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Monday, September 28 · 31 stories
- Federal Policy
Trump Administration Plans to Reshore Production of 86 Key Drugs
According to a Sept. 25 Bloomberg report cited by Becker's Hospital Review, the Trump administration is developing an initiative to move manufacturing of 86 essential medicines to the U.S. within 18 months. Under the plan, the Office of Management and Budget would solicit proposals from healthcare industry stakeholders on how to reshore production of drugs on the list. The report does not specify an effective date or regulatory vehicle for the initiative. Because many of the listed medicines are generics commonly used in Medicaid populations, supply chain shifts could affect drug availability and pricing that state Medicaid pharmacy programs and MCOs manage.
- Industry
R1 Completes Acquisition of Prior Authorization AI Firm Humata Health
R1 has closed its acquisition of Humata Health, an AI-powered touchless prior authorization company, following an August announcement of the deal. The acquisition supports R1's stated strategy to automate revenue cycle operations through its Phare Operating platform. Health systems and providers using R1's revenue cycle services may see prior authorization workflows increasingly automated as the technology is integrated. The deal reflects broader industry investment in AI tools to speed up prior authorization, a process that affects Medicaid MCO utilization management and provider administrative burden.
- Industry
Insurers, Billing Vendors Clash Over AI's Impact on Health Costs
An insurance industry report claims that AI-powered billing tools used by providers could add billions of dollars in extra health spending. Billing technology companies dispute that framing, arguing the underlying problem is the complexity of the healthcare billing system itself rather than AI tools. Providers, payers, and billing vendors are affected as this dispute shapes how AI-driven coding and claims practices get scrutinized going forward. No specific effective date or regulatory action is described in the report.
- Federal Policy
CMS Cancels 760,000 ACA Enrollments, Halts New Broker Sign-Ups
CMS cancelled roughly 760,000 individual Affordable Care Act Marketplace enrollments and imposed a temporary moratorium on registering new agents and brokers for plan year 2027, effective September 22, 2026. The action accompanies enhanced verification requirements aimed at curbing improper or unauthorized enrollments in ACA plans. Agents, brokers, health plans, and affected consumers must adjust to stricter oversight and potential enrollment disruptions during the moratorium period. Morgan Lewis reports the moves signal a broader shift toward more aggressive CMS scrutiny of Marketplace enrollment integrity.
- Federal Policy
Study Finds Sudden Infant Death Widening Black-White Mortality Gap
A study published Sept. 22 in JAMA Network Open found that the gap in infant mortality rates between Black and white babies widened between 2020 and 2024, with sudden unexpected infant death identified as the largest single driver of the disparity. Researchers analyzed federal birth and infant death records covering nearly 58 million live births to reach these findings. The study does not describe a specific policy action or regulatory change tied to the findings. For Medicaid programs, which finance a large share of births and infant care, the research underscores persistent racial disparities in birth outcomes relevant to maternal and infant health initiatives.
- State Policy · CO
Colorado to Receive $169 Million for Rural Health Services
CMS announced $169 million in federal funding to expand specialty care, strengthen emergency services, and improve access to blood transfusions for patients in Colorado. The funding targets rural and underserved areas of the state, aiming to close gaps in specialty and emergency care access. The press release does not specify an effective date or application deadline, nor does it name the specific funding mechanism behind the award. For state Medicaid officials and rural providers in Colorado, the funding could support infrastructure and service expansion tied to Medicaid beneficiary access in areas with historically limited care options.
