23 States Sue CMS Over Medicaid Work Requirements Rule Exemptions
On June 29, 2026, twenty-three states, two governors, and the District of Columbia filed suit in U.S. District Court for Massachusetts challenging CMS implementation of Medicaid work requirements under the One Big Beautiful Bill Act. Plaintiffs allege CMS unlawfully narrowed exemptions for medically frail beneficiaries. The litigation seeks to block enforcement of the work requirements rule pending judicial review. This lawsuit directly affects managed care organizations responsible for identifying medically frail populations, verifying exemptions, and ensuring compliance with work requirement reporting.
MCOs face immediate uncertainty about enforcing work requirements and identifying medically frail exemptions while this litigation proceeds, potentially requiring dual compliance frameworks depending on court rulings.
Managed Care
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