HHS announced that 10 states—Alaska, Colorado, Hawaii, Louisiana, Maryland, Mississippi, Montana, North Dakota, Washington, and West Virginia—will join the Certified Community Behavioral Health Clinic (CCBHC) Medicaid Demonstration Program. The demonstration, operated jointly by CMS and SAMHSA, tests an alternative payment model for comprehensive community behavioral health services. CCBHCs provide a defined scope of crisis, mental health, and substance use disorder services under a prospective payment system. For participating states, managed care organizations will need to contract with CCBHCs and adjust payment methodologies to comply with the demonstration's requirements.
Why it mattersMCOs in these 10 states must prepare to integrate CCBHCs into their networks and implement prospective payment methodologies that differ from standard fee-for-service or capitated behavioral health reimbursement.
Behavioral Health · Managed Care
The number of uninsured children under age 6 increased 23% between 2022 and 2024, reaching the highest level in nearly a decade, compared to a 17% increase for school-aged children. The sharper rise among younger children coincides with Medicaid redeterminations that began after the end of the continuous enrollment provision in spring 2023. Young children face higher procedural disenrollment risk due to more frequent address changes and verification requirements. The data suggests gaps in ex parte renewal processes and family communication strategies that disproportionately affect families with infants, toddlers, and preschoolers.
Why it mattersMCOs must strengthen outreach and renewal assistance for members with young children, who face elevated procedural disenrollment risk and represent a population segment with high preventive care needs and quality measure stakes.
Managed Care · Maternal · CHIP
The Department of Health and Human Services announced an action plan targeting psychiatric overprescribing and promoting deprescribing when clinically appropriate. HHS Secretary Robert F. Kennedy, Jr. outlined the initiative at a mental health summit focused on overmedicalization. The announcement did not specify implementation timelines, enforcement mechanisms, or how the plan would apply to Medicaid managed care organizations. HHS has not released detailed guidance on prescribing standards, prior authorization changes, or utilization management requirements that would affect MCO behavioral health benefit administration.
Why it mattersAny federal directive to reduce psychiatric prescribing could require MCOs to revise utilization management protocols, prior authorization criteria, and pharmacy benefit designs for behavioral health drugs, though operational details remain unclear.
Behavioral Health · Pharmacy · Managed Care
A group of Democratic senators released a policy framework Wednesday to create a new Medicare home care benefit and expand Medicaid home- and community-based services. The proposal represents a significant shift in federal long-term care policy, potentially affecting how both Medicare and Medicaid fund home-based care. Details on implementation timelines, eligibility criteria, and financing mechanisms have not yet been specified. If enacted, the framework could reshape payment structures and access requirements for home health and HCBS providers serving dual-eligible and Medicaid-only populations.
Why it mattersMedicaid managed care organizations would need to prepare for expanded HCBS obligations, potential new dual-eligible coordination requirements, and shifts in state-federal financing if the proposal advances to legislation.
LTSS · Managed Care
The Centers for Disease Control and Prevention reported that the U.S. uninsurance rate remained stable in 2024 compared to the prior year. The data provides a baseline before anticipated coverage losses from federal healthcare spending cuts included in recent budget legislation. Medicaid managed care organizations may see enrollment declines if federal funding reductions lead to eligibility restrictions or benefit changes. The timing of any coverage losses will depend on how states implement budget cuts and whether Medicaid programs face disproportionate reductions.
Why it mattersStable enrollment provides a pre-policy baseline for MCOs to measure potential membership and revenue impacts from federal spending cuts that may trigger state Medicaid program reductions.
Managed Care · Finance
Rep. Beth Van Duyne (R-Texas) introduced the Protecting Seniors and Stopping Fraudsters Act on Wednesday to increase Medicare oversight of home health and hospice services. The bill aims to crack down on fraudulent providers and enhance beneficiary protections in these sectors. The National Alliance for Care at Home has expressed support for the legislation. While the bill targets Medicare, Medicaid managed care organizations that contract with home health and hospice providers should monitor this legislation, as federal fraud enforcement standards often inform state oversight approaches and MCO network adequacy requirements.
