Judge Richard Stearns Blocks CMS’s Narrow Medicaid Work Exemption Rule

U.S. District Judge Richard Stearns blocked CMS’s narrow Medicaid 'medically frail' rule on October 29, 2026.

On October 29, 2026, U.S. District Judge Richard G. Stearns, serving in the District of Massachusetts, ruled that the Centers for Medicare and Medicaid Services (CMS) unlawfully narrowed the definition of "medically frail" for Medicaid exemptions tied to work requirements. This challenged CMS’s guidance under the 2025 One Big Beautiful Bill, a federal policy that introduced Medicaid work mandates.

The "One Big Beautiful Bill" is a 2025 federal statute that requires able-bodied Medicaid recipients to meet certain work or community engagement standards unless exempted for reasons like medical frailty. CMS’s rule tightened exemptions by requiring beneficiaries to prove their medical conditions "significantly impair" their ability to work, reducing the population qualifying as medically frail.

Twenty-five states and the District of Columbia sued CMS, arguing the restrictive rule would cause eligible but medically frail individuals to lose Medicaid coverage, disrupting access to necessary healthcare. The plaintiffs contended the CMS interpretation was inconsistent with federal Medicaid law and the intent behind the exemptions.

Judge Stearns sided with the states, issuing a permanent injunction against CMS’s definition and implementing a six-month stay to let states update their Medicaid eligibility systems. In his ruling, Stearns noted, "Because enforcement of an unlawful definition of 'medically frail' may lead to the disenrollment of otherwise eligible vulnerable individuals relying on Medicaid coverage for continuity of care, the States (and public) face potential for great hardship."

This case received wider corroboration from independent reporting by NPR, which confirmed the states’ concerns and judicial decision.

For legal and health policy professionals, the ruling highlights ongoing judicial scrutiny of Medicaid work requirement policies and the critical importance of exemption definitions. States now face regulatory and operational challenges adapting systems before the stay expires. Monitoring forthcoming CMS guidance and state-level adjustments will be essential for practitioners advising on Medicaid compliance and eligibility.

What's next: States have six months to revise their eligibility verification systems to comply with the ruling before CMS enforcement could resume.