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Rural Health Transformation Program: The Window to Build Sustainable Change Is Now

The Rural Health Transformation Program (RHTP) is entering a critical implementation phase. As states begin deploying historic federal investments in rural healthcare, attention is shifting from grant awards to execution, performance measurement, and sustainability. Recent Centers for Medicare & Medicaid Services (CMS) approvals of additional state RHTP initiatives, coupled with upcoming reporting requirements and future funding determinations, are heightening the focus on how states, providers, technology companies, and community organizations will demonstrate progress and long-term value.

This article examines emerging themes in RHTP implementation, including the growing emphasis on chronic disease prevention, technology-enabled care delivery, performance measurement, and sustainability planning. Health Management Associates’s (HMA) multidisciplinary teams also are available to support organizations seeking to maximize the long-term value of RHTP investments beyond the initial federal funding period.

Common Priorities Emerging in State Rural Health Transformation Program Plans

State RHTP strategies vary considerably; however, state applications share several priorities aligned with CMS’s funding priorities. Technology modernization, telehealth, workforce development, chronic disease management, behavioral health, maternal health, and care coordination appear throughout state proposals. Through its work with states, providers, and rural communities, Health Management Associates (HMA) has identified another common thread across applications: rural health challenges are deeply interconnected.

Providers struggling with workforce shortages are often serving populations with higher rates of chronic disease. Communities facing limited specialty access frequently experience transportation barriers and gaps in digital connectivity. Behavioral health needs intersect with physical health conditions, maternal health outcomes, and emergency department utilization. States are responding by increasing their focus on and pursuit of broader transformation strategies.

During a recent HMA webinar, RHTP Beyond the Grant Approval: Building Sustainable Rural Transformation, speakers highlighted one of the most important directional lessons emerging from early RHTP implementation: technology, workforce, access, care delivery, and prevention strategies must be designed as mutually reinforcing investments and not as siloed initiatives.

Chronic Disease Prevention and Management Is Central to Rural Health Transformation

Our work with states and their RHTP partners indicates that chronic disease prevention, monitoring, and management have become a central organizing principle for many RHTP investments. Technology modernization, telehealth expansion, workforce initiatives, behavioral health integration, and community-based care models are frequently being positioned as complementary strategies to improve population health and address the conditions that drive preventable morbidity, mortality, and healthcare costs in rural communities. This includes ensuring rural residents receive care earlier, stay connected and engaged in their care longer, and avoid preventable deterioration in health status.

As HMA experts discussed during the recent webinar, this represents an important shift. Historically, many healthcare systems have been structured around treating disease after complications emerge. RHTP creates an opportunity to invest in more effective models, including those that can identify risk sooner, improve follow-up with patients, and strengthen connections between patients and care teams.

Telehealth, Data Platforms, and AI Support in Rural Health Transformation

Technology appears throughout nearly every state strategy and is often viewed as one of the most visible components of RHTP. HMA webinar speakers emphasized that technology is a vital enabling capability in RHTP initiatives.

Technology alone is unlikely to produce meaningful transformation.

HMA is working with states and their partners on strategic approaches to technology adoption. For example, states, providers, care teams, and patients should consider technology initiatives that can strengthen care models, extend workforce capacity, improve coordination and collaboration in support of population health, and generate actionable insights.

Sustainability Planning Must Begin Early in the Rural Health Transformation Program

Every state and RHTP participant understands that this federal funding is temporary. The urgent challenge is to identify, early and explicitly, which initiatives can produce enough value to warrant ongoing support after the funding period concludes.

While some states awarded the first year of RHTP funding quickly, many of these awards may serve as a bridge while states establish the structures and policies needed to support long-term RHTP initiatives. CMS’s reporting and ongoing evaluation of RHTP programs will require states to embed sustainability into program design, governance, measurement, financing, and partnerships from the outset.

States will need to provide RHTP participants with clear baselines and direction on meaningful outcomes. It also requires thinking beyond grant budgets to identify long-term operational and financial models capable of supporting ongoing services.

What States, Providers, and Technology Partners Should Do Next

The window for shaping long-term RHTP success is open now. State and local government and partner organizations have an opportunity to move beyond individual projects and build integrated strategies.

HMA’s multidisciplinary teams support program design, implementation planning, data strategy, technology modernization, performance measurement, governance, financing strategy, partnership development, and sustainability planning. As states and RHTP participants make decisions regarding governance, technology, data strategy, care models, and performance measurement, HMA can help ensure decisions and investments are optimized to make the progress needed to secure future funding and sustain transformation beyond the grant period.

Connecting the Dots: Medicaid Program Integrity Enters a New Era of Strategy and Operational Readiness

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There is no shortage of news, federal activity, and operational urgency concerning fraud, waste, and abuse (FWA) in healthcare. Across Medicare, Medicaid, the Affordable Care Act Marketplaces, and other federally funded health programs, the executive branch is advancing a more aggressive program integrity agenda. The US Department of Health and Human Services (HHS), including the Centers for Medicare & Medicaid Services (CMS) and HHS Office of Inspector General, as well as the US Department of Justice, are placing greater emphasis on payment accuracy, provider and vendor oversight, data-driven detection, and defensible compliance processes.

As scrutiny intensifies, organizations across the healthcare ecosystem are challenged to move beyond traditional audit and recovery activities toward a more proactive, enterprise-wide approach to managing risk and preventing FWA. Although these trends affect all healthcare stakeholders, the implications for Medicaid are particularly significant given the program’s scale, complexity, and reliance on partnerships among state agencies, managed care organizations, providers, and technology vendors.

To better understand how organizations should respond, Jennifer Colamonico connected with Clint Eisenhower, Regional Director at Health Management Associates (HMA), and Jennifer Bridgeforth, Associate Principal at HMA. The discussion below incorporates insights from HMA colleagues Christine Rein, Amber Swartzell, and Elizabeth Linville, who joined HMA’s August 12, 2026, webinar on how new program integrity expectations are affecting Medicaid payment, operations, and compliance strategies.

Jennifer Colamonico: We hear a lot lately about heightened scrutiny and program integrity. What’s fundamentally different about this moment from what Medicaid leaders and their organizations have experienced in the past?

Clint Eisenhower: The biggest shift is that program integrity can no longer be viewed as a narrow compliance function. What we are seeing now is a move toward enterprise accountability—and we are really at the outset of this journey. Program integrity touches finance, operations, eligibility, screening, compliance, provider oversight, analytics, clinical teams, procurement, technology, and leadership decision-making. A provider issue can become a payment issue. A data gap can become an audit issue. A documentation weakness can become a compliance issue. The organizations that are best positioned are the ones that understand how those functions connect and can demonstrate that they are managing risk in a coordinated, evidence-based way.

From a leadership standpoint, leaders of Medicaid organizations can’t simply ask whether they have a program integrity function. We know—and federal and state regulators know—that most organizations do. Instead, leaders need to ask whether that function is designed to withstand increasing scrutiny while it also helps the organization manage risk, support stronger operational performance, and continue to serve Medicaid beneficiaries effectively.

Q: Many organizations are trying to figure out whether this is just another enforcement cycle or something more significant. How are you advising clients to think about the current level of federal scrutiny?

Eisenhower: Every organization should be asking where its greatest vulnerabilities are—whether its controls, oversight processes, policies or operational capabilities may not be sufficient to address them. From there, leaders can prioritize what should be addressed now and what can be phased in.

We’ve worked with agencies and organizations first on the objective assessment of their risk and moved to translate the findings into operational change, which may include developing roadmaps, updated workflows, and& stronger policies, among other actions.

Q: There’s a lot of discussion about moving beyond the traditional pay-and-chase model, but what does a program integrity-first approach look like in practice?

Jennifer Bridgeforth:HMA is working with many state leaders and healthcare organizations that are navigating significant changes across Medicaid financing, eligibility and enrollment systems, and program administration. At the same time, new federal policy and budget constraints are prompting many states to rethink how services are delivered, managed, and financed. Whether a state is redesigning benefits, implementing new eligibility processes, restructuring payment approaches, or pursuing broader delivery system reforms, program integrity considerations need to be embedded into those decisions from day one.

That includes documentation requirements, monitoring protocols, data validation, and accountability structures built into the program design.

It also means aligning oversight efforts with emerging federal and state priorities. We are seeing increased attention on areas such as nonemergency medical transportation, applied behavior analysis, personal care services, durable medical equipment, and behavioral health services, as well as techniques such as evaluation and management coding, and identifying high-volume billing patterns. Medicaid leaders need to design programs and workflows that identify risks earlier, support appropriate access to care, and create feedback loops that strengthen operations over time, reducing reliance on a traditional pay-and-chase approach.

Q: One challenge we hear about frequently is how to strengthen oversight without creating barriers to care. How can organizations strike that balance, particularly in areas like behavioral health and applied behavior analysis (ABA), where access is already strained?

Bridgeforth: That balance is critical. Many of the areas under scrutiny are also in which there is tremendous demand and, in some markets, a shortage of providers. ABA and behavioral health are good examples. The answer cannot be to discourage appropriate access. Instead, organizations need stronger documentation, clearer policies, better training, and a shared understanding of what compliant billing and service delivery look like.

Provider education is one of the most important tools. When providers are asked to document more or differently, it can feel like administrative burden. Education has to explain not only what the requirements are, but why they matter.

Eisenhower: Health plans and providers have a strategic opportunity here. States still need partners to help achieve access goals and improve outcomes. Plans, providers, and vendors that can demonstrate strong program integrity policies and effective oversight can position themselves as trusted partners. They help states pursue access and quality goals with greater confidence that those initiatives will not create unnecessary compliance exposure.

Q: Organizations are investing heavily in analytics and AI capabilities. Where do you see the greatest opportunity for these tools to strengthen program integrity efforts?

Bridgeforth: Advanced analytics and AI are becoming increasingly important for detection and prevention. Real-time monitoring, claims pattern analysis, and predictive tools can help organizations identify risk earlier and take action before issues become larger findings or recoveries. But technology is valuable only if the organization has the governance, workflows, documentation, and case management processes to act on the data that the tools identify.

