CMS Administrator Dr. Mehmet Oz sent a letter to State Medicaid Directors on April 23, 2026, requesting each state develop and submit a comprehensive two-year provider revalidation strategy focused on high-risk providers. The letter, identified as an SMD (State Medicaid Director letter), is not published on the official Medicaid.gov site but is available through Fox News. Minnesota's early implementation offers initial lessons for states responding to the directive. The request affects all state Medicaid agencies and their managed care partners responsible for provider enrollment and network adequacy.
Why it mattersManaged care organizations must coordinate with states on provider revalidation requirements that may affect network composition, credentialing timelines, and compliance with federal enrollment standards.
Managed Care
ACAP and a coalition of health care organizations submitted a letter to HHS on February 7, 2026, requesting clarification on how Medicaid managed care plans should verify and document substance use disorder (SUD) treatment exemptions from community engagement requirements. The letter addresses operational challenges MCOs face in implementing exemption processes without clear federal guidance on documentation standards, member privacy protections, and coordination with SUD providers. The coalition seeks guidance on verification procedures to ensure eligible beneficiaries receive exemptions while maintaining compliance with federal requirements.
Why it mattersMCOs implementing community engagement requirements need clear federal standards for verifying SUD exemptions to avoid inappropriate coverage terminations and ensure compliant exemption processes.
Behavioral Health · Managed Care
Medicaid Health Plans of America sent a letter to Senate leadership urging caution on specific provisions in the House-passed budget reconciliation bill. The trade association outlined concerns about how reconciliation measures could affect Medicaid managed care operations and beneficiaries. The letter was addressed to Senate Majority Leader John Thune, Minority Leader Chuck Schumer, and Finance Committee leadership. The reconciliation bill is now under consideration in the Senate, with potential modifications before final passage.
Why it mattersBudget reconciliation bills can fundamentally reshape Medicaid financing, eligibility, and managed care rules without requiring bipartisan support, making industry advocacy and Senate action pivotal for MCO operations.
Managed Care · Finance
Medicaid Health Plans of America submitted recommendations on draft federal legislation aimed at improving care coordination and outcomes for dually eligible beneficiaries. The trade association expressed support for the bill's integration goals while raising concerns about specific provisions and requesting clarification on implementation details. The legislation seeks to better align Medicare and Medicaid services for the approximately 12 million Americans enrolled in both programs. MHPA's feedback reflects managed care industry priorities around dual eligible special needs plans (D-SNPs) and integrated care models.
Why it mattersDraft legislation affecting dual eligible integration could reshape D-SNP requirements, care coordination mandates, and financial arrangements between Medicare Advantage plans and Medicaid managed care organizations.
LTSS · Managed Care
The Modern Medicaid Alliance has issued a statement urging Congress to reject proposed cuts to Medicaid currently under consideration. The advocacy coalition warns the cuts would directly affect Medicaid beneficiaries' access to care. The statement comes as Congress debates budget reconciliation proposals that could significantly reduce federal Medicaid spending. Timing and specific legislative vehicles remain subject to ongoing negotiations.
Why it mattersFederal Medicaid spending cuts would directly affect MCO capitation rates, covered benefits, and enrollment levels, potentially forcing operational adjustments and network reductions.
Managed Care · Finance
The Association of State and Territorial Health Officials (ASTHO) and the National Association of Medicaid Directors (NAMD) jointly called on Congress to provide full federal funding for Medicaid and CHIP programs in U.S. territories. Unlike states, territories receive capped federal Medicaid funding rather than open-ended matching funds, creating coverage gaps and program instability. The organizations advocate for parity in federal funding treatment between states and territories. This call comes as territories face recurring funding cliffs that threaten coverage for vulnerable populations.
Why it mattersTerritory Medicaid funding constraints affect managed care organizations operating in Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands, where federal funding caps create program uncertainty and potential coverage disruptions that impact capitation rates and enrollment stability.
