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Thursday, September 10 · 23 stories
- Federal Policy
Latham & Watkins September 2026 Drug Pricing Digest Compiles Recent Policy Developments
Latham & Watkins published its September 2026 Drug Pricing Digest, tracking recent developments in the Medicaid Drug Rebate Program, 340B Program, Medicare, and state drug pricing laws. The digest compiles regulatory updates, guidance, and legal developments affecting pharmaceutical manufacturers and payers. This monthly reference document provides a consolidated view of drug pricing policy changes across federal and state programs. Medicaid agencies and managed care plans use these updates to track rebate program changes, 340B compliance requirements, and state legislative activity affecting drug costs.
- State Policy
Half of U.S. Hospitals Now Lack Obstetric Services Amid Medicaid Funding Pressures
Nearly half of U.S. hospitals currently operate without obstetric services, according to a new report, with closures potentially accelerating as Medicaid funding cuts threaten hospital financial stability. The loss of maternity wards disproportionately affects rural and low-income communities where Medicaid covers approximately 42% of births nationally. Hospitals cite declining Medicaid reimbursement rates and low delivery volumes as primary factors in closure decisions. The trend has significant implications for maternal health access and outcomes, particularly for Medicaid enrollees who face increased travel distances for delivery and prenatal care.
- Legal
CMS Releases Guidance on ABA Therapy Compliance Amid Rising Fraud Concerns
CMS has issued new guidance addressing compliance and payment-integrity risks in applied behavior analysis (ABA) therapy for autism, one of Medicaid's fastest-growing service categories. The guidance responds to increasing expenditures, varying clinical practices, and reported fraud schemes in ABA services. Rapid program growth, extensive use of paraprofessional staff, and complex documentation and supervision requirements have created heightened compliance risks. The guidance affects state Medicaid agencies overseeing ABA programs, managed care organizations with behavioral health responsibilities, and ABA providers navigating fraud and abuse prevention requirements.
- Federal Policy
Home Health Groups Urge CMS to Let Medicare Enrollment Moratorium Expire
LeadingAge and the National Alliance for Care at Home submitted letters asking CMS not to extend the Medicare home health enrollment moratorium as its expiration approaches. The groups, including LeadingAge which previously supported the freeze, are now calling for more targeted enforcement measures instead of a blanket moratorium. The moratorium has restricted new Medicare-certified home health agencies from entering the market. The shift reflects provider concerns that broad enrollment freezes limit beneficiary access while failing to address fraud effectively.
- State Policy · CT
Connecticut Report Finds 570,000 Households Below Survival Budget in 2024
United Way of Connecticut's annual ALICE report found 39% of state households — 570,000 total — could not afford a basic survival budget covering food, housing, utilities, childcare, healthcare, and transportation in 2024, down slightly from 2023 but still 14.5% higher than pre-pandemic levels. The survival budget threshold for a family of four remained $116,000. The report warns 2025 federal cuts to SNAP, Medicaid, and marketplace subsidies — including projected coverage losses for 110,000 Connecticut Medicaid adults by January 2026 — will likely worsen poverty metrics going forward. State lawmakers have not enacted a proposed child tax credit despite bipartisan support.
- Federal Policy · WV
CMS Awards West Virginia $4.8 Million for Rural Workforce and Preventive Care
CMS announced $4.8 million in federal funding to West Virginia to strengthen rural healthcare workforce capacity and expand preventive care services. The funding will support recruitment and retention of healthcare providers in underserved rural areas and increase access to preventive health services for Medicaid and Medicare beneficiaries. Implementation timing and specific program requirements were not detailed in the announcement. The award reflects federal prioritization of rural healthcare infrastructure in a state where Medicaid covers approximately one-third of the population and rural provider shortages directly affect beneficiary access.
