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Tuesday, September 29 · 26 stories
- Legal
UnitedHealthcare, TeamHealth Settle $100M Upcoding Lawsuit
UnitedHealthcare and TeamHealth voluntarily dismissed with prejudice a lawsuit in which the insurer had accused the physician staffing company of upcoding emergency department claims. The dismissal, filed September 24 in Tennessee federal court, followed the parties notifying the court on August 11 that they had reached a settlement. Terms of the settlement were not disclosed in available court records. While the case involved commercial claims rather than Medicaid specifically, the underlying upcoding allegations against a major ED staffing firm are relevant to program integrity efforts across payers, including Medicaid managed care plans that contract with or reimburse similar staffing arrangements.
- Industry
Podcast Examines AI Guardrail Gaps After Agent Breaches Health Data Site
In a Federation of American Hospitals podcast episode, host Chip Kahn discusses a recent incident in which an OpenAI agent accessed an Australian government website containing health care data, citing it as an example of AI systems operating without adequate oversight. The episode examines implications for hospitals already using AI in billing, scheduling, and clinical decision-making, as industry executives call for slower AI deployment and stronger regulation. No specific policy action, rule, or regulatory deadline is described. The discussion raises concerns relevant to health systems, including those serving Medicaid populations, about oversight gaps as AI tools increasingly touch administrative and clinical workflows.
- State Policy · PA
Allegheny County Kindergarten MMR Rate Falls Below Herd Immunity Threshold
Pennsylvania has confirmed 835 measles cases across 39 counties in 2026, including 164 hospitalizations and four deaths among unvaccinated residents, compared to just 16 cases statewide in 2025. Allegheny County's kindergarten MMR vaccination rate stood at 91.8% for the 2025-26 school year, below the 95% threshold needed to prevent community spread, continuing a decade-long decline. The MMR vaccine is available at no cost to Medicaid-enrolled, uninsured, and underinsured children at Pennsylvania's 59 state health centers. The outbreak underscores how declining childhood vaccination coverage is driving disease resurgence in a state where Medicaid covers a large share of pediatric immunizations.
- Federal Policy
CMS Ends Automatic Medicare Add-On Payments for Breakthrough Devices
CMS has finalized removal of the pathway that let FDA "breakthrough"-designated devices automatically qualify for supplemental Medicare payments, including new technology add-on payments and transitional pass-through payments, without demonstrating substantial clinical improvement or novelty. Device manufacturers are affected most directly, since new breakthrough-designated products will need to meet standard evidentiary requirements to secure extra payment starting in October. The change follows an August CMS rule finalizing the policy shift. While this is a Medicare payment policy change, Medicaid stakeholders should track it because device coverage and payment precedents set in Medicare often influence state Medicaid fee schedules and managed care benefit design for the same technologies.
- Managed Care
Yale Researchers Propose 10 Policies to Cut Healthcare Spending
Yale University researchers published 10 policy proposals aimed at reducing U.S. healthcare spending, touching Medicare Advantage payment methodology, site-neutral payment policy, drug pricing, and nursing home care. Nine of the proposals come with combined annual savings estimates ranging from roughly $70 billion to $84 billion; the tenth is not quantified in the same way. The proposals target federal payers and providers broadly rather than Medicaid specifically, though several areas, drug costs and nursing home/LTSS spending, overlap with state Medicaid programs. No implementation timeline or legislative vehicle is specified; these are research recommendations, not enacted policy.
- State Policy · RI
Rhode Island AG Rejects Turnaround Plan for Safety-Net Hospitals
Rhode Island Attorney General Peter Neronha's office rejected a financial turnaround plan submitted by CharterCARE Health of Rhode Island, the new owner of Roger Williams Medical Center and Our Lady of Fatima Hospital, saying it relied on unrealistic assumptions. The plan was required under conditions imposed when the hospitals' sale to nonprofit owner The Centurion Foundation closed in March. Neronha gave the owners until October 2 to submit a revised plan, warning the hospitals could be at risk of closing by year's end despite an $85 million cash infusion required at sale closing. Both hospitals serve large shares of Medicaid and Medicare patients and face pressure from new federal Medicaid eligibility requirements and funding cuts expected to increase uncompensated care.
