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Friday, July 10 · 26 stories
- Industry
Sturgis Hospital Closes After 101 Years as 720 U.S. Hospitals Face Closure Risk
Sturgis Hospital in Michigan closed June 19, 2026, after 101 years of operation, following a 13% volume decrease over two years. An estimated 720 hospitals nationwide are at risk of closure. The closures disproportionately affect rural facilities facing declining patient volumes and financial pressures. For Medicaid managed care organizations, rural hospital closures threaten network adequacy, emergency access, and continuity of care for beneficiaries in underserved areas.
- Industry · IA
CommonSpirit Closes Labor and Delivery Services at Iowa Hospital
CHI Health Mercy Council Bluffs will end labor and delivery and Level 2 NICU services on August 31, 2026. CommonSpirit Health will consolidate these services at its Omaha birth centers, located approximately 15 minutes away, which currently deliver over 4,460 babies annually. Patients will transition to the Omaha facilities for obstetric care.
- Industry
Dementia Costs Projected at $818 Billion in 2026, Threatening Home Health Workforce
Dementia and Alzheimer's disease are projected to cost the United States $818 billion in 2026, with families and individuals bearing more than 80% of the economic burden according to a study in Alzheimer's & Dementia. Flournoy Health Systems CEO warns this growing cost pressure could further strain the home health workforce. The projections come as managed care organizations face increasing demand for long-term services and supports, particularly home and community-based services for members with cognitive impairment. The workforce impact threatens network adequacy for LTSS benefits.
- Federal Policy
CMS Issues Claims Attachment Rule Establishing HIPAA Standards for Electronic Documentation
CMS finalized a claims attachment rule establishing HIPAA standards for electronic submission of supporting documentation with health care claims. The rule requires standardized submission using the Health Level 7 (HL7) framework and covers digital signature requirements. This applies to all entities submitting electronic claims under HIPAA transaction standards, including Medicaid managed care organizations. Implementation timelines and compliance deadlines are set by CMS for covered entities to transition to the standardized format.
- State Policy · NM
New Mexico Approves $8M Behavioral Health Plan for Northern Region
New Mexico's behavioral health oversight committee unanimously approved an $8 million plan for the state's northern region on Thursday, the second of 13 regional proposals under development. The committee is overseeing the state's broader effort to rebuild its behavioral health care infrastructure. The approval allows implementation to proceed in the northern region, though the article does not specify an effective date. This action signals continued progress in New Mexico's statewide behavioral health system redesign, which will affect managed care organizations serving Medicaid beneficiaries in the region.
- State Policy · NJ
New Jersey Bill Advances to Help Medicaid Recipients Meet Federal Work Requirements
New Jersey Democrats advanced legislation Monday to help Medicaid beneficiaries find volunteer positions that satisfy new federal work requirements for Medicaid and SNAP benefits. The bill aims to facilitate compliance with federal mandates by creating pathways to qualifying volunteer opportunities. The legislation responds to new federal work requirements that could affect Medicaid eligibility for certain adult beneficiaries. If enacted, the bill would provide infrastructure to connect beneficiaries with compliant work activities.
- State Policy · ID
Idaho Reports 36% Rise in Uninsured Young Children After Medicaid Redeterminations
Idaho's uninsured rate for children under age 6 increased 36% following post-pandemic Medicaid redeterminations, giving the state the fifth-highest rate nationally. The increase follows Idaho's removal of tens of thousands of children from Medicaid after the end of the COVID-19 public health emergency continuous coverage requirements. The report highlights coverage loss among young children eligible for CHIP and Medicaid during the unwinding period. Idaho Medicaid managed care organizations face higher rates of uninsured eligible children in their service areas.
- State Policy · OR
Oregon Allocates $37.5M to Rural Hospital Maternity Services After Federal Medicaid Cuts
Oregon will distribute up to $37.5 million to approximately 24 rural hospitals across 17 counties to strengthen maternity care services, combining a one-time $25 million state investment with at least $12.5 million in federal matching funds. The funding responds to recent federal Medicaid cuts that have destabilized rural maternity services. The initiative targets hospitals providing obstetric care in underserved areas where access to maternal health services has been declining. For Medicaid managed care organizations operating in Oregon, this investment may affect network adequacy requirements and maternity care capacity in their rural service areas.
- State Policy · SC
South Carolina Democratic Gubernatorial Candidates Support Medicaid Expansion
Three Democratic candidates for South Carolina governor—State Rep. Jermaine Johnson, attorney Mullins McLeod, and businessman Billy Webster—voiced support for Medicaid expansion during a June 3, 2026 debate focused on affordability. All three candidates agreed South Carolina should expand Medicaid eligibility under the Affordable Care Act. The candidates also expressed support for legalizing medical marijuana. South Carolina remains one of ten states that have not expanded Medicaid, leaving an estimated 230,000 low-income adults without coverage.
- State Policy · SC
South Carolina Enacts Vape Tax to Offset Medicaid Tobacco Revenue Decline
South Carolina enacted legislation taxing vapes with revenue directed to Medicaid to compensate for declining cigarette tax collections. The law takes effect in October 2026. Governor Henry McMaster signed the measure two weeks ago. The legislation addresses a budget gap facing South Carolina Medicaid as smoking rates decline and traditional tobacco tax revenue decreases, while simultaneously reducing taxes on electronic cigarettes that contain tobacco.