- State Policy · CA
California Governor Candidates Offer Vague Health Cost Plans Ahead of Medi-Cal Cuts
California gubernatorial candidates Xavier Becerra (Democrat) and Steve Hilton (Republican) have each outlined broad health care affordability goals but have not detailed how they would pay for them, according to CalMatters. Becerra says he wants universal coverage and to cut administrative waste but has declined interview requests and specific policy questions. Hilton released a 'Working Class Health Care Guarantee' proposing price transparency and replacing part of Medi-Cal with personal health spending accounts, though it faces long odds in the Democrat-controlled legislature. The stakes are high for Medi-Cal enrollees, who face significant federal rule changes taking effect January 1 that are expected to cause coverage losses regardless of who wins the governor's race.</br>
- Legal
DOJ Revises Justice Manual on FCA Guidance Use, Qui Tam Dismissals
In a client alert, Bass, Berry & Sims reports that the Department of Justice has revised its Justice Manual to limit reliance on sub-regulatory guidance to establish legal duties in False Claims Act cases and to expand DOJ's use of dismissal authority over qui tam suits. The firm notes that guidance documents such as CMS manuals and Local Coverage Determinations remain usable as evidence of scienter, notice, industry standards, and medical necessity, even though they cannot themselves create the underlying legal obligation. Healthcare providers and Medicaid managed care organizations facing FCA exposure are most affected, since many billing and coverage disputes turn on sub-regulatory guidance. The firm does not specify an effective date for the revisions in the excerpt provided.
- Legal · GA
OIG Reviews Georgia Medicaid Fraud Control Unit's 2024 Operations
HHS OIG conducted its periodic onsite inspection of Georgia's Medicaid Fraud Control Unit, evaluating the unit's caseload, staffing, training, and compliance with federal performance standards for 2024. Medicaid Fraud Control Units investigate and prosecute provider fraud and patient abuse or neglect in Medicaid-funded facilities, and OIG's inspections assess whether states are meeting federal operational and reporting requirements. The report covers findings and any recommendations for Georgia's unit as of the 2024 review period. State Medicaid agencies and program integrity stakeholders use these reports to benchmark fraud unit performance and identify operational gaps.
- Legal
Brief Details Medicaid Fraud Control Units' Caseload and Outcomes
A policy brief explains how Medicaid Fraud Control Units (MFCUs) function within state program integrity efforts, drawing on caseload and case outcome data to describe their operations and current challenges. MFCUs investigate and prosecute provider fraud and patient abuse or neglect in Medicaid-funded facilities, working alongside state Medicaid agencies and federal oversight bodies. The brief does not describe a new rule or event but compiles background and data on unit performance and the issues they currently face. State Medicaid agencies, providers, and compliance officials rely on understanding MFCU activity to gauge fraud enforcement risk and program integrity priorities.
- State Policy · OH
Ohio Medicaid Proposes Overhaul of Behavioral Health Coverage Rules
The Ohio Department of Medicaid has circulated proposed rulemaking covering 11 rules, six to be amended and five rescinded and replaced, that would significantly restructure Medicaid-covered behavioral health services statewide. The changes would affect nearly every community behavioral health provider in Ohio, altering coverage requirements and service standards. The client alert from Shumaker, Loop & Kendrick outlines the scope of the proposal but does not specify a comment deadline or effective date. Providers should review the proposed rules closely given the breadth of the restructuring and its potential impact on billing, documentation, and service delivery.
- Federal Policy
Senate Democrats Question Kennedy Ethics Compliance on Vaccine Lawsuit Divestment
Senate Democrats are questioning whether HHS Secretary Robert F. Kennedy Jr. potentially violated his ethics agreement by allegedly concealing an arrangement to collect money from a settlement with a vaccine manufacturer. Kennedy pledged to divest from the lawsuit during his confirmation process last year. The senators' inquiry raises concerns about potential conflicts of interest at the federal agency overseeing Medicaid and other health programs. The matter is significant for Medicaid stakeholders because Kennedy's leadership of HHS includes oversight of CMS, which administers the Medicaid program and sets immunization policy affecting coverage requirements for state programs and managed care plans.
- State Policy · OR
Oregon Warns Consumers Against Limited-Benefit Self-Funded Plans Ahead of Open Enrollment
Oregon's Department of Consumer and Business Services issued a consumer warning about self-funded limited partner plans that promise low premiums but typically cover only preventive care, leaving enrollees exposed to large medical bills. The warning comes as open enrollment for individual coverage begins November 1, with ACA-compliant premiums rising nearly 22% and subsidies shrinking. Regulators identified specific warning signs and companies marketing these non-ACA-compliant plans, which often misrepresent consumers as "limited partners" or "employees" to avoid consumer protection rules. The advisory matters for Medicaid stakeholders because cost-pressured consumers dropping or avoiding Marketplace coverage due to premium increases may cycle into Medicaid eligibility or present as uncompensated care for safety-net providers.
