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Tuesday, July 7 · 24 stories
- Legal · NY
HHS-OIG Denies Recertification for New York Medicaid Fraud Control Unit, Freezes $60 Million
The HHS Office of Inspector General denied recertification for New York's Medicaid Fraud Control Unit and froze $60 million in annual federal funds effective July 1, 2026. This action came one week after DOJ's National Health Care Fraud Takedown announced partnerships with all 50 state MFCUs. The denial represents an unprecedented enforcement step against a state fraud control unit that typically partners with federal authorities on Medicaid provider fraud investigations. For Medicaid managed care organizations in New York, this creates uncertainty around ongoing fraud investigations, referral processes, and coordination with state enforcement authorities on provider integrity matters.
- State Policy · IN
Indiana to Implement Medicaid Work Requirements Starting January 2027
The Indiana Family and Social Services Administration released implementation details for Medicaid work requirements affecting able-bodied adults ages 19-64 enrolled in the Healthy Indiana Plan. Requirements begin January 1, 2027, with early compliance rules for new applicants and an 80-hour monthly work obligation for current enrollees. The policy applies to HIP members without exemptions such as disability, pregnancy, or caregiver status. Indiana becomes one of the first states to move forward with work requirements following recent federal policy shifts, requiring managed care organizations to track and report member compliance.
- Federal Policy
HHS Postpones Preventive Services Task Force Meetings, Plans August Reboot with Eight New Members
The Department of Health and Human Services will announce eight new members of the U.S. Preventive Services Task Force and schedule the panel's first meeting in 17 months for late August. HHS canceled four prior meetings, removed two vice chairs in May, and allowed the 16-member panel to shrink to eight as terms expired without replacement. The task force grades preventive services that Medicaid expansion programs and most private insurers must cover without cost-sharing when rated A or B. Recommendations on prostate cancer screening, weight loss counseling, cervical cancer screening, perinatal depression, and alcohol abuse await votes or formal publication.
- State Policy · CO
Colorado Maternal Health Initiative Leader Discusses Perinatal Care Transformation Under Medicaid
Elephant Circle founder Indra Lusero discusses Colorado's comprehensive maternal health initiatives under Medicaid in a Q&A format. Colorado was among the first states to pursue broad perinatal care reforms aimed at improving outcomes for pregnant and postpartum enrollees. The interview covers the state's maternal health strategy during a period described as involving recent federal funding constraints. The discussion addresses how Colorado's Medicaid program has approached perinatal care delivery and payment reform.
- Federal Policy
Proposed Medicaid Work Requirements Face Rural Service Delivery Challenges
A proposed federal rule implementing H.R. 1's Medicaid work and volunteer reporting requirements faces operational challenges in rural areas where postal service limitations may prevent beneficiaries from meeting documentation deadlines. The law, projected to result in 10 million Americans losing coverage, requires monthly work or volunteer activity reporting to maintain eligibility. Rural beneficiaries may face particular difficulty submitting timely verification due to mail delays and limited internet access. The rule remains in proposed form with implementation timing not yet finalized.
- Federal Policy
CMS Proposes 2.4% Outpatient Rate Increase With 340B Cuts and Site-Neutral Imaging Expansion
CMS released its proposed 2027 outpatient prospective payment system rule with a 2.4% base rate increase, significant reductions to 340B drug payments, and an expansion of site-neutral payment policies to off-campus imaging services. Provider groups say the combined effect of 340B cuts and site-neutral expansions could result in negative net payment updates for many hospitals. The rule is in proposed form, meaning CMS will accept public comments before issuing a final rule later this year. For Medicaid managed care organizations, these Medicare payment changes often influence hospital contracting strategies, network stability, and cost-shifting dynamics.
- Managed Care
States Urged to Modernize Program Integrity in Medicaid Self-Directed Care Programs
An analysis calls on states to redesign program integrity approaches for self-directed Medicaid services by focusing on four priorities that allow oversight to scale with program growth. Self-directed care models, where beneficiaries manage their own long-term services and supports budgets, have expanded rapidly but present unique fraud and compliance risks. The recommendations address how states can maintain effective oversight without constraining beneficiary choice and flexibility. For managed care organizations administering or overseeing self-directed options, this highlights evolving state expectations for program integrity infrastructure in LTSS programs.
- State Policy · IN
Indiana Maintains Medicaid Funding Block to Planned Parenthood After Federal Ban Expires
Planned Parenthood remains excluded from Indiana's Medicaid program despite the recent expiration of a federal prohibition on Medicaid payments to abortion providers for non-abortion services. The organization reports it is still unable to receive reimbursement for covered Medicaid services in Indiana. The continued funding block appears to rely on state-level policy even after federal restrictions lapsed. This affects Medicaid beneficiaries' access to family planning, preventive care, and other covered services through Planned Parenthood clinics in Indiana.
- Federal Policy
SHADAC Releases Administrative Cost Monitoring Guide for H.R.1 Medicaid Implementation
SHADAC published a monitoring guide for states implementing H.R.1's Medicaid structural changes, which include mandatory 80-hour monthly work requirements, elimination of continuous eligibility, and reduced federal match rates. The guide focuses on tracking administrative costs as states build new verification systems and comply with restrictions on retroactive coverage and presumptive eligibility. States face significant operational buildout with reduced federal funding, requiring new data infrastructure to verify work activities and manage increased enrollment churn.
