CMS released an informational bulletin outlining the federal funding methodology for the Basic Health Program (BHP) in program year 2027. The guidance details how CMS will calculate federal payments to states operating BHPs — currently Minnesota and New York — for coverage of low-income individuals ineligible for Medicaid but below 200% of the federal poverty level. The methodology takes effect for the program year beginning in 2027. This matters for the two BHP states because the federal payment formula directly determines their program budgets and affects whether BHP remains financially sustainable compared to Marketplace coverage.
Why it mattersThe federal payment methodology determines whether Minnesota and New York can sustain their Basic Health Programs as a cost-effective alternative to Marketplace coverage for low-income populations.
Finance
The National Association of Medicaid Directors submitted comments to CMS in response to a request for information on Medicaid Enterprise Systems IT standards. The RFI solicited stakeholder input on technical standards and interoperability requirements for state Medicaid IT systems. State Medicaid agencies are directly affected as these standards will shape future MES certification requirements and enhanced federal funding eligibility. The timing matters because CMS is gathering input to inform future rulemaking on MES modernization and MITA framework requirements.
Why it mattersState Medicaid agencies must understand evolving federal IT standards that determine which system investments qualify for 90% enhanced federal match and shape vendor selection and procurement strategy.
Finance · Managed Care
The Senate Finance Committee on September 24, 2026, advanced Chris Klomp's nomination for deputy secretary of the Department of Health and Human Services by a 15-12 vote, sending it to the full Senate. Klomp currently serves as director of Medicare and deputy administrator at CMS. The nomination now awaits a floor vote. If confirmed, Klomp would hold the second-highest position at HHS, with oversight authority spanning CMS, including Medicaid and CHIP operations, along with other departmental programs.
Why it mattersThe HHS deputy secretary holds significant operational authority over CMS, influencing Medicaid policy implementation, waiver decisions, and state-federal program oversight.
Managed Care
In September 2026, the Census Bureau issued a proposed rule that would prohibit the collection of race and ethnicity data in the decennial census and exclude many noncitizen immigrants from the apportionment count. The changes would affect how Medicaid programs identify disparities in access, quality, and outcomes for beneficiaries. If finalized, the rule would limit state Medicaid agencies' and managed care organizations' ability to stratify performance data, target interventions, and comply with federal health equity reporting requirements that rely on census-based demographic benchmarks. The proposed changes matter because Medicaid programs use census race and ethnicity data to establish stratified quality measures, identify underserved populations for outreach and enrollment, and allocate resources for programs addressing maternal health, behavioral health, and chronic disease disparities.
Why it mattersMedicaid agencies and health plans rely on census race and ethnicity data to meet federal health equity reporting requirements, stratify HEDIS and quality measures by demographics, and target interventions to populations with documented disparities.
Managed Care · Maternal · Behavioral Health
The Wall Street Journal reports that new customs requirements taking effect October 22, 2026, could disrupt access to prescription drugs for millions of Americans who purchase medications from Canadian and other foreign mail-order pharmacies. The change affects individuals who rely on imported pharmaceuticals for cost savings. The timing and scope of enforcement will determine how many consumers and which medication categories face immediate supply interruptions. For Medicaid programs, this could increase formulary pressure if beneficiaries who previously self-paid for imported drugs now seek coverage through state plans, and may affect dual-eligible populations managing Medicare Part D coverage gaps.
Why it mattersState Medicaid agencies may face increased prescription volume and costs if beneficiaries previously buying imported drugs shift to state-covered formularies after losing access to foreign mail-order sources.
Pharmacy
The American Hospital Association submitted comments on September 23 supporting the bipartisan SECURE 340B Act introduced in July, urging Congress to permanently prohibit rebate models in the 340B drug pricing program. The legislation combines hospital-sought protections with new program requirements. AHA stated it shares the bill's goals while seeking the rebate ban provision. This affects how safety-net hospitals and Medicaid providers access discounted pharmaceuticals under 340B, with potential implications for pharmacy carve-outs and drug purchasing arrangements in Medicaid managed care.
Why it mattersA permanent rebate ban would codify how Medicaid MCOs and providers structure 340B pharmaceutical arrangements, potentially restricting states' flexibility to use rebate models in managed care pharmacy contracts.
Pharmacy · Managed Care
CMS has published a Federal Register notice requesting public comment on one or more information collection requests under its existing Paperwork Reduction Act generic clearance umbrella (control number 0938-1148). The umbrella, approved in April 2021, covers Medicaid and CHIP state plan amendments, waivers, demonstrations, and reporting requirements. Comments are due 60 days from publication. The generic clearance process allows CMS to expedite approval of voluntary, low-burden information collections that do not raise substantive policy issues, streamlining the agency's ability to request information from states without full PRA review for each individual collection.
Why it mattersThe notice signals CMS may be preparing new or modified state reporting or submission requirements for SPAs, waivers, or demonstrations that state Medicaid agencies will need to track and respond to once finalized.
Managed Care · LTSS · Behavioral Health · Finance
CMS has re-established a computer matching program with the U.S. Department of the Treasury's Do Not Pay Working System, administered by the Bureau of Fiscal Service. The match enables CMS to verify payment eligibility and prevent improper payments across Medicare and Medicaid by cross-referencing beneficiary and provider data against federal databases tracking death records, excluded parties, and debarred entities. The re-establishment continues an existing fraud prevention tool used by CMS to support program integrity efforts. The match affects CMS payment operations and supports state Medicaid agencies' ability to identify ineligible providers or payments flagged through federal screening.
Why it mattersThe data match supports Medicaid program integrity by enabling real-time verification of provider and beneficiary eligibility against federal exclusion and death lists, reducing improper payments and supporting state agency compliance with federal screening requirements.
Finance · Managed Care