- Federal Policy
CMS Proposes Reduced Payment for Same-Day Evaluation and Procedure Services
CMS has proposed a rule to reduce Medicare payment for evaluation and management services performed on the same day as a procedure, paying full price for the more expensive service and a reduced rate for the second to account for shared costs. The change would affect how providers bill Medicare Part B for same-day services, such as when a dermatologist evaluates a patient and immediately performs a removal procedure during the same visit. The proposal aims to eliminate duplicative billing and reduce out-of-pocket costs for Medicare beneficiaries, who currently pay copayments based on the full rate for both services. The rule would lower costs for patients and taxpayers by preventing Medicare from paying twice for overlapping service components.
- State Policy
SHVS Toolkit Illustrates State Medicaid Work Requirement Evaluation and Compliance Process
State Health and Value Strategies published a toolkit demonstrating how states apply work reporting requirements in Medicaid, including the stepwise process for determining member exemptions, verifying qualifying activities, and managing noncompliance. The toolkit walks through evaluation hierarchies, mandatory and short-term hardship exceptions, and data verification procedures using member scenarios. It provides operational guidance for states implementing or managing work requirement programs under federal approval.
- Federal Policy
SAMHSA Awards $247.9 Million in Behavioral Health Grants
The Substance Abuse and Mental Health Services Administration announced September 25 that it awarded $247.9 million in grants to expand access to addiction treatment, mental health services, and recovery support. The funds will support school-based mental health services, trauma treatment for children and families, overdose reversal efforts by first responders and communities, and employment support for people in recovery. The awards take effect immediately for grantees nationwide. For state Medicaid agencies and managed care organizations, these federal grants represent new resources that may complement or coordinate with Medicaid-funded behavioral health services, particularly for populations eligible for both programs.
- Federal Policy
CMS Strengthens Federal ACA Marketplace Anti-Fraud Efforts
In its Health Care Week in Review, Alston & Bird reports that CMS has strengthened anti-fraud efforts for the federal ACA marketplace. The changes affect health plans participating in the federal exchange and brokers or agents facilitating enrollment. The timing and specific measures were not detailed in the available summary. The action reflects CMS's continued focus on program integrity in marketplace operations, with potential compliance implications for participating insurers and enrollment entities.
- State Policy · VT
Vermont Orders UVM Medical Center to Submit Medical Education Funding Plan by December
Vermont's Green Mountain Care Board approved UVM Medical Center's 2027 budget with conditions requiring the hospital to form a public working group and submit a plan by December 15, 2026 for how it funds medical education. The order follows a July analysis finding the medical center spent $161 million on medical education in 2025, with $82 million paid by commercial insurers — a cost projected to reach $88 million in 2026. The working group must examine the role, expenses, and benefits of the Larner College of Medicine and residency programs, with the care board voting on approval by January 15, 2027. UVM Health leaders say they will focus on filling workforce gaps in primary care, mental health, and anesthesiology.
- Managed Care
Utilization Management Emerges as Key Challenge for Healthcare AI Adoption
Healthcare AI developers face significant technical and operational barriers in applying artificial intelligence to utilization management and prior authorization processes. The challenge lies in predicting reimbursement outcomes before denials occur, requiring AI systems to navigate complex medical necessity criteria, payer-specific coverage policies, and claims adjudication logic that varies across health plans and service categories. For Medicaid managed care organizations, this affects the feasibility of AI-driven automation in authorization workflows, claims processing, and appeals management. The difficulty stems from the need to replicate payer decision-making logic across thousands of procedure-diagnosis combinations and benefit design variations.
- Industry
Bipartisan Federal Legislation Targets PBM Vertical Integration
Two states have enacted laws barring pharmacy benefit managers from owning retail pharmacies, addressing vertical integration models like CVS Health's. A federal bill with bipartisan sponsors would extend this prohibition nationwide. The proposal unites Republicans traditionally opposed to market intervention with Democrats more comfortable with regulatory oversight. For Medicaid managed care plans and carved-out PBM arrangements, any federal restriction on vertical integration would fundamentally reshape pharmacy network structures and vendor contracting options.
