other information provided under penalty of perjury (such as using a screening tool) is reasonable, because once an individual is enrolled in coverage or once an enrolled beneficiary experiences a new or worsening condition that could result in qualifying for the medical frailty exclusion, the beneficiary is able to receive covered services to address their health condition. We encourage beneficiaries in this situation to access appropriate services for which they are entitled to coverage, which is in beneficiaries' best interest and may lower future, downstream costs to Medicaid that could result from delaying receipt of necessary care. When beneficiaries ( printed page 33407) access covered services, their receipt of services will appear (with some degree of lag) in adjudicated claims or encounter data (as applicable), which constitutes reliable information available to the State. Thus, once a beneficiary has enrolled in coverage and started receiving covered services to address their health condition, we expect States will be able to reverify their continued qualification for the medical frailty exclusion (as applicable) on an ex parte basis using information contained in State systems.

While we believe requiring documentation when there is no reliable information available after previously verifying an individual's medical frailty status using a statement or other information provided under penalty is reasonable, we recognize that some States may need to make system and process changes to implement these documentation requirements. As such, as provided in § 435.557(f)(1)(i), States may require documentation or accept other information (even if documentation is reasonably available) to verify an individual's medical frailty status through December 31, 2027.

States must reverify that an individual is medically frail or otherwise has other special medical needs at least every 12 months, although States may reverify more frequently, such as at each renewal.. For individuals who were enrolled or last verified based on information provided under penalty of perjury, such as responses to questions in a screening tool, without additional verification (such as reliable information available to the State or documentation provided by the individual), § 435.557(f)(1)(ii)(A) requires, beginning January 1, 2028, that the individual's medical frailty status must be reverified at the next regular renewal, which could be 6 months from the individual's last verification even in a State that otherwise elects to reverify medical frailty status every 12 months. States must attempt this verification and each verification thereafter using adjudicated claims or encounter data as relevant to the individual for the preceding 12 months, before requesting documentation from the individual. We expect that after individuals are enrolled and gain access to coverage, States generally will be able to reverify on an ex parte basis using reliable information available to the State. We therefore believe requiring reverification at least once every 12 months balances the goal of promoting continued coverage for vulnerable populations with the importance of community engagement in achieving the program's goals, as well as the need to maintain program integrity. Moreover, standardizing the timeframe simplifies the administration of the requirement.

Finally, CMS recognizes that processes for the identification and verification of individuals who may be medically frail or otherwise have special medical needs intersect with Federal privacy requirements; in particular, we recognize the intersection of 42 CFR part 2 and the medically frail exclusion for individuals with SUDs. It is critical that Federal civil rights requirements for individuals with disabilities, as well as Federal privacy protections, be observed in this and all contexts related to the implementation of the community engagement requirement. States must ensure that they take appropriate steps to safeguard Medicaid beneficiary and applicant information used in the specified excluded individual identification and verification processes discussed in this section of the rule, and that the information is accessed, stored, and handled consistent with all applicable Federal requirements, including section 1902(a)(7) of the Act; 42 CFR 431, subpart F ; the Health Insurance Portability and Accountability Act of 1996 (HIPAA); 42 CFR part 2 ; [ 104 ] and any other applicable Federal privacy laws, as well as applicable State laws. The Department of Health and Human Services Office for Civil Rights (OCR) enforces the requirements of 42 CFR part 2 . We will work with OCR to provide States with technical assistance on the intersection of 42 CFR part 2 and the community engagement requirement. Further, applicable individuals who meet the definition of a person with a disability under section 504, section 1557, or the ADA but do not qualify for an exclusion or exception may require reasonable modifications to comply with the community engagement requirement. We remind States that they are required to provide such reasonable modifications in implementing the community engagement requirement where necessary to avoid discrimination on the basis of disability under section 504, section 1557, and the ADA. In addition, States must comply with notice requirements at § 435.917(a) and must provide assistance to individuals seeking help with the application or renewal process in accordance with § 435.908(a).