- State Policy · KY
Kentucky Governor Announces Medicaid Reimbursement Cuts Effective Under New State Budget
Kentucky Governor Andy Beshear announced Thursday that Medicaid reimbursement rates and other social service programs will face cuts under the two-year state budget passed by the Republican-controlled General Assembly. The reductions, which Beshear attributes to legislative budget decisions, will affect foster care programs and Medicaid provider payments. The timing of implementation and specific rate reductions were not detailed in the announcement. These cuts will directly impact managed care organizations operating in Kentucky through reduced capitation rates or altered service requirements.
- State Policy · MN
Minnesota Terminates 3,000 Medicaid Providers in Federal Fraud Crackdown
Minnesota's Department of Human Services terminated funding to more than 3,000 care providers across 13 Medicaid service categories following a four-month revalidation screening of approximately 5,500 providers. The action represents a 60% termination rate and responds to heightened federal scrutiny over fraud in Minnesota's social services programs. The revalidation effort targeted providers across multiple service lines, requiring rapid compliance with new screening requirements. The mass terminations create immediate network adequacy concerns for Medicaid managed care organizations operating in Minnesota and signal potential federal enforcement pressure on other states with similar fraud vulnerabilities.
- State Policy · NE
Nebraska Reviews Federal Medicaid Work Rule, Continues May Implementation
Nebraska became the first state to implement federally mandated Medicaid work requirements in May 2026. CMS released an interim final rule this week outlining requirements all states must follow by January 1, 2027. Nebraska DHHS is reviewing the federal rule but declined to pause its current implementation. The state's approach will serve as an early test case for other states preparing to comply with the federal mandate.
- State Policy · OK
Oklahoma Extends Foster Care Services to Age 21 with Medicaid Coverage
Oklahoma enacted legislation allowing foster youth to voluntarily remain in state care until age 21, retaining stipend payments, Medicaid coverage, and caseworker support. The law, which passed unanimously this session, enables eligible young adults to continue services beyond their 18th birthday. Implementation timing was not specified in the report. The policy affects Medicaid managed care organizations serving foster care populations in Oklahoma, who will need to ensure continuous coverage and coordinate care for this extended eligibility group.
- State Policy · NE
Nebraska Seeks Federal Waiver to Exempt Dawson County from Medicaid Work Requirements
Nebraska Governor Jim Pillen has directed the state's Department of Health and Human Services to request federal approval for a temporary high-unemployment exemption from Medicaid work requirements in Dawson County. The county recorded the state's highest unemployment rate in April. The waiver request would suspend work requirement enforcement in the county while the broader state policy remains in effect. Federal approval from CMS is required before the exemption can take effect.
- State Policy · WI
Wisconsin Launches Webpage on Federal Medicaid Work Requirement Implementation
The Wisconsin Department of Health Services has created a webpage to inform BadgerCare recipients about new federal work requirements taking effect in 2027. The state is currently reviewing the federal rule issued June 1, 2026, which governs state implementation of the requirements. The webpage marks Wisconsin's initial public communication on compliance with the federal mandate, though specific implementation details remain under review.
- Legal · NH
Federal Trial Set for November on New Hampshire LTSS Program ADA Compliance
A federal judge has scheduled a November 2026 trial to determine whether New Hampshire's Choices for Independence program violates federal law by failing to provide adequate home and community-based services for elderly individuals and people with physical disabilities. The case centers on allegations that the state's LTSS program forces beneficiaries into institutional settings in violation of the Americans with Disabilities Act and the Supreme Court's Olmstead decision. The trial outcome could establish precedent for evaluating HCBS adequacy and state compliance with federal integration mandates. U.S. District Judge Paul Barbadoro will hear evidence on whether the program meets federal standards for community-based care.
- State Policy · NH
CMS Approves New Hampshire $205M Rural Health Transformation Spending Plan
CMS approved New Hampshire's spending plan for approximately $205 million in federal Rural Health Transformation Program funding awarded in late 2025. The GO-NORTH initiative will fund rural health infrastructure and service delivery improvements across the state. The approval allows New Hampshire to begin deploying federal dollars for rural provider support and access expansion. Medicaid managed care organizations operating in rural New Hampshire counties should anticipate changes in provider networks and potential care delivery model shifts as these federal investments take effect.
- State Policy · NM
New Mexico Spent $844M on Behavioral Health Since 2022 Despite Access Gaps
New Mexico invested $843.5 million in behavioral health system infrastructure since 2022, yet a new state report shows persistent access barriers for residents seeking appointments and rising overdose deaths. New Mexico was among only seven states where overdose deaths increased last year. The report suggests outcomes have not kept pace with financial investment. The findings have implications for Medicaid managed care organizations responsible for behavioral health service delivery and network adequacy in the state.
- State Policy
First 1115 SUD IMD Waiver Evaluations Show Mixed Progress on State Milestones
Early summative evaluations of Section 1115 waivers allowing Medicaid payment for substance use disorder treatment in institutions for mental disease reveal uneven state performance on required milestones. The brief analyzes evaluation findings as states navigate waiver renewals amid evolving federal Medicaid policy. States must demonstrate progress on access to evidence-based treatment, use of opioid use disorder medications, and improved care transitions. The findings come as CMS continues to refine expectations for SUD IMD waiver demonstrations and states prepare renewal applications.