The 2025 Budget Reconciliation Act (P.L. 119-21) requires states to condition Medicaid eligibility on participation in qualifying community engagement activities for certain applicants and beneficiaries. A new report recommends states develop transparent monitoring and evaluation plans for implementing these requirements. The law creates operational obligations for state Medicaid agencies to establish verification systems, track compliance, and determine eligibility impacts. This represents a significant administrative burden for states and managed care organizations that will need to operationalize work reporting, exemption processes, and disenrollment protocols.
Why it mattersState Medicaid agencies and MCOs must build new infrastructure to verify work activities, process exemptions, and manage eligibility redeterminations tied to community engagement compliance.
Managed Care · Finance
The National Association of Medicaid Directors submitted formal comments on July 31, 2026, regarding CMS's interim final rule imposing community engagement requirements on certain Medicaid beneficiaries. The rule was issued with a comment period, allowing state Medicaid agencies and stakeholders to provide feedback before final implementation. NAMD's comments reflect state perspectives on operational feasibility, administrative burden, and compliance requirements associated with implementing work or community engagement mandates. The comment period signals that states will need to prepare for potential implementation depending on the final rule's provisions.
Why it mattersCommunity engagement requirements fundamentally alter Medicaid eligibility administration, requiring state agencies to build new tracking systems, establish exemption processes, and manage compliance reporting — with significant operational and financial implications if the rule proceeds.
Managed Care · Finance
CMS issued an informational bulletin on July 14, 2026, addressing how state Medicaid and CHIP agencies should handle eligibility and verification after DHS terminated parole programs for Cuban, Haitian, Nicaraguan, and Venezuelan nationals. The guidance clarifies that individuals who entered under these programs and whose parole has been terminated no longer meet the qualified non-citizen immigration status required for Medicaid eligibility in most categories, though emergency Medicaid remains available. States must update verification processes and eligibility determinations to reflect the changed immigration status of affected individuals. The guidance affects states with significant populations who entered under these parole programs and requires immediate attention to systems and procedures.
Why it mattersState Medicaid agencies must immediately update eligibility systems and redetermination processes to accurately verify immigration status for thousands of individuals whose parole status changed, with direct operational implications for enrollment, notices, and appeals.
CHIP
CMS issued an informational bulletin on July 7, 2026, rescinding the fast-track federal review process for Section 1115 demonstration extensions. States seeking to extend existing Section 1115 demonstrations must now follow standard CMS review timelines and procedures, which typically require full public notice and comment periods and can take six months or longer. The rescission is effective immediately and applies to all pending and future extension requests. This change affects states with demonstrations expiring soon that planned to use expedited procedures, requiring them to build additional lead time into their extension planning and potentially delaying implementation of continuation authority.
Why it mattersStates must now allow significantly more lead time for demonstration extensions, potentially creating coverage or administrative continuity risks for demonstrations expiring in the next 12-18 months that anticipated fast-track approval.
Managed Care · LTSS · Behavioral Health
CMS released an informational bulletin clarifying state agency responsibilities for monitoring and overseeing Medicaid and CHIP managed care organizations. The guidance addresses network adequacy monitoring, financial solvency review, quality performance measurement, and corrective action protocols that states must implement. States should review existing oversight processes against the CIB framework and adjust monitoring practices as needed to align with federal expectations. The bulletin provides operational direction for state Medicaid agencies on maintaining program integrity and beneficiary protections in managed care delivery systems.
Why it mattersState Medicaid agencies must ensure their MCO oversight infrastructure meets CMS expectations for network monitoring, financial reviews, and quality measurement — gaps could trigger federal corrective action or affect managed care authority approval.
Managed Care
The Medicaid and CHIP Payment and Access Commission released its June 2026 Report to Congress covering seven policy areas. Key chapters examine community engagement requirements in Medicaid, automation in prior authorization processes, managed care accountability mechanisms, access to residential treatment services for Medicaid-enrolled youth, and transitions to adult coverage for children and youth with special health care needs. The report provides policy recommendations and analysis for congressional consideration on these topics. MACPAC reports typically inform federal legislative and regulatory activity in Medicaid and CHIP.