Why it mattersMedicaid MCOs with home health or hospice networks may face heightened scrutiny if Medicare fraud enforcement standards are later applied to Medicaid programs or if states adopt similar provider vetting requirements.
LTSS
Federal regulators released a final rule Thursday governing how health plans and providers resolve payment disputes over out-of-network emergency and certain non-emergency services under the No Surprises Act. The rule refines the independent dispute resolution process that applies when plans and providers cannot agree on payment rates for surprise bills. Health plans criticized the rule for not doing enough to prevent providers from exploiting the arbitration system, while the rule's proponents say it balances provider and plan interests. The changes take effect upon publication in the Federal Register.
Why it mattersMedicaid managed care organizations contracting with commercial providers or operating dual-eligible plans need to understand how federal surprise billing arbitration rules affect their network adequacy strategies, rate negotiations, and member cost-sharing obligations when out-of-network care occurs.
Managed Care · Finance
The Substance Abuse and Mental Health Services Administration awarded $255 million to Vibrant Emotional Health to continue administering the 988 Suicide & Crisis Lifeline. The contract supports a national network of over 200 local crisis contact centers that have handled more than 25 million contacts since the lifeline's launch. The funding sustains federal infrastructure for crisis response services that increasingly intersect with Medicaid-funded behavioral health benefits. Medicaid managed care organizations often coordinate with 988 for crisis intervention and may face network adequacy requirements tied to crisis services availability.
Why it mattersMedicaid MCOs increasingly coordinate behavioral health benefits with 988 crisis services and may need to demonstrate crisis network adequacy as states expand crisis system infrastructure under federal behavioral health parity and access requirements.
Behavioral Health · Managed Care
The U.S. Department of Labor formally rescinded the 2024 overtime rule and returned to the 2019 salary threshold framework. The 2024 rule would have expanded overtime eligibility for home care workers, but courts vacated it after the first threshold increase took effect. The rescission provides immediate relief to home health and home care providers who faced increased labor costs under the 2024 standards. Providers operating under Medicaid managed care contracts can now plan staffing and budgets using the lower 2019 thresholds.
Why it mattersMedicaid managed care organizations with home and community-based services contracts face lower labor cost pressures and greater staffing flexibility under the 2019 overtime thresholds, affecting capitation rate adequacy and LTSS network stability.
LTSS · Managed Care
The Trump administration's $50 billion rural health initiative will not fund hospital reopenings, despite Republican campaign messaging around rural healthcare access. The fund's structure focuses on operational support for existing facilities rather than capital investment to restore shuttered hospitals. Rural hospital closures disproportionately affect Medicaid beneficiaries, who comprise a significant share of patient populations in these areas. The policy gap means communities that have already lost hospital access will not see facility restoration through this federal initiative.
Why it mattersMedicaid managed care organizations operating in rural areas must plan network adequacy strategies without expectation of federal support for reopening closed hospitals, requiring alternative solutions for beneficiary access to inpatient and emergency services.
Managed Care
A GAO report found that HUD lacks uniform data entry procedures for service coordinators in multifamily housing and cannot determine how many properties employ them or whether properties comply with program requirements. HUD also does not routinely analyze performance reports from service coordinators. Stakeholders reported service coordinators help residents avoid eviction and apply for Medicaid, but five studies showed mixed results on health, financial, and housing outcomes. Rural challenges include managing multiple funding sources, limited service providers, and long distances to services.
Why it mattersMedicaid managed care organizations partner with housing providers to address social determinants of health, and weak HUD oversight of service coordinators limits visibility into whether housing-based care coordination effectively connects members to Medicaid services and reduces avoidable utilization.
LTSS · Managed Care