The new Rural Health Transformation Program is distributing $50 billion to states over five years to strengthen rural healthcare through cooperative agreements. States are now transitioning from planning to implementation, with CMS finalizing agreements and establishing spending timelines that require budget period funds to be used within roughly 18 months. While the program addresses broad rural health priorities including technology, behavioral health, and value-based care, its structure and state-level implementation may intersect with Medicaid managed care operations in rural markets.

The federal Rural Health Transformation Program allocates $50 billion over five years through state cooperative agreements to strengthen rural healthcare delivery, with significant implications for how FQHCs serve Medicaid beneficiaries in underserved areas. While funding flows through states rather than directly to providers, the program's focus on access expansion, workforce retention, and care model innovation could reshape FQHC participation in Medicaid managed care networks and delivery system reform. States are designing tailored rural health transformation plans that will determine how safety-net providers integrate behavioral health, dental, and other services for Medicaid populations.

CMS has updated its guidance on State Directed Payments in Medicaid managed care, revising how states can grandfather existing arrangements under new statutory payment caps enacted by Congress. The February 2026 guidance modifies CMS's interpretation of the grandfathering window and affects SDPs for hospital, nursing facility, and academic medical center practitioner services—critical payment mechanisms MCOs use to distribute supplemental payments to providers. This represents a significant shift in federal oversight that will require MCOs and state Medicaid agencies to reassess their SDP arrangements and compliance strategies.

A new CMS final rule restricts how states can structure healthcare-related taxes—especially those targeting managed care organizations—by closing a loophole that allowed higher tax rates on Medicaid-heavy providers. The regulation prohibits states from using utilization tiers or proxy classifications that effectively isolate high-Medicaid-volume entities, affecting nine tax waivers across seven states. For MCO executives and state Medicaid directors, this changes the financing landscape by limiting a common strategy for generating state match dollars tied to managed care arrangements.

California's 58 counties serve as critical administrators and providers within the state's Medi-Cal managed care system, which now covers approximately 15 million members with 95% enrolled in managed care plans. Recent state reforms including CalAIM and BH-CONNECT have significantly expanded county obligations around Enhanced Care Management, Community Supports, behavioral health coordination, and cross-system data reporting. These evolving responsibilities require counties to balance state mandates with local delivery needs while managing both Medi-Cal specialty behavioral health services and safety net programs for vulnerable populations.

This discussion examines how Medicaid managed care organizations can better coordinate with child welfare, behavioral health, and other family-serving systems to improve outcomes for children and families—Medicaid's largest user population. The conversation addresses common barriers like agency silos, policy volatility, and capacity constraints that prevent effective cross-system collaboration. For MCO compliance teams and state Medicaid directors, this speaks to growing expectations around care coordination and whole-family approaches in managed care contracting and operations.

Sellers Dorsey provides a state-by-state breakdown of how the new $50 billion Rural Health Transformation Program allocated first-year funding to stabilize rural health systems and expand care access. While the program addresses rural provider infrastructure broadly, it has implications for Medicaid managed care networks that depend on rural providers for network adequacy and member access. The analysis offers state-specific details relevant to MCOs operating in rural service areas or managing provider relationships in underserved regions.

Sellers Dorsey's CEO argues that recent federal policy changes, including H.R.1, are forcing Medicaid programs to move away from one-size-fits-all models toward community-tailored strategies backed by stronger data analytics and accountability measures. The commentary positions 2025 as an inflection point requiring states and MCOs to demonstrate measurable value, modernize operations, and use technology to target interventions more precisely across diverse populations and geographies.

Sellers Dorsey experts discuss how states are leveraging Medicaid waivers to customize programs and test innovative approaches for child and family well-being, including mobile crisis response, school-based behavioral health services, and home-based family support. The conversation focuses on waiver design and implementation as tools for states to secure federal funding for services that address gaps in traditional Medicaid coverage. This is directly relevant for MCO compliance teams and state Medicaid officials navigating waiver strategies and service expansion requirements.

Sellers Dorsey reviews state applications to the newly established Rural Health Transformation Program, a $50 billion federal initiative to modernize rural healthcare delivery under H.R.1. While not Medicaid-specific, the program has clear implications for Medicaid managed care organizations operating in rural areas, as many beneficiaries in these regions rely on Medicaid coverage and states may coordinate RHTP funds with Medicaid delivery system investments.

