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Wednesday, July 22 · 13 stories
- Federal Policy
Webinar Examines H.R.1 Impact on Medicaid Maternal and Infant Health Programs
A webinar titled 'Medicaid Connections: Maternal and Infant Health and Justice' addresses how H.R.1 legislation affects Medicaid-funded maternity care. The session focuses on reproductive justice and optimizing Medicaid to fund holistic, culturally centered care including midwifery and doula services. As the nation's largest payer for maternity care, Medicaid plays a central role in addressing systemic health inequities for maternal and infant populations. The webinar provides guidance for policymakers on funding structures that support comprehensive perinatal services.
- Legal
D.C. Circuit Rules Drugmakers Need HHS Approval for 340B Rebate Models
The U.S. Court of Appeals for the D.C. Circuit ruled July 21, 2026, that pharmaceutical manufacturers cannot implement 340B rebate models without prior approval from the HHS secretary. The decision upheld lower court rulings against Novartis, Johnson & Johnson Health Care Systems, Bristol Myers Squibb, and Eli Lilly. The ruling reinforces federal authority over 340B program administration and blocks manufacturer attempts to unilaterally restructure drug discount delivery mechanisms. For Medicaid managed care organizations with provider networks that include 340B-eligible entities, the decision preserves existing 340B purchasing pathways and prevents disruption to contract pharmacy arrangements that affect covered entity participation and pharmacy network stability.
- Federal Policy
CMS Proposes Ban on Medicare Payment for Third-Party Remote Patient Monitoring
CMS has issued a proposed rule that would prohibit Medicare payment for remote patient monitoring services delivered by third-party vendors. Health systems, physician groups, and telehealth trade associations are opposing the proposal, citing concerns about disrupted RPM programs and unclear reimbursement alternatives. The proposal has prompted some organizations to pause RPM expansion plans and appears to conflict with congressional support for broader telehealth access. If finalized, the policy would require Medicare providers to deliver RPM services directly rather than through vendor arrangements.
- Federal Policy
Rural Hospital CEO Criticizes $50B Federal Rural Health Transformation Program Structure
A rural hospital CEO has publicly criticized the $50 billion Rural Health Transformation Program, which launched last year following Medicaid cuts under HR-1. Rural health executives are questioning the program's design, citing concerns that states control funding distribution, eligible uses are narrowly defined, and the structure may not adequately address care access challenges in communities affected by Medicaid reductions. The criticism reflects broader implementation concerns among rural providers about whether federal support will effectively reach facilities serving Medicaid populations.
- State Policy · CO
Colorado Medicaid Owes $8 Million in Federal Funds for HCBS Claims
An Office of Inspector General audit found Colorado Medicaid improperly claimed at least $8 million in federal funds for in-home disability care services. The OIG identified an additional $45 million in federal payments requiring further review. State officials acknowledged billing errors but stated no fraud occurred. The audit examined home and community-based services claims, a program area where improper billing has drawn increased federal scrutiny. Colorado must repay the federal share of identified improper payments.
- Federal Policy
AHA Urges CMS to Scale Back Medicaid State-Directed Payment Limits in Proposed Rule
The American Hospital Association submitted comments July 21, 2026, opposing portions of a CMS proposed rule implementing reconciliation-mandated changes to Medicaid state-directed payments. The rule proposes new limits on targeted fee-for-service payments and SDP design that exceed statutory requirements. CMS projects the rule would reduce Medicaid payments by $510.1 billion over 10 years—more than triple the Congressional Budget Office estimate of $149.4 billion. AHA argues the cuts would reduce care access, worsen workforce shortages, and threaten hospital financial viability, urging CMS to rescind provisions beyond what Congress required and mitigate SDP reductions.
