CMS Issues Guidance on New Budget Neutrality Requirements for 1115 Waivers

Sellers Dorsey breaks down a new CMS State Medicaid Director Letter that implements statutory budget neutrality requirements for Section 1115 demonstrations approved after January 2027, stemming from federal legislation. The guidance previews forthcoming rulemaking and provides states with early direction on compliance with these new fiscal guardrails. This matters for MCOs because 1115 waivers often define managed care program structure, covered populations, and available funding—and tighter budget neutrality requirements may constrain demonstration scope and financing approaches.

Managed Care · Finance

This is outside commentary from Sellers Dorsey, not part of Medicaid Monitor's independently scored news coverage.

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