Cross-program compliance is also important. Many organizations operate across Medicaid, Medicare, Marketplace, commercial, and other public programs. When program integrity is approached at the enterprise level, improvements in one area can strengthen compliance across multiple product lines or programs.

Q: You’ve worked with states and healthcare organizations at very different stages of maturity. What are some of the most common gaps or challenges you’re helping clients address today?

Bridgeforth:We’ve worked with organizations atvery different stages of maturity.For example, we supported an organizational assessment and gap analysis that helped a client identify major opportunities across its program integrity function. The team developed a roadmap organized across seven FWA pillars, identified 52 enhancement opportunities, translated those into 184 key actions, and developed 116 success measures so leadership could monitor progress over time.

HMA and HealthTech Solutions, an HMA Company, also supported a statewide implementation that included electronic visit verification improvements, prepayment analytics, post-payment analytics, and modernization of claims review processes. The effort the state move from manual, reactive processes toward a more proactive model, with insights from post-payment analytics informing prepayment edits that could be updated in weeks rather than months.

Q: If you’re a Medicaid leader looking ahead to the next 12 to 24 months, what should be at the top of your program integrity agenda?

Eisenhower: Many of the steps that reduce program integrity risk are the same steps that help organizations perform better: stronger governance, better data, clearer accountability, more consistent workflows, improved provider relationships, and effective monitoring. The upside is not only avoiding findings or reducing audit exposure. It is also ensuring Medicaid dollars are directed to the right beneficiaries, the right services, the right providers, and the right outcomes.

How HMA Can Help

HMA helps states, health plans, providers, and healthcare organizations assess program integrity risk, strengthen governance and compliance infrastructure, design and implement payment integrity strategies, support provider education, modernize analytics and monitoring, and translate findings into measurable operational improvements. HMA can meet organizations where they are, whether they need a targeted assessment, a phased roadmap, implementation support, data analytics support, or enterprise-wide program integrity transformation.

For more information, go to: https://www.healthmanagement.com/services/our-medicaid-consultants-help-you-develop-innovative-strategies/.

SFY 2027 Budgets Signal How States Are Responding to Medicaid and SNAP Funding Provisions in the WFTCA

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State fiscal year (SFY) 2027 budgets provide insights into how states are responding to the Medicaid and Supplemental Nutrition Assistance Program (SNAP) funding and operational changes included in the 2025 budget reconciliation legislation, P.L. 119-21, the Working Families Tax Cut Act (WFTCA). Many of the law’s most significant changes will phase in, with full implementation set for 2029. Nonetheless, states are already adjusting their budgets, operational infrastructures, eligibility requirements, and financial strategies to address WFTCA’s new administrative requirements, reductions in federal Medicaid funding, and increased SNAP cost sharing responsibilities, among other reforms.

In its newly updated report, Fiscal Year 2027 Enacted State Budget Overview (subscriber access required), Health Management Associates Information Services (HMAIS), examined state Medicaid agency funding and budget provisions that signal how states are preparing for WFTCA implementation. As of July 31, 2026, all states except South Carolina had enacted their SFY 2027 budgets, and many states that enacted two-year spending plans in 2025 have now approved supplemental budgets. Some states are investing in staffing, eligibility systems, compliance activities, and other infrastructure to maintain coverage and services wherever possible, while others are identifying reductions or alternative funding strategies as they look ahead to more limited federal funding and future budget tradeoffs.

Following is a snapshot of the key trends and state responses to WFTCA policies, which the full report covers in more detail.

Medicaid and SNAP Policy Changes Shaping State FY 2027 Budgets

Major WFTCA provisions affecting state budgets include work/community engagement requirements and more frequent eligibility checks for expansion beneficiaries, an increased state share of SNAP administrative costs, and restrictions on provider taxes and state directed payments.

Medicaid Community Engagement Requirements Drive New State Investments. States that expanded Medicaid eligibility through the Affordable Care Act (ACA) must implement an 80-hour per month community engagement/work requirement for expansion populations by January 1, 2027. These enrollees will also be subject to six-month eligibility reviews.

In anticipation of significant administrative demands, states allocated funding for more staff, IT enhancements, provider and community education, as well as public education to assist individuals subject to the new requirements. States already had been working to meet this requirement before the Centers for Medicare & Medicaid Services (CMS) released the Medicaid Community Engagement Requirement for Certain Individuals Interim Final Rule (CMS-2454-IFC) on June 1, 2026. They may need to adjust their funding requests and implementation strategies to align with the new federal mandates. Examples of state responses include:

Illinois allocated $55 million to the Department of Human Services to hire 450 additional staff and update eligibility determination systems to implement new eligibility and work requirements for Medicaid and SNAP.
Kentucky’s biennial budget includes $35 million in SFY 2027 and $11 million in SFY 2028 to implement Medicaid work and community engagement requirements and other related needs.
Maine’s supplemental SFY 2025–27 budget includes funding to establish 35 eligibility specialist positions as well as other workers to implement work requirements.

States Budget for Higher SNAP Administrative Costs and Error Rate Penalties. States are now responsible for 75% of SNAP administrative costs, up from 50% previously. Beginning in federal fiscal year 2028, the WFTCA imposes a cost sharing requirement on states that have a SNAP payment error rate of more than 6%. In response, many states included funding or budget language to address these new fiscal and administrative responsibilities. Examples include:

Arizona is allocating $31.8 million for the Department of Economic Security to cover the larger state share of administrative costs, as well as $10.8 million and 88 full-time equivalent (FTE) positions to reduce the SNAP error rate.
California’s Department of Social Services is set to receive a $30.6 million general fund increase to account for the increase state share of administrative expenses, a nearly $8 million total increase for CalFresh staffing for WFTCA and federal changes and a $4.8 million total increase for enhanced monitoring of CalFresh to meet new error rate requirements.
Florida is setting aside $4 million for the Department of Children and Families to procure a vendor to help reduce the SNAP error rate.
Iowa included an increase of $8.7 million for the increased state share of SNAP administrative costs.
Applying a slightly different approach to the error rate, Alabama’s budget requires the Department of Human Resources to develop a plan that will modify SNAP benefits or eligibility as necessary to cover any penalty imposed on the state in SFY 2028.

States Assess the Impact of Federal Restrictions on Medicaid Financing Tools. The WFTCA freezes current provider tax programs, bars new ones, and requires Medicaid expansion states to phase down the minimum allowable tax rate from 6% to 3.5% by 2032. It also caps state directed payments at 100% of Medicare rates for expansion states and 110% for non-expansion states. Grandfathered payment arrangements will be phased down by 10% annually beginning in 2028.

While this provision will not fully impact states until the next fiscal year, some states are already alerting policymakers and Medicaid organizations that the change will significantly affect their approach to financing the state share of Medicaid costs. States signaling the challenges ahead include:

New York reported that its assessment tax on managed care organizations (MCOs) is noncompliant with WFTCA.
California’s MCO tax is also noncompliant and will expire December 31, 2026. The state’s budget does include an WFTCA-compliant tax that will generate $575 million in SFY 2027, $2.3 billion in SFYs 2028 and 2029, and $1.7 billion in SFY 2030.
Although West Virginia’s final budget includes $877 million from Health Care Provider Tax collections to cover medical services and associated administrative costs, this amount is $46.1 million more than was included in Gov. Patrick Morrisey’s proposed budget. The governor’s proposed budget highlighted how the state will be able to rely less on funds accrued from this tax because of the WFTCA’s limits on provider taxes.

States Increase Investments in Program Integrity and Fraud Prevention

Multiple state budgets also account for the federal government’s crackdown on fraud, waste, and abuse (FWA) in Medicaid and other public benefit programs. Missouri’s Department of Social Services budget includes $17.9 million for the Missouri Medicaid Audit and Compliance Unit to design, implement, maintain, and operate a Medicaid provider enrollment system; $7 million for a case management, provider enrollment, and fraud detection system; and $6.7 million to expand efforts to eliminate fraud through proactive measures using data analytics.

Florida allocated $10.8 million total to combat public assistance fraud, including $2 million in nonrecurring state funds for the Department of Financial Services to competitively procure and implement a public assistance fraud software solution to prevent, detect, and investigate SNAP fraud.

In addition, Rhode Island’s budget establishes an Office of the Inspector General to combat FWA of public funds; Arizona is increasing staff for its Medicaid Fraud Control Unit by four FTE positions; and Colorado included funds to improve the state’s provider directory and conduct a pediatric behavioral therapy audit.

WFTCA Could Reshape Medicaid Financing, Enrollment, and Market Strategy

The WFTCA will reshape Medicaid financing, eligibility, enrollment, and program operations over the next several years, requiring states, health plans, providers, and other stakeholders to adapt to an evolving policy and market landscape. Although many provisions phase in through 2029, SFY 2027 budgets demonstrate that implementation is already underway. New York, for example, projects annual federal funding for Medicaid and the Essential Plan will decline from $77.5 billion in SFY 2027 to $68.5 billion in SFY 2030—a nearly $10 billion annual reduction. California estimates federal community engagement requirements could reduce program costs by $357.6 million in SFY 2027 and approximately $9.6 billion through SFY 2029–30.

HMA Helps Organizations Navigate Medicaid Transformation and WFTCA Implementation

States and other stakeholders will need to continue to adapt as the full effects of WFTCA and other federal priorities take hold. Health Management Associates (HMA) brings the expertise, tools, and insights needed for stakeholders to stay on top of the rapidly changing environment. Contact HMA’s Medicaid experts to discuss how state budget and policy decisions affect your organization’s strategy, operations, and long-term positioning in this evolving healthcare landscape.

The full report is available to HMAIS subscribers through our Medicaid competitive intelligence, strategy, and transformation tool.

Why CMS Must Modernize Quality Measurement for Value-Based Care

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How should quality measurement evolve as CMS expands value-based care?

As the Centers for Medicare & Medicaid Services (CMS) shifts Medicare toward prospective payment and accountable care, quality measurement must evolve from encounter-based reporting to longitudinal, digital measurement that evaluates patient outcomes across the full care journey. Payment reform and measurement reform must advance together to support value-based care.