Why it mattersMACPAC recommendations often shape CMS regulatory priorities and congressional Medicaid legislation, making this report a roadmap for potential federal policy changes affecting state agencies, managed care organizations, and providers across multiple program areas.
Managed Care · Behavioral Health · Maternal · CHIP
CMS will not enforce the federal requirement for states to establish fee-for-service grievance systems for home and community-based services until December 31, 2027. The enforcement discretion applies to 42 CFR 431.205(d), which requires states to implement grievance procedures for HCBS beneficiaries in FFS arrangements comparable to managed care protections. States must still comply with all other due process and fair hearing requirements under existing federal rules. The delay gives states additional time to develop compliant systems while CMS considers whether regulatory modifications are needed.
Why it mattersStates operating HCBS programs under fee-for-service models gain nearly two additional years to build grievance infrastructure without federal enforcement action, affecting implementation timelines and compliance priorities for state Medicaid agencies.
LTSS
CMS released the 2026 Federal Poverty Level standards in an informational bulletin dated January 23, 2026. The updated income thresholds apply to Medicaid and CHIP eligibility determinations starting February 2026. States must update their eligibility systems and Modified Adjusted Gross Income (MAGI) conversion tables to reflect the new FPL amounts. The guidance affects income-based eligibility for millions of Medicaid and CHIP beneficiaries nationwide, requiring states to adjust eligibility thresholds and redetermination processes.
Why it mattersState Medicaid agencies must implement system changes and update eligibility criteria by February 2026 to ensure accurate eligibility determinations and maintain federal compliance.
CHIP · Managed Care · Finance
The Medicaid and CHIP Payment and Access Commission (MACPAC) released its March 2026 Report to Congress covering four policy areas: a recommendation to strengthen the home- and community-based services workforce, behavioral health services in Medicaid and CHIP, Medicaid coverage for justice-involved youth, and coverage for children in foster care. The report was delivered to Congress in March 2026. MACPAC reports typically inform federal legislative activity and CMS policy development, particularly regarding long-term services and supports financing, behavioral health integration, and coverage for vulnerable populations.
Why it mattersMACPAC recommendations frequently influence congressional appropriations and CMS rulemaking on HCBS reimbursement, behavioral health parity enforcement, and specialty population coverage requirements that directly affect state plan design and MCO contract terms.
LTSS · Behavioral Health · CHIP
The Medicaid and CHIP Payment and Access Commission (MACPAC) released an issue brief examining fraud, waste, and abuse in Medicaid using government data sources. The brief defines these program integrity concerns, reviews measurement methodologies, and provides an overview of federal and state program integrity responsibilities. The analysis identifies documented instances of integrity issues across the Medicaid program. This resource offers Medicaid agencies and managed care organizations a framework for understanding program integrity risks and measurement approaches as they design compliance and oversight strategies.
Why it mattersMACPAC's framework helps state agencies and health plans benchmark their program integrity efforts against documented fraud, waste, and abuse patterns and assess whether their measurement and oversight approaches align with federal expectations.
Managed Care · Finance
The Medicaid and CHIP Payment and Access Commission submitted comments to HHS Secretary Robert F. Kennedy, Jr. on proposed rulemaking addressing interoperability standards and prior authorization requirements for prescription drugs. The proposed rule would implement new interoperability standards for payers, including state Medicaid programs and managed care plans. MACPAC's letter provides the Commission's assessment of the rule's provisions and their potential impact on Medicaid program operations, drug access, and administrative burden for states and plans.
Why it mattersThis represents formal stakeholder input on federal rulemaking that would establish new technical and operational requirements for how Medicaid programs and MCOs handle drug prior authorization and exchange health information electronically.
Pharmacy · Managed Care
CMS published a new toolkit to help states strengthen oversight of Applied Behavior Analysis (ABA) services for children with autism in Medicaid and CHIP. The toolkit provides guidance on monitoring provider qualifications, service quality, and care coordination to prevent harmful practices and ensure medically necessary treatment. States can use the resources immediately to enhance program integrity and beneficiary protections. This matters because ABA is a significant behavioral health expenditure across state Medicaid programs, and inconsistent oversight has led to quality concerns and potential fraud.
