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Friday, September 25 · 27 stories
- Legal
DOJ and State MFCU Enforcement Rises in Applied Behavior Analysis Billing
Epstein Becker & Green reports that Department of Justice and state Medicaid Fraud Control Unit enforcement activity targeting applied behavior analysis (ABA) providers has increased. The firm advises ABA providers to strengthen compliance programs by monitoring state Medicaid billing rules, scope-of-practice requirements, CMS guidance, and recent OIG audit findings. No specific enforcement actions or effective dates are identified. The guidance addresses compliance risk management for ABA providers billing Medicaid, particularly for behavioral health services.
- Federal Policy
NAMD Submits Comments on CMS Medicaid Enterprise Systems IT Standards RFI
The National Association of Medicaid Directors submitted comments to CMS in response to a request for information on Medicaid Enterprise Systems IT standards. The RFI solicited stakeholder input on technical standards and interoperability requirements for state Medicaid IT systems. State Medicaid agencies are directly affected as these standards will shape future MES certification requirements and enhanced federal funding eligibility. The timing matters because CMS is gathering input to inform future rulemaking on MES modernization and MITA framework requirements.
- Federal Policy
CMS Issues Federal Funding Methodology for Basic Health Program Year 2027
CMS released an informational bulletin outlining the federal funding methodology for the Basic Health Program (BHP) in program year 2027. The guidance details how CMS will calculate federal payments to states operating BHPs — currently Minnesota and New York — for coverage of low-income individuals ineligible for Medicaid but below 200% of the federal poverty level. The methodology takes effect for the program year beginning in 2027. This matters for the two BHP states because the federal payment formula directly determines their program budgets and affects whether BHP remains financially sustainable compared to Marketplace coverage.
- Legal · TN
OIG Finds Tennessee Improperly Claimed Millions in Federal Medicaid Reimbursement for Targeted Case Management
The HHS Office of Inspector General determined that Tennessee claimed federal Medicaid reimbursement for targeted case management services that failed to meet federal and state requirements. The audit identified millions of dollars in improper payments during the review period. Tennessee must repay the improper federal share and strengthen its oversight of targeted case management claims to ensure compliance with Medicaid program requirements. The finding underscores OIG's ongoing scrutiny of state compliance with service-specific billing standards and federal claiming accuracy.
- Industry
Healthcare Executives Prioritize Revenue Cycle and Utilization Management Technology Investments
A new survey finds healthcare providers are directing IT investment toward revenue cycle management tools, while payers focus technology spending on utilization management solutions. The findings reflect strategic priorities tied to financial performance and care management efficiency. The survey did not specify implementation timelines or investment amounts. This trend matters for Medicaid managed care organizations balancing administrative cost ratios with effective care management and accurate claims processing.
- Industry
AHA Launches Week-Long Campaign on Maternal and Child Health
The American Hospital Association will run its Better Health for Mothers and Babies Awareness Week from September 28 through October 2, 2026. The campaign will share hospital and health system stories, resources, and promising practices related to maternal health, neonatal and pediatric care, workforce development, public policy, innovation, and community partnerships. Daily themes include maternal health advances, NICU Awareness Day on September 30, pediatric care innovations, and policy and workforce strategies. The AHA will host a webinar on pediatric behavioral healthcare on September 30 at 2 p.m. ET and provide social media materials, discussion guides, and resources throughout the week for hospitals and health systems to participate.
- State Policy · CA
Watsonville Community Hospital Reports $10M Loss in Six Months, Considers Service Cuts
Watsonville Community Hospital in California lost $10 million in the last six months and $22.4 million in 2025, according to a hospital spokesperson. The hospital's board reviewed potential operational changes at a September 22 retreat, including growth opportunities and possible service closures, amid an $85,000 daily cash shortfall. The hospital's financial distress may affect access to care for Medicaid beneficiaries in the Watsonville area, particularly if services are reduced or eliminated.
- Industry
BCBS Study Finds Hospital AI Billing Tools Added $942M in Excess Costs
The Blue Cross Blue Shield Association released a second study estimating that hospitals' use of AI-assisted billing tools generated approximately $942 million in excess costs to BCBS plans over two years. The findings contribute to an ongoing dispute between hospitals and payers over AI-driven billing and claims practices. The study did not specify a timeframe for the two-year period or detail methodology. For Medicaid managed care organizations contracting with hospitals that deploy AI billing software, the findings suggest potential cost pressures similar to those documented in commercial insurance, though no Medicaid-specific impact data was provided.
- Industry
Aveanna, Addus, and Pennant Discuss 2027 Growth Strategies at Jefferies Conference
Three publicly traded home-based care providers — Aveanna Healthcare, Addus HomeCare, and the Pennant Group — presented at the 2026 Jefferies Healthcare Services and Technology Conference, outlining their growth strategies for 2027 beyond new patient referrals. The presentations occurred last week and focused on how the industry's largest operators plan to expand. These companies serve Medicaid beneficiaries through home health, personal care, and related services, often under managed care contracts or state Medicaid programs. Their growth strategies will affect LTSS service capacity, provider network adequacy, and care delivery models in Medicaid managed care.
- Industry
John Oliver Episode Spotlights UnitedHealth Vertical Integration Amid Cyberattack and Earnings Decline
In a September 20 episode, late-night host John Oliver questioned UnitedHealth Group's current structure amid heightened scrutiny of its vertical integration. The segment follows a period marked by a major cyberattack, declining earnings, and broader regulatory and public attention to the company's combined insurance and provider operations. No specific policy action or enforcement is reported. The episode reflects growing public and political discourse around health care consolidation, particularly involving firms that operate both health plans and clinical services.