Key Takeaways

CMS is shifting Medicare toward prospective, population-based payment models.
Traditional encounter-based quality measures were designed for fee-for-service care.
Digital quality measures should evaluate longitudinal outcomes, prevention, and care coordination.
Interoperability infrastructure—including Fast Healthcare Interoperability Resources (FHIR) APIs and Qualified Health Information Networks (QHINs)—should enable measurement rather than function solely as a compliance requirement.
Healthcare organizations need integrated policy, data, analytics, governance, and technology capabilities to succeed in value-based care.

Across the Innovation Center strategy, accountable care initiatives, and the National Quality Strategy,[1] the policy direction is increasingly clear: payment models should reward positive outcomes, seamless care coordination, and high performance across the entire patient journey—not just an isolated activity.

Prospective payment encourages primary prevention, cohesive team-based care, virtual engagement, timely social needs response, and proactive follow-up. However, the quality measurement architecture supporting Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs)[2] and Promoting Interoperability (PI)[3] is not keeping pace. Too much of today’s quality measurement focuses only on encounters, service-oriented events, fixed reporting periods, and discrete measure submissions. As a result, CMS risks building future payment models on measurement logic designed for a traditional transactional healthcare system.

Success in value-based care requires the ability to manage longitudinal data, understand quality measure logic, close care gaps proactively, establish accountable care relationships, and translate digital infrastructure into measurable improvements in quality, outcomes, and cost performance.

The central challenge is not whether quality measurement becomes digital. It is whether digital quality measurement becomes truly aligned with prospective accountability.

CMS Focuses on Outcomes

CMS’s recent strategies point toward coordinated, team-based, accountable care in which clinicians and other entities are responsible for quality, cost, and outcomes over time. This policy shift recognizes that meaningful improvement often happens outside the walls of a triggering encounter: closing a care gap before a visit, preventing deterioration, reconciling medications after a transition, engaging a patient between appointments, or coordinating services across settings.

Prospective payment rewards organizations for managing risk. Quality measurement should therefore follow the same logic. Clinical quality measures used for accountability should evaluate patient-centered outcomes, longitudinal trajectories, prevention and early detection, patient experience, and cross-provider coordination. Technical capability measures matter but should not be confused with patient outcome signals.

A measurement system built for the future must be able to evaluate whether accountable entities are improving patient outcomes over time. It should capture prevention, patient experience, care coordination, and total cost management in ways that reflect real clinical accountability. That is a different task than confirming whether documentation was completed during a denominator-eligible encounter.

dQMs Should Not Simply Digitize Legacy Reporting

Digital quality measures (dQMs) are quality measures expressed as standardized computable specifications, using FHIR and Clinical Quality Language (CQL) to automate measure calculations, reduce manual data abstraction, and provide more timely insights into patient care. Traditional clinical quality measure models were developed when interoperable, electronic clinical data were limited, and manual abstraction was standard practice. Because many still reflect important evidence-based care, those measures should not necessarily be discarded, but technical specifications must be re-evaluated to effectively operate in a healthcare environment in which connected networks, APIs, and broader data liquidity make earlier identification, cross-setting coordination, and proactive outreach the new normal.

MVPs are an important evolutionary step for MIPS. By grouping measures and activities around specialties, conditions, or episodes of care, MVPs can make quality reporting more coherent and clinically relevant than traditional MIPS. However, MVPs do not automatically transform the core logic of quality measurement, nor do they enable the individual measures to function as a cohesive unit. If the measures inside an MVP remain tied to encounter-triggered denominators, legacy numerator-denominator constructs, and retrospective submissions, the program may become more organized without advancing value-based care. Successful administrative reporting is not the same as patient improvement, and any quality measurement system used for prospective population-based accountability should make that distinction explicit.

CMS’s digital quality measurement agenda[4] offers a major opportunity. Digital quality measures can draw from standardized electronic data, support FHIR-based exchange, reduce manual abstraction, and create more timely feedback loops for quality improvement. In a mature interoperable environment, data from EHRs, claims, registries, health information exchanges, devices, and other relevant sources help organizations identify care gaps before visits occur and effectively track outcomes across settings. However, digitization alone is not modernization. A quality measure can be expressed in FHIR-CQL and packaged as a dQM while still carrying assumptions from the previous era of clinical quality reporting. If the underlying logic remains anchored in payment-coded encounters and retrospective documentation, the industry will simply automate yesterday’s measurement model.

Without modernization across both quality measurement and payment, CMS will create an increasingly digital system that remains fundamentally encounter-based. Organizations may invest in coding, documentation, attestation, and measure optimization while remaining only loosely connected to the outcomes that matter to patients and purchasers. The result would be more burden, more opportunities for gaming, and weaker alignment between quality reporting and the goals of value-based care. While this might reduce some reporting friction, it would not support the prospective accountability CMS is advancing.

Promoting Interoperability Is Necessary Infrastructure

The same concern applies to PI. Interoperability is essential to modern accountability, but when PI operates primarily as a scored compliance category—through Certified Electronic Health Record Technology (CEHRT),[5] attestations, fixed reporting windows, and required measure sets—it can become a parallel administrative layer rather than the infrastructure that enables better outcomes. This creates a subtle but important policy risk: CMS may reward technical compliance even when the measurement system does not reliably demonstrate improvements in longitudinal health.

This argument is not anti-interoperability. In fact, prospective payment absolutely depends upon a reliable interoperability infrastructure. QHINs,[6] FHIR APIs, patient access capabilities, health information exchange, e-prescribing, and electronic public health reporting are all foundational to a digital learning health system and to effective longitudinal care management.

The issue is how interoperability is recognized as an integral part of a prospective quality strategy. PI should function less like an independent scoring domain and more like the infrastructure that allows accountable entities to understand their patient populations healthcare needs, efficiently exchange actionable care plans, identify care gaps, incorporate patient-generated data, and continuously evaluate outcomes over time.

Conclusion: Success in Value-Based Care Requires Operational Transformation

CMS is moving toward prospective payment, accountable care, interoperability, and outcome-based accountability, but payment reform and measurement reform must advance together. If CMS continues to place modern payment models on top of legacy measurement logic, the system may become more digital without becoming more meaningful. The next phase of quality strategy should use interoperability not as an end goal, but as the operating foundation for measuring what prospective payment is intended to reward—better outcomes across the full patient journey. For healthcare organizations, the implications are immediate. Success in value-based care will require more than compliance with reporting requirements. It will require the ability to manage longitudinal data, understand measure logic, close care gaps proactively, establish accountable care relationships, and translate digital infrastructure into measurable improvements in quality, outcomes, and cost performance.

As CMS expands accountable care and prospective payment, organizations will need quality measurement systems that evaluate outcomes across the patient journey—not simply document clinical encounters. Digital quality measurement, interoperability, longitudinal analytics, and proactive care management will increasingly become core capabilities for success in value-based care.

HMA’s perspective: Digital quality measurement should not simply automate legacy quality reporting. It should measure whether accountable organizations improve patient outcomes over time.

HMA’s Digital Healthcare Quality Transformation service brings a unique combination of expertise spanning healthcare policy, value-based care strategy, interoperability, data quality, digital quality measurement, analytics, governance, and operational transformation. We work with health plans, providers, ACOs, states, and healthcare innovators to bridge the gap between regulatory compliance and real-world performance, helping organizations build the data infrastructure, governance frameworks, care delivery capabilities, and measurement strategies needed to succeed in an increasingly digital and outcomes-driven healthcare ecosystem. By connecting strategy, technology, and execution, HMA helps clients move beyond compliance and develop the capabilities necessary to deliver measurable improvements in quality, patient outcomes, operational performance, and value.

Frequently Asked Questions

What are digital quality measures (dQMs)?

Digital quality measures (dQMs) use standardized electronic clinical data to evaluate healthcare quality and outcomes. dQMs leverage standards such as Fast Healthcare Interoperability Resources (FHIR) and Clinical Quality Language (CQL) to automate measure calculations, reduce manual data abstraction, and provide more timely insights into patient care. When implemented effectively, dQMs enable healthcare organizations to identify care gaps, monitor performance, and improve patient outcomes using interoperable data.

Why is CMS modernizing quality measurement?

The Centers for Medicare & Medicaid Services (CMS) is modernizing quality measurement to support its transition from fee-for-service reimbursement to prospective, value-based payment models. As Medicare increasingly rewards organizations for improving patient outcomes, managing population health, and coordinating care across settings, quality measurement must evolve beyond encounter-based reporting to evaluate performance across the entire patient journey.

Why are traditional quality measures no longer sufficient?

Many traditional clinical quality measures were designed for a healthcare system built around individual encounters, retrospective reporting, and manual data collection. While many remain clinically important, they often do not fully capture longitudinal care management, prevention, patient engagement, or care coordination. As payment models shift toward population-based accountability, quality measurement must better reflect how organizations improve health outcomes over time.

What is longitudinal outcomes measurement?

Longitudinal outcomes measurement evaluates patient care across time rather than during a single point in time. Instead of measuring whether a required action occurred during an office visit, longitudinal measurement assesses whether healthcare organizations identify care gaps, coordinate services, engage patients, prevent disease progression, and improve health outcomes throughout the patient’s care journey.

How do MIPS Value Pathways (MVPs) support value-based care?

Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs) organize quality measures, improvement activities, and cost measures around specific specialties, conditions, or episodes of care. This approach makes reporting more clinically relevant than traditional MIPS reporting. However, achieving meaningful value-based care also requires measures within MVPs to evolve beyond encounter-based logic and better reflect longitudinal accountability and patient outcomes.

What role does interoperability play in quality measurement?

Interoperability enables healthcare organizations to securely exchange clinical information across providers, health plans, public health agencies, and patients. Standards such as FHIR APIs, Qualified Health Information Networks (QHINs), electronic health records (EHRs), and health information exchanges support more complete patient information, improve care coordination, and provide the data needed for digital quality measurement and population health management.