- Legal
Baker Donelson Flags 2026 Medicare Fraud Enforcement Surge for Providers
In a client alert, Baker Donelson reports that CMS has imposed three nationwide Medicare enrollment moratoria in 2026 freezing new enrollment for home health agencies, hospices, and certain durable medical equipment suppliers. The firm notes these moratoria are running alongside a multiagency fraud task force, congressional investigations, and state oversight inquiries, with an August 2026 OIG white paper on durable medical equipment fraud signaling likely future enforcement tools. Providers and suppliers in these sectors, including those with dual Medicare-Medicaid enrollment, face heightened scrutiny now. The alert advises affected entities to prepare for expanded compliance reviews and potential parallel state Medicaid enforcement actions.
- Industry · ME
Democratic Super PAC Airs Ad Tying Collins to Medicaid Cuts
The Senate Majority PAC, a Democratic super PAC, launched an ad campaign attacking Sen. Susan Collins (R-Maine) over the closure of about a dozen birthing centers in Maine, linking the closures to Medicaid cuts in the One Big Beautiful Bill Act. The ad argues Collins enabled the cuts despite voting against the final legislation. The campaign is part of ongoing 2026 midterm messaging tying federal Medicaid reductions to state-level provider closures, particularly in maternal health services. No new policy or funding action is described; this is a political advertising campaign referencing prior Medicaid legislation.
- State Policy · CA
Newsom Signs Limited CARE Court Fixes, Bigger Overhaul Bills Die
California Gov. Gavin Newsom signed two bills making incremental changes to CARE Court, the state's mental health court program launched in 2023 to connect severely mentally ill residents with treatment. One law lets more first responders refer people into the program; another allows family members to share treatment-relevant information with care teams. Two more sweeping bills that would have created pathways from CARE Court into involuntary conservatorship died in the Assembly Appropriations Committee in August over cost concerns and insufficient data on program performance. State data through June 2025 show CARE Court has reached far fewer people than projected, with only 517 of 2,216 petitions resulting in care agreements.
- Industry
Hospital CEOs Warn 340B Rebate Pilot Could Strain Cash Flow
Becker's Hospital Review reports that hospital CEOs are closely watching a limited federal rebate pilot set to begin January 1, 2027, that would change how some 340B drug discounts are delivered. Currently, eligible hospitals receive 340B discounts upfront at the point of purchase; the pilot would instead require hospitals to pay full price and later receive a rebate, delaying access to discount funds. CEOs interviewed say this shift could affect hospital cash flow and staffing decisions, particularly for safety-net and disproportionate-share hospitals that rely on 340B savings to fund operations. The change comes amid ongoing legal challenges to the 340B program's administration.
- Federal Policy
Medicaid Work Requirements Set to Begin in 2027, CBO Projects Coverage Losses
New federally mandated Medicaid work requirements are scheduled to take effect at the start of 2027, and the nonpartisan Congressional Budget Office estimates the changes could leave 8 million more people nationally without health insurance. Patients and caregivers are voicing concern about how the requirements will affect their coverage and access to care. NBC News reports on these concerns ahead of implementation. State Medicaid agencies and beneficiaries have roughly a year to prepare for eligibility verification and enrollment changes.
- State Policy · MI
Michigan Distributes $173M Rural Health Grants, Faces Transparency Questions
Michigan health officials detailed allocation of the state's initial $173 million rural health transformation award, telling a House Appropriations Subcommittee that $124.6 million has been approved for 236 subrecipients, though the state's public tracking website shows only about $102 million awarded to 126 organizations as of late August. Funds are split across four priorities: chronic disease collaboration, workforce development, home-based care access, and technology upgrades, with recipients including the Department of Labor and Economic Opportunity, tribal governments, local health departments, universities, and fewer than 20 Federally Qualified Health Centers. State lawmakers flagged a discrepancy between figures cited to legislators and what's publicly posted, calling it a transparency issue as budget deadlines approach. Rural healthcare leaders separately argue the funding is insufficient to offset federal Medicaid cuts affecting their systems' stability.
- Industry
STAT Previews Midterm Election Stakes for Drug Pricing, Medicaid Policy
In its STAT+ preview, STAT reports that the outcome of the upcoming midterm elections could drive significant shifts in health care policy, including drug pricing rules, Medicaid funding, and research funding levels. The piece frames these as issues affecting hospitals, pharmaceutical companies, and by extension the state Medicaid programs and providers that depend on federal funding decisions. No specific legislative or regulatory action has occurred yet; the article previews potential outcomes tied to the midterm election results. Medicaid stakeholders should watch how election results could reshape federal funding and drug pricing policy in the coming budget and legislative cycles.