Managed Care · Finance · CHIP
The House Energy & Commerce Health Subcommittee held a hearing on April 30, 2024, to consider legislative proposals addressing Medicaid access and program integrity. The Medicaid Health Plans of America submitted a statement for the record supporting bipartisan policy to strengthen home and community-based services and make related changes permanent. The hearing covered multiple proposals affecting Medicaid program operations and access to care. MHPA's statement signals managed care industry support for HCBS policy changes under congressional consideration.
Why it mattersCongressional movement on HCBS policy could affect MCO contract requirements, service delivery obligations, and reimbursement structures for long-term services and supports.
LTSS · Managed Care
The FDA has approved a new gene therapy treatment for children aged 2 and older with sickle cell disease. The approval expands treatment options for pediatric patients with this serious inherited blood disorder, which disproportionately affects Medicaid beneficiaries. Sickle cell disease affects approximately 100,000 Americans, with the majority covered by Medicaid. Managed care organizations will need to evaluate coverage policies, establish prior authorization criteria, and assess the financial impact of this high-cost specialty therapy on capitation rates and medical loss ratios.
Why it mattersGene therapies for sickle cell disease can cost $2-3 million per patient, creating significant financial exposure for Medicaid MCOs with pediatric populations and requiring immediate attention to coverage determinations, utilization management protocols, and rate adequacy discussions with state Medicaid agencies.
Managed Care · Finance
On June 16, 2026, CMS published a proposed rule to codify the Medicare Drug Price Negotiation Program established by the Inflation Reduction Act of 2022. The rule would formalize existing program guidance, introduce new policy proposals, and establish the regulatory framework for drug selection, negotiation, re-negotiation, compliance monitoring, and civil monetary penalties. The proposed rule affects Medicare Part D plans and manufacturers. Public comments on the proposed rule are due approximately 60 days after publication in the Federal Register.
Why it mattersMedicare Part D drug pricing changes directly affect Medicaid managed care organizations through Medicaid-Medicare dual eligible populations and potential spillover effects on Medicaid pharmacy benefit management and supplemental rebate negotiations.
Pharmacy · Managed Care · Finance
The Partnership for Medicaid released recommendations for CMS and states on implementing community engagement requirements under H.R. 1. The guidance addresses operational considerations for managed care organizations tasked with verifying beneficiary compliance and coordinating exemptions. Implementation timelines and specific federal guidance remain pending. This matters because MCOs will likely bear responsibility for tracking work requirements, exemption processes, and related reporting — operational burdens that require system changes, vendor coordination, and potential contract amendments.
Why it mattersMCOs will face new operational requirements for verifying beneficiary work activity, managing exemptions, and reporting compliance under H.R. 1 community engagement provisions.
Managed Care
Medicaid Health Plans of America led a coalition letter to Senate Finance and House Energy & Commerce leadership on March 3, 2025, expressing support for Medicaid and CHIP programs. The letter was sent to committee chairs and ranking members as Congress considers budget and program changes. The coalition advocates for preserving funding and program integrity during legislative discussions. This signals organized industry pushback against potential Medicaid cuts or restructuring under consideration in the 119th Congress.
Why it mattersCoordinated advocacy from the managed care industry may influence congressional decisions on Medicaid funding levels, eligibility rules, and program structure that directly affect MCO revenues and enrollment.
Managed Care · CHIP · Finance
In July 2025, President Trump signed H.R. 1 into law, reducing federal Medicaid funding by $1 trillion over ten years and establishing a federal work requirement for certain adult enrollees. The law mandates that covered adults work, attend school, or volunteer to maintain eligibility. The requirements apply to non-exempt adult populations and represent a fundamental shift from prior waiver-based work requirement approaches to a statutory federal mandate. States must implement compliance tracking and reporting systems, affecting MCO enrollment verification, eligibility redeterminations, and coverage continuity processes.
Why it mattersManaged care organizations must build new systems to verify and document member compliance with work requirements, anticipate enrollment churn and disenrollment volumes, and adjust actuarial assumptions for membership stability and medical loss ratios.
Managed Care · Finance