How are digital quality measures different from electronic clinical quality measures (eCQMs)?

Electronic clinical quality measures (eCQMs) digitized many traditional quality measures by using electronic health record data instead of manual chart abstraction. Digital quality measures (dQMs) build on this foundation by using modern interoperability standards, including FHIR and CQL, to improve data exchange, automation, and scalability. However, simply expressing a measure digitally does not modernize its underlying clinical logic.

Why is prospective payment changing quality measurement?

Prospective payment models reward healthcare organizations for managing the health of patient populations rather than billing for individual services. Because providers are increasingly accountable for outcomes, prevention, care coordination, and total cost of care, quality measurement must evaluate these longitudinal activities instead of focusing primarily on documentation associated with individual encounters.

What capabilities do healthcare organizations need to succeed in value-based care?

Success in value-based care requires more than meeting reporting requirements. Organizations need the ability to integrate longitudinal clinical and claims data, understand quality measure logic, identify and close care gaps proactively, exchange data through interoperable systems, support coordinated care teams, monitor patient outcomes continuously, and use analytics to improve quality, cost, and operational performance.

How can healthcare organizations prepare for the future of CMS quality measurement?

Healthcare organizations can prepare by investing in interoperability, data governance, digital quality measurement capabilities, analytics, and clinical workflows that support proactive care management. Organizations that align policy, technology, quality measurement, and operational transformation will be better positioned to succeed as CMS expands prospective payment, accountable care, and outcomes-based reimbursement.

[1] Centers for Medicare & Medicaid Services. CMS National Quality Strategy. Available at: https://www.cms.gov/medicare/quality/meaningful-measures-initiative/cms-quality-strategy.

[2] Quality Payment Program. MIPS Value Pathways (MVPs). Available at: https://qpp.cms.gov/reporting-requirements/ways-to-report/mvp.

[3] Quality Payment Program. Promoting Interoperability: APP Requirements. Available at: https://qpp.cms.gov/reporting-requirements/ways-to-report/app/promoting-interoperability.

[4] Centers for Medicare & Medicaid Services. Optimal health for All Within Nation’s Health and Long-Term Care Systems: CCSQ FY2025–2028 Strategic Roadmap. March 11, 2026. Available at: https://www.cms.gov/newsroom/blog/optimal-health-all-within-nations-health-long-term-care-systems-ccsq-fy2025-2028-strategic-roadmap.

[5] Centers for Medicare & Medicaid Services. Certified EHR Technology. Available at: https://www.cms.gov/medicare/regulations-guidance/promoting-interoperability-programs/certified-ehr-technology.

[6] Ibid

Early Bird Pricing Ends August 7 for HMA’s National Conference: US Healthcare 2026: Signals, Signs & Flashing Lights

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The agenda is now live for US Healthcare 2026: Signals, Signs & Flashing Lights, the Health Management Associates (HMA) national conference, October 5-7, 2026, in New Orleans, LA. Healthcare leaders will join peers, policymakers, innovators, and industry experts to discuss the most significant trends in healthcare, including historic policy and financing changes in Medicaid, program integrity, artificial intelligence (AI), behavioral health transformation, affordability challenges, and emerging care delivery models.

Early bird registration pricing ends August 7!

New This Year: Two Exclusive Preconference Sessions

HMA is offering two special preconference sessions that combine our expert-led learning with valuable networking opportunities.

Attendees will deepen their understanding of, and gain insights into, the federal policy landscape heading into the mid-term elections. This interactive session led by Leavitt Partners, an HMA company, will help attendees understand what’s coming next from Washington, DC, and explore the strategic implications for health plans, providers, state agencies, and healthcare investors.

A preconference session, AI in Healthcare: Moving from Experimentation to Execution, will lead attendees through practical applications of AI across healthcare operations, clinical workflows, analytics, consumer engagement, and administrative efficiency. Discussion will center on topics such as governance, implementation, and risk considerations. Attendees will have the opportunity to learn from peers, share experiences, and build connections in a collegial setting before the main conference begins.

Key Topics Shaping the Healthcare Agenda

The 2026 agenda is intentionally reflective of the issues facing leaders who work in strategy, operations, growth, policy, innovation, quality, and community impact across healthcare sectors.

Highlights include sessions on:

The future of Medicaid financing, delivery system transformation, and state innovation
Fraud, waste, abuse, and program integrity priorities across federal and state programs
AI applications that are reshaping healthcare operations, care delivery, and decision-making
Rural Health Transformation Programs (RHTPs) and strategies for sustainable community investment
Behavioral health policy and delivery trends, including the evolving crisis care continuum
Applied behavior analysis (ABA) therapy at the intersection of behavioral health, access, and oversight
Life sciences innovation and its impact on payers, providers, and patients
Coverage transitions, affordability challenges, and changing market dynamics
Emerging opportunities for collaboration across healthcare, social services, and community-based care

Attendees also will have opportunities to engage in HMA’s popular Coffee Conversations, during which participants can join facilitated discussions on timely topics and exchange ideas.

Review the full agenda, secure your hotel accommodations, and take advantage of early bird savings before August 7, 2026.

Connecting the Dots: What CMS’s Proposed Rule on Provider Taxes Rule Could Mean for States, Marketplaces, and Health Insurers

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The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule on July 21, 2026, to implement Section 71115 of the 2025 budget reconciliation act, P.L. 119-21, the Working Families Tax Cut (WFTCA). The proposal calls for introducing significant changes to how states finance Medicaid through healthcare-related taxes.

Though much of the attention has focused on the proposed rule’s implications for Medicaid provider taxes, it also raises important questions for State-Based Marketplaces (SBMs), Section 1332 reinsurance programs, health insurers, and state budget officials. The comment period closes September 12, 2026, giving states and stakeholders a limited window to assess the proposal and provide feedback to CMS.

To better understand the potential implications, Andrea Maresca spoke with Mary Goddeeris, Principal at Health Management Associates (HMA) and Medicaid financing expert; Lina Rashid, Principal at HMA and federal healthcare and Marketplace policy expert; and Zach Sherman, Managing Director for Coverage Policy and Program Design at HMA, and a national expert on ACA Marketplaces and state coverage programs.

Q: What is CMS proposing in this rule, and why is it generating attention among state policymakers and healthcare leaders?

Mary Goddeeris: At its core, the proposal implements Section 71115 of WFTCA, which significantly changes the federal rules governing Medicaid provider taxes. Historically, states could satisfy the federal indirect hold harmless test by using a generally applicable 6 percent threshold. The new law replaces that standard with more restrictive state- and provider-specific thresholds. For many provider taxes in Medicaid expansion states, allowable thresholds will phase down beginning in fiscal year 2028 and fall to 3.5 percent by 2032. The proposed rule implements those statutory changes.

The statutory change has attracted a lot of attention because provider taxes are one of the primary tools states use to finance Medicaid programs. Any changes to those financing mechanisms can have a ripple effect on state budgets, provider payments, managed care financing, supplemental payment programs, and long-term Medicaid strategy. State officials and healthcare leaders are all evaluating the potential fiscal and operational implications.

Q: The proposal is framed as a Medicaid financing rule. Why are stakeholders outside Medicaid also paying attention?

Lina Rashid: One reason is that CMS proposes creating a new permissible provider tax class called “services of health insurers.” CMS indicates this class could include issuers offering individual market coverage, group market coverage, catastrophic plans, short-term limited duration insurance, and certain excepted benefit products (dental and vision only policies), among others. Managed care organizations would generally remain under an existing provider class.

The proposal raises questions because many states already use insurer assessments to fund activities outside Medicaid. These assessments may support State-Based Marketplaces (SBMs), Section 1332 reinsurance programs, or other state affordability initiatives. The proposed rule seems to make these assessments subject to the same provider tax framework and hold harmless restrictions that would be applied to Medicaid financing rules.

The proposal does not clearly answer how broadly CMS intends to interpret these provisions, especially in the cases of taxes that have no direct connection to Medicaid financing. Under a strict framework, it is possible that many states may not meet CMS’s standard, and that they may face financial consequences with respect to the Medicaid program, SBMs, or other initiatives.

Q: How could the proposed rule affect ACA Marketplaces and Section 1332 reinsurance programs?

Zach Sherman: The immediate challenge is the uncertainty with this proposed rule. Many SBMs and reinsurance programs rely on assessments imposed on commercial health insurers. Currently, those assessments generally support Marketplace operations, affordability programs, or reinsurance initiatives rather than Medicaid.

CMS writes that healthcare-related taxes imposed on the new insurer class would be subject to the same hold harmless framework established in Section 71115. The proposal does not, however, clearly state whether insurer assessments used for non-Medicaid purposes would be included. Clarity on this issue is critical because many states depend on these assessments to sustain Marketplace infrastructure and affordability initiatives.

States that already operate SBMs, states considering transition to an SBM, and states supporting reinsurance programs through insurer assessments will want to evaluate how the proposal could affect existing funding models and future flexibility, alongside impacts to Medicaid funding.

Q: For the newly established health insurer permissible class, is the applicable threshold determined by aggregating all taxes imposed on entities within the class, for example including assessments on individual market issuers and catastrophic plans, or is the threshold applied separately to distinct entities within the class?

Rashid: If individual market issuers and catastrophic plans are both included in the same new permissible class (“services of health insurers”), then they would be aggregated across the class to measure if it meets CMS’s threshold, not separately. It would be the combined impact of individual market issuers and catastrophic plans revenue generated from the taxes imposed divided by the applicable revenue base for the health insurer class.

Q: What are the most significant questions states should be considering right now?

Goddeeris: States first need to understand their exposure under the Medicaid provisions themselves. Many states rely heavily on provider taxes to support Medicaid financing. They should be analyzing existing tax structures, estimating future fiscal impacts, and understanding how the phased-down thresholds could affect funding sources over time.

State officials should also consider how this proposal intersects with other major Medicaid policy and budget pressures. States are conducting eligibility redeterminations, implementing new federal requirements, evaluating managed care financing approaches, and managing broader budget constraints. This proposed rule could become another important factor in long-term Medicaid financing decisions and potential driver for significant policy and programmatic changes.

