On June 1, 2026, the Centers for Medicare & Medicaid Services (CMS) issued the interim final rule (IFR) implementing Medicaid work requirements. The rule, CMS-2454-IFC, meets the statutory deadline set by H.R. 1 and provides states with the regulatory framework they have awaited since the law’s July 4, 2025, signing.
Dozens of analyses have explained what the rule says. This is not one of them. This article explains what state agencies, managed care organizations (MCOs), providers, and patient advocates need to do and when, based on the rule’s actual requirements. The comment period closes on July 31, 2026. Several of the deadlines below are earlier than most stakeholders expect.
The Rule in Brief
Adults ages 19 to 64 enrolled in Medicaid expansion or in certain Section 1115 demonstrations, now covering 43 states and the District of Columbia, including states with partial expansion waivers such as Georgia and Wisconsin, must demonstrate 80 hours per month of qualifying activity: employment, work programs, community service, at least half-time education, or monthly earnings equivalent to $580. States must generally implement this requirement by January 1, 2027.
The most consequential provision is not the 80-hour requirement: it is CMS’s definition of who is exempt. The law exempts individuals who are "medically frail," and the IFR adds a critical qualification: a qualifying condition alone is insufficient. The condition must significantly impair the individual’s ability to complete 80 hours of qualifying activity per month. States may not expand beyond the five statutory categories (substance use disorders (SUD), disabling mental disorders, physical, intellectual, or developmental disabilities, blindness or disability, and serious or complex medical conditions) and must develop ICD-10 code lists to screen for potentially frail beneficiaries. However, appearing on those lists does not confer an exemption. Functional impairment must still be established for each individual. That two-part test (condition plus functional impairment) drives most of the action items that follow.
What Providers Need to Do Now
Providers are the least-addressed audience in most IFR analyses, yet they will bear the operational burden once self-attestation ends.
Through the end of 2027, individuals may self-attest to medical frailty when claims or administrative data cannot verify their status. Beginning January 1, 2028, self-attestation is permitted only once per continuous enrollment period. After January 2028, or if they have already used their one self-attestation, they must provide supporting documentation, such as a provider certification or medical records. CMS did not prescribe what a provider certification must contain; states will define that standard. However, the IFR’s two-part test makes clear what any sufficient certification must demonstrate: the individual must fall within one of the five statutory categories, and the condition must significantly impair the ability to complete 80 hours of qualifying activity per month. A certification that documents a diagnosis without addressing functional capacity is structurally insufficient under the IFR.
Providers should start building records that satisfy both prongs now, not in 2027.
Document ADL limitations alongside the diagnosis. The IFR’s functional impairment standard maps directly to activities of daily living: mobility, self-care, and daily functioning. Clinical notes that address only diagnosis and treatment plan, without addressing functional status, will not support a medical frailty determination.
Document the severity of conditions. The IFR lists conditions that generally qualify (cancer, end-stage renal disease, HIV/AIDS, significant heart disease, multiple sclerosis, Parkinson’s disease) and those that generally do not unless additional severity is present (diabetes, asthma, hypertension, ADHD, obesity, anemia). For patients with diagnoses in the second category who have severe manifestations, providers must document what makes this patient’s presentation different: hospitalization frequency, specialist involvement, treatment complexity, and activity restrictions.
For SUD patients, document ongoing treatment status. The IFR exempts individuals actively engaged in SUD treatment or recovery. However, CMS has specified that individuals who have maintained stable recovery for five or more years do not qualify for the SUD exemption. In practice, a patient in long-term, stable recovery would need to qualify under a different statutory category, such as a disabling mental disorder, rather than relying solely on the SUD exemption. Ongoing treatment records documenting active SUD engagement, rather than merely a resolved or historical diagnosis, are time-sensitive for this reason.
