Indiana Outlines Medical Frailty Exemptions for Upcoming Medicaid Work Requirements

INDIANAPOLIS – State officials on Tuesday, Oct. 27, unveiled specific details for how Indiana will apply a new federal definition for medical frailty. This definition is a critical exemption to work requirements set to begin on Jan. 1 for tens of thousands of Medicaid expansion enrollees.

The Healthy Indiana Program (HIP) served approximately 475,000 Hoosiers as of Wednesday, Sept. 30, according to a quarterly financial presentation from the Family and Social Services Administration. This figure includes an “expansion” population of 355,000 working-age adults whose income levels are slightly too high for traditional Medicaid coverage.

These expansion enrollees will soon face work requirements, needing to demonstrate 80 hours of work, volunteering, or school enrollment per month for three months prior to their application or redetermination to maintain coverage. Earning at least $580 a month, equivalent to 80 hours at a minimum-wage job, would also fulfill this requirement.

Exemptions to these requirements will be available for several groups, including parents of younger children and participants in certain drug treatment programs. A key exemption is for individuals considered medically frail.

Indiana has previously used the concept of medical frailty, but for a distinct benefit package within the HIP program. Now, this concept will be redefined specifically to serve as an exclusion from the upcoming work requirements.

A new federal framework narrows the definition of medical frailty into five statutory categories. These include individuals considered blind or disabled under the Social Security Act, those with physical, developmental, or intellectual disabilities, disabling mental disorders, substance use disorders, and serious or complex medical conditions. A significant change is that an individual falling into one of these categories is only considered medically frail if their condition "significantly impairs their ability to satisfy the work requirements."

Starting next year, the state will implement decisions on these exemptions using a new tool called Milliman Advanced Risk Adjusters, or MARA. This tool will sweep through all claims data available to the state. Chief Clinical Officer Katrina Etter noted that the tool has been "specifically customized it for the purpose of evaluating claims against the new federal definition."

State officials outlined three primary paths to securing a medical frailty exemption, which, once granted, will last for six months at a time.

Tier 1 is described as “diagnosis-based.” Under this tier, MARA will automatically identify members who have a medical diagnosis from a state-approved list of conditions. Tier 2 is “evidence-based,” where MARA will review qualifying conditions in conjunction with the treatments, services, or supports a member is receiving. Both Tier 1 and Tier 2 determinations will be continually reviewed.

A run of the MARA tool on Wednesday, Sept. 30, estimated that nearly 140,000 people would qualify as medically frail through these first two mechanisms.

For those not identified as medically frail through Tiers 1 or 2, a third path is available. Medicaid Chief Operating Officer Lindsey Lux explained, “If somebody does not hit medically frail through the use of that tool in one of those first two tiers, that’s when they can submit supplemental information for our clinical team to review.”

Under this Tier 3, a participant, healthcare provider, managed care organization, or the state itself can make a recommendation or referral. The state’s clinical staff will then evaluate supporting documentation, such as medical records, treatment notes, medication lists, and lab results, to make a final decision.

Currently, the clinical team responsible for these manual reviews consists of three full-time staff members. Etter stated, “I do anticipate that we will need to build the team over time. But I do think we want to see the volume of that tier three pathway, which will help inform what that looks like.”

In addition to staffing, officials are working to update online guidance and create necessary forms. Etter anticipates that MARA will be run again next month, with mailers detailing medical frailty determinations sent out by late November or early December.

These mailers will inform recipients if they are deemed medically frail and thus require no further action. Alternatively, they will notify individuals if a determination of medical frailty cannot be made based on current information, providing a pathway to submit additional documentation if they believe an error has occurred.

State estimates indicate that nearly a quarter of the projected medically frail plan members will qualify solely through disabling mental disorders. It is important to note that there is no Tier 1 pathway for this category of conditions, meaning these individuals must be identified under Tier 2 or undergo manual review by the state’s clinical team.