Q: Where should healthcare stakeholders focus their attention while the regulation is pending?

Sherman: Stakeholders should start by assessing whether they could be directly or indirectly affected. States, Marketplaces, health plans, providers, and trade associations may all have different perspectives on implementation questions that remain unresolved.

Rashid: Organizations also should focus on identifying areas where they need additional clarification. In our review, some of the most significant questions involve the scope of the insurer class, how CMS will measure the allowable threshold within each class, the applicability of the rule and hold harmless requirements to non-Medicaid assessments, and how CMS intends to interpret statutory language. Those are all issues stakeholders may want to address in their comments.

How HMA Can Help

Although CMS’s proposal focuses on implementing Medicaid financing reforms enacted by Congress, the effect may extend beyond Medicaid to include insurer assessments, Marketplace funding, reinsurance programs, and state affordability initiatives. Until CMS provides clarification, states and insurers will likely continue evaluating potential operational, fiscal, and policy implications.

HMA Medicaid financing, federal policy, actuarial, and Marketplace experts are helping states, health plans, provider organizations, and other stakeholders evaluate the proposed rule, assess potential impacts, and develop comment strategies.

HMA and its companies, including Wakely and Leavitt Partners, can support strategic planning, design and implementation of SBMs, Medicaid and Marketplace policy development and regulatory compliance, actuarial analysis, data development and reporting. Connect with us to learn how we can help your organization navigate the federal and state policy changes. Access additional insights from the ACA Marketplace team here.

How CMS’s Proposed MSSP Changes Could Strengthen ACO Growth and Sustainability

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Last week’s Health Management Associates (HMA) Weekly Roundup reviewed the Calendar Year (CY) 2027 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program (PFS) proposed rule (CMS-1848-P). That overview highlighted provisions that signal a broader shift in how the Centers for Medicare & Medicaid Services (CMS) is approaching physician payment, primary care, digital healthcare, and value-based care.

This week, our focus turns to the rule’s proposed changes to the Medicare Shared Savings Program (MSSP).

Why CMS Is Proposing MSSP Changes

The proposed updates are designed to address feedback and challenges that accountable care organizations (ACOs) have identified over multiple agreement periods, including benchmark volatility, concerns about rebasing, and questions about whether financial incentives adequately reward ongoing performance.

CMS is seeking to make the program more predictable while continuing to encourage accountability for quality and total cost of care. The proposals also reflect broader agency goals to make the MSSP more attractive to current and prospective ACOs, strengthen primary care, and improve access for beneficiaries in underserved and provider shortage areas. The impact, however, will vary by region and practice.

In a July 27, 2026, paper, CY 2027 MSSP Proposed Rule Analysis: What the Medicare Shared Savings Program Changes Mean for ACOs, Wakely, an HMA Company, explains that the financial effect of certain provisions depends on an ACO’s track, agreement period, historical savings, regional efficiency, risk profile, beneficiary assignment, and provider growth strategy.

Key Proposed Changes to MSSP

Several proposed changes stand out for ACO leaders and provider organizations, including:

Higher Shared Savings for BASIC Level E ACOs. CMS proposes to increase the BASIC Level E shared savings rate from 50 percent to 60 percent for agreement periods beginning in 2027 or later. This change could make the highest-risk BASIC track more attractive relative to other options and improve financial returns for ACOs that are successfully managing cost and quality performance.
Changes to Benchmark Methodology. CMS proposes to modify how prior savings are incorporated into future benchmarks. The changes are intended to better recognize organizations that have generated savings while addressing long-standing concerns among providers that benchmark rebasing can diminish incentives for high-performing ACOs over time.
New Accountable Care Prospective Trend (ACPT) Guardrails. The proposal would establish guardrails and annual recalculation mechanisms for the ACPT to reduce the likelihood that prospective spending projections diverge significantly from actual national cost trends. CMS also proposes applying certain guardrail provisions to payment years 2025 and 2026, potentially before many 2027 provisions take effect. For agreement periods beginning in 2027 or later, CMS proposes a two-sided guardrail and annual recalculation approach designed to reduce the risk that the prospective trend materially diverges from observed national spending trends.
Qualifying Provider Network Growth Incentive and Quality Reporting Updates. CMS proposes a new incentive to support ACO growth and participation. Provider entities should evaluate how beneficiary assignment interacts with provider expansion. As Wakely’s actuaries note, adding providers does not necessarily translate into meaningful assignment growth or financial benefit. The proposed rule also includes changes to quality reporting policies intended to reduce administrative burden and better align program operations with care delivery realities, particularly in rural and underserved areas and markets with access constraints.

Potential Market-Shifting Effects

The proposed MSSP changes could influence market behavior beyond annual participation decisions. By making changes to BASIC Level E economics, refining benchmark rules, and adding protections against certain trend-related volatility, CMS may encourage more organizations to consider where they want to be on the spectrum of risk -based arrangements.

Regionally efficient ENHANCED ACOs that rebase or enter the program in 2027 could face less favorable benchmark adjustments. Lower-risk ACOs may have less room under the proposed risk-adjusted benchmark cap. Organizations that pursue provider growth without corresponding increases in assigned beneficiaries may not realize the intended network growth incentive. These dynamics could create winners and losers based on local market position, historical performance, patient mix, and each organization’s financial and operational strategy.

How HMA and Wakely Can Help

ACO and provider leaders should use the proposed rule period to assess how the MSSP changes could affect their 2027 strategy and near-term financial projections. Current ACOs should revisit payment year 2025 and 2026 forecasts, evaluate the proposed ACPT guardrail, and model how the 2027 benchmark changes may affect renewal, track selection, and downside risk exposure. Organizations considering MSSP entry should evaluate whether the proposed changes improve the business case for participation and what capabilities would be needed to succeed.

Although the proposals focus on MSSP, their significance extends beyond Medicare ACOs. The changes reflect CMS’s broader effort to strengthen participation incentives, improve benchmark stability, and refine value-based payment models based on operational experience. As a result, the proposals may influence how Medicare Advantage plans, Medicaid programs, and commercial payers structure risk arrangements.

Providers and partners should also prepare comments grounded in data and operational experience. HMA and Wakely help ACOs, providers, health systems, payers, enablement organizations, and investors evaluate the policy, actuarial, operational, and market implications of Medicare accountable care changes. Our teams support MSSP strategy, benchmark and shared savings modeling, risk assessment, provider network analysis, care management design, comment letter development, and implementation planning.

As CMS considers comments and moves toward a final rule, organizations should not wait to understand how the proposed MSSP changes could affect participation decisions, market strategy, and accountable care capabilities. HMA and Wakely can help stakeholders translate the proposed rule into actionable scenarios and prepare for the financial and operational choices ahead.

CY 2027 PFS Proposed Rule Signals Major Changes for Physician Payment, Primary Care, Digital Healthcare, and Value-Based Care

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The calendar year 2027 Medicare Physician Fee Schedule proposed rule signals continued efforts at the Centers for Medicare & Medicaid Services to modernize physician payment, recalibrate reimbursement, strengthen accountable care incentives, and prepare Medicare for evolving care delivery models.

The Centers for Medicare & Medicaid Services (CMS), on July 14, 2026, released the Calendar Year (CY) 2027 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program (PFS) proposed rule (CMS-1848-P). The proposal outlines policies that, if finalized, would take effect January 1, 2027, including annual payment updates and offers signals about the agency’s broader Medicare payment reform agenda.

This article summarizes the scope of the proposed rule and highlights five provisions and policy signals that may have significant financial, operational, and strategic implications across the healthcare system. In future weeks, Health Management Associates (HMA), experts will examine the proposed changes specific to the Medicare Shared Savings Program (MSSP).

HMA’s Take on the Proposed Rule

CMS continues to advance several long-term priorities, including strengthening accountable care models, rethinking primary care payment, recalibrating payment rates and methodologies, modernizing quality reporting, expanding access to preventive and lifestyle-based interventions, and aligning Medicare payment policy with technology-enabled care delivery. The rule also includes several Requests for Information (RFI) that point to potential future reforms of physician payment, valuation, coding, and care delivery infrastructure.

The CY 2027 PFS proposed rule is notable for the signals CMS is sending about the future direction of Medicare physician payment with policy proposals and RFIs designed for transformational reform over the long term and reduced dependency on the legacy physician payment infrastructure. Targeted payment proposals and methodology changes will begin to peel back what CMS perceives as layers of outdated payment policies and billing conventions that no longer fully reflect how healthcare services are delivered. Policies in this proposed rule create opportunities for stakeholder engagement with CMS on new ideas, alternative approaches and scaling value within Original Medicare.

CMS will accept comments on the proposed rule through September 14, 2026. Organizations that may be affected by these proposals should use the comment period to provide data, operational examples, and policy recommendations that will inform the final rule and influence the next phase of Medicare physician payment reform.

Key Changes in the PFS Proposed Rule

1. Reimagining Primary Care Reimbursement and Care Management Within Traditional Medicare

CMS seeks feedback on how to “reimagine” primary care payment in Original Medicare, including alternatives to existing coding and fee-for-service (FFS) reimbursement. The agency is considering prospective primary care payment and outcomes-based approaches, including potential permanent implementation of prospective primary care payment within the MSSP.

CMS also is asking for input on how care management coding and payment could be redesigned to better reflect technology-enabled, team-based, and longitudinal care while maintaining program integrity. These questions build on concerns that documentation requirements, cost sharing, and fragmented coding may limit broader adoption of care management services.

HMA Analysis:CMS is signaling that primary care reform remains central to its long-term Medicare strategy. Although the rule does not immediately replace the foundational FFS architecture, the call for public input creates an important opportunity for stakeholders to shape how CMS defines comprehensive primary care, how it measures outcomes, and how payment could better support sustained patient engagement, team-based care, and digital healthcare models.