For mental health conditions, ensure formal diagnostic coding. The IFR requires states to develop ICD-10 code lists to screen claims and encounter data for individuals who may qualify as medically frail. Because verification begins with those code lists, a clinical note that describes symptoms narratively, without a formal diagnosis and its corresponding ICD-10 code, will not be captured in the state’s screening process. The statutory category is disabling mental disorder, a term the IFR leaves to state discretion to define. The IFR identifies established clinical frameworks, including DSM-5 and ICD-10, as the appropriate basis for identifying qualifying conditions. States will operationalize the category through specific ICD-10 codes. Providers should ensure that qualifying mental health diagnoses are formally documented and coded, not merely described narratively.
The January 2028 self-attestation cliff is about 18 months away. That is not a long runway for patients who have never needed formal documentation of their limitations and for providers who have never been asked to provide it.
What State Agencies Need to Build
States face a more complex operational challenge. By January 1, 2027, states must finalize eligibility business rules; develop and validate ICD-10 code lists; build or modify IT systems to support verification, compliance tracking, and data exchange; conduct mandatory outreach to enrolled beneficiaries; and coordinate with managed care plans, SNAP, TANF, and workforce agencies.
Nebraska implemented work requirements on May 1, 2026, but its nearly 300-page index of diagnosis and procedure codes may need revision to align with the IFR’s functional impairment standard. Montana is set to launch on July 1, 2026; Arkansas begins a soft implementation on July 1 but will not disenroll anyone until January 2027. Iowa is targeting December 1. Most states are still finalizing legal and operational frameworks, and several are expected to seek good-faith extensions of the deadline.
Navigating Good-Faith Deadline Extensions
CMS estimates that about 10 states will apply for good-faith deadline extensions, but the IFR’s impact analysis projects that only two will be approved. If your state is among those seeking an extension, the process is important.
Initial extensions will be granted for no more than six months and may be renewed if the state continues to demonstrate a good-faith effort toward compliance. All extensions expire by December 31, 2028. No exceptions. A state that receives a six-month extension, fails to achieve compliance, and then receives a second extension still faces the hard outer deadline.
States must request an extension before January 1, 2027, and demonstrate that implementation has been infeasible despite genuine effort. The IFR does not publish a checklist of qualifying criteria. CMS will evaluate state-by-state circumstances, but the implicit standard is that the state must be actively building compliant systems and demonstrating measurable progress. States considering a request should document their implementation efforts now, including any barriers, to support the initial request and establish the record of ongoing good-faith effort required for any renewal.
What the extension does not provide: a pause. States under a good-faith exemption cannot defer outreach, pause policy development, or put IT work on hold. The extension defers only the obligation to condition eligibility on meeting work requirements. All preparatory obligations remain in effect.
What MCOs Need to Do Now
For MCOs, the IFR is largely permissive rather than mandatory. MCOs may conduct outreach, provide education, refer to qualifying work programs, and share information with state agencies regarding enrollees’ health conditions, including medically frail status and SUD treatment participation. However, MCOs may not make eligibility or compliance determinations. That authority remains exclusively with the state.
Two points for MCOs to act on now. First, CMS has signaled that certain outreach activities could be treated as value-added services and counted toward MCO medical loss ratio (MLR) calculations. CMS did not specify which activities qualify, making this a priority for comment before July 31. MCOs that invest in compliant outreach have a financial incentive to urge CMS to provide specificity. Second, the IFR requires states to exhaust available data sources, including MCO claims and encounter data from the prior 12 months, before requesting documentation from individuals. States and MCOs that have not established data-sharing agreements and workflows should treat this as an immediate priority.
The self-attestation cliff also matters for MCO member management. The populations least likely to have documented conditions in claims data, including those previously uninsured, those receiving care outside Medicaid, and those whose conditions are not yet captured in standard encounter data, are also the populations MCOs are most likely to miss during their ex parte review process. Identifying those members now, before the cliff, is both a coverage quality and a risk management issue.
What Patient Advocates Need to Do
The January 2028 self-attestation cliff creates an 18-month window for proactive advocacy. Most clients who will lose self-attestation eligibility are unaware of what is coming, and most of their providers have never been asked to document functional limitations for this purpose. Advocates should identify clients likely to be affected: those whose diagnoses appear on state ICD-10 screening lists, but whose medical records address only diagnosis and treatment, not functional capacity. These clients need provider documentation that meets the IFR’s two-part test before the cliff arrives, not after. Before beginning that work, however, advocates should screen clients for categorical exemptions. Parents, guardians, and caretakers of dependent children aged 13 and under are entirely exempt from the work requirement and need not navigate the medical frailty documentation process.