- Federal Policy
CMS Proposes New Provider Tax Thresholds, Phases Out 6% Hold Harmless Rule
CMS released a proposed rule updating Medicaid provider tax policies following the July 2025 reconciliation law. The rule replaces the current 6% indirect hold harmless threshold with state- and provider class-specific thresholds based on taxes enacted as of July 4, 2025, and implements phased reductions for Medicaid expansion states starting in fiscal year 2028. CMS proposes to sunset the current 75/75 compliance test and establishes a new "Services of Health Insurers" provider tax class, bringing existing state taxes on health insurers under federal oversight. Comments are due 60 days after Federal Register publication.
- Legal
23 States Sue CMS Over Medicaid Work Requirements Rule Exemptions
On June 29, 2026, twenty-three states, two governors, and the District of Columbia filed suit in U.S. District Court for Massachusetts challenging CMS implementation of Medicaid work requirements under the One Big Beautiful Bill Act. Plaintiffs allege CMS unlawfully narrowed exemptions for medically frail beneficiaries. The litigation seeks to block enforcement of the work requirements rule pending judicial review. This lawsuit directly affects managed care organizations responsible for identifying medically frail populations, verifying exemptions, and ensuring compliance with work requirement reporting.
Tuesday, July 21 · 15 stories
- Industry
Novo Nordisk Sues Eli Lilly Over Obesity Drug Advertising Claims
Novo Nordisk has filed a lawsuit against Eli Lilly alleging misleading advertising of Lilly's GLP-1 obesity medications. The suit, which follows a cease-and-desist demand, claims Lilly is using deceptive advertisements to portray its products as broadly superior to Novo's competing medicines. Lilly has responded that its marketing campaign is truthful. The legal action comes as both manufacturers compete intensively in the rapidly growing obesity treatment market.
- Federal Policy
Senate Democrat Proposes Medicare Enrollment for All Children Under Age 26
Sen. Andy Kim (D-N.J.) introduced legislation to automatically enroll all American children in Medicare from birth through age 25, calling the proposal MediKids. The bill would create universal federal coverage for children regardless of family income. No timeline for committee consideration or floor action has been announced. The proposal would fundamentally restructure pediatric coverage currently delivered through Medicaid, CHIP, and commercial insurance, though passage prospects remain uncertain given divided government.
- Federal Policy
Four House Republicans Join Democratic ACA Discharge Petition
Four Republican members of the U.S. House of Representatives joined a Democratic discharge petition related to the Affordable Care Act on December 17, 2025. The Association for Community Affiliated Plans issued a statement from CEO Margaret A. Murray responding to this development. A discharge petition can force a floor vote on legislation if it receives 218 signatures. The bipartisan support suggests potential movement on ACA-related legislation that could affect Medicaid expansion states and marketplace programs.
- State Policy · NM
New Mexico Lawmakers Criticize Slow Rollout of Behavioral Health System Reforms
Bipartisan New Mexico legislators voiced frustration over delays in implementing the state's behavioral health system overhaul during a Monday legislative session. The criticism focuses on the pace of program deployment intended to rebuild behavioral health infrastructure and service delivery. The concerns come amid ongoing challenges in the state's behavioral health network, which affects Medicaid managed care organizations responsible for coordinating behavioral health services for enrollees. The delays may impact MCO network adequacy requirements and care coordination for members with behavioral health needs.
- Federal Policy · CA
HHS Defers $1 Billion in Federal Medicaid Payments to Two States
HHS and CMS announced Tuesday they deferred over $1 billion in federal Medicaid payments to two states, including $867.5 million to California, citing high-risk claims including home-based services. The deferrals represent a federal payment hold while CMS reviews claims for potential fraud, waste, or abuse. The action takes effect immediately. This is significant because payment deferrals can strain state budgets and delay provider payments, potentially disrupting network adequacy and access to home and community-based services that many MCOs coordinate or manage under managed long-term services and supports contracts.