2. CMS Proposes Stronger Incentives for Accountable Care and Value-Based Models

CMS continues to promote ongoing, whole person care and clinician participation in accountable care organizations (ACOs). The agency proposes higher reimbursement for qualifying office visits furnished to beneficiaries in the MSSP and the forthcoming Long-term Enhanced ACO Design (LEAD) model when visits meet additional complexity thresholds.

CMS also proposes to replace the current flat-dollar payment for code G2211 with a percentage-based modifier approach. Under the proposal, visits furnished in eligible accountable care arrangements would receive a larger payment adjustment than similar complex visits furnished outside an ACO setting. CMS also proposes broader MSSP changes to strengthen participation in two-sided risk, encourage new entrants, refine beneficiary assignment, and improve the financial methodology.

In addition, CMS proposes several technical and operational refinements to the Ambulatory Specialty Model, a mandatory Innovation Center model designed to test specialty-specific value-based payment arrangements.

The agency also continues to move quality reporting toward more focused, clinically meaningful measures. CMS proposes to eliminate the Merit-based Incentive Payment System (MIPS), which has been in place for many years, and transition to specialty-specific MIPS Value Pathways (MVPs) by 2029. The agency’s rationale is that MVPs are more streamlined and would reduce physician burden. CMS also proposes to add three more MVPs in diabetes, hypertension, and hospital-based care to increase the opportunities for physicians to report relevant MVPs.

HMA Analysis:CMS is using the PFS to drive the healthcare system toward rewarding higher-value, longitudinal care and away from isolated FFS encounters. Although the proposed payment differential for complex visits in accountable care arrangements could strengthen the business case for ACO participation, it also creates operational and financial questions for clinicians and organizations that remain outside these models. CMS also continues to refine its quality reporting structures and seeks to reduce burden on physicians to better measure the quality of care delivered to Medicare beneficiaries.

3. Physician Payment Would Decline Overall, Despite Statutory Updates

Despite a positive statutory update of 0.75% for qualifying Alternative Payment Model (APM) participants or 0.25% for non-qualifying clinicians, and a slight increase resulting from budget neutrality calculations, the proposed Medicare PFS Conversion Factor (CF) will decline in CY 2027 because the one-time statutory 2.5% increase Congress provided for CY 2026 expires before CY 2027.

As proposed, the qualifying APM conversion factor would decrease by approximately 1.19%, from $33.57 in 2026 to $33.17 in 2027. The non-qualifying CF would decrease by approximately 1.68% from $33.40 in CY 2026 to $32.84 in CY 2027.

CMS also projects significant specialty-level variation from proposed relative value unit changes. Clinical social workers and clinical psychologists would receive the largest aggregate increases, while otolaryngology and dermatology would see the largest estimated reduction at −9%. The impact of changes in relative value units (RVUs) on allowed charges are aggregate projections.

HMA Analysis: Although the CF reductions are relatively modest compared with some recent physician payment debates, the cumulative effect of annual updates, budget neutrality adjustments, and specialty-specific RVU changes remains material. The effect on practices and clinicians will vary by service mix, specialty, payer mix, and Medicare FFS volume. Physician practices, health systems, and specialty groups should model both aggregate and service-level impacts in their comments to CMS and begin planning for potential payment changes in 2027.

4. CMS Proposes Targeted Payment Recalibration for Procedures, Visits, and Practice Expenses

CMS proposes several changes to the service/procedure payment methodology to improve accuracy, transparency, and consistency in PFS rate setting. One notable proposal would reduce payment when the same physician or another clinician in the same group practice furnishes a separately identifiable Evaluation and Management (E/M) service the same day as a procedure by the same physician or another clinician in the same group practice.

Under the proposal, Medicare would pay the highest-priced service at 100% and all other same-day surgical procedures or E/M visits at 50%. CMS states that efficiencies occur when the same practitioner (or a practitioner in the same group practice) provides an E/M service in conjunction with a procedure that already includes pre-service, intra-service, and post-service work through a “global period”). CMS expects the largest negative impact on otolaryngology, dermatology, and podiatry.

HMA Analysis: These proposals reflect CMS’s continued interest in updating payment methods that the agency views as outdated or misaligned with care delivery. The same-day E/M and procedure proposal could create meaningful revenue pressure for certain procedural specialties.

5. CMS Proposes to Align PFS Payment with Technology, Prevention, and Program Integrity Priorities

The proposed rule includes several policies and RFIs that signal CMS’s interest in modernizing Medicare payment for technology-enabled healthcare while improving outcomes and strengthening program integrity. Remote patient monitoring is an area of particular focus for CMS. Consistent with recent Office of Inspector General reports and recommendations calling for additional oversight, CMS proposes guardrails for currently reimbursed technologies, including remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM). The proposed guardrails require that these services be furnished only to established patients and only to allow payment for RPM or RTM services performed by clinical staff employed by the practice—not when those services are delivered by contractors. CMS also is proposing revising how the agency will pay for these services given concerns about possible overvaluation of these services and outlines consideration of four new bundled codes.

CMS also plans to shift reimbursement for software as a medical service (SaMS) analysis of laboratory tests from the Clinical Laboratory Fee Schedule (CLFS) to contractor pricing. In parallel, the agency requests comments on whether payment for SaMS analyses should align with policies proposed for hospital outpatient department that increasingly support clinical diagnosis, monitoring, and care management.

Consistent with broader prevention and Make America Healthy Again priorities, CMS also proposes national valuation and payment conditions for health and well-being coaching services, payment for diagnosis and management of suspected adverse vaccine reactions, increased reimbursement for smoking and tobacco-use cessation services, and feedback on multi-domain interventions that may slow Alzheimer’s disease progression. CMS also proposes to recognize diabetes self-management training and medical nutrition therapy as qualified preventive services covered and paid as stand-alone billable visits under the Rural Health Clinic benefit.

HMA Analysis: The proposed changes signal CMS’s interest in distinguishing between technology that supports integrated, clinician-led care and arrangements the agency believes may increase fragmentation or inefficient or concerning billing practices. Digital health, remote monitoring, software, laboratory, and AI interest-holders should consider the payment opportunities and compliance priorities CMS signals. Prevention-focused providers and rural health organizations also should assess how proposed coverage and payment changes could expand access to services that historically have been difficult to scale.

Looking Ahead

HMA experts are analyzing the rule’s potential impact across physician specialties, health systems, ACOs, rural providers, digital health companies, and other interest-holders. Contact HMA’s Medicare experts to discuss how these proposals might affect your organization’s payment strategy, Medicare operations, and long-term positioning in this evolving healthcare landscape.

Outlook 2026: Building Coordinated Behavioral Health Systems Through Quality, Program Integrity, and Provider Partnership

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States are facing growing pressure to strengthen behavioral health systems and demonstrate outcomes. In response, states are increasingly examining how program integrity can serve not only as an oversight function, but also as a catalyst for quality improvement and value-based care.

In this Outlook 2026 interview, Jen Colamonico speaks with Alyssa Lord, Health Management Associates (HMA) Principal and former Deputy Secretary of Maryland’s Behavioral Health Administration, about lessons from Maryland’s experience, the role of provider partnerships, and how states can use program integrity, quality measurement, regulatory modernization, and data-driven decision-making to improve behavioral health outcomes.

Jen Colamonico: States across the country are working to improve behavioral health access and coordination while facing workforce shortages, fragmented systems, and growing demand for services. Based on your experience, what are the biggest challenges to building a truly coordinated behavioral health system?

Alyssa Lord: One of the biggest challenges is that we still tend to think about behavioral health separately from the rest of healthcare. The head is not disconnected from the body, and, as a result, our systems, financing structures, and care delivery models often operate in silos.

For individuals and families with complex behavioral health needs, navigating the healthcare system can be incredibly difficult. There are barriers related to access, network adequacy, stigma, and parity. The result is often delayed care and missed opportunities to address physical health, behavioral health, and social needs in a coordinated way. Building better coordination requires states to move beyond individual programs and look at how the entire continuum of care works together.

Q: What lessons can other states learn from Maryland’s efforts to strengthen coordination and improve access?

Alyssa Lord: One of the most important lessons is the value of stakeholder engagement. In Maryland, meaningful reforms were possible because providers, families, advocates, state leaders, and individuals receiving services all had a voice in identifying barriers and opportunities for improvement. For example, the state found that eligibility requirements for certain home and community-based behavioral health services had become so restrictive that they created barriers rather than pathways to care. By working closely with families and providers, Maryland was able to redesign the program, reduce access barriers, and improve awareness that services were available.

Another lesson is that access and quality must be addressed together. Expanding services is important, but states also need to define what success looks like. How are services being measured? Are people receiving timely care? Are outcomes improving? States need clear performance measures that help determine whether investments produce meaningful results.

Q: Why should healthcare leaders think differently about the relationship between program integrity and quality?

Alyssa Lord: Too often, program integrity is viewed solely through the lens of fraud, waste, and abuse. Although those issues are important, that definition is incomplete. Program integrity also encompasses the policies, safeguards, oversight processes, and accountability structures that support patient safety, access, quality, and responsible stewardship of public resources.

The strongest programs view program integrity and quality improvement as complementary rather than competing priorities. States have an opportunity to use program integrity frameworks to identify and reward high-performing providers, measure outcomes, and support value-based approaches that improve care. Providers that embed quality and compliance into their operations—from staff training and onboarding to internal monitoring and performance measurement—often have the strongest foundation for long-term success.

Q: Maryland implemented a provider enrollment moratorium that attracted national attention. What problem was the state trying to solve, and what lessons emerged from that experience?

Alyssa Lord: Maryland observed exponential growth in several behavioral health service categories without measurable improvements in quality, outcomes, or patient experience. That disconnect raised important questions about quality, utilization patterns, continuity of care, and whether individuals were receiving the right services at the right time.

Importantly, many providers supported the state’s temporary pause on new provider enrollment effort because they shared concerns about maintaining a continuum of care and distinguishing high-quality providers from those with rapid growth that may not have been accompanied by positive outcomes.

For states considering similar approaches, transparency and provider engagement are essential. Providers need to understand the objective is improving quality and protecting access—not simply limiting participation.