Before July 31, advocates and legal organizations should submit comments urging CMS to establish nationwide minimum documentation standards. The IFR leaves the content of documentation entirely to state discretion. Without federal floors, the threshold for qualifying provider certification will vary significantly across states, creating new geographic inequities in access to the medical frailty exemption. Comments requesting national minimum elements are the most direct way to prevent that outcome.
For patient advocates, the re-enrollment pathway is critical yet underreported in most analyses of the IFR.
Before an individual is disenrolled, the state must issue a noncompliance notice. The individual then has 30 calendar days from receipt of the notice to demonstrate compliance or claim an exemption. During this window, coverage remains in effect. Before disenrollment, the state must also review all other Medicaid eligibility pathways, and the individual has the right to a fair hearing before coverage ends.
If disenrollment occurs, there is no lockout period. The IFR explicitly prohibits states from restricting an individual’s ability to reapply at any time.
Advocates should build client navigation workflows around these protections now. The 30-day noncompliance window, the obligation to check other eligibility pathways, and the no-lockout re-enrollment right are protections that affected individuals will not discover on their own.
Making the Comment Period Count
Because this is an interim final rule, CMS can implement it without first issuing a proposed rule. CMS is accepting public comments through July 31, 2026, and may revise the provisions before the final rule is issued. This is one of the few remaining opportunities to influence how the rule is written before it governs millions of people’s access to care.
The highest-value targets for comment are not the mechanics of the requirement; they are the questions CMS left unaddressed.
For clinical organizations and providers: The functional impairment standard. CMS has said that conditions must "significantly impair" the ability to complete 80 hours per month, but it has not defined "significantly," specified what evidence is sufficient to establish that, or outlined how states should adjudicate borderline cases. Organizations with clinical expertise should press for clearer guidance that protects individuals with severe manifestations of conditions on the "generally does not qualify" list.
For state agencies: Good-faith extension criteria. CMS will evaluate extension requests on a state-by-state basis but has not published the criteria or evidentiary standards it will apply. States should seek a clear framework before the January 1, 2027, deadline that specifies what documentation of good-faith effort is required and how CMS will evaluate renewal requests against the December 31, 2028, outer limit.
For MCOs: Value-added services and MLR classification. CMS signaled that certain outreach activities could count toward MCO MLR calculations but did not specify which activities. Health plans should seek clarification before the final rule is issued.
For patient advocates: Procedural protections during disenrollment. The IFR establishes a 30-day noncompliance notice window and prohibits lockout periods, but it does not specify the content, readability, or language-access requirements for noncompliance notices, nor does it set a timeline for fair hearing decisions. Advocates should push for minimum procedural standards to ensure affected individuals can meaningfully exercise their rights before coverage ends.
For all stakeholders: Documentation standards after January 2028. The IFR requires documentation but leaves content standards to the states. National guidance on minimum elements would reduce the risk of wide variation across states and prevent new inequities in access to the medical frailty exemption.
Conclusion
The IFR’s implementation clock is running on four parallel tracks. Providers have roughly 18 months to build the documentation practices their patients will need when self-attestation ends. State agencies have until January 1, 2027, to complete eligibility systems, ICD-10 code lists, and mandatory outreach, or to demonstrate good-faith efforts to extend that deadline, with a hard outer limit of December 31, 2028. MCOs must establish data-sharing agreements and press CMS for MLR specificity before the final rule closes that window. Patient advocates must help clients document functional limitations before the cliff, not after.
None of these tracks is independent. The two-part test for medical frailty links them: providers must document it, states must adjudicate it, MCOs must support its identification, and advocates must protect clients whose documentation is incomplete. Organizations that act before their specific deadlines will be better positioned to serve the populations who depend on this coverage.
Atrómitos is a boutique consulting firm specializing in health and human services policy, organizational strategy, and fund development. Read our February 2026 policy brief, Medicaid Work Requirements Are Now Law.