Why it mattersStates gain concrete tools to audit ABA providers, verify credentials, and enforce quality standards in a high-cost service area where oversight gaps have created compliance and quality risks.
Behavioral Health · Managed Care
CMS has announced emergency resources and regulatory flexibilities to assist Washington state in responding to a declared public health emergency. The flexibilities allow the state to modify service delivery requirements, adjust provider enrollment procedures, and access expedited waiver authority. These measures take effect immediately and remain in place for the duration of the emergency declaration. The announcement provides operational relief for Washington's Medicaid program, enabling rapid response to urgent health system needs without standard administrative timelines.
Why it mattersWashington Medicaid agencies and contracted health plans gain immediate authority to suspend or modify standard program requirements during the emergency, affecting provider networks, prior authorization, and beneficiary access requirements.
Managed Care
CMS has approved funding for North Dakota to launch the Coordinating and Connecting Care Initiative, a program designed to improve care coordination and integration across Medicaid services. The initiative targets beneficiaries with complex medical and behavioral health needs, including those requiring long-term services and supports. Implementation details, effective dates, and specific funding amounts were not provided in the available information. The program aims to reduce fragmentation in care delivery and improve health outcomes for high-needs Medicaid populations.
Why it mattersSignals federal support for state-level care coordination models that could influence how other states structure integrated care programs for dual-eligible and high-cost Medicaid populations.
Managed Care · LTSS · Behavioral Health
CMS released updated Supplemental Security Income (SSI) and spousal impoverishment standards effective for 2026. The bulletin provides revised income and resource thresholds that states must apply when determining Medicaid eligibility for aged, blind, and disabled individuals, as well as protections for spouses of institutionalized individuals. These standards affect eligibility determinations for coverage of long-term services and supports. State Medicaid agencies must implement these updated figures in their eligibility systems and processes.
Why it mattersStates must update eligibility systems and redetermination processes to reflect new income and resource limits that directly affect LTSS eligibility and spousal protections for institutionalized beneficiaries.
Finance · LTSS
The Medicaid and CHIP Payment and Access Commission (MACPAC) submitted a comment letter to CMS in response to a request for information on combatting fraud, waste, and abuse in federal health care programs. MACPAC's letter addresses four areas: eliminating ineffective or redundant program integrity activities and requirements, promoting high-value program integrity activities, identifying barriers to program integrity, and providing evidence-based findings and recommendations. The comment letter reflects MACPAC's policy research and advisory role to Congress on Medicaid program integrity issues.
Why it mattersMACPAC's recommendations to CMS on program integrity often influence federal policy development and can shape future CMS guidance, regulations, or legislative proposals affecting state Medicaid agencies' compliance and oversight responsibilities.
Finance · Managed Care
CMS released the FY 2027 Hospital Inpatient Prospective Payment System (IPPS) and Long-Term Care Hospital (LTCH) PPS final rule, effective October 1, 2026. The rule primarily updates Medicare payment rates and policies for acute care hospitals and LTCHs. While the rule focuses on Medicare reimbursement, hospitals participating in both Medicare and Medicaid may see operational impacts related to quality reporting, graduate medical education, and uncompensated care payment adjustments that can affect their broader financial position. The rule has minimal direct Medicaid policy implications but may influence hospital participation and capacity in both programs.
Why it mattersHospitals serving dual Medicare-Medicaid populations need to assess how Medicare payment changes affect their overall financial viability and willingness to maintain Medicaid contracts, particularly for safety-net facilities relying on DSH and uncompensated care payments.
Finance
The Medicaid and CHIP Payment and Access Commission submitted comments to CMS on proposed Medicare Advantage policy and technical changes for contract year 2027. The letter focuses on dual eligible special needs plans (D-SNPs), which serve beneficiaries enrolled in both Medicare and Medicaid. MACPAC has prioritized D-SNPs given their widespread use and the coordination challenges between Medicare Advantage plans and state Medicaid programs. The comment letter addresses proposed changes affecting how these plans operate and coordinate care for dual eligibles.