States and payers should be focusing on metrics that matter—reductions in avoidable emergency department utilization, improved care coordination, stronger continuity of care, reduced hospitalizations, faster access to treatment, and other outcome measures that demonstrate whether services are improving lives.

This is where value-based approaches become particularly important. Rather than focusing exclusively on volume, states can align incentives around outcomes and quality, creating a more sustainable model for providers while ensuring that public resources are supporting meaningful improvements in care.

Q: What role do technology, data, and predictive analytics play in improving care and program integrity—and where can they become a hindrance?

Alyssa Lord: Technology and data should help organizations focus on meaningful signals rather than creating additional administrative tasks. The goal is to use data to improve decision-making, identify emerging risks, support providers, and strengthen quality improvement efforts.

Advanced analytics can help states and health plans identify unusual utilization patterns, monitor quality measures, improve oversight, and prioritize resources where they are needed most. Better dashboards, automated processes, shared data sources, and predictive analytics all have the potential to improve both program integrity and care delivery.

At the same time, technology can become a hindrance when it generates duplicative reporting requirements, repeated manual submissions, or additional administrative burden without producing meaningful insights. Behavioral health providers have historically faced challenges adopting technology, in part because they were often excluded from earlier investments that accelerated electronic health record adoption across the broader healthcare system. Many behavioral health providers remain small practices with limited infrastructure and resources.

As states continue modernizing oversight and quality measurement, technology investments need to be accompanied by realistic implementation strategies, provider support, and a clear focus on reducing—not increasing—administrative burden.

Q: We expect program integrity to remain a high priority this year and beyond. How should states and other healthcare organizations be thinking about planning?

The future belongs to organizations that stop viewing program integrity, quality, and value as separate workstreams. The strongest behavioral health systems will be those that use all three together to improve outcomes, strengthen provider performance, and build greater trust in the care being delivered.

HMA, including HMA companies Wakely and Leavitt Partners, is actively helping states, health plans, providers, and other stakeholders navigate the changing landscape of behavioral health delivery. HMA can support strategic planning, policy design, value-based payment design and readiness, data development and reporting. Connect with HMA to learn how we can support your organization in navigating the next phase of behavioral health transformation and care delivery.

You can listen to the full discussion with Alyssa Lord on HMA’s Vital Viewpoints podcast, Can Better Program Integrity Lead to Better Behavioral Health? Access additional insights from HMA’s behavioral health team here.

CY 2027 OPPS Proposed Rule Signals Major Changes for 340B Hospitals, Site-Neutral Payments, and Digital Health

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The Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2027 Medicare Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Centers (ASC) proposed rule (CMS-1850-P), July 2, outlining policies that would take effect, if finalized, January 1, 2027. Although the proposed rule includes annual payment updates, it also offers insights into the agency’s broader policy agenda.

CMS continues to advance several long-term priorities, including site-neutral payment reform, elimination of the inpatient only list to migrate services to lower-cost settings, and efforts to align reimbursement more closely with acquisition costs for pharmaceuticals purchased through the 340B Drug Pricing Program. CMS is refining its policies that encountered operational or legal challenges, most notably in the case of its 340B payment proposals.

The rule also signals how CMS is preparing Medicare for the next generation of healthcare delivery. As software-based therapies, artificial intelligence, and other health technology become increasingly integrated into care delivery, the agency is laying the groundwork for payment policies that reflect evolving care models and emerging medical innovation.

This article highlights five proposals that may have significant financial, operational, and strategic implications across the healthcare system.

Highlights of Key Changes in the OPPS Proposed Rule

1. CMS Intends to Cut to Reimbursement for Drugs Acquired Under the 340B Program

Based on findings from a survey of hospital acquisition costs, CMS proposes reducing reimbursement for drugs acquired through the 340B Drug Pricing Program from Average Sales Price (ASP) plus 6 percent to ASP minus 33.4 percent beginning in CY 2027. CMS estimates the policy could reduce Medicare fee-for-service (FFS) drug spending by $4.55 billion in its first year, which would be redistributed to non-drug service payments under OPPS’s budget neutrality rules.

The proposal would similarly reduce payment rates for 340B drugs paid under alternative methodologies, including those reimbursed using Wholesale Acquisition Cost (WAC). Vaccines, pass-through drugs, and certain non-opioid pain management products would remain exempt, as would Children’s Hospitals, Sole Community Hospitals, and PPS-exempt cancer hospitals.

CMS also proposes applying the policy to 340B drugs administered in non-excepted off-campus provider-based departments while leaving reimbursement for non-340B drugs unchanged.

Health Management Associates (HMA) Analysis: CMS is effectively continuing a policy discussion that has been ongoing for nearly a decade. Although prior litigation altered the agency’s approach, the proposal demonstrates CMS’s continued interest in aligning Medicare reimbursement more closely with acquisition costs for 340B drugs. The financial implications will vary significantly across hospitals depending on their reliance on 340B savings. At the same time, providers with limited 340B exposure may benefit from the budget-neutral redistribution of savings elsewhere in the OPPS payment system.

2. Because of the 340B Payment Cuts, Hospitals Will See an Increase in the Conversion Factor Used to Set Payments for Most Non-Drug Items and Services

CMS proposes an overall 2.4 percent payment increase in OPPS payments for CY 2027, but payment levels will vary under the rule based on major policy changes. The proposed 340B payment reduction, for instance, would trigger an 8.44 percent increase in the conversion factor for non-drug services. CMS is also proposing a conversion factor reduction of 3 percent intended to recover increased payments hospitals received for non-drug items and services as a result of CMS’s remedy related to prior 340B reimbursement cuts.i

HMA Analysis: The proposed payment updates illustrate how interconnected Medicare payment policies have become. Organizations should look beyond the headline increase and evaluate how individual provisions interact. The proposed reduction in 340B reimbursement serves as a budget-neutral offset that increases the OPPS conversion factor, creating winners and losers across provider categories. Separately, the proposal would accelerate the pace and magnitude of legal-remedy-related rate reductions originating from the termination of an earlier iteration of the 340B payment reduction policy. Understanding this redistribution effect will be critical for forecasting organization-specific financial effects.

3. More Proceduresare Moving to the Outpatient Setting

CMS proposes removing 638 procedures from the Medicare Inpatient Only (IPO) list in CY 2027, representing nearly half of the remaining procedures designated as such. The proposed removals focus on less complex services across several clinical areas, including digestive, endocrine, respiratory, urinary, maternity, and other procedural categories.

HMA Analysis: This proposal continues CMS’s long-term strategy of shifting appropriate services to outpatient settings. As the IPO list continues to shrink, hospitals will have greater flexibility to conduct procedures in the outpatient setting than in the past. At the same time, hospitals billing for certain previously IPO-listed services in inpatient settings could encounter greater scrutiny and pressure to migrate towards outpatient sites. Because many commercial coverage policies and utilization management approaches have historically relied on Medicare’s IPO framework, the proposal may accelerate broader market movement toward outpatient care, creating operational, capacity, and revenue implications for providers.

4. Site-Neutral Payment Reform Remains a Long-Term CMS Priority

CMS proposes extending site-neutral payment policies to imaging services without contrast provided in excepted off-campus provider-based departments (PBDs). The agency notes substantial growth in the utilization and spending associated with these services over the past decade and views the proposal as a continuation of broader efforts to reduce payment differentials across sites of care. This proposal follows CMS’s recent expansion of site-neutral payment policies for drug administration services.

HMA Analysis: The proposal reinforces that site-neutral payment reform remains a priority for CMS. Although the immediate policy targets imaging services without contrast, stakeholders should view the proposal within the context of a broader and continuing effort to reduce payment differentials between hospital outpatient departments and physician office settings. Hospitals with significant outpatient imaging capacity—particularly in off-campus PBDs—should evaluate the potential financial impact and consider how future site-neutral policies could affect other service lines. Hospitals should also anticipate incremental additions to this framework in the future, as CMS continues to scrutinize site-of-care allocations for services.

5. A Future Framework for AI and Digital Health is in the Works, While Maintaining Existing Policies in the Short Term

Recognizing the growing role of software and AI-enabled technologies in healthcare delivery, CMS proposes using CY 2027 as a bridge year while it develops a longer-term payment approach for technologies categorized as Software as a Medical Service (SaMS). Under the proposal, technologies currently assigned to New Technology Ambulatory Payment Classifications (NT-APCs) would generally maintain their payment assignments during CY 2027.

HMA Analysis: Although the proposal preserves near-term payment stability, it may be one of the most consequential signals in the rule for manufacturers, digital health companies, investors, and providers adopting new technologies. CMS is exploring how software-based interventions, AI-enabled tools, and algorithm-driven services generate value and how that value should be reflected in Medicare payment policy. Future reimbursement methodologies will likely place greater emphasis on demonstrated clinical outcomes, efficiency gains, and measurable impacts on healthcare utilization. Organizations developing or deploying these technologies should view CY 2027 as an opportunity to prepare for a more mature reimbursement framework in the years ahead and to engage with CMS on preferred policy approaches.

Looking Ahead

The CY 2027 OPPS proposed rule provides insight into the direction of Medicare reimbursement policy, changes in Hospital Conditions of Participation (CoP) for obstetrical services, and planned revisions to the exceptions to the “four walls” requirement under the Medicaid clinic benefit for Indian Health Services/Tribal clinics, behavioral health clinics, and clinics located in rural areas. For hospitals, health systems, manufacturers, life sciences companies, digital health organizations, and investors, now is the time to assess potential impacts and evaluate strategic responses before policies are finalized. Comments on the proposed rule are due August 31, 2026.

HMA is helping organizations understand the financial, operational, and market implications of the proposed rule through:

Customized financial impact modeling
340B reimbursement and redistribution analyses
Site-neutral payment impact analyses
Clinical service line and specialty-specific analyses
Medicare and Medicaid policy scenario planning and forecasting
Regulatory comment strategy development

As CMS continues to pull the thread on several long-term policy priorities, organizations that begin planning now will be better positioned to navigate the changes ahead. Contact HMA’s Medicare experts to discuss how these proposals may affect your organization and explore potential strategic responses before the final rule is released.

