25-State Medicaid Lawsuit Targets Documentation Rule, Seeks Injunction Ahead of August Deadline

A coalition of 25 states and the District of Columbia filed suit against the Trump administration, challenging a Medicaid Interim Final Rule that requires vulnerable enrollees to submit documentation proving they qualify for medical exemptions from new work requirements. The litigation — naming Centers for Medicare & Medicaid Services Administrator Dr. Mehmet Oz and Health and Human Services Secretary Robert F. Kennedy Jr. as defendants — seeks a temporary stay and preliminary injunction before states face an August 31 deadline to mail notices to Medicaid enrollees.

The Rule and Its Documentation Shift

The CMS Interim Final Rule, issued in early June, rewrites how medically fragile Medicaid recipients qualify for exemptions from work, volunteering, or education requirements set to take effect in January 2027. Under prior guidance, agencies were to grant exemptions automatically by reviewing existing health records — no additional paperwork required. The new rule eliminates that pathway, placing the burden of proof on enrollees themselves.

Starting in 2028, recipients without immediately available medical records would be limited to a single self-attestation filing — made under penalty of perjury — to establish that their condition prevents them from working. Previous policy allowed repeated self-attestations as health circumstances changed.

CMS Projections Anchor the Legal Argument

The plaintiffs lean heavily on the agency's own modeling. CMS projects 2.3 million enrollees will lose Medicaid coverage in the rule's first year. Separately, the agency estimates that 7% of enrollees who are actively working or legitimately qualify for an exemption will still lose coverage — attributable to paperwork confusion, missed deadlines, or missing documentation rather than any eligibility failure.

The suit also flags cost and operational disruption: states would be forced to dismantle automated eligibility systems already built and funded, replacing them with costlier manual review processes.

The Administration's Rationale

Oz has defended the documentation requirements as a fraud-prevention measure, arguing that guardrails protect Medicaid's long-term viability. The able-bodied work requirement — 20 hours per week of employment, volunteering, or schooling — is intended, in Oz's framing, to ensure recipients of taxpayer-funded coverage contribute to society. He has described the changes as consistent with preserving, not cutting, the program.

Plaintiffs and Next Steps

The filing spans a broad geographic coalition: California, New York, Illinois, Pennsylvania, Michigan, North Carolina, Virginia, Wisconsin, Colorado, Minnesota, and 15 other states and jurisdictions. The complaint argues the IFR violates federal law and departs from Congressional intent. With the August 31 notice deadline approaching, the plaintiffs are pressing for emergency relief to pause enforcement while litigation proceeds.