Why it mattersD-SNP policy changes directly affect state Medicaid agencies' ability to coordinate benefits and manage care for dual eligibles, who represent disproportionate Medicaid spending and often receive long-term services and supports.
Managed Care · LTSS
Medicaid covers nearly half of all children and youth with special health care needs (CYSHCN), but when they age out of children's Medicaid and transition to adult coverage, they face significant changes to benefits, provider networks, and care coordination. These transitions can result in coverage gaps and disruptions in medically necessary services. The challenges are particularly acute for youth who rely on pediatric specialists, EPSDT benefits, and care coordination programs that do not continue into adult Medicaid. State Medicaid agencies and managed care organizations must address transition planning, benefit continuity, and provider capacity to support this population.
Why it mattersManaged care organizations and state Medicaid agencies must develop transition protocols and ensure adequate adult provider networks to prevent costly gaps in care and avoidable emergency department utilization for a high-need population aging into adult coverage.
LTSS · Managed Care
The Medicaid and CHIP Payment and Access Commission released Chapter 4 of its report examining access to residential behavioral health treatment for children enrolled in Medicaid. Federal law requires that Medicaid provide behavioral health services to youth with disabilities, including those with intense treatment needs or who pose safety risks. The chapter addresses how states ensure appropriate access to residential treatment for youth who cannot be safely served in community or home settings. This review comes as states face pressure to expand community-based behavioral health capacity while maintaining necessary institutional options for high-acuity cases.
Why it mattersState Medicaid agencies must balance federal Early and Periodic Screening, Diagnostic and Treatment requirements against managed care network adequacy standards and institutional payment policies for high-acuity youth behavioral health.
Behavioral Health · Managed Care
MACPAC's Chapter 5 outlines recommendations to improve transitions to adult Medicaid coverage for children and youth with special health care needs (CYSHCN). The recommendations address challenges CYSHCN face when aging into adult eligibility, including simultaneous SSI age-18 redeterminations and shifts in coverage structures. The timing for implementation is not specified in the excerpt. This matters because CYSHCN transitions involve complex eligibility changes and service disruptions that affect state Medicaid agencies, managed care organizations managing pediatric and adult populations, and specialty providers serving this population.
Why it mattersState agencies and MCOs face operational challenges when CYSHCN lose pediatric eligibility, undergo SSI redeterminations, and transition between benefit structures — MACPAC recommendations signal potential federal guidance or state flexibility to reduce coverage gaps and service disruptions for this medically complex population.
Managed Care · CHIP
A KFF brief analyzes how Medicaid finances health and related services delivered in school settings for students with disabilities. Federal law allows state Medicaid programs to reimburse schools for covered services provided to Medicaid-enrolled children when medically necessary and included in an Individualized Education Plan (IEP). The brief addresses the intersection of Medicaid payment policy and Individuals with Disabilities Education Act (IDEA) requirements. This affects state Medicaid agencies' payment methodologies for school-based services and managed care organizations' responsibilities when schools are in-network providers.
Why it mattersState Medicaid agencies must ensure payment policies comply with federal requirements for school-based services while managed care contracts must address how MCOs reimburse school districts for IEP-related health services.
Managed Care · Finance
The Program of All-Inclusive Care for the Elderly (PACE) served approximately 89,659 individuals in 2023, according to newly released demographic data. PACE provides fully integrated Medicare and Medicaid services to individuals age 55 or older who meet nursing facility level of care criteria but can live safely in the community. The report characterizes the demographic composition of PACE enrollees. PACE operates as an alternative to institutional long-term care, with states and CMS sharing financial responsibility for dual-eligible beneficiaries.
Why it mattersPACE enrollment data informs state decisions on capitated long-term care alternatives and helps managed care plans assess opportunities in dual-eligible integration programs.