- Federal Policy
CMS Announces 16 State Rural Health Transformation Program Distributions
CMS has announced 16 state-level allocations from the Rural Health Transformation Program over the past month, directing funding toward technology upgrades, service expansions, and workforce development. These distributions follow CMS's December 2025 approval of $50 billion in total Rural Health Transformation Program funding for fiscal year 2026. States are now earmarking specific portions of their allocations for targeted rural health initiatives. The distributions affect Medicaid-participating rural providers and community health systems receiving transformation funding.
- Federal Policy
Kaine Says Congress May Revisit Summer 2026 Medicaid Changes
Senator Tim Kaine (D-Va.) said Wednesday that Congress may reconsider Medicaid changes enacted by Republicans in summer 2026, potentially without Democrats retaking control. Speaking at a Virginia food bank, Kaine suggested growing bipartisan interest in adjusting or reversing those provisions. The summer 2026 legislation included unspecified Medicaid program changes. No timeline or specific legislative vehicle was mentioned for potential revisions.
- Industry
Corporate Lobby Groups Backed Safety-Net Cuts Affecting Low-Wage Employees
Industry groups representing major low-wage employers praised tax cuts in the 2025 One Big Beautiful Bill Act while remaining largely silent on $1 trillion in Medicaid cuts and $186 billion in SNAP reductions over a decade, according to the Institute for Policy Studies' Executive Excess 2026 report. The report found that corporations including Walmart (16,000 employees on Medicaid in six states) and Kroger (2,800 on Medicaid) did not publicly oppose cuts to programs their own workforces depend on. The National Retail Federation was the only major industry group to mention the safety-net cuts, praising them for reducing fraud.
- State Policy · AK
Alaska Awards $25.8 Million in Fifth Round of Rural Health Transformation Funding
Alaska's Department of Health announced $25.8 million in federal Rural Health Transformation Program awards on Friday, bringing total awards to over $207 million of the state's $272 million allocation. The fifth round funds 32 projects for healthcare infrastructure, telehealth, workforce development, and nutrition programs, including awards to tribal health organizations, hospitals, local governments, and school districts. All awards must be distributed by October 30, 2026. The program was created in 2025 to offset rural healthcare impacts from Medicaid spending cuts totaling nearly $1 trillion over the next decade.
- Federal Policy · NM
Senate Bill Would Direct CMMI to Study Medicaid Coverage of Produce Prescription Programs
The Accountable Produce is Medicine Act of 2026, co-sponsored by Sen. Martin Heinrich (D-N.M.) and introduced in August 2026, would require the Center for Medicare and Medicaid Innovation to conduct a five-year study on whether paying for nutrition assistance programs improves outcomes for Medicaid and Medicare beneficiaries with chronic diseases. The bill would evaluate clinical measures including weight, blood pressure, and blood glucose. Currently, food prescription programs like Presbyterian Healthcare Services' Food Farmacy in New Mexico rely entirely on health system or donated funding because food distribution is not a billable Medicaid or Medicare service. Both House and Senate versions await committee consideration.
- Industry · NV
Nevada Congressional Candidates Diverge on Medicaid Work Requirements in 1st District Race
Rep. Dina Titus (D-NV) and state Sen. Carrie Buck (R-Henderson) are competing for Nevada's 1st Congressional District seat, which covers Downtown Las Vegas, the Strip, Henderson, and Boulder City. Both candidates agree on reinstating Affordable Care Act premium subsidies to prevent coverage loss and premium increases for thousands of Nevadans. The candidates differ on Medicaid work requirements, with implications for program eligibility and enrollment in Nevada's Medicaid expansion population. Both candidates also support deportation enforcement focused on violent criminals rather than all undocumented immigrants, a position relevant to emergency Medicaid utilization patterns.
- State Policy · MD
State Audit Questions Medicaid Payments for Incarcerated Individuals
State auditors and health officials disputed the propriety of millions of dollars in Medicaid payments made on behalf of incarcerated individuals during a legislative hearing Wednesday. The disagreement centers on whether these payments comply with federal Medicaid eligibility rules, which generally prohibit coverage for inmates except for specific inpatient services. Lawmakers expressed frustration over the conflicting interpretations between the state's audit and health agencies. The dispute raises compliance and oversight questions for state Medicaid programs navigating federal restrictions on inmate coverage while implementing new suspension and pre-release enrollment policies.
