On January 1, 2027, Medicare Advantage organizations, Medicaid managed care plans, CHIP managed care entities, and federally facilitated exchange QHP issuers must support electronic prior authorization through standardized APIs under CMS's 2024 Interoperability and Prior Authorization final rule. The rule requires impacted payers to enable providers to determine prior authorization requirements, submit requests, and receive approval decisions electronically through EHR integration, using standardized HL7 FHIR-based workflows. The rule does not eliminate prior authorization or change medical necessity criteria — it standardizes the electronic exchange of prior authorization information between providers and health plans. Hospitals should engage EHR vendors and health plans now to prepare workflows, test systems, and train staff before implementation.
Why it mattersMedicaid managed care plans must implement new API-based prior authorization capabilities within six months, requiring coordination with provider EHR systems, technology vendors, and internal operations to meet federal interoperability standards.
Managed Care
The HHS Office of Inspector General has initiated an audit examining whether the Department of Health and Human Services has established adequate governance for developing and deploying artificial intelligence tools across its operations. The audit will assess compliance with federal requirements, including National Institute of Standards and Technology AI risk management standards and departmental policies. The review covers AI governance structures affecting HHS agencies including CMS. The audit's scope and timeline for completion have not been publicly specified.
Why it mattersThe audit may influence how CMS implements AI tools in Medicaid program integrity, eligibility systems, and managed care oversight, potentially leading to new compliance requirements for state agencies and health plans using AI-driven administrative systems.
Managed Care · Finance
CMS published the 2027 Physician Fee Schedule proposed rule on July 16, proposing to make 340B claims data reporting mandatory for covered entities participating in Medicare Part D, converting what was previously a voluntary submission. The proposal would require 340B covered entities to submit Part D claims data to the Medicare Part D Claims Data 340B Repository starting in 2027. This change affects hospitals, federally qualified health centers, and other 340B covered entities that dispense drugs under Medicare Part D, requiring new compliance infrastructure and potentially increasing administrative burden for entities that have not voluntarily reported to date.
Why it mattersMandatory 340B reporting creates new compliance obligations for Medicaid managed care organizations and providers operating 340B programs, particularly those that have avoided voluntary reporting and may lack the data systems to meet CMS requirements.
Pharmacy · Managed Care
CMS published its quarterly compilation of manual instructions, regulations, and Federal Register notices issued between April and June 2026 for Medicare, Medicaid, and other CMS-administered programs. This is a routine administrative notice that compiles previously issued guidance and rulemakings from the quarter into a single reference document. The listing provides a consolidated index of policy issuances for stakeholders tracking program changes. This quarterly publication serves as an administrative record and reference tool rather than announcing new policy.
Why it mattersThis compilation helps state Medicaid agencies and managed care plans track what guidance and rules CMS issued during Q2 2026, though it contains no new policy itself.
Managed Care · Finance
On July 1, 2026, CMS proposed enrollment-related policy changes under the Home Health Prospective Payment System aimed at reducing improper Medicare payments and protecting beneficiaries. The proposed rule introduces new enrollment requirements and fraud deterrence measures for home health providers. While the rule targets Medicare home health providers, states with Medicaid home health programs or 1915(c) waiver programs providing home and community-based services may see similar enrollment standards adopted or referenced in future Medicaid guidance. CMS has not specified a comment deadline or effective date in the summary provided.
Why it mattersStates with Medicaid LTSS or HCBS waiver programs often align provider enrollment standards with Medicare requirements, and new fraud controls may inform future Medicaid compliance expectations for home health agencies.
LTSS
ACA Marketplace enrollment declined nationwide in 2026 for the first time in seven years following the expiration of temporary enhanced premium tax credits, with all states except New Mexico experiencing enrollment losses. Enrollment fell 15% on the federal marketplace (HealthCare.gov), while state-based marketplaces saw smaller declines averaging 6%, particularly in states that partially offset the federal subsidy loss with state funds. The enhanced subsidies, which had driven enrollment growth since their introduction, expired at the end of 2025.
Why it mattersLower marketplace enrollment may increase Medicaid churn and enrollment as subsidy-eligible individuals lose affordable coverage options and potentially qualify for Medicaid instead, affecting state program costs and managed care plan enrollment.
Managed Care · Finance
CMS proposed removing 638 procedures from the Medicare Inpatient Only List in the CY 2027 OPPS/ASC Proposed Rule, effective January 1, 2027. This follows removal of 285 procedures in CY 2026. The broader scope includes surgical services beyond the 2026 focus on musculoskeletal procedures. The removals affect whether procedures must be performed in inpatient settings or can shift to outpatient settings under Medicare payment rules.
Why it mattersMedicaid managed care plans that follow Medicare payment methodologies or use Medicare's IPO List for prior authorization criteria will need to update utilization management protocols and network adequacy assessments as services shift from inpatient to outpatient settings.
Managed Care