LTSS · Managed Care
H.R. 1 introduces Medicaid work requirements and other eligibility changes that are expected to complicate state eligibility determinations and increase payment error rates. The legislation adds new verification requirements and eligibility criteria that states must administer, creating additional documentation burdens and potential error points in the Payment Error Rate Measurement (PERM) process. These changes take effect upon enactment, with states required to implement new systems and processes to manage the added complexity. States face heightened risk of federal scrutiny and potential financial penalties as error rates climb due to the more complex eligibility landscape.
Why it mattersStates must prepare for increased administrative burden and higher PERM error rates that could trigger corrective action plans and federal financial penalties.
Finance · Managed Care
KFF published an informational brief examining the IT systems states use to administer Medicaid programs, including claims processing, eligibility determination, and provider enrollment. The brief covers federal funding mechanisms for state Medicaid IT systems, CMS oversight requirements for systems modernization projects, and common implementation challenges states face. It provides context on how states finance and manage enterprise systems critical to program operations, enrollment, and payment accuracy.
Why it mattersState Medicaid agencies and their IT vendors need to understand federal funding rules and CMS oversight frameworks when planning systems modernization or procurement, as compliance affects reimbursement and project approval.
Finance · Managed Care
CMS issued the final rule for inpatient rehabilitation facility payment rates effective October 1, 2026. The rule implements a 2.6% payment rate increase for FY 2027, resulting in an estimated $280 million increase in aggregate IRF payments. The rule updates wage index values, adjusts the case-mix group relative weights, and modifies quality reporting program requirements. While the rule primarily affects Medicare IRF payments, it may have indirect implications for Medicaid beneficiaries who receive post-acute rehabilitation services in dual-eligible or Medicaid-participating IRFs.
Why it mattersPayment rate changes and quality measure updates in Medicare IRF settings can influence provider participation and service delivery models that also serve dual-eligible Medicaid beneficiaries requiring intensive rehabilitation.
LTSS
CMS released the final rule updating hospice wage index values and payment rates for FY 2027 (October 1, 2026 through September 30, 2027). The rule implements a market basket update and wage index changes affecting hospice reimbursement rates. It also finalizes modifications to the Hospice Quality Reporting Program, including quality measure updates and reporting requirements that hospices must meet to avoid payment reductions. The updates take effect October 1, 2026.
Why it mattersMedicaid covers hospice services through a mandatory state plan benefit with payment rates often tied to Medicare levels, meaning rate changes and quality reporting requirements established in this rule may affect Medicaid hospice reimbursement and provider compliance obligations in states that benchmark to Medicare rates.
LTSS
CMS issued a readout celebrating the first year of its Health Technology Ecosystem initiative. The ecosystem aims to modernize health data exchange and interoperability across Medicare, Medicaid, and other programs. CMS highlights progress on data-sharing standards, API implementation, and partnerships with states and plans over the past year. For Medicaid managed care organizations and state agencies, this signals continued federal investment in technical infrastructure that will require ongoing system upgrades and compliance with evolving interoperability requirements.
Why it mattersState Medicaid agencies and MCOs must continue investing in FHIR API capabilities and data exchange infrastructure to meet CMS interoperability mandates tied to the Health Technology Ecosystem's ongoing rollout.
Managed Care
CMS issued a procedural notice inviting comment on a proposed pathway to align Medicare coverage determinations with FDA device approvals, potentially enabling immediate coverage for certain breakthrough medical devices upon FDA clearance. The notice seeks stakeholder input on framework design, eligibility criteria, and implementation mechanisms. Comments are due 60 days after Federal Register publication. If finalized, this pathway could reduce coverage uncertainty for medical device manufacturers and accelerate beneficiary access to innovative technologies, though Medicaid coverage determinations remain state-specific and not directly governed by Medicare pathways.
Why it mattersThis proposal could establish precedent for accelerated coverage pathways that state Medicaid programs may reference when making their own coverage determinations for new medical devices and technologies.
CMS announced $160 million in funding to deploy advanced telehealth technologies in Alaska, including drone-based prescription delivery and surgical robotics. The initiative aims to expand access to care in rural and remote areas where traditional healthcare infrastructure is limited. State Medicaid agencies and managed care organizations serving Alaska beneficiaries will need to coordinate with providers on technology implementation and reimbursement frameworks. The funding represents a significant federal investment in addressing geographic barriers to care for Medicaid enrollees in frontier communities.
