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Friday, September 25 · 27 stories
- Legal
Labcorp Settles Multistate Data Breach Investigation for $2.28 Million
Labcorp agreed to pay $2.28 million to 44 state attorneys general to resolve an investigation into a 2019 data breach at its former debt-collection vendor, American Medical Collection Agency (AMCA). The breach at AMCA's parent company, Retrieval-Masters Creditors Bureau, exposed personal information of more than 27.5 million people nationwide. The settlement resolves state enforcement actions stemming from the vendor's inadequate data security practices. For Medicaid managed care organizations and providers using third-party vendors for billing and collections, this enforcement action underscores state regulators' willingness to hold covered entities accountable for vendor data security failures affecting patient information, including Medicaid beneficiaries.
- Industry
Report Finds 340B Hospitals Spend Less on Charity Care Than Non-340B Peers
A new report finds hospitals participating in the 340B drug pricing program spend less on charity care than non-participating hospitals, contrary to the program's intent to support safety-net care. The findings intensify ongoing debate over 340B program integrity and whether participating hospitals deliver commensurate community benefits. Critics argue the program has expanded without corresponding patient benefits, while hospital groups dispute the methodology of such studies. The report has no immediate regulatory implications but may inform future congressional or CMS oversight of 340B hospital eligibility and accountability measures.
- Industry
Home-Based Care Providers Deploy AI, Outreach to Address Referral Bottlenecks
Home-based care providers report that referral processing, maintenance, and development remain persistent operational challenges, according to industry leaders interviewed by Home Health Care News. Companies are responding with AI-powered tools, clinician-led outreach initiatives, and strengthened relationships with franchise owner-operators to streamline referral workflows. These operational adjustments aim to reduce administrative friction in care coordination. For Medicaid managed LTSS and home and community-based services programs relying on home-based care networks, improvements in referral efficiency may affect network adequacy and care access.
- Federal Policy
Census Bureau Proposes Eliminating Race and Ethnicity Data Collection
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.
- Legal · TN
Planned Parenthood Sues Tennessee AG Over Investigation Demanding Patient Records, Donor Details
Planned Parenthood of Tennessee and North Mississippi filed a legal challenge in Davidson County Chancery Court on Wednesday to block Attorney General Jonathan Skrmetti's investigative demand for donor information, provider credentials, and medical records of patients who received abortion referrals or gender-affirming care. The Sept. 3 demand letter targets the organization's post-abortion-ban services — providing information and out-of-state abortion referrals — and seeks records of patients treated for gender dysphoria, including named individuals and all minors who received gender-affirming care after July 1, 2023, when Tennessee's ban on such care for minors took effect. Planned Parenthood argues the demands violate free speech protections and constitute political intimidation; the AG's office says it has authority to request information when state law violations may have occurred. Abortion Care Tennessee disclosed this week it faces a similar investigation targeting medication abortion referral services.
- Federal Policy
New Customs Requirements Set to Disrupt Canadian Prescription Imports October 22
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.
- Federal Policy
AHA Urges Permanent Ban on 340B Rebate Models in SECURE 340B Act Comments
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.
- Legal
Warren, Wyden Introduce Bill to Ban Corporate Practice of Medicine Nationwide
In its September 25 publication, Foley & Lardner reports that Senators Elizabeth Warren, Ron Wyden, and Jeff Merkley, along with three House members, introduced the Stop Corporate Takeovers of Physicians Act on September 16, 2026. The legislation would impose federal restrictions on corporate practice of medicine (CPOM), targeting private equity ownership structures and management services organization (MSO) arrangements commonly used in physician practice acquisitions. If enacted, the bill would affect how private equity firms and corporate entities structure their investments in physician practices, potentially requiring restructuring of existing MSO-based transactions that rely on management agreements to circumvent state CPOM restrictions. The legislation matters for Medicaid managed care organizations and providers because many MCO networks include physician groups owned through MSO structures, and federal CPOM restrictions could disrupt network composition, provider contracting models, and care delivery arrangements.
- Legal
DOJ and State MFCU Enforcement Rises in Applied Behavior Analysis Billing
Epstein Becker & Green reports that Department of Justice and state Medicaid Fraud Control Unit enforcement activity targeting applied behavior analysis (ABA) providers has increased. The firm advises ABA providers to strengthen compliance programs by monitoring state Medicaid billing rules, scope-of-practice requirements, CMS guidance, and recent OIG audit findings. No specific enforcement actions or effective dates are identified. The guidance addresses compliance risk management for ABA providers billing Medicaid, particularly for behavioral health services.
- Federal Policy
NAMD Submits Comments on CMS Medicaid Enterprise Systems IT Standards RFI
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.
- Federal Policy
CMS Issues Federal Funding Methodology for Basic Health Program Year 2027
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.
