HMA Weekly Roundup

Federal Shifts and the Potential Impacts on Healthcare Quality Oversight

This week, our In Focus section explores how recent federal shifts—particularly under the Trump Administration—are reshaping healthcare quality oversight. Health Management Associates (HMA) has published several analyses on the 2025 Budget Reconciliation Act (H.R. 1, formerly known as the One Big Beautiful Bill, here), Title IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA, here), and the 2025 Centers for Medicare & Medicaid Services (CMS) Quality Conference (here). Together, these federal changes and the policy priority shifts described at the Quality Conference, have implications for monitoring and oversight of healthcare quality for publicly insured, commercially insured, and uninsured individuals.

In this article, HMA experts highlight potential areas for state Medicaid programs, healthcare organizations, and other industry partners to watch for as the rollout of new policies and programs begins to affect programs that monitor quality and creates the imperative to develop new oversight mechanisms.

Overview of Key Federal Policy Shifts

2025 Budget Reconciliation Act/H.R. 1

In July 2025, President Trump signed H.R. 1, the sweeping budget reconciliation legislation that directly affects publicly financed health coverage. Notable policy changes with quality implications include:

• Mandatory six-month redetermination and community engagement for select populations
• Stricter rules on healthcare-related provider taxes and state-directed payment policies
• Elimination of Affordable Care Act (ACA) subsidy eligibility for certain lawfully present immigrants
• An end to conditional eligibility for ACA subsidies, as well as passive re-enrollment
• Required compliance with community engagement and work policies

Personal Responsibility and Work Opportunity Reconciliation Act of 1996

On July 10, 2025, the US Department of Health and Human Services (HHS) and other agencies, redefined “federal public benefits” to exclude individuals with “unsatisfactory immigration status” from certain healthcare programs. Examples include Certified Community Behavioral Health Clinics (CCBHCs), Community Health Centers/Federally Qualified Health Centers (FQHCs), grant-funded programs administered by the Substance Abuse and Mental Health Services Administration (SAMHSA), and Title X Family Planning.

2025 CMS Quality Conference

During the 2025 CMS Quality Conference, Centers for Medicare & Medicaid Services (CMS) Administrator Dr. Mehmet Oz and senior CMS officials, emphasized CMS’s and HHS’s evolving priorities under the Trump Administration. Notable priorities include empowering patients with data, reducing waste and tackling fraud, focusing on prevention, and transitioning to digital quality measures.

Quality Oversight Impacts

Key impacts on quality monitoring programs resulting from these federal changes and evolving priorities include:

Budget constraints elevate monitoring and value-based care metrics. Reduced Medicaid funding and tighter payment rules heighten the need for real-time monitoring of value-based care metrics to ensure financial sustainability in the changing market, optimize reimbursement.

Enrollment changes challenge quality tracking. Tighter eligibility and enrollment policies are expected to decrease enrollment in Medicaid (particularly among the adult expansion population) and the Affordable Care Act Marketplace program. Frequent redeterminations may cause coverage gaps and churn, distorting quality measure denominators and complicating performance tracking – especially for preventive and chronic care metrics.

Specifically, as the population mix in publicly funded programs changes or as gaps in enrollment exceed the 30‒45-day continuous enrollment criteria for many quality measures, the eligible population/denominators of quality measures will likewise fluctuate. Populations that lose coverage or churn on and off eligibility rolls can result in differential impacts for various quality measures (e.g., healthier individuals losing coverage affects prevention measures more than measures of chronic disease care).

Although performance on value-based care quality measures will have increased importance, the ability to track and trend performance will be increasingly challenging. Healthcare organizations will benefit from forecasting potential changes to patient mix and volume and real-time monitoring and improvement opportunities.

Rise in uncompensated care requires new quality monitoring. H.R. 1 changes that reduce eligibility, paired with PRWORA changes that limit treatment for certain individuals who receive public benefits, are likely to lead to increases in the uninsured population and inhibit access to preventive care. These populations tend to use emergency departments more often for health issues that could have been treated earlier or more effectively in outpatient settings, yet quality oversight is limited for populations that receive care outside of publicly or commercially funded programs. New mechanisms for quality oversight—and funding of those mechanisms—will be needed to monitor the health of these populations.

New programs and priorities warrant updated monitoring. H.R. 1’s Rural Health Transformation Program and CMS’s dual-track quality measurement approach (“treating illness” versus “maintaining health”) necessitate a reevaluation of current metrics and monitoring systems.

Implementation of digital quality measures will support these efforts when fully implemented. The accelerated movement toward digital quality measurement and interoperability may create an imperative for healthcare organizations to make the shift. For example, the transition to digital quality measures will be necessary to ensure real-time oversight and improvement of quality measures, population health analytics, maximizing value-based care payments and efficiencies needed to effectively respond to federal changes. At the same time, healthcare organizations will need strategies to effectively deploy digital quality and interoperability within and across their organizations to not just comply, but to maximize their capabilities.

Connect with Us

HMA works with state agencies, payers, health systems, and providers to assess and implement quality systems, value-based care programs, performance improvement and digital health. To discuss how federal changes will affect your organization’s quality programs, contact our featured experts: Jodi Pekkala and David Polakoff.