2026 Medicaid, Medicare Advantage, and Marketplace Trends Healthcare Leaders Need to Understand

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As Independence Day approaches, we have curated a selection of In Focus analyses that continue to resonate with healthcare leaders as they navigate a rapidly changing policy environment. From Medicaid work requirements and Affordable Care Act (ACA) Marketplace stability to social determinants of health initiatives, state transformation efforts, and consequential legal decisions, these articles offer insights into the developments shaping healthcare in 2026.

Act Now to Implement Community Engagement Requirements

New Medicaid community engagement requirements are moving from policy debate to implementation reality. Health Management Associates (HMA) experts break down the critical implementation challenges and strategic decisions that cannot wait. Get the insights here.

ACA Marketplace Affordability and Coverage Stability

Coverage affordability and enrollment stability remain among the most important healthcare policy challenges facing states and issuers. HMA analyzes emerging funding approaches, policy risks, and what healthcare leaders should watch as ACA Marketplace dynamics continue to evolve. Get the insights here.

New Guidance Raises the Bar for MedicaidSection 1115 Demonstrations

New guidance from the Centers for Medicare & Medicaid Services (CMS) fundamentally changes expectations for Medicaid Section 1115 demonstrations. HMA provides a first take on how the guidance could affect Medicaid 1115 waiver approvals and the future of state innovation. Understand the policy changes and their implications before your next strategic planning discussion. Get the insights here.

The Value Shift in Medicare Advantage: What 2026 Benefits Tell Us About the Market’s Next Chapter

Medicare Advantage (MA) is entering a new era of value management as plans rethink benefit design amid mounting financial and regulatory pressures. Drawing on proprietary analysis from Wakely, an HMA Company, this article reveals how 2026 benefit changes are reshaping member value and what they signal about the future direction of the MA market. Get the insights here.

The New Operating Reality in Behavioral Health

The rules of success in behavioral health are changing. HMA explores the market, policy, and operational trends that are redefining performance and what leaders should do now to stay ahead. Get the insights here.

As healthcare policy, financing, and delivery systems continue to evolve, organizations need more than headlines—they need actionable insights grounded in real-world experience. HMA’s multidisciplinary team works with state agencies, health plans, providers, community organizations, and federal stakeholders to navigate complex challenges across Medicaid, Medicare, behavioral health, Marketplace coverage and healthcare transformation initiatives.

The articles highlighted here offer a snapshot of our capabilities and expertise. Through our consulting services, research, analytics, and thought leadership, HMA provides the expertise and strategic guidance organizations need to anticipate change, manage risk, and seize emerging opportunities across the healthcare landscape.

Medicaid Managed Care Enrollment Declines in Q1 2026: HMA Analysis of State Trends and Market Share

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Health Management Associates (HMA) analyzed monthly Medicaid managed care enrollment data from 34 states to assess enrollment trends as of March 2026. The findings show that Medicaid managed care enrollment continued to decline as states navigate new eligibility policies and preparations for new Medicaid community engagement requirements under the 2025 budget reconciliation act, P.L. 119-21, now known as the Working Families Tax Cut (WFTC) Act. These trends serve as an early indicator of how policy and programmatic changes may affect Medicaid enrollment levels in the years ahead.

Drawing on monthly enrollment data from the 34 states, HMA found that Medicaid managed care enrollment fell to 60.4 million members in March 2026—a decline of 3.1 million members from March 2025, or 4.8 percent year over year. As states prepare to address this issue, this enrollment snapshot provides important insights into how administrative and policy changes may shape Medicaid participation in the years ahead.

Medicaid Managed Care Enrollment Trends in Q1 2026

HMA Information Services (HMAIS) maintains a database of monthly Medicaid enrollment from all 50 states and Puerto Rico. The most recent HMA analysis showed that enrollment declines were widespread across the 34 states studied (Figure 1). Key findings include:

Enrollment changes varied considerably across states, reflecting a combination of state-specific demographic, administrative, operational, and policy factors.
Of the 34 states, only four—Colorado, Mississippi, Nevada, and South Carolina—showed modest gains in Medicaid managed care enrollment from March 2025.
Several states experienced particularly significant declines. Arizona, Indiana, Kansas, and Louisiana each reported data reflecting , ranging from
Among the expansion states in the analysis, enrollment declined by 2.5 million (5 percent) to 48.4 million. The eight non-expansion states included in this analysis experienced a decline of 547,000 (4.4 percent), bringing enrollment to 12 million enrollees.

Figure 1. HMA Analysis of Medicaid Managed Care Enrollment in 34 States, March 2026

Note: States colored as blue shown on the map above are included in the HMA Enrollment Analysis.

National Medicaid Managed Care Market Share

HMAIS’s resource contains information on approximately 300 Medicaid managed care plans across 41 states and tracks corporate ownership, program participation, and tax status among participating plans.

As of March 2026, Centene held the largest share of the national Medicaid managed care market at 17.9 percent. Elevance followed with 10.6 percent, while United and Molina accounted for 8.4 percent and 6.0 percent, respectively (see Figure 2). These four organizations represented 42.9 percent of enrollment among the plans analyzed, underscoring continued concentration among large, national Medicaid managed care organizations, even as overall enrollment declines.

Figure 2. National Medicaid Managed Care Enrollment Share by Parent Organization, March 2026

How Medicaid Work Requirements and Eligibility Policies Could Affect Enrollment in 2027

The enrollment trends observed at the end of the first quarter (Q1) of 2026 come on the cusp of significant policy change. On June 1, 2026, the Centers for Medicare & Medicaid Services (CMS) released an interim final rule establishing a national framework for implementing Medicaid community engagement requirements under P.L. 119-21. The rule outlines federal parameters for eligibility exemptions and state implementation responsibilities.

States must now translate these federal requirements into operational eligibility policies, technology systems, administrative procedures, and beneficiary communications. As implementation moves forward, enrollment trends will provide important insights into how policy changes and state implementation affect enrollment levels and continuity of coverage across Medicaid programs.

Several states are advancing implementation of the new eligibility policies. Nebraska launched Medicaid work/community engagement requirements on May 1, 2026. Montana plans to begin implementation on July 1, 2026, while Arkansas intends to begin a soft launch of the new requirements in July 2026 before enforcement begins in January 2027.

Declines in enrollment are often an early indicator of broader impacts across the healthcare system, including uncompensated care levels, shifts in payer mix, and increased financial pressure on safety‑net systems. For managed care organizations, even modest enrollment changes can mask shifts in risk profiles, geographic concentration, or service needs.

Data Considerations.The data in this analysis have some important limitations. States report enrollment figures at different points throughout the month, with some data reflecting beginning of the month totals and others capturing end of month enrollment. In addition, some state datasets encompass all Medicaid programs offering managed care plans, whereas others reflect only a subset of the managed Medicaid population. As a result, the findings should be viewed as indicative of broader trends rather than a comprehensive state-by-state comparison.

The HMAIS enrollment reports and analyses, available through subscription, use data from nearly 300 health plans in 41 states. The report provides by-plan enrollment plus corporate ownership, program inclusion, and for-profit versus not-for-profit status, with breakout tabs for publicly traded plans. HMAIS’s Medicaid enrollment data, financials, procurement tracking, and a robust library of public documents equips stakeholders with timely, actionable intelligence. Subscribe here.

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HMA knows the Medicaid managed care landscape and how it is evolving. Medicaid changes under the WFTCA are affecting eligibility, financing, waivers, managed care oversight, provider reimbursement, and program integrity. HMA helps organizations assess impact, plan next steps, and move from policy analysis to implementation with confidence. Contact us to prepare your organization.

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How should quality measurement evolve as CMS expands value-based care?

Key Takeaways

CMS Focuses on Outcomes

dQMs Should Not Simply Digitize Legacy Reporting

Promoting Interoperability Is Necessary Infrastructure

Conclusion: Success in Value-Based Care Requires Operational Transformation

Frequently Asked Questions

What are digital quality measures (dQMs)?

Why is CMS modernizing quality measurement?

Why are traditional quality measures no longer sufficient?

What is longitudinal outcomes measurement?

How do MIPS Value Pathways (MVPs) support value-based care?

What role does interoperability play in quality measurement?

How are digital quality measures different from electronic clinical quality measures (eCQMs)?

Why is prospective payment changing quality measurement?

What capabilities do healthcare organizations need to succeed in value-based care?

How can healthcare organizations prepare for the future of CMS quality measurement?

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Connecting the Dots: What CMS’s Proposed Rule on Provider Taxes Rule Could Mean for States, Marketplaces, and Health Insurers

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CY 2027 OPPS Proposed Rule Signals Major Changes for 340B Hospitals, Site-Neutral Payments, and Digital Health

2026 Medicaid, Medicare Advantage, and Marketplace Trends Healthcare Leaders Need to Understand

Medicaid Managed Care Enrollment Declines in Q1 2026: HMA Analysis of State Trends and Market Share

Featured Solutions:

Featured HMA insights:

More insights from our companies:

Insights

HMA Insights - Blog

553 Results found.

How should quality measurement evolve as CMS expands value-based care?

Key Takeaways

CMS Focuses on Outcomes

dQMs Should Not Simply Digitize Legacy Reporting

Promoting Interoperability Is Necessary Infrastructure

Conclusion: Success in Value-Based Care Requires Operational Transformation

Frequently Asked Questions

What are digital quality measures (dQMs)?

Why is CMS modernizing quality measurement?

Why are traditional quality measures no longer sufficient?

What is longitudinal outcomes measurement?

How do MIPS Value Pathways (MVPs) support value-based care?

What role does interoperability play in quality measurement?

How are digital quality measures different from electronic clinical quality measures (eCQMs)?

Why is prospective payment changing quality measurement?

What capabilities do healthcare organizations need to succeed in value-based care?

How can healthcare organizations prepare for the future of CMS quality measurement?

Why CMS Is Proposing MSSP Changes

Key Proposed Changes to MSSP

Potential Market-Shifting Effects

How HMA and Wakely Can Help