Medicaid FAQs for healthcare providers

What is Medicaid expansion?

Medicaid expansion is a part of the Affordable Care Act (ACA) meant to provide health insurance to more people with low incomes. Before this law, Medicaid was usually limited to specific groups, like children, pregnant women, seniors, and people with disabilities. But many low-income adults, especially those without children, could not get coverage no matter how little money they made.

States that choose to expand Medicaid open the program to almost all adults who make up to 140% of the Federal Poverty Level. Expanding the program is optional for states. As of mid- 2026, 40 states and Washington, D.C., have chosen to adopt it.

What is changing with Medicaid, and why does it affect my practice?

The 2025 federal law known as H.R. 1 (the “One Big Beautiful Bill Act”) created new work, or community engagement requirements for many adults covered through Medicaid expansion. It also shortened renewal periods and tightened verification rules. Healthcare providers are increasingly called upon to verify medical exemptions, document incapacitating diagnoses, and provide supporting clinical evidence to prevent patient disenrollment. Because these changes rely heavily on documentation, and states may look to treating providers to confirm exemptions, front desk staff, care managers, and clinicians may all be asked to help patients respond.

Frequently asked questions for healthcare providers

What are the core work/community engagement requirements for patients?

Medicaid beneficiaries subject to the policy are generally required to complete a specified number of hours per month (typically 80 hours per month) in qualifying activities to maintain coverage.

When do these new work/community engagement requirements go into effect for patients?

Under the law, states must begin implementing the new requirements for certain Medicaid adults by January 1, 2027. However, states can choose to implement the requirement earlier.

Are there non-employment activities that meet the requirement?

Yes. Patients who are not currently employed in traditional paid work can satisfy requirements through a combination of:

• Caregiving responsibilities for a dependent child or incapacitated family member
• Job skills training and vocational education programs
• Community service or volunteer activities with registered non-profit organizations
• Participation in accredited substance use disorder (SUD) treatment programs

What medical exemptions exist, and how does a diagnosis qualify a patient?

Exemptions protect individuals whose physical, mental, or developmental conditions impair their ability to work or participate in qualifying activities. Key medical exemption categories include:

• Short-Term Incapacity: Temporary medical conditions (like surgical recovery, etc) expected to last 30 to 180 days.
• Medically Frail: Individuals certified by a healthcare provider as physically or mentally unable to work due to acute or chronic illness, disability, or severe injury.
• Substance Use Disorder: Patients active in medically supervised treatment, recovery, or rehabilitation.
• Pregnancy & Postpartum Period: Women during pregnancy and up to 12 months postpartum (varies by state).

Does a diagnosis automatically qualify a patient for the medical frailty exemption?

No. Under CMS’s June 2026 guidance, a diagnosis alone is not enough; the state must also find that the condition limits the person’s ability to work. This means self-reported or provider-documented information about how a condition affects functioning, not just the diagnosis code, is likely to matter when a patient’s exemption is being decided.

What specific paperwork must healthcare providers complete?

Providers may be asked to complete state-specific Medical Exemption / Physician Verification Forms or issue a clinical letter on official letterhead detailing:

• Provider licensure, NPI number, and signature.
• Primary diagnosis (ICD-10 code) and severity of the condition.
• Explanation of how the condition impairs the patient’s functional capacity to obtain or sustain 80 hours/month of work.
• Estimated duration of the temporary or permanent medical incapacity.

How often do patients need to recertify their exemptions or hours?

Recertification timelines depend on the type of exemption. Permanent or chronic condition exemptions are typically recertified annually during regular Medicaid renewal. Temporary medical exemptions usually require recertification every 3 to 6 months. Monthly reporting of hours is required for non-exempt patients actively fulfilling hours.

What happens if a patient fails to recertify or report hours?

Failure to submit required paperwork or complete hours leads to suspension or termination of Medicaid benefits after a grace period. Healthcare providers can assist by identifying at-risk patients during routine clinical visits, proactively filling out exemption forms, and connecting patients with clinic social workers or patient navigators.