- Federal Policy
OBBBA Changes Medicaid Improper Payment Penalties, Increasing State Financial Liability
The Obligation-Based Budgeting and Accrual (OBBBA) legislation changes how improper payment penalties apply to state Medicaid programs under the Payment Error Rate Measurement (PERM) program. According to the National Health Law Program analysis, the changes expose states to significantly increased financial liability when their Medicaid error rates exceed federal thresholds. The modifications alter long-standing PERM rules that determine when CMS can impose financial penalties on states for payment inaccuracies. NHeLP provides recommendations for states to mitigate potential adverse effects from the new penalty structure.
- Federal Policy
Trump Administration Proposes AI Solutions Amid $1 Trillion Medicaid Rural Provider Cuts
The Trump administration is proposing artificial intelligence as a solution for rural health care providers facing nearly $1 trillion in Medicaid cuts over the next decade. Rural health leaders express skepticism about AI's ability to offset the financial impact of these proposed cuts. The cuts would affect hospitals, clinics, and other providers serving Medicaid beneficiaries in rural areas. The proposal reflects a broader federal strategy to reduce Medicaid spending while relying on technology to maintain access, though implementation details and timelines remain unclear.
- State Policy · TX
Texas Medicaid Application Backlog Exceeds 200,000 Amid System and Policy Challenges
More than 200,000 Texans are waiting for Medicaid approval as enrollment declines, driven by outdated technology and stricter eligibility requirements affecting both Medicaid and SNAP. State officials and advocates report the backlog is preventing timely application processing. The delays affect beneficiaries seeking coverage and states' ability to meet federal timeliness standards. This represents an operational breakdown in Texas's eligibility determination system during a period when application volume and administrative requirements have increased.
- Federal Policy
Study Finds State-Directed Payment Caps Could Cut Medicaid Spending 10-25% in 17 States
A Health Affairs study published September 9 projects that 17 states could see Medicaid spending reductions of 10% to 25% under new federal limits on state-directed payments introduced in HR 1. The analysis by health policy analyst Debra Lipson examined state-directed payment applications approved by CMS through May 31 for rating periods beginning in 2024. The findings suggest significant fiscal impact on state Medicaid programs and provider payments as federal restrictions on state-directed payment arrangements take effect.
- State Policy · OR
Oregon Projects $1.3 Billion Medicaid Funding Shortfall From 2025 Federal Tax Law
Oregon health officials informed state legislators that the 2025 federal tax and spending law will require the state to find nearly $1.3 billion over four years to maintain current Medicaid operations. The shortfall results from federal cuts and new restrictions enacted under the GOP law. State officials presented the estimate to lawmakers on Wednesday, highlighting the fiscal pressure on Oregon's Medicaid program. The projection underscores the immediate budget challenge facing Oregon as it plans for the next biennial budget cycle.
Wednesday, September 9 · 12 stories
- Federal Policy
Advocacy Group Critiques Foundation for Government Accountability Medicaid Work Requirement Data
An advocacy organization has published a methodological critique of research from the Foundation for Government Accountability supporting Medicaid work reporting requirements. The critique challenges FGA's data analysis used to justify work requirement policies at state and federal levels. The piece focuses on what the authors identify as flawed methodology in FGA's research on Medicaid eligibility policies. This represents ongoing policy debate over work requirements as states and federal policymakers consider changes to Medicaid eligibility rules.
- Industry · AR
Cambia to Assume Operational Control of Arkansas Blue Cross in October
Cambia Health Solutions is moving forward with an affiliation agreement to assume operational control of Arkansas Blue Cross and Blue Shield, with the transaction expected to close in October 2026. No assets are changing hands in the deal. The affiliation will place Arkansas Blue Cross's operations, which include the state's Medicaid managed care business, under Cambia's operational control. The transaction represents a consolidation in the Blue Cross Blue Shield system affecting one of Arkansas's major Medicaid health plans.