- State Policy · AR
Arkansas Awards $54.6M in Second Rural Health Transformation Program Round
Arkansas awarded $54.6 million to dozens of recipients in the second funding round of a federal rural healthcare program, state officials announced Thursday. The Rural Health Transformation Program, established through the 2025 One Big Beautiful Bill Act, provides $50 billion to states over five years for projects supporting rural healthcare infrastructure and services. The awards support facility improvements, workforce recruitment, telehealth expansion, and care coordination initiatives across rural communities. For Medicaid managed care plans and providers operating in rural Arkansas counties, these investments may strengthen network capacity and access in historically underserved areas where network adequacy has been challenging.
- Legal · IA
Iowa Medicaid Fraud Elimination Task Force Defers Staffing Recommendations
Iowa Attorney General Brenna Bird stated Thursday that the state Medicaid Fraud Elimination Task Force, established by Governor Kim Reynolds on July 1, will address staffing and funding recommendations for the Medicaid Fraud Control Unit at future meetings rather than immediately. The task force is charged with submitting a final report at a date not specified in the source article. Critics have called for increased resources for fraud control efforts. The development affects Iowa's Medicaid program integrity operations and state enforcement capacity.
- State Policy · NC
North Carolina Restores Perinatal Quality Collaborative After Medicaid Funding Dispute
North Carolina has restored funding for the Perinatal Quality Collaborative of North Carolina, enabling dozens of hospitals statewide to participate in maternal and newborn care research beginning next year. The collaborative lost funding in October 2025 due to a Medicaid funding dispute, delaying planned research projects that were originally scheduled to launch in 2025. The restoration allows the state's hospitals to resume quality improvement work targeting maternal and perinatal outcomes. This matters for North Carolina providers and state Medicaid officials managing maternal health initiatives under heightened federal scrutiny of maternal outcomes.
- Federal Policy
CMS Seeks Comment on Generic Clearance for State Plan Amendments and Waiver Information Collections
CMS has published a Federal Register notice requesting public comment on one or more information collection requests under its existing Paperwork Reduction Act generic clearance umbrella (control number 0938-1148). The umbrella, approved in April 2021, covers Medicaid and CHIP state plan amendments, waivers, demonstrations, and reporting requirements. Comments are due 60 days from publication. The generic clearance process allows CMS to expedite approval of voluntary, low-burden information collections that do not raise substantive policy issues, streamlining the agency's ability to request information from states without full PRA review for each individual collection.
- Federal Policy
CMS Re-Establishes Data Match With Treasury Do Not Pay System
CMS has re-established a computer matching program with the U.S. Department of the Treasury's Do Not Pay Working System, administered by the Bureau of Fiscal Service. The match enables CMS to verify payment eligibility and prevent improper payments across Medicare and Medicaid by cross-referencing beneficiary and provider data against federal databases tracking death records, excluded parties, and debarred entities. The re-establishment continues an existing fraud prevention tool used by CMS to support program integrity efforts. The match affects CMS payment operations and supports state Medicaid agencies' ability to identify ineligible providers or payments flagged through federal screening.
- Federal Policy
Senate Finance Committee Advances Chris Klomp Nomination for HHS Deputy Secretary
The Senate Finance Committee on September 24, 2026, advanced Chris Klomp's nomination for deputy secretary of the Department of Health and Human Services by a 15-12 vote, sending it to the full Senate. Klomp currently serves as director of Medicare and deputy administrator at CMS. The nomination now awaits a floor vote. If confirmed, Klomp would hold the second-highest position at HHS, with oversight authority spanning CMS, including Medicaid and CHIP operations, along with other departmental programs.
- State Policy · ID
Idaho Lawmakers Seek Payment, Prior Authorization Protections in Medicaid Transition
Idaho's Medicaid Review Panel heard updates on the state's transition to a new service delivery model, with legislators emphasizing the need for timely provider payments and prior authorization decisions. The article does not specify what new model Idaho is adopting, when the transition takes effect, or what triggered the legislative focus. Medicaid recipients testified on service coordination concerns. The development suggests Idaho is restructuring its delivery system with legislative oversight of operational safeguards for providers and beneficiaries.
- State Policy · NY
190,000 New York CDPAP Caregivers File for Union Election with 1199SEIU
Caregivers in New York's Consumer-Directed Personal Assistance Program (CDPAP) have filed for a union election with 1199SEIU United Healthcare Workers East. If successful, 190,000 self-directed Medicaid home care workers would join the union. The filing sets the stage for a vote that could reshape labor relations in New York's largest self-directed personal care program. For Medicaid managed care plans administering CDPAP benefits, unionization could affect caregiver wage rates, contracting terms, and administrative costs tied to CDPAP services.
- State Policy · DE
Delaware Awards $23M to Local Health Centers Ahead of Federal Medicaid Cuts
Delaware has awarded $23 million to three local medical centers as the state prepares for federal Medicaid funding reductions set to take effect later this year. The awards are part of Delaware's strategy to stabilize its healthcare infrastructure as both Medicaid cuts and rising commercial insurance rates threaten access. The investments target health centers serving Medicaid and uninsured populations, positioning safety-net providers to absorb increased demand as federal support declines. The timing reflects state anticipation of coverage losses and shifts in payer mix once federal cuts are implemented.
Thursday, September 24 · 28 stories
- Industry
LHC Group Reports Patient Data Breach After Employee Phishing Attack
LHC Group, a home health and hospice provider owned by UnitedHealth Group's Optum, disclosed a data breach stemming from a voice phishing (vishing) attack on an employee. The company became aware of the incident on April 7, 2026, and issued a public notice in September 2026. Patient information was exposed in the breach. The notice does not specify the number of affected individuals or what types of patient data were compromised.