- State Policy · NH
NH Committee Recommends Overhaul of Disability Abuse Reporting System
New Hampshire's System Review Committee finalized recommendations to reform the state's oversight of developmental disability care, following a Bulletin investigation that found hundreds of abuse and neglect incidents in the taxpayer-funded, privately-run care network. Key proposals include a centralized complaint intake system, a single designated lead agency for investigations, a 24/7 reporting hotline, a new 'inconclusive' finding category for investigators, a public education campaign on reporting obligations, and unannounced facility visits. The recommendations target the state Department of Health and Human Services, which currently splits oversight across multiple siloed offices including Medicaid Program Quality, Adult Protective Services, and Licensing and Certification. No implementation timeline was specified in the recommendations released Thursday.
- State Policy · NC
North Carolina Auditor Relaunches Review of Delayed Medicaid IT Project
North Carolina's state auditor is restarting a review of a Medicaid computer-system overhaul that is years behind schedule and has cost hundreds of millions of taxpayer dollars. WRAL Investigates obtained federal documents showing early warnings about the project's problems, along with a prior state audit that was never publicly released. The renewed review affects the state Medicaid agency's technology modernization effort and comes as officials face public scrutiny over cost overruns and delays. State officials are expected to respond to the findings on WRAL-TV broadcasts.
- State Policy · MT
Montana's Early Medicaid Work Requirement Rollout Sparks Confusion
Montana implemented Medicaid work requirements ahead of the national Jan. 1 start date required in most states, requiring beneficiaries to document work, volunteering, or schooling to keep coverage. Beneficiaries and advocates report confusion and anxiety over reporting rules and eligibility verification during the early rollout. The early start makes Montana a preview of implementation problems other states may face when their own work requirements take effect January 1. Enrollees who fail to properly document compliance risk losing coverage, and caseworkers face added administrative burden processing verifications.
Monday, September 28 · 31 stories
- Industry
Novo Nordisk's Trial Drug Outperforms Zepbound in Weight Loss
Novo Nordisk reports that its experimental next-generation obesity drug, positioned as a successor to Wegovy, produced greater weight loss than Eli Lilly's Zepbound in a head-to-head clinical trial. The result intensifies competition in the GLP-1 weight-loss drug market between the two dominant manufacturers. No regulatory approval or launch timeline was announced, and pricing or Medicaid coverage decisions are not yet at issue. For Medicaid stakeholders, the news signals that pipeline competition in this drug class will continue to grow, with implications for future coverage and cost pressure once new products reach market.
- Industry
Study Finds Long COVID Persists Among Healthcare Workers
A new study finds that healthcare workers continue to experience persistent long COVID symptoms, compounding existing workforce burnout and staffing shortages. The findings affect hospitals, nursing facilities, and other providers that serve Medicaid patients and already face labor supply constraints. No specific policy action or effective date is described in this report. The study's findings matter for Medicaid stakeholders because provider workforce shortages directly affect beneficiary access to care, particularly in long-term care and safety-net settings that rely heavily on Medicaid reimbursement.
- Industry · AL
DCH Health System to End Fayette Medical Center Lease Early
DCH Health System and the Fayette County Hospital Board announced they will not continue their lease agreement for Fayette Medical Center, ending it ahead of its scheduled September 30, 2027 expiration. The arrangement began in October 2007 and covered 20 years of hospital operations in Fayette County, Alabama. The release cites financial factors as the reason for winding down the lease, though the exact termination date and transition plan were not detailed in the announcement. The change affects hospital governance and operations in the county, with implications for Medicaid beneficiaries who rely on the facility for care.
- Industry
Fair Health Reports Rising Commercial Delivery Costs Nationwide
Fair Health's Cost of Giving Birth tracker finds the median in-network cost of a vaginal delivery reached $15,728 nationally, up 3.6% year-over-year, while cesarean section costs rose 3.2% to $19,911. The analysis draws on commercial claims data and breaks out costs by state. The report does not address Medicaid-specific reimbursement rates or state Medicaid delivery costs, which are typically set separately through state fee schedules or managed care contracts. It matters for benchmarking maternity cost trends even though the underlying data reflects commercial, not Medicaid, payment levels.