Sellers Dorsey's issue brief examines how Medicaid has developed from its inception through major policy milestones including HCBS waivers, the Olmstead decision, and managed LTSS models to become the primary coverage source for 35% of Americans with disabilities. The analysis covers both historical innovations in person-centered care and self-direction as well as ongoing operational challenges like workforce shortages that affect service delivery. For MCO executives and state Medicaid leaders, the piece provides context on how disability policy and LTSS have become central to managed care obligations and program design.

Sellers Dorsey outlines a multi-step assessment process to determine whether hospitals are organizationally and financially prepared to enter risk-based arrangements with payers, including Medicaid managed care organizations. The framework begins with evaluating existing managed care contracts and operational structures to optimize hospital sustainability while maintaining care quality. While the piece addresses both Medicare and Medicaid populations, its focus on payer contracting and managed care operations has direct application for hospitals negotiating with Medicaid MCOs.

Children adopted from foster care face significantly elevated rates of chronic physical conditions and mental health challenges, with up to 80% experiencing significant behavioral health issues compared to 18-22% of the general population. The piece emphasizes that these children maintain Medicaid eligibility post-adoption and rely on comprehensive, trauma-informed Medicaid services to address complex medical and behavioral health needs. While focused on adoption awareness, it underscores the critical role of Medicaid managed care in serving this high-acuity pediatric population.

This analysis examines the evolution of care delivery for dual-eligible beneficiaries who require coordination between Medicare and Medicaid, particularly for long-term services and supports that Medicare excludes. The piece traces how integrated care models including D-SNPs and PACE programs have emerged as essential tools for managing this complex, high-need population. For Medicaid MCOs and state directors, understanding dual-eligible integration is critical given these beneficiaries' disproportionate cost and care coordination challenges.

Sellers Dorsey released a comprehensive guide examining how states can better leverage and coordinate federal funding sources—including Medicaid—to support child welfare and family well-being programs. The playbook addresses challenges in blending multiple funding streams and identifies opportunities for enhanced coordination. This is relevant to Medicaid MCOs increasingly serving foster care populations and managing behavioral health services for children involved in welfare systems.

CMS has reversed its longstanding interpretation of how Medicaid managed care organizations should handle payments for emergency services provided to undocumented immigrants, issuing new guidance that affects MCO capitation arrangements and emergency service reimbursement protocols. The policy shift carries significant operational and financial implications for how states structure their managed care contracts and how MCOs process and pay claims for this population. Sellers Dorsey's analysis examines CMS's legal reasoning for the change and outlines the compliance options available to state Medicaid agencies and their contracted health plans.

Sellers Dorsey leaders discuss the role of care coordinators in helping children and families with child welfare involvement navigate complex healthcare systems. The conversation focuses on care coordination as a critical function for serving vulnerable pediatric populations with complex needs, a growing priority area for Medicaid MCOs serving children and families. This addresses operational and clinical coordination challenges relevant to plans managing maternal and child health populations under Medicaid.

CMS has released the application notice for its Rural Health Transformation Program, a $50 billion initiative designed to help state governments improve healthcare access and outcomes in rural communities. While the program is state-administered and addresses healthcare infrastructure broadly, Medicaid managed care organizations with rural service areas may find relevant opportunities given states' typical reliance on Medicaid financing for rural safety net providers and potential integration with managed care delivery systems.

This analysis examines Medicaid's coverage of foster care youth—reaching 99% of this population—and identifies system fragmentation as a barrier to effective care delivery. The piece outlines federal policy frameworks connecting Medicaid to child welfare and highlights state opportunities to improve coordination between health plans and child welfare agencies. For MCO compliance teams and state directors, it offers a policy roadmap for addressing a high-needs population with complex behavioral health and care transition requirements.

Kinship care—placement of children with relatives—affects nearly 1 in 11 children and offers better placement stability and behavioral health outcomes than other arrangements. Medicaid MCOs have an opportunity to support these caregivers, who face financial constraints and system navigation challenges, through tools like TCARE that identify caregiver needs and connect them to services. The discussion explores practical ways health plans can fill critical support gaps for kinship families.