Why it mattersAlaska Medicaid programs and MCOs must prepare infrastructure and payment policies to support novel delivery modalities including drone logistics and robotic-assisted procedures for rural beneficiaries.
Managed Care
CMS awarded $93.3 million in federal funding to Georgia to expand telehealth services and advance surgical robotics in rural areas. The funding supports infrastructure for remote care delivery and robotic surgery capabilities in underserved communities. Awards are available immediately for eligible Georgia providers and health systems. The investment aims to address rural healthcare access gaps that affect Medicaid beneficiaries who rely on safety-net providers in non-urban areas.
Why it mattersRural Medicaid beneficiaries in Georgia will gain expanded access to specialty care through telehealth and advanced surgical services, potentially reducing avoidable transfers and improving outcomes for populations served by rural providers.
Managed Care
The Trump Administration announced $122 million in federal funding for Virginia to expand healthcare access, strengthen the healthcare workforce, and support innovation. The funding will support multiple programs including Medicaid initiatives, community health centers, and workforce training. Details on specific allocation amounts, eligible providers, and timeline for fund distribution were not provided in the announcement. The funding reflects broader federal efforts to address healthcare workforce shortages and access gaps in states.
Why it mattersState Medicaid agencies should monitor how allocated funds intersect with existing Medicaid programs, particularly for workforce development and provider capacity expansion that affects network adequacy and access standards.
Managed Care · Finance
The Centers for Medicare and Medicaid Services has developed ACCESS, a new accountable care model for healthcare providers and organizations. The model represents CMS's latest approach to value-based care arrangements, offering an alternative framework for providers considering accountable care participation. Healthcare organizations are evaluating whether the model aligns with their operational capabilities and patient populations. The model follows CMS's broader strategy of expanding alternative payment models beyond traditional fee-for-service arrangements.
Why it mattersProviders participating in Medicaid managed care contracts need to understand how this Medicare innovation model may influence state Medicaid agencies' expectations for value-based payment arrangements and quality measurement in dual-eligible populations.
Managed Care
KFF published an issue brief describing federal mandatory and optional eligibility pathways and covered services in Medicaid. The brief explains how federal statute and regulations establish baseline coverage requirements while allowing states flexibility to expand eligibility and benefits beyond federal minimums. It serves as a reference guide for understanding the framework within which states design their Medicaid programs. The document provides foundational information on program structure rather than reporting new policy changes.
Why it mattersState Medicaid agencies and health plans use this framework to understand coverage requirements when designing benefit packages, determining eligibility systems, and negotiating managed care contracts.
Managed Care · Finance
CMS announced a nationwide expansion of its joint replacement bundled payment model through the Medicare program. The expansion builds on results from a previous demonstration that tested episode-based payments for hip and knee replacements. Medicare Advantage plans and traditional Medicare will implement the model across all states. The expansion does not directly affect Medicaid fee-for-service or managed care payment methodologies, though some dual-eligible beneficiaries may be affected if enrolled in Medicare Advantage.
Why it mattersThe expansion may affect care coordination for dual-eligible beneficiaries receiving joint replacements under Medicare coverage, requiring Medicaid MCOs to align supplemental services with Medicare episode-based payments.
Managed Care
CMS announced $3.15 million in funding to expand pharmacy connectivity infrastructure in rural Ohio communities. The grant supports enhanced electronic prescribing and health information exchange capabilities for pharmacies serving Medicaid and Medicare beneficiaries in underserved areas. The funding is part of broader federal efforts to improve prescription drug access and coordination in rural settings. Rural Medicaid managed care plans and provider networks may see improved medication management and reduced gaps in care coordination as pharmacy data integration improves.
Why it mattersEnhanced pharmacy connectivity in rural areas can reduce medication errors and improve care coordination for Medicaid MCOs managing high-need populations in underserved regions.
Pharmacy · Managed Care