- State Policy · DE
Delaware Enacts Hospital Price Caps, Charity Care Expansion, PE Acquisition Moratorium
Delaware Governor Matt Meyer signed three healthcare bills on July 20, 2026, that will phase in hospital price caps, expand charity care eligibility, and temporarily block private equity acquisitions of nonprofit hospitals. The legislation aims to improve healthcare affordability and access in Delaware. The price cap implementation will be delayed to allow a phased approach. These changes affect hospital reimbursement structures and access requirements that impact Medicaid managed care organizations contracting with Delaware hospitals.
- Industry
Stanford Expert Discusses Evolving AI Regulation in Health Care Delivery
Dr. Michelle Mello of Stanford's Healthcare Ethical Assessment Lab for AI discussed regulatory frameworks for artificial intelligence deployment in clinical settings during an interview. The conversation addressed accountability structures, oversight mechanisms, and liability questions as AI tools increasingly enter medical practice. While the discussion covers broader health care AI governance, specific Medicaid managed care implications were not detailed. The podcast explores ongoing policy development rather than reporting finalized regulatory action.
- Managed Care
Health Insurers Report Progress on Prior Authorization Simplification One Year After Voluntary Pledge
In June 2025, major health insurers committed to simplifying and reducing prior authorization requirements for plans covering 257 million Americans. One year later, payers report progress on their voluntary commitments, though implementation remains incomplete. The initiative affects commercial, Medicare Advantage, and potentially Medicaid managed care plans. For Medicaid MCOs, this signals industry-wide movement toward streamlined utilization management practices that may inform state contract requirements and CMS managed care rules.
- Federal Policy
Maryland Court Enjoins Eight Provisions of CMS 2027 Marketplace Payment Rule
A federal district court in Maryland issued a preliminary injunction on July 16, 2026, blocking eight provisions of CMS's 2027 notice of benefit and payment parameters final rule. The enjoined provisions include expanded out-of-pocket maximums for bronze and catastrophic plans, broader catastrophic plan eligibility, relaxed network adequacy standards, and a new pathway for non-network plans to qualify as marketplace coverage. The court found plaintiffs likely to succeed on Administrative Procedure Act claims and that irreparable harm would occur without relief. The injunction took effect July 20, 2026, while the remainder of the rule proceeded as scheduled.
- Federal Policy
Compounding Pharmacies Modify GLP-1 Formulations to Circumvent FDA Compounding Restrictions
A JAMA Health Forum study published July 17, 2026 finds that some compounding pharmacies are making minor compositional changes to semaglutide and tirzepatide products to evade FDA restrictions on compounding copies of approved drugs. The FDA previously added these GLP-1 medications to its drug shortage list due to surging demand, which legally permitted compounding. As shortages resolve and FDA moves to restrict compounding of these products, some pharmacies are altering formulations to maintain legal compounding status. This affects Medicaid managed care organizations that cover GLP-1s for diabetes and obesity, as it creates uncertainty around formulary management, prior authorization protocols, and pharmacy network oversight.
- Industry
Clinic and Physician Practice Bankruptcies Spike in 2026
Healthcare provider bankruptcies have increased sharply in 2026, driven in part by Medicaid payment cuts, according to a Gibbins Advisors report. The trend affects clinics and physician practices across the sector. The financial pressures are ongoing, with no specific effective date noted. For Medicaid managed care organizations, provider network stability is at risk as financial strain forces practice closures, potentially creating access gaps and requiring network adequacy monitoring.
- State Policy · NY
New York Struggles to Establish Oversight for Opioid Settlement Spending
New York state agencies face challenges establishing clear oversight for multibillion-dollar opioid settlement funds, which come with loose spending guidelines rather than strict requirements. Advocates for individuals affected by the opioid crisis are calling for stronger fiscal guardrails and accountability mechanisms. The situation in New York reflects broader challenges states face in managing settlement dollars intended for substance use disorder treatment and prevention. The lack of centralized oversight raises concerns about whether funds will reach evidence-based programs that serve Medicaid populations most affected by opioid use disorder.