ACCC’s Comments on the 2026 CMS Interim Final Rule

The passage of the Working Families Tax Cut Act (WFTC), also known as the One Big Beautiful Bill Act (OBBBA), marked a significant shift in Medicaid eligibility policy when it was signed into law on July 4, 2025. The legislation established new community engagement requirements for certain Medicaid beneficiaries and applicants to be eligible for coverage.¹ Although Congress included exemptions intended to protect vulnerable populations, recent regulatory implementation by the Centers for Medicare & Medicaid Services (CMS) has raised concerns among oncology providers and other healthcare stakeholders about how these requirements may affect patients with cancer, such as creating barriers to coverage, increasing administrative burden, and potentially disrupting care.

On June 1, 2026, CMS published its interim final rule (IFR), Medicaid Program; Community Engagement Requirement for Certain Individuals in the Federal Register, followed by a public comment period that closed on July 31, 2026, during which time interested parties could submit feedback.

The Working Families Tax Cut Act

Under the WFTC, certain adults aged 19 to 64 years enrolled in Medicaid through the Affordable Care Act Medicaid expansion, as well as some individuals enrolled in certain Medicaid waiver programs, must meet monthly community engagement requirements to remain eligible for coverage. Affected individuals must participate in at least 80 hours per month of qualifying activities, such as employment, education, community service, or other approved activities.² These requirements apply across 41 Medicaid expansion states and the District of Columbia, as well as certain waiver-based programs, affecting a total of 44 state Medicaid programs.^3,4

Recognizing that some individuals in this population face substantial health-related challenges, Congress included a medical frailty exemption in the WFTC, exempting individuals deemed “medically frail or otherwise [have] special medical needs” from the community engagement requirements. The medical frailty exemption requires one of five qualifying conditions: blindness or disability; substance use disorder; disabling mental disorder; physical, intellectual, or developmental disability limiting daily activities; or a serious or complex medical condition. In addition, the individual’s qualifying condition must significantly impair their ability to consistently work or participate in community engagement activities.⁴

States will be required to develop a list of diagnoses and other codes to identify individuals who qualify for the medical frailty exemption. To verify medical frailty status, states must only use existing claims and encounter data from the past 12 months, but individuals may have to provide additional documentation when necessary.⁴

Implications of the Medical Frailty Exemption

Along with many other patient advocacy groups and healthcare provider organizations, ACCC submitted a comment letter to CMS on July 31, 2026, to express its concerns about the IFR. Firstly, ACCC noted that the IFR’s inclusion of additional requirements to qualify for this exemption from the community engagement requirements may increase the risk that vulnerable populations will lose their coverage despite ongoing healthcare needs.^5,6 For patients with cancer, maintaining continuous insurance coverage is particularly important, as cancer treatment frequently involves extended courses of care, multidisciplinary services, prescription drugs, imaging studies, laboratory testing, and long-term follow-up. Even short interruptions in coverage can delay treatment and increase financial hardship—a concern many ACCC members have expressed.

A central focus of ACCC’s comment letter was the implications of the “significantly impair” clause in the medical frailty exemption. Namely, the Association expressed concerns that this additional requirement narrows the original statutory exemption and creates uncertainty and undue administrative burden for patients, caregivers, and providers attempting to determine eligibility. Patients whose symptoms—and therefore their functional status—fluctuate during treatment may have a particularly difficult time procuring documentation from providers to establish that their condition significantly impairs their ability to comply with community engagement requirements.

In addition, the downstream effects of related administrative burdens on cancer programs and oncology practices may be significant, consuming clinical resources to prepare documentation and navigate eligibility questions that could otherwise be directed toward patient care. Finally, delays, interruptions, or loss in Medicaid coverage may force patients to postpone screenings, treatment, or follow-up care—decisions that can have significant clinical consequences.

With these concerns in mind, ACCC made the following requests of CMS in its letter:

1. Remove the IFR requirement that a condition must “significantly impair” an individual’s ability to fulfill the community engagement requirements, as it was not contained in the statute and imposes challenging administrative burdens on patients and their healthcare providers.
2. If CMS retains the “significantly impair” standard, ACCC asks that it be amended to reflect the real experiences of patients with cancer who are or may become Medicaid beneficiaries, and those of the healthcare providers who serve them. The IFR or any upcoming CMS guidance should minimize administrative burdens on patients and providers, as well as the potential for inappropriate losses or interruptions in coverage.
3. ACCC appreciates that, in developing the IFR, CMS considered whether cancer and certain other serious conditions should automatically qualify for the “serious and complex” condition exemption and decided against it.⁷ ACCC respectfully submits that, if a cancer diagnosis alone is insufficient, clarifying guidance should be issued that provides patients, providers, and implementing states with a reasonable and practicable method of determining patient eligibility.

ACCC’s Position

ACCC is very concerned that the IFR’s interpretation of the medical frailty exemption, particularly the addition of the “significantly impair” requirement, may create unnecessary barriers for patients with cancer and increase administrative burdens on providers.

Accordingly, ACCC respectfully urges CMS to remove the “significantly impair” requirement from the IFR and/or any forthcoming CMS guidance or final regulation. Alternatively, if this requirement remains, ACCC asks CMS to amend the medical frailty standards to reflect the real experiences of individuals with serious and complex medical conditions, including cancer. These requirements should also provide a reasonable and practicable way of determining these patients’ eligibility.

As states prepare to implement the community engagement requirements in 2027 and given the importance of Medicaid coverage for many patients with cancer, ACCC hopes that CMS will consider making its recommended changes to the IFR or subsequent guidance.

Read ACCC’s full comment letter to CMS here.

References

1. Working Families Tax Cut Act, Pub L No. 119-21, 139 Stat 72 (2025). Accessed July 31, 2026. https://www.congress.gov/119/plaws/publ21/PLAW-119publ21.pdf
2. Medicaid program; community engagement requirement for certain individuals. Fed Regist. 2026;91(106):33348-33482. Accessed July 31, 2026. https://www.govinfo.gov/content/pkg/FR-2026-06-03/html/2026-11094.htm
3. Barker T, Farrell C, Pai A, Nacht J. CMS issues interim final rule imposing Medicaid work requirements for expansion populations. Foley Hoag. June 4, 2026. Accessed July 31, 2026. https://foleyhoag.com/news-and-insights/publications/alerts-and-updates/2026/june/cms-issues-interim-final-rule-imposing-medicaid-work-requirements-for-expansion-populations/
4. Diana A, Tolbert J, Rudowitz R. The medical frailty exemption from Medicaid work requirements: key takeaways from the CMS interim final rule. KFF. June 23, 2026. Accessed July 31, 2026. https://www.kff.org/medicaid/the-medical-frailty-exemption-from-medicaid-work-requirements-key-takeaways-from-the-cms-interim-final-rule/
5. ASCO urges CMS to protect patients with cancer from Medicaid work requirements. American Society of Clinical Oncology. July 30, 2026. Accessed August 21, 2026. https://www.asco.org/news-initiatives/policy-news-analysis/ASCO-urges-CMS-protect-cancer-patients-Medicaid-work-requirements
6. Joint statement on the impact of Medicaid community engagement requirements and cancer care. Cancer Support Community. Accessed August 21, 2026. https://www.cancersupportcommunity.org/sites/default/files/file/2026-06/Joint%20Statement%20on%20Medicaid%20Cmty%20Requirements.pdf
7. Fed. Reg. P. 33375.