- Legal · TN
OIG Finds Tennessee Improperly Claimed Millions in Federal Medicaid Reimbursement for Targeted Case Management
The HHS Office of Inspector General determined that Tennessee claimed federal Medicaid reimbursement for targeted case management services that failed to meet federal and state requirements. The audit identified millions of dollars in improper payments during the review period. Tennessee must repay the improper federal share and strengthen its oversight of targeted case management claims to ensure compliance with Medicaid program requirements. The finding underscores OIG's ongoing scrutiny of state compliance with service-specific billing standards and federal claiming accuracy.
- Industry
Healthcare Executives Prioritize Revenue Cycle and Utilization Management Technology Investments
A new survey finds healthcare providers are directing IT investment toward revenue cycle management tools, while payers focus technology spending on utilization management solutions. The findings reflect strategic priorities tied to financial performance and care management efficiency. The survey did not specify implementation timelines or investment amounts. This trend matters for Medicaid managed care organizations balancing administrative cost ratios with effective care management and accurate claims processing.
- Industry
AHA Launches Week-Long Campaign on Maternal and Child Health
The American Hospital Association will run its Better Health for Mothers and Babies Awareness Week from September 28 through October 2, 2026. The campaign will share hospital and health system stories, resources, and promising practices related to maternal health, neonatal and pediatric care, workforce development, public policy, innovation, and community partnerships. Daily themes include maternal health advances, NICU Awareness Day on September 30, pediatric care innovations, and policy and workforce strategies. The AHA will host a webinar on pediatric behavioral healthcare on September 30 at 2 p.m. ET and provide social media materials, discussion guides, and resources throughout the week for hospitals and health systems to participate.
- State Policy · CA
Watsonville Community Hospital Reports $10M Loss in Six Months, Considers Service Cuts
Watsonville Community Hospital in California lost $10 million in the last six months and $22.4 million in 2025, according to a hospital spokesperson. The hospital's board reviewed potential operational changes at a September 22 retreat, including growth opportunities and possible service closures, amid an $85,000 daily cash shortfall. The hospital's financial distress may affect access to care for Medicaid beneficiaries in the Watsonville area, particularly if services are reduced or eliminated.
- Industry
BCBS Study Finds Hospital AI Billing Tools Added $942M in Excess Costs
The Blue Cross Blue Shield Association released a second study estimating that hospitals' use of AI-assisted billing tools generated approximately $942 million in excess costs to BCBS plans over two years. The findings contribute to an ongoing dispute between hospitals and payers over AI-driven billing and claims practices. The study did not specify a timeframe for the two-year period or detail methodology. For Medicaid managed care organizations contracting with hospitals that deploy AI billing software, the findings suggest potential cost pressures similar to those documented in commercial insurance, though no Medicaid-specific impact data was provided.
- Industry
Aveanna, Addus, and Pennant Discuss 2027 Growth Strategies at Jefferies Conference
Three publicly traded home-based care providers — Aveanna Healthcare, Addus HomeCare, and the Pennant Group — presented at the 2026 Jefferies Healthcare Services and Technology Conference, outlining their growth strategies for 2027 beyond new patient referrals. The presentations occurred last week and focused on how the industry's largest operators plan to expand. These companies serve Medicaid beneficiaries through home health, personal care, and related services, often under managed care contracts or state Medicaid programs. Their growth strategies will affect LTSS service capacity, provider network adequacy, and care delivery models in Medicaid managed care.
- Industry
John Oliver Episode Spotlights UnitedHealth Vertical Integration Amid Cyberattack and Earnings Decline
In a September 20 episode, late-night host John Oliver questioned UnitedHealth Group's current structure amid heightened scrutiny of its vertical integration. The segment follows a period marked by a major cyberattack, declining earnings, and broader regulatory and public attention to the company's combined insurance and provider operations. No specific policy action or enforcement is reported. The episode reflects growing public and political discourse around health care consolidation, particularly involving firms that operate both health plans and clinical services.
- State Policy · AR
Arkansas Awards $54.6M in Second Rural Health Transformation Program Round
Arkansas awarded $54.6 million to dozens of recipients in the second funding round of a federal rural healthcare program, state officials announced Thursday. The Rural Health Transformation Program, established through the 2025 One Big Beautiful Bill Act, provides $50 billion to states over five years for projects supporting rural healthcare infrastructure and services. The awards support facility improvements, workforce recruitment, telehealth expansion, and care coordination initiatives across rural communities. For Medicaid managed care plans and providers operating in rural Arkansas counties, these investments may strengthen network capacity and access in historically underserved areas where network adequacy has been challenging.
- Legal · IA
Iowa Medicaid Fraud Elimination Task Force Defers Staffing Recommendations
Iowa Attorney General Brenna Bird stated Thursday that the state Medicaid Fraud Elimination Task Force, established by Governor Kim Reynolds on July 1, will address staffing and funding recommendations for the Medicaid Fraud Control Unit at future meetings rather than immediately. The task force is charged with submitting a final report at a date not specified in the source article. Critics have called for increased resources for fraud control efforts. The development affects Iowa's Medicaid program integrity operations and state enforcement capacity.
