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Tuesday, July 7 · 24 stories
- 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.
- Managed Care
KLAS Spotlight Profiles RAAPID's AI-Driven Risk Adjustment Coding Platform
KLAS Research published an Emerging Company Spotlight on RAAPID, a vendor offering neuro-symbolic AI solutions designed to improve risk adjustment coding defensibility for health plans. The report includes customer satisfaction ratings and performance assessments from RAAPID clients in 2026. Risk adjustment coding accuracy directly affects capitation payments and audit exposure for Medicaid managed care organizations, particularly as CMS and state agencies intensify oversight of diagnosis reporting and hierarchical condition categories. The spotlight provides comparative data for MCOs evaluating technology vendors to support compliant coding practices.
- Federal Policy
Medicaid Funding Restored for Planned Parenthood Healthcare Services After One-Year Ban
Medicaid funding for Planned Parenthood and other previously excluded healthcare providers has been restored after a one-year ban enacted by Republicans. The providers can now resume billing Medicaid for covered services excluding abortion. The restoration is effective immediately. This affects Medicaid managed care organizations' provider networks and member access to family planning, preventive care, and reproductive health services in states where these providers serve Medicaid enrollees.
- State Policy · OH
Ohio Economists Split on Medicaid Fraud Prevention Bill Awaiting Governor Signature
Ohio's Senate Bill 315, passed by the General Assembly in June 2026, awaits Governor DeWine's signature. The legislation requires the Ohio Department of Medicaid to suspend payments under certain fraud-prevention circumstances and includes other anti-fraud measures. A panel of economists is divided on whether these provisions will effectively reduce Medicaid fraud. The bill's implementation timeline depends on the governor's action.
- Federal Policy · OH
Ohio University Receives $10M from CMS Rural Health Transformation Fund
Ohio University will receive $10 million as the first award from CMS's Rural Health Transformation Program, designed to offset congressional Medicaid cuts. The Athens-based institution was selected from Ohio's allocation under the federal initiative. The program represents CMS's response to budget reductions affecting rural health infrastructure. Timing and specific use requirements for the funds were not detailed in the announcement.
- Legal
CMS Payment Suspensions for Fraud or Overpayment Trigger Compliance Requirements
CMS can temporarily suspend Medicare and Medicaid payments to providers when evidence of overpayment or suspected fraud exists. While suspensions are temporary, they create immediate financial pressure and can lead to exclusion if providers fail to achieve compliance. The suspension authority applies to both fee-for-service and managed care contexts when credible allegations of fraud arise. Providers facing suspension must respond quickly to CMS documentation requests and implement corrective action plans to avoid permanent exclusion from federal healthcare programs.