- Federal Policy
CMS Re-Establishes Data Match With VA to Verify Minimum Essential Coverage for Marketplace Eligibility
CMS has re-established a data matching program with the Department of Veterans Affairs to verify whether Marketplace applicants are enrolled in VA health care programs that constitute minimum essential coverage. The match allows CMS to determine eligibility for Insurance Affordability Programs by checking VA enrollment status. The program takes effect July 7, 2026, under Privacy Act requirements. This represents continuation of an existing verification process used in Marketplace eligibility determinations.
- Managed Care
NASHP Publishes Behavioral Health Integration Resource for Medicaid MCOs
The National Academy for State Health Policy released a resource examining behavioral health integration strategies in Medicaid managed care contracts. The snapshot covers care coordination approaches, quality measurement frameworks, and payment methodologies states are using to advance integrated behavioral health delivery through MCO contracts. The resource is intended for state Medicaid programs and managed care plans developing or refining behavioral health integration requirements.
- State Policy · NY
New York Medical Aid in Dying Act Takes Effect August 5, 2026
New York's Medical Aid in Dying Act becomes effective August 5, 2026, establishing a legal framework for terminally ill adults to request and self-administer life-ending medication. The law, introduced in January 2025 and amended in February 2026, affects health plans, providers, and facilities operating in New York's Medicaid program. Managed care organizations must prepare compliance protocols, update provider contracts, and clarify coverage policies before the effective date. The law represents the latest state-level expansion of medical aid in dying, joining ten other states with similar statutes.
- Federal Policy
602 Hospitals Face 50-75% Wider Deficits Under Federal Cuts, NNU Projects
National Nurses United released a report July 6 projecting that 602 financially vulnerable hospitals could see their combined deficit grow by 50% to 75% under the combined impact of Medicare sequestration, Medicaid cuts tied to HR 1, and the expiration of enhanced ACA marketplace subsidies. The report identifies these hospitals as particularly at risk from the confluence of federal payment reductions. The analysis warns of a preventable financial crisis affecting provider networks that serve Medicaid populations.
- Industry
15 Hospitals Close Maternity Units in First Half of 2026
Fifteen hospitals closed labor and delivery services in the first half of 2026, continuing a trend that saw 29 closures in the prior year. The closures are driven by financial pressures, staffing shortages, and declining birth rates. The pattern reflects ongoing consolidation in maternity care delivery that affects network adequacy and access to prenatal and delivery services. These closures require Medicaid managed care plans to assess network gaps and ensure adequate coverage for pregnant members.
- Federal Policy
SAMHSA Opens $281 Million in Behavioral Health Grant Funding Across 15 Programs
The Substance Abuse and Mental Health Services Administration announced more than $281 million in grant funding opportunities across 15 programs targeting addiction, overdose prevention, mental illness treatment, and recovery services. The announcement was made on July 6, 2026. Applications are now open for eligible providers and organizations. This funding represents a significant federal investment in expanding behavioral health service capacity and infrastructure, with potential implications for Medicaid managed care organizations that coordinate or provide behavioral health services to their enrollees.
- Legal · NY
PPL Reaches $162M Settlement Over New York CDPAP Payroll Violations
A federal judge preliminarily approved a $162 million class action settlement with approximately 200,000 home care workers alleging payroll and benefits violations following New York's transition of its Medicaid-funded Consumer Directed Personal Assistance Program (CDPAP) to a single fiscal intermediary, Public Partnerships LLC (PPL). The settlement addresses claims arising from the state's consolidation of CDPAP fiscal intermediary services. The approval comes weeks after DOJ involvement in related matters. Final approval is pending.
- Federal Policy · ID
Idaho to Distribute $186 Million in Federal Rural Health Transformation Grants
Idaho will distribute approximately $186 million in federal Rural Health Transformation grants over five years, funded by legislation passed in July 2025. The grants target infrastructure projects to improve rural healthcare delivery. State officials are encouraging local contractors to prepare for project implementation. The funding represents a significant federal investment in rural health infrastructure with potential implications for Medicaid provider networks in underserved areas.
- Managed Care · AR
Centene Exits Arkansas Medicaid Expansion Program in 2027
Centene Corporation will discontinue participation in Arkansas' ARHOME Medicaid expansion program in 2027, according to the state Department of Human Services. The withdrawal affects one of the state's major managed care organizations serving the expansion population. Arkansas receives billions in federal Medicaid dollars annually, and Centene's exit will require the state to reassign covered members to remaining health plans or adjust its managed care delivery system. The decision reflects ongoing commercial considerations in state Medicaid managed care markets.
- State Policy · SC
South Carolina Behavioral Health Agency Eliminates 248 Positions in Reorganization
South Carolina's Department of Behavioral Health and Developmental Disabilities eliminated 248 positions as part of a reorganization, resulting in 47 layoffs. The department was created in 2025 to consolidate mental health and developmental disabilities services. The restructuring affects state agency capacity to oversee behavioral health and developmental disabilities services, including programs delivered through Medicaid managed care organizations. The changes take effect immediately as part of the department's operational consolidation.
Monday, July 6 · 8 stories
- Federal Policy
CMS Proposes Provider Enrollment and Billing Privilege Changes in Home Health Rule
CMS included proposed changes to Medicare provider enrollment regulations (42 CFR Part 424, Subpart P) in its July 1, 2026 Home Health Prospective Payment System proposed rule. The changes would affect requirements for providers and suppliers to obtain and maintain Medicare billing privileges. The proposed modifications are embedded in the home health payment rule rather than issued as standalone enrollment guidance. Comment periods and effective dates follow standard